Sitting of 30 June 1998

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

  EYRE REVIEW
  Resolved,
  That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there will be laid before this House a Return of the Report of the inquiry of the future of lyric theatre in London by Sir Richard Eyre.

Oral Answers to Questions
  HEALTH
  The Secretary of State was asked—
  HEALTH

    Kidderminster Hospital
    Mr. Christopher Gill: If he will visit south Shropshire to assess the effect upon the local community of proposals to reduce the range of facilities available at Kidderminster hospital. [46601]
    The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): The ministerial team conducts a wide-ranging programme of regional visits. I take particular interest in the west midlands, as the hon. Gentleman will know. I have no immediate plans to visit south Shropshire.
    Mr. Gill: My constituents will be disappointed by that reply. I and they are conscious of the fact that Kidderminster hospital is not the only hospital in this country to be facing either closure or cuts. There are many testimonials to the Labour party's broken election promises. May I remind the Minister of what his colleague the hon. Member for Wyre Forest (Mr. Lock) said during the election campaign? He said:
    "We will only prevent further cuts at Kidderminster if the Government provides enough money to the Health Authority to fund the hospital"?
    Mr. Boateng: The hon. Gentleman well knows that the agenda at Kidderminster is not a cuts agenda. He is well aware—because he has been a party to them—of the discussions that have taken place between his health authority and all parties interested in the Kidderminster hospital. Submissions will come to Ministers in due course, and decisions will be taken in the best interests of all the people of Kidderminster.
    Mr. David Lock: Is not a high standard of care provided by the staff and management at Kidderminster, which led to that hospital getting a charter mark last year? Does not the hospital deserve praise for its fall in emergency admissions? In comparison, every other hospital in the west midlands has seen rises. Will my hon. Friend accept the thanks of my constituents for the extra £13.5 million of Government money provided since the election to Worcestershire health authority, which will give the possibility of options for Kidderminster? Must not all those important factors be taken into account by his right hon. and hon. Friends when deciding the best configuration for acute services in the county?
    Mr. Boateng: My hon. Friend is a stout defender of the interests of the NHS in his constituency, and I join him in thanking all those who have contributed to the success of the hospital and its earning of a charter mark. The Government are committed to making sure that there is investment year on year in the NHS to enable its staff to deliver the high-quality health care that is the due of each and every person in this country. That is why the Government have found an additional £2 billion for the NHS since the last general election—money that the Conservative party would never have found.

    Dental Services (Shropshire)
    Mr. Peter Bradley: What steps he is taking to meet the dental health needs of the people of Shropshire. [46602]
    The Minister of State, Department of Health (Mr. Alan Milburn): Seven investing-in-dentistry funding requests from Shropshire health authority have been approved to make national health service dental services available to thousands in the area. Access to NHS dentistry should also benefit from the approval of a first-wave personal dental service pilot in Shropshire, due to commence on 1 October 1998.
    Mr. Bradley: Many people will benefit from the £19 million that the Government are putting into NHS dentistry. Some 20,000 people in Shropshire—my constituents, as well as those of the hon. Member for Ludlow (Mr. Gill)—will benefit from the schemes. However, can my hon. Friend give any hope to the remaining 36,000 people in Shropshire of the 56,000 who lost access to NHS dentistry when the previous Government reneged on fee agreements with NHS dentists? Will those people have their access to NHS dentistry restored in future years?
    Mr. Milburn: I am grateful for my hon. Friend's support. I assure him that we shall continue to do everything that we can to improve access to NHS dentistry in Shropshire and the rest of the country. I can report that, so far, we have approved 140 investing-in-dentistry projects, giving extra access to NHS dental care to 250,000 patients who would not otherwise have had it. We are doing that by offering the NHS dentist a grant in exchange for continuing to treat NHS patients. In other words, this Government are bringing back into the health service dentists whom the previous Government drove out.

    Hospitals (Clinical Performance)
    Dr. Desmond Turner: What action he is taking to improve patients' access to information about local hospitals' clinical performance. [46603]
    Fiona Mactaggart: What action he is taking to improve patients' access to information about local hospitals' clinical performance. [46615]
    The Secretary of State for Health (Mr. Frank Dobson): We want to develop a system that will provide general practitioners and their patients with access to fair and accurate indications of clinical performance in their local hospitals. As a first step, we shall publish later this year a number of hospital-based clinical indicators on deaths and complications covering a range of operations.
    Dr. Turner: Is not the public availability of meaningful information on clinical outcomes an absolute prerequisite for achieving the universally high standards of clinical performance that the Government want? Moreover, had we had such data in the public purview before now, we might have detected sooner such unfortunate occurrences as the poor surgical performance on babies in Bristol or the appalling record of hip replacements. Does my right hon. Friend agree that the data can be of vital help in transforming the health service?
    Mr. Dobson: It is certainly our wish that the various arrangements that we are making to set quality standards and make sure that they are met will avoid awful occurrences such as the deaths of babies who had heart operations in Bristol, the cervical cancer screening failures in Kent and Canterbury and the breast cancer screening failures in Devon and Exeter. To do that, it will be necessary for the people who are conducting the operations and the hospital management to have data available to them, and we believe that it should be made available also to local general practitioners and patients.
    Fiona Mactaggart: I congratulate my right hon. Friend on using the opportunity of the 50th anniversary of the NHS to end the cloak of professional secrecy that has kept patients in the dark about the results of treatments. However, I urge him to think carefully about how he presents the information. There are areas of clinical practice where information is publicly available—for example, for in vitro fertilisation and other fertility treatments. Those tables can be misleading because clinics that use the most adventurous treatments or treat older women seem to have less successful results than those that use basic treatments, treat conservatively or treat young women. I urge my right hon. Friend, in publishing this information—which I welcome enormously—to think about the quality of information to patients, so that they can understand it as well as possible.
    Mr. Dobson: It is certainly the case that we are trying to make sure that any information that is published commands the support of the professionals involved. As I said in my first answer, that means making sure that the information is both fair and accurate.
    I have said in the House before, and I will say again, that Great Ormond Street hospital for sick children is in my constituency. The surgeons there frequently perform
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    extremely difficult and complex operations on children who have already undergone operations in other hospitals. Sadly, the children often die, despite the efforts of the doctors, nurses and other staff at Great Ormond Street.
    We certainly need to have in place a system that reflects the complexity of operations and the state of health of the patients. I am determined to have statistics that properly reflect all the circumstances; without them, no one, least of all the patients who would otherwise be misled, will benefit.
    Mrs. Jacqui Lait: Is not one of the most useful techniques to determine clinical excellence Health Services Accreditation? Can the Secretary of State assure me that its disposal will be carried out to the highest possible standards, that no undue influence will be exerted on such disposals, and that those involved in the process who may have a conflict of interest will be invited to withdraw and fall silent?
    Mr. Dobson: The process of accreditation of a group of doctors or an institution necessarily involves judgments by other doctors. There is no way people without the necessary professional expertise can judge other people's professional expertise. From time to time, there may appear to be conflicts of interest because of connections within the medical and other professions. We shall try to avoid that—but we cannot get away from the fact that the only people capable of judging professional competence are other members of the same profession. We do need outside influence, but in the end there is no point in getting someone who is not a liver transplant expert to judge the skill of another liver transplant expert.
    Dr. Evan Harris: Does the Secretary of State accept that the inquiry into the Bristol scandal may find that the problem was not to do with the publication of data but rather to do with the failure to act on data known to the professionals? Given the way that the media may report such data, is there not a danger of repeating the second-generation pill scare? Information wrongly portrayed in that case led to greater inefficiency, poorer health, and a greater number of unwanted pregnancies and abortions.
    Finally, does the right hon. Gentleman agree that there may be an increased use of palliation instead of operations; and that clinical judgments may be distorted in an attempt by surgeons to avoid appearing low down league tables when dealing with difficult, possibly terminal cases?
    Mr. Dobson: I am not quite sure from that whether the Liberal party is for or against the publication of this information. I thought that I had made it clear that we want the statistics published to show the nature and complexity of the operations and the general state of health of the patients. As far as I know, that commands the support of the representatives of the medical, nursing and midwifery professions; providing that we act in this way, none of the problems to which the hon. Gentleman refers should arise. Meanwhile, someone in the Liberal party needs to make it clear whether it believes in keeping the information secret or making it public.

    Teenage Smoking
    Mrs. Sylvia Heal: What initiatives he is bringing forward to reduce the incidence of teenage smoking. [46604]
    The Minister for Public Health (Ms Tessa Jowell): The Government's strategy on smoking, including plans to reduce smoking among young people, will be set out in detail in the tobacco control White Paper to be published later this year.
    Mrs. Heal: Does my hon. Friend agree that, if we are to protect our children and young people from the dangers of smoking, we must try a variety of methods, including controlling access to cigarettes and a ban on tobacco advertising? I hope that she will join me in congratulating Sandwell health authority and trading standards officers, who have carried out a number of visits to traders to advise them of their obligations. They have also attempted some test purchases which, in some cases, have resulted in prosecutions and fines.
    I am sure that my hon. Friend is also aware of the report that ASH—Action on Smoking and Health—published last week, exposing the activities of members of the tobacco industry who target children. One of the bosses, speaking of teenagers, said, "They got lips, we want them." Is it not shameful that the only contribution of the Conservative party has been to block a ban on tobacco advertising?
    Ms Jowell: Yes, it is shameful; and yes, I am delighted to join my hon. Friend in commending the efforts of authorities such as Sandwell that are seeking to protect young people from the effects of tobacco. The figures speak for themselves: there are 160,000 more regular smokers among children between the ages of 11 and 15 than there were 10 years ago. Children smoke the most regularly advertised brands of cigarettes. At current rates, smoking will kill about 1 million of today's children in their middle years. That is why it was so important that the UK Government acted, where the previous Government had failed to act, to secure a European Union-wide ban on the advertising and promotion of tobacco last week.
    Mr. Alan Duncan: Does the Minister believe that the incidence of teenage smoking will be reduced by the publication by her Department—at public expense—of a glossy magazine about health targets, which contains no fewer than 32 photographs of herself? What is the justification for that extraordinary publication? Does she hope that it will distract youngsters from poster sites, or does she see herself as a ministerial nicotine patch?
    I speak as a non-smoker who also believes in choice. Given that there is little or no evidence to suggest that teenagers are tempted to smoke by adverts, even if they are keen on racing cars, will the Minister accept that discipline by parents and schools, and education about the harmful effects of that self-polluting habit, are what is required? What is her budget for such health education, and how will she concentrate it on the young?
    Ms Jowell: Yes, I agree that health education is important, and yes, I agree that parental dissuasion from
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    smoking is also important, but it is absolutely clear that the rate at which young people smoke will not decrease unless we ban tobacco advertising. The Conservative party, when in government, steadfastly stood in the way of protecting children's health, by blocking the European ban on tobacco advertising.
    Mr. Vernon Coaker: Does the Minister agree that, if we are to tackle the scourge of the increase in teenage smoking, we must give young people good role models, not only to educate them on the harmful effects of cigarette smoking, but to present to them the fact that it is uncool to smoke? Unfortunately, many young people see cigarettes as a fashion accessory. Unless we tackle that aspect in our health education literature and promotions, we shall find it very difficult to reduce the incidence of teenage smoking.
    Ms Jowell: I entirely agree with my hon. Friend. He has drawn attention to another reason why the Government must lead on a range of strategies in order to reduce smoking among children—but it is our intention to reduce smoking among children, and we shall deliver on it.

    Finished Consultant Episodes
    Mr. Ian Bruce: How many patients were treated by the NHS in each of the last five years; and what was the average waiting time for hospital treatment. [46605]
    The Minister of State, Department of Health (Mr. Alan Milburn): Approximately 8 million, 8.6 million, 9 million, 9.3 million followed by a record 9.5 million finished consultant episodes in 1997–98. The average waiting time for admission was 45 days in 1995–96, the latest year for which figures are currently available.
    Mr. Bruce: I am grateful to the hon. Gentleman for those figures, which demonstrate the success, over 50 years of the NHS, of constantly treating more patients. I am sure that he would wish to congratulate the NHS on that—and to congratulate the Conservative party on having been in charge of the NHS for 35 of those years. However, I wonder whether he would agree that, as we try to increase the number of people going through the NHS and to shorten waiting lists, one of the most important objectives should be to reduce waiting times. Can he pledge to the House that when—if—he ever shortens waiting lists, he will also have started to reduce waiting times?
    Mr. Milburn: I can tell the hon. Gentleman that we have already started to reduce waiting times. For the first time since records began, there are no people waiting 18 months or more for treatment. We shall continue to make progress on that. The hon. Gentleman and his party should grasp the point that, as we reduce waiting lists, we shall reduce waiting times. With regard to his party's custody of the national health service, I remind the hon. Gentleman that his party opposed the creation of the NHS.
    Mr. David Winnick: Is it not important to have a national health service? Arising from

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    what my hon. Friend has just said, and in view of the 50th anniversary of the NHS this Sunday, would it not be appropriate for the Tory Opposition, especially Front-Bench Members, to apologise to the country for the fact that their party did all that it could, in Parliament and outside, to stop the national health service coming into being? Would it not be a sign of humility if the new health spokesperson for the Conservative Opposition made that apology today?
    Mr. Milburn: That is a matter for the right hon. Lady.
    Mr. Simon Hughes: Now that it appears from press briefings that Ministers have accepted that, if more patients are to be treated more quickly and better, significantly more money is needed for the health service—there is apparently to be an announcement about that—and that a proper inspectorate is needed to ensure decent quality—there is apparently to be an announcement about that, too—will there also be an announcement that we are to have a more democratic health service at the end of the Government's period in office? Will we have representatives accountable to the public taking regional strategic decisions, and patients and ordinary people taking local health decisions? Are we to have a professionals-run health service, or a people's health service?
    Mr. Milburn: We shall not have direct elections to NHS boards, if that is what the hon. Gentleman is asking, but I give him this assurance. We have had the national health service for 50 years, and its achievements have been immense. I am sure that everyone in the House would want to pay tribute to all the work that all the staff have done for all that time. However, the NHS has never done a very simple thing: we have never asked patients what they want from the national health service, and what they think about the local services that the NHS delivers. We shall do that for the first time this year. There will be the first annual national survey of patients. It will happen later this year, next year and every year thereafter. It will enable us to give patients a hand in decision-making in the NHS.
    Dr. Brian Iddon: Is it not the case that the national health service is owed a colossal sum of money, some of it by those indulging in private practice? If that money had been collected in 1996 alone, is it not true that we should not have been left with the mess of long waiting lists?
    Mr. Milburn: As my hon. Friend knows, last year this Government directed the NHS to do what it should always have done: to make first use of NHS capacity, before considering referring to the private sector.
    Rev. Martin Smyth: I join in the praise of the national health service but, with reference to waiting time, will the Minister give us an assurance that the time taken by the general practitioner to get in touch with the consultant will be taken into account? There is a tendency to ignore that, and some patients are waiting far too long to see a consultant.
    Mr. Milburn: I agree with the hon. Gentleman. Patients are sick of waiting for GP appointments and
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    out-patients appointments. They are sick of waiting to get into hospital, and some even have to wait to get out of hospital. That is why the Government are pledged to get waiting lists down. As we get waiting lists down, we shall get waiting times down as well.
    Mr. Bob Blizzard: Is my hon. Friend aware of the enormous success of the James Paget hospital, which serves my constituency, which has reduced waiting lists by 375 patients in the months from January to May this year? Following the increase in resources that the hospital has received from the Government, it expects to have reduced waiting lists by March 1999 to 225 below the figure for March 1997. Is that not proof that, in my constituency, the pledge is being honoured?
    Mr. Milburn: I thank my hon. Friend, and I should be grateful if he would pass on Ministers' thanks for the enormous efforts that are being made in his local hospital. We want to see that achievement replicated everywhere. We are confident that that will occur and that, by March next year, waiting lists will be lower than the record level that we inherited in May last year.
    Mr. Dafydd Wigley: Does the Minister accept that, when the NHS was established 50 years ago, it drew heavily on the egalitarian principles that were the background to the service in Wales? Those principles enshrined the idea that people should have access to health care in line with their needs and not their ability to pay. Given that those are the principles of the national health service, will the Minister assure the House today that it is Government policy that every person who needs a life-saving, life-enhancing or pain-reducing treatment will get it as quickly on the NHS as by going privately? If that cannot happen now, when will it be achieved?
    Mr. Milburn: That is precisely what we want to see for the national health service. The Government were elected on a manifesto pledge that the national health service will be there for patients when they need it. Need and not people's ability to pay or who their general practitioner is should be the factor that determines how health care will be made available to individual patients.
    Mr. Richard Burden: When Opposition Members talk about their custody of the national health service, does my hon. Friend agree that it is worth reminding them that, when they left office, waiting lists were at a record high and rising? Will my hon. Friend expand on his previous comments about the need for a comprehensive health service? An insidious element of the previous Government was that treatment depended on who one's general practitioner was rather than clinical need. Does my hon. Friend agree that clinical need should be the sole criterion for NHS treatment?
    Mr. Milburn: My hon. Friend is absolutely right: the Conservatives' record on waiting lists and waiting times is far from happy. During their 18-year tenure of office, 400,000 people were added to the waiting list. The previous Government never managed to achieve what we shall achieve in office: getting waiting lists down not just this year but next year and in subsequent years. We shall achieve that goal and, when we do, I hope that Opposition Members will praise us.
    Mr. Peter Bottomley: I am sure that we shall. Do not the elderly—not just in Worthing but

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    throughout the country—wait the longest for treatment? Emergency services are usually utilised by young people while the elderly need cataract, hip and heart treatments and the like. Does the Minister agree that resources matter in large part? When does he expect that his Government will see a real increase in resources each year that matches the average for the 18 years in which the Conservatives cared for the health service?
    Mr. Milburn: Shortly.

    National Institute for Clinical Excellence
    Mr. Steve Webb: To what extent health authorities will be able to disregard the guidelines issued by the proposed national institute for clinical excellence. [46606]
    The Minister of State, Department of Health (Mr. Alan Milburn): We shall be consulting shortly on our proposals for the national institute for clinical excellence. We intend that its guidance will apply to all health authorities. We do not expect that any health authorities or individual clinicians will disregard advice from the national institute, but they will need to take account of local circumstances and the needs of individual patients when implementing guidance.
    Mr. Webb: I am grateful to the Minister for that response. I tabled the question because some of my constituents who would benefit from using beta interferon to treat multiple sclerosis cannot receive that treatment because they live in Avon. However, if they lived in Somerset, they could receive that treatment. Some of my constituents have paid privately for the treatment and are benefiting from its use. Will the Minister give a cast-iron assurance that the national institute for clinical excellence will introduce a guideline, stating that this drug works and is effective, that will be followed uniformly across the country?
    Mr. Milburn: I am aware of those concerns and of the particular problems experienced in Avon. Department of Health officials have examined carefully Avon health authority's policy on beta interferon. It is fair to say that we have the worst of all worlds at present: too many unproven treatments are introduced into the national health service too quickly while too many proven treatments, on both cost and clinical grounds, are introduced too slowly. The consequence is a lottery of care. The national institute and national service frameworks are about guaranteeing fair access to treatment throughout the country. I hope that, when we publish our proposals shortly, the hon. Gentleman will welcome them.
    Mr. Barry Sheerman: Does my hon. Friend agree that clinical excellence is at the heart of a good-quality NHS, and should not we be wary this week of being carried away? We have a good NHS, but it could be a darn sight better. For 35 years, it let many people down because the Tories were running it. Many people have been let down by the NHS, and it is our duty to look forward to the next 10, 20 and 50 years. We must ensure first, that the Tories never get their hands on it again and
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    secondly, that we make it as good for every British citizen as it possibly can be.
    Mr. Milburn: My hon. Friend is absolutely right. The best in the NHS is still the envy of the world. We may not have the best football team in the world—time will tell about that—and we certainly do not have the best cricket team in the world, but we do have the best health care system in the world. We should not talk down the prospects of the NHS. We want it to continue to expand and thrive, and to guarantee excellence and high standards everywhere.
    Mr. Philip Hammond: The Conservative party welcomes the pursuit of clinical excellence, but the Secretary of State has said that the function of the national institute for clinical excellence will be to give a strong lead on clinical and cost effectiveness. Is it not inevitable that NICE will become part of the rationing mechanism, ruling out the use of certain drugs, treatments and procedures within the NHS? What assurance can the Minister give that, combined with cash limits on general practitioners' prescription budgets, NICE will not place intolerable restrictions on clinical freedom?
    Mr. Milburn: I welcome the hon. Gentleman to his first formal appearance at health questions. I assure him that NICE is not a national council for rationing, and I remind him that it was the previous Conservative Government who introduced cash-limited budgets for GPs.
    Mr. Paul Flynn: When the House looks back at the NHS in 50 years' time, does my hon. Friend think that one of the causes of celebration will be that the Government challenged the two main causes of waste and inefficiency in the NHS now—the faith in the omnipotence of the individual clinician and the fact that so many decisions are taken for reasons of commercial profit? Will the Government redouble their efforts to ensure that we break away from so much of the mythology-based medicine from which we suffer now and go on to science-based and evidence-based medicine?
    Mr. Milburn: I think that the NHS wants evidence-based medicine. I do not think that there has been a time in the past 50 years when the clinical professionals, who, after all, deliver the quality of care that we all want to see for our constituents, have been so geared to improving standards. The Government want a partnership to be forged between the Department of Health and the clinical professionals—in particular, their leaders—to ensure that standards are as high as possible everywhere inside the NHS, and that effectiveness is the driving force for treating patients.

    Private Medical Insurance
    Mr. Desmond Swayne: What assessment his Department has made of the impact of the ending of tax relief on private medical insurance premiums for the over-60s on the current size of hospital waiting lists. [46607]
    The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): No formal assessment has been made, but we expect that any additional demand will

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    be small in comparison with the substantial additional resources that we are making available to the NHS.
    Mr. Swayne: It is too early for reliable statistics, but the anecdotal evidence, certainly from my constituents, is that the Government's short-sighted action will have a significant and detrimental impact on waiting lists. Can the Minister rise above dogma for a moment and acknowledge that co-operation with the private sector might just be part of the solution to long waiting lists?
    Mr. Boateng: Fifty years on and Conservative Members still have not learnt; they put the interests of private medicine before a national health service free for all at the point of use. When we come to look at the use to which the £140 million that we saved from abolishing that tax relief is put, we shall see that cutting VAT for elderly people's heating bills did more for the health of the elderly than private medicine ever did.
    Mr. David Hinchliffe: Is it not a fact that those who queue jump by going private lengthen the queue for everyone else? In the 50th year of the NHS, would not the most appropriate tribute to Nye Bevan be to deal with his unfinished business and get rid of private medicine for the NHS, once and for all?
    Mr. Boateng: Each and every person must make a decision in relation to private medical insurance. We are concerned to improve the NHS for all the people, putting the interests of the many before the few—that is the Labour way.
    Sir Peter Tapsell: Is it not worth recording that Nye Bevan, whom I greatly liked and admired, not only did not try to get rid of private medicine, but, when he became seriously ill, had all his treatment in private hospitals?
    Mr. Boateng: Conservative Members fought against Aneurin Bevan and everything that he stood for. On every occasion, Conservative Members voted against the creation of the NHS. They cannot be trusted with it—we can.

    NHS Management Costs
    Ms Gisela Stuart: What targets he has set for reduction in NHS management costs by 2002. [46608]
    The Secretary of State for Health (Mr. Frank Dobson): Our White Paper, "The new NHS", sets out a programme of action to release £1 billion from bureaucracy over five years. By the end of this year, £240 million that, under the Tories, would have been spent on bureaucracy, will have been released for patient care, which is what the people of this country want.
    Ms Stuart: Is my right hon. Friend aware that, in the first year of the Labour Government, my health authority, Birmingham, received an extra £201,000 to improve breast cancer treatment, and £219,000 to improve intensive care for children? Can he confirm that that money was available not least because of his decision to halt the eighth wave of GP fundholding? Can I have some
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    reassurance that the Labour Government's commitment to primary health groups will not introduce a new bureaucracy, but will be part of a continued commitment to fund money into patient care, not into bureaucracy?
    Mr. Dobson: It is certainly the case that primary care groups will reduce the amount of money spent on the paperwork of transactions between primary care and hospitals, and that the previous Government had earmarked £20 million to be spent simply on the paperwork of the eighth wave of fundholding. We stopped that, and £10 million went to better breast cancer services and £5 million to improving children's intensive care. I am sure that, apart from a few witless loons on the Conservative Benches, everyone in the country thinks that that is right.
    Mr. Shaun Woodward: While the Secretary of State remains concerned about targets, he will be aware that hospitals up and down the country face closure. In my constituency, we have three community hospitals: Burford faces the certainty of closure, Witney faces the closure of 25 per cent. of its beds, and Chipping Norton will lose beds too, yet all have an occupancy rate of more than 90 per cent. The hon. Gentleman knows that Oxfordshire community health council has decided to refer to him the absurd proposals for closures and bed cutting that have been put forward by the community health trust because of his failure to supply enough money. Will he guarantee the people of west Oxfordshire that he will save Burford hospital from closure, and save the beds that are due to close at Witney hospital?
    Mr. Dobson: I cannot offer any such guarantees at the Dispatch Box. As Conservative Members who still have fading memories of being in government may recall, it is proper for me to comment in detail on proposals that come before me only after I have considered all the detailed information. Otherwise, any decision that I made could be challenged in the courts. The Government have put £2 billion extra into the NHS, over and above what the Tories had put into the budget for last year and this year—£2 billion more than they had intended to spend, and £1 billion more than the Liberal Democrats promised to spend.
    Mr. Hilton Dawson: What scrutiny is my right hon. Friend giving to the pioneering effort across Morecambe Bay acute health trusts and Morecambe Bay community health trust in order to develop services across a wide area, and to cut the ludicrous bureaucratic costs inflicted on us by the previous Government? While I am on my foot, will he commend the sterling work of the accident and emergency department at the Royal Lancaster infirmary and look into giving the nurses more pay?
    Mr. Dobson: I pay tribute to all the work that is being done in the Morecambe bay area. By amalgamating four trusts, we are saving a huge amount in bureaucratic costs. That money will now be better spent on patient care, which is what people in the Morecambe bay area want.

    Drugs Budgets
    Dr. Jenny Tonge: What plans he has to ensure that capping drugs budgets in primary care groups does not give rise to rationing by GPs. [46609]
    The Minister of State, Department of Health (Mr. Alan Milburn): No individual element of the unified budget will be artificially capped. Health authorities and their primary care groups will continue to develop a range of measures to encourage general practitioners to use cost-effective and rational prescribing. As now, no one will be denied the drugs that they need. That is a guarantee.
    Dr. Tonge: I am a little disturbed that, on two occasions in the Chamber this afternoon—the first was the response to my hon. Friend the Member for Northavon (Mr. Webb)—the Minister has suggested that institutes of clinical excellence should set priorities. He is now asking GPs in health authorities to set priorities within their identified budgets. All that I can say is that we heard it in the House first, rather than from the newspapers. This health team is now actively considering setting priorities, or introducing rationing, into the health service.
    Is the Minister happy with his total cave-in to the British Medical Association, in that primary health care trust boards will consist of seven GPs, one nurse, one social worker and one lay member? Does not that breach the national health service's standing orders on professional representation? How on earth does the Minister think that he will get seven GPs in the same room agreeing with one another at the same time?
    Mr. Milburn: GPs have already been doing that in recent years, and they will continue to do it. The local medical committees conference voted overwhelmingly for it. We have now given GPs and nurses more power and leverage than they have ever had before in the national health service. I am surprised that the hon. Lady does not welcome that.
    Mrs. Angela Browning: The Minister will know that he replied to me in a written answer about the licensing and prescription of the drug Viagra. May I convey to him today the concerns of GPs in my constituency, who have asked me to draw to his attention the fact that if the new drug, for which no provision is currently made in the drugs budgets, is made available under NHS prescription, it should be available on clinical need only through hospitals, not through GP practices? GPs are very concerned about their drugs' budgets.
    Mr. Milburn: Yes.

    Hospital Waiting Lists
    Mr. Dennis Skinner: When he expects there to be a downturn in hospital waiting lists; and if he will make a statement. [46610]
    The Secretary of State for Health (Mr. Frank Dobson): The evidence is that today, as we are speaking, hospital waiting lists are coming down. Early indications
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    from the NHS executive show that waiting lists stopped rising in May and have been coming down in June: the supertanker has turned. I am confident that that will be confirmed when the validated figures are published in August. The Government intend to ensure that the waiting lists keep coming down.
    Mr. Skinner: That is wonderful news, especially as it was not even a planted question—I showed great perception when I tabled the question a fortnight ago. Does my right hon. Friend agree that, as a testament to the health service that we have been discussing in the past 45 minutes, we should ensure that, having built it, we now rebuild it for the next century after the destruction caused during the past 18 Tory years? That will need a lot more money, and my right hon. Friend has asked for more money in the past from the Chancellor of the Exchequer and from the Prime Minister. We shall need at least £12 billion between now and the next general election to ensure that the promises that we made last time will be carried out, and that the Tories will be sent packing.
    Mr. Dobson: I am sure that no one would have dared suggest that my hon. Friend had tabled a planted question. If I may say so without embarrassing him, I cannot think of anyone for whom I would rather have provided that reply. I shall bear his point in mind. When we compare ourselves with the people who founded the national health service 50 years ago, we should remember that they founded it on an act of faith. They hoped it would work; we know it works.
    Miss Ann Widdecombe: We congratulate the national health service, which is why the Opposition Front-Bench team are proud to wear their badges. That view does not seem to be shared by the Secretary of State or the Minister of State. May I invite the Secretary of State to ask his hon. Friend the Member for Bolsover (Mr. Skinner) to congratulate the previous Conservative Government, who built the Bolsover community hospital, which I assume his constituents use, and the nearby Chesterfield and North Derbyshire Royal hospital, which is a large, successful hospital that his constituents also use? We built those hospitals.
    May I turn to the right hon. Gentleman's rather hopeful answer, although he did admit that it was not based on any firm statistics? Have not the Government merely taken the first step towards getting the lists down to the level they inherited from us and away from their own record levels? Waiting lists are not coming down; under this Government, they have been going up to record levels, and the Government admit that it will take them half a Parliament just to get them down to the levels that we left them with.
    Mr. Dobson: The right hon. Lady may expect my hon. Friend the Member for Bolsover (Mr. Skinner) to congratulate the Tory Government, but probably the only thing he would congratulate them on is being so useless that they lost the last election by the biggest landslide in the 20th century. The right hon. Lady would like the waiting lists to continue to rise, because that would be to the political advantage of the Tory party, but they are coming down.
    Miss Widdecombe: The right hon. Gentleman has not entirely answered my question. Is this not just the first

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    predicted, not even guaranteed, step towards getting waiting lists down to the level at which we left them? Will he also please tell us how the waiting lists for the waiting lists are doing? Why is he refusing to publish information about waiting times for out-patient appointments as requested by my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond)? Will he tell us about rationing, which has meant that four minor operations are no longer available anywhere in the country on the national health service? Is that also a means of getting waiting lists down?
    When he has answered my questions—I say this in great hope, because it is more likely that his hon. Friend the Member for Bolsover (Mr. Skinner) would congratulate us than it is that the Secretary of State would answer a question—will he guarantee that at this moment, no other area in the NHS is suffering as a result of his concentration on the failed delivery of his early pledge?
    Mr. Dobson: I do not know how the right hon. Lady understands the concept of movement. If waiting lists were rising and are now coming down, I think it fairly obvious that that constitutes a first step—like, perhaps, the first step taken by the people who used to escape from prison when the right hon. Lady was Minister with responsibility for prisons.
    Any journey has to begin with a first step, and this is that first step. I am not pretending that it is the second step, or the third step; but I am promising that there will be more steps, and that they will mean that waiting lists come down.
    Miss Widdecombe: May I have the answers to my questions about the waiting lists for waiting lists, the waiting times for out-patient appointments, rationing whereby minor operations are no longer available and the fact that other parts of the NHS are suffering as a result of concentration? May I have those answers, please?
    Mr. Dobson: We publish exactly the same information as was published by the last Government throughout the 18 years during which they were in office. They did not publish information about the length of time for which people were waiting for out-patient appointments, and we have not started to do so, although it is possible we shall.
    If the right hon. Lady believes that certain people are being denied operations to which they are clinically entitled, will she give me the details? I will then follow up the information, and ensure that the people concerned have those operations. Will the right hon. Lady do that, instead of just making cheapskate remarks over the Dispatch Box?

    Drug Misuse Services
    Helen Jones: What assessment has been made by his Department of the extent of the link between money invested in drug misuse treatment and money saved from the cost of crime. [46611]
    The Minister for Public Health (Ms Tessa Jowell): The benefits of treatment, and the reduction of crime as a result, have been clearly established by the national treatment outcome research study. It concluded that for every £1 spent on drug treatment, £3 of the costs of crime
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    was saved. Prevention is a key part of the Government's strategy to tackle drug abuse and protect communities from its awful consequences.
    Helen Jones: I thank my hon. Friend for her reply. Is she aware of the very different views on the link between crime and drug misuse held by the hon. Member for Rutland and Melton (Mr. Duncan), who, in his book "Saturn's Children", called for the legalisation of the distribution and consumption of hard drugs? What would be her Department's response should the shadow Health Minister call for the legalisation of crack, smack and Ecstasy?
    Ms Jowell: My hon. Friend raises an important question. We know that the views of the hon. Member for Rutland and Melton (Mr. Duncan) were set out very fully in the first edition of his book, but the House is entitled to know also whether, since he has changed the chapter concerned and given an undertaking to the leader of his party, he has also changed his mind about these matters.
    Mrs. Ann Winterton: If the Minister has any questions about the Opposition's policy on the drugs strategy, she ought to ask me. My hon. Friend the Member for Rutland and Melton (Mr. Duncan) follows my policy.
    Is the Minister aware of research undertaken in America, which shows that money spent on drug detoxification and rehabilitation programmes provides excellent value? What new money is the Department providing for such programmes in order to bring down the waiting lists and waiting times that are growing day by day?
    Ms Jowell: The hon. Lady has come to the rescue of the hon. Member for Rutland and Melton, who stayed in his seat rather than answer questions from the Front Bench.
    The hon. Lady is right: detoxification can be a highly effective part of getting people off drugs. We are determined to invest in treatments that are effective, and announcements about spending on treatments for drugs will be made in the course of the comprehensive spending review that is due shortly.

    Breast Cancer Treatment
    Mr. Eric Martlew: What steps he is taking to improve access to breast cancer treatment. [46612]
    The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): We have made £10 million available for breast cancer services, which is being used to support more than 300 initiatives throughout the country. Particular emphasis has been given to supporting projects that give rapid access to diagnostic services.
    Our White Paper sets out a specific target that everyone with suspected cancer will be able to see a specialist within two weeks of urgent referral. That has been guaranteed for breast cancer by April 1999.
    Mr. Martlew: I thank the Minister for that and the £140,000 that has been put into Cumbria since October. The Minister may be aware that we have a local difficulty in Carlisle—people who are picked up on the screening

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    system cannot be treated at the Cumberland infirmary. If he is not aware of that, later this week, I will be giving him a 14,000-name petition on the matter, collected by the women of Carlisle.
    It would be unfair for the Minister to respond to that matter today because an expert panel is looking into it, but can we look at the scheme nationally and locally? It is for women aged between 50 and 65. There is much concern among women who are over 65 and outside the scheme. When I talk to medical experts and doctors, they say that there is no medical reason for their exclusion. Will the Minister review that policy and, in the meantime,
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    will he give an assurance to those women over 65 that, if they wish to continue to be screened, they will be accommodated by the NHS?
    Mr. Boateng: I can give that assurance. We have a number of pilot projects that are looking specifically at the issue of automatic call-back for screening for women over 65, and we will consider the results of those pilot projects in due course. The national programme co-ordinator is, I understand, giving advice to interested parties in his constituency about the screening service for women in Cumbria and I welcome my hon. Friend's interest in and concern about that matter.

Points of Order
3.31 pm
Mr. Michael Howard: On a point of order, Madam Speaker. I know that you will be aware that very many questions have been tabled to the Foreign Secretary and other Ministers on the involvement of Sandline International in the supply of arms to Sierra Leone. Ministers have refused to answer those questions on the ground that they came within the scope of the Legg inquiry, which they have said they do not wish to prejudge.
This morning, the Foreign Secretary wrote to the Chairman of the Foreign Affairs Select Committee a letter that contains the following two sentences:
"There was no ministerial conspiracy to breach the arms embargo. There was no connivance within Whitehall to breach the arms embargo."
Those assertions not so much prejudge as entirely pre-empt questions that lie at the heart of the Legg inquiry. Will you now give an indication of your views, in the light of the Foreign Secretary's letter, on the propriety of Ministers refusing to answer questions in the way I have identified?
Madam Speaker: As the right hon. and learned Gentleman will appreciate, it is not for me to comment on answers to questions that are given by Ministers. I must also make it clear that, unless a matter is reported to me by the Chairman of a Select Committee, I do not propose to alter the long-standing practice of not commenting from the Chair on the proceedings of Select Committees. The matter must be reported to me in the first place by a Chairman of a Committee before I make any statement or any comment about it.
Mrs. Jacqui Lait: On a point of order, Madam Speaker. I am most grateful to you. Can you give me some guidance? It was obvious to me that the Secretary of State for Health was not aware that the NHS organisation Health Services Accreditation was being disposed of. There are concerns about the process of that disposal. Can you give me some guidance on how he could come to the Chamber and publicly give me some advice on the disposal of Health Services Accreditation?
Madam Speaker: I think that the hon. Lady is attempting to prolong health questions. Perhaps she might care to table a further question to the Secretary of State for Health, or refer the matter to his attention by means of an early-day motion.

Unsolicited Facsimile Messages
3.34 pm
Mr. Christopher Fraser: I beg to move,
That leave be given to bring in a Bill to prohibit the sending of facsimile messages offering for sale goods or services or seeking answers by questionnaire without prior permission of the recipient.
Increasing numbers of people find it convenient to have a fax telephone machine at home. Almost without exception, small businesses use a fax machine to conduct their day-to-day business in what they expect to be a cost-effective and convenient manner.
Home users and businesses alike are being plagued by unwanted facsimile messages which use up paper, tie up telephone lines and arrive at all hours of the day and night. I have had many letters from my constituents and from colleagues whose constituents are receiving such facsimiles, asking how to put a stop to this invasion of their privacy. They are dismayed to learn that the solution, if it works, may cost them yet more money.
Fax marketing has increased hugely in recent months. Organisations have been carrying out automatic number searches in order to identify fax numbers and compile lists. The Office of Telecommunications—Oftel—is taking action against those who have adopted that practice, but vast lists already exist which include many ex-directory residential numbers. Those lists are clearly being used extensively.
Constituents have provided me with examples of goods and services that they have been offered. They are numerous and come in many forms. They cover everything from supplies of a recently identified wonder drug, world cup tickets, miracle diets and discount air fares to how to win the national lottery or buck the stock market, from debt collection services to questionnaires on this country's future in Europe and the registration of paedophiles, and highly distasteful joke faxes.
I have also received complaints from constituents about unsolicited telephone calls and junk mail and about the growing problem of junk e-mails, but I have chosen to deal today only with the nuisance of unsolicited facsimile messages rather than with all distance-selling practices, and I do so for several reasons. Most important, unlike junk mail or telephone calls, an unsolicited fax involves a cost to the recipient by way of paper, toner or ribbon and electricity. Junk faxes are expensive to receive. However irritating, junk mail and telephone calls cost the recipient nothing.
Junk messages tend to be sent in the middle of the night and wake the domestic user who has a phone by the bed. Unsolicited telephone selling usually takes place during the day or early evening and, though inconvenient, is less intrusive. The receipt of a lengthy fax ties up telephone lines, causing inconvenience and irritation, especially when long messages of a business nature are sent to domestic users or to a small business that needs access to what may be a limited number of telephone lines.
The content of some messages is of an undesirable or offensive nature—not something I should wish young people or children to see. Junk mail can be thrown away intact with its contents never read.
At the moment, we have an opt-out regime for marketing faxes. The fax preference service, established by the Direct Marketing Association, has reduced the

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number of unsolicited residential faxes received, but it remains legal for a company to send a fax to a registered number against the wishes of the recipient. Many constituents who are registered with the fax preference service continue to receive messages. They see that as adding insult to injury. The service is, of course, aimed at home users rather than business users. A business can register under the scheme, but there is no obligation for marketing companies to cross-check and remove such numbers from their lists.
As the House will know, the Telecommunications Act 1984 requires anyone running a telecommunications system in the United Kingdom to do so under licence. Companies using fax marketing are subject to a class of licence that contains measures aimed at limiting the nuisance caused by unsolicited calls by requiring callers to cease making such calls on receipt of a written request from the recipient. Oftel can then be requested to intervene in order to enforce the rules if the company continues to transmit messages. In serious cases, a licence can be revoked.
Unsolicited facsimile messages that promote premium-rate telephone services are also governed by a code of practice issued by ICSTIS, the Independent Committee for the Supervision of Standards of Telephone Information Services.
ICSTIS tells me that it has become apparent that many customer complaints about unsolicited faxes relate to those promoting premium-rate numbers, and that, over the past year or so, such complaints have risen sharply. Examples of the type of messages generating a complaint to ICSTIS are similar to those that I have already cited, and include faxes soliciting information to compile business information directories; fax-back questionnaires; and faxes promoting other so-called joke faxes.
ICSTIS continues to take action against companies whose services breach its code, which sets standards on content, and has recently banned one company whose series of joke faxes were deemed to be offensive and inappropriate.
Before the proliferation of fax marketing, the combined approach that I have outlined—enforced by Oftel and ICSTIS—may well have offered adequate protection to my constituents and others. However, I now share my constituents' view that that approach is unsatisfactory. The quantity and content of messages coming into our homes and businesses make them a genuine concern. They represent the thin end of the wedge. If we do not act now to address a relatively simple issue and so draw a line in the sand, how can we expect to regulate as information technology moves forward and access to the internet and e-mail become as commonplace as we all expect them to do?
The current regulation system is no longer adequate. Numerous companies are sending unsolicited faxes, and each company must individually receive a letter requesting that it desist from doing so. Marketing companies make it clear that unstamped post will be returned, so the cost of each envelope and postage has to be borne by each recipient. It is possible to calculate the cost of receiving one fax and requesting the sender to remove a number from its list. However, it adds up to a significant sum when that cost is multiplied several times to cover the cost of all the faxes received in one week. Only last week, one of my constituents received seven such faxes.
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The European Union distance selling directive and telecommunications data protection directive—which go some way to dealing with the problem of unwanted fax messages—are in the process of being adopted. However, they will leave it to member states to choose between a prior consent regime and an opt-out regime. The Government have not announced how they will proceed on the issue.
We must not allow our constituents to continue to be pestered. Unsolicited faxes are costing them sleep and considerable sums, and are causing immense frustration and annoyance. The solution could be very simple—the onus must be placed on the person sending the fax and not on the one receiving it. We will overcome some of the problems that I have described by requiring a company or individual wishing to transmit multiple advertising faxes or fax-back questionnaires first to seek prior consent from the proposed recipient.
Such a Bill will, of course, need careful and detailed drafting to avoid unnecessary bureaucracy. My Bill may make the process cumbersome and expensive for marketing companies, although marketing companies may think that that price is worth paying. Most important, my Bill would restore control of fax machines to their users. I urge the House to support it.
Question put and agreed to.
Bill ordered to be brought in by Mr. Christopher Fraser, Mr. David Atkinson, Mrs. Angela Browning, Mr. Geoffrey Clifton-Brown, Mr. James Gray, Mr. Dominic Grieve, Mrs. Eleanor Laing, Dr. Julian Lewis, Mr. Owen Paterson, Mr. David Ruffley, Mr. Desmond Swayne and Mr. Robert Walter.

Unsolicited Facsimile Messages
  UNSOLICITED FACSIMILE MESSAGES
  Mr. Christopher Fraser accordingly presented a Bill to prohibit the sending of facsimile messages offering for sale goods or services or seeking answers by questionnaire without prior permission of the recipient: And the same was read the First time; and ordered to be read a Second time on Friday 3 July, and to be printed [Bill 215].

FINANCE (No. 2) BILL [WAYS AND MEANS]
Resolved,
That provision may be made in the Finance (No. 2) Bill for and in connection with restricting relief under sections 95(3) and 97(4) of the Finance Act 1986.—[Mr. Robert Ainsworth.]

FINANCE (NO. 2) BILL [WAYS AND MEANS]
Resolved,
That provision may be made in the Finance (No. 2) Bill—

(a) amending section 22A of the Capital Allowances Act 1990;

(b) repealing section 76(3) of that Act.—[Mr. Robert Ainsworth.]

Orders of the Day
  Finance (No. 2) Bill
  Not amended in Committee and as amended in the Standing Committee, considered.
  Finance (No. 2) Bill
    New clause 13

      DEPOSITARY RECEIPTS AND CLEARANCE SERVICES: EXCHANGES OF SHARES
      '.—(1) In section 95 of the Finance Act 1986 (depositary receipts: exceptions) in subsection (3) (exchanges) after paragraph (b) there shall be added—
      "and the shares in company Y are held under a depositary receipt scheme."
      (2) At the end of that section there shall be added—
      "(5) For the purposes of subsection (3) above, the cases where shares are held under a depositary receipt scheme are those cases where, in pursuance of an arrangement,—

      (a) a depositary receipt for chargeable securities has been, or is to be, issued by a person falling within section 93(2) above in respect of the shares in question or shares of the same kind and amount; and

      (b) the shares in question are held by that person, or by a person whose business is or includes holding chargeable securities as nominee or agent for that person, towards the eventual satisfaction of the entitlement of the receipt's holder to receive chargeable securities.

      (6) Where an arrangement is entered into under which—

      (a) shares in a company (company X) are issued to persons in respect of their holdings of shares in another company (company Y), and

      (b) the shares in company Y are cancelled, the issue shall be treated for the purposes of subsection (3) above as an issue by company X in exchange for the shares in company Y.

      (7) In this section "depositary receipt for chargeable securities" has the same meaning as in section 93 above (see section 94 above)."
      (3) In section 97 of the Finance Act 1986 (clearance services: exceptions) in subsection (4) (exchanges) after paragraph (b) there shall be added—
      "and the shares in company Y are held under a clearance services scheme."
      (4) At the end of that section there shall be added—
      "(6) For the purposes of subsection (4) above, the cases where shares are held under a clearance services scheme are those cases where—

      (a) an arrangement falling within paragraph (a) of subsection (1) of section 96 above has been entered into; and

      (b) in pursuance of that arrangement, the shares are held by the person referred to in that paragraph as A or by a person whose business is or includes holding chargeable securities as nominee for that person.

      (7) Where an arrangement is entered into under which—

      (a) shares in a company (company X) are issued to persons in respect of their holdings of shares in another company (company Y), and

      (b) the shares in company Y are cancelled, the issue shall be treated for the purposes of subsection (4) above as an issue by company X in exchange for the shares in company Y."

      (5) In section 99(10) of the Finance Act 16 (which makes provision in relation to the interpretation of "chargeable securities" in sections 93, 94, 96 and 97A)—

      (a) after "94," there shall be inserted "95,"; and

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      (b) after "96" there shall be inserted ", 97".

      (6) This section applies where the issue by company X referred to in section 95(3) or (6) or 97(4) or (7) of the Finance Act 1986 is an issue on or after 1st May 1998.—[Mr. Geoffrey Robinson.]
      Brought up, and read the First time.
      3.44 pm
      The Paymaster General (Mr. Geoffrey Robinson): I beg to move, That the clause be read a Second time.
      The clause makes two changes to the scope of the relief from stamp duty reserve tax, known as SDRT, when there is an exchange of shares held in a depositary receipt scheme or a clearance service. SDRT on share transfers is usually charged at 0.5 per cent., but the rate is 1.5 per cent. when United Kingdom shares are issued or transferred into a depositary receipt scheme. The higher rate is a kind of season ticket charge. It reflects the fact that transfers of depositary receipts within the scheme will not be liable to the tax. There are similar rules for clearance services.
      There is a relief from the 1.5 per cent. charge when there is an exchange of shares in a takeover or merger. For example, when company X takes over company Y, there is no 1.5 per cent. charge on the shares that company X issues into the depositary receipt scheme in exchange for the existing shares in company Y. Normally, 1.5 per cent. tax will already have been paid when the existing shares in company Y entered into the scheme in the first place. The aim of the relief is to prevent a second 1.5 per cent. charge from being levied merely because new shares are being issued in exchange for the existing ones.
      The new clause deals with two points. First, the Inland Revenue has received legal advice that the relief works more narrowly than the way in which it has been applied because, in this context, the meaning of exchange is confined to cases where company X issues shares to company Y shareholders in exchange for the existing company Y shares. In practice, there are also cases where the existing company Y shares are cancelled and new company Y shares are issued to company X in return for the issue of new shares in company X to company Y shareholders. Until the receipt of the legal advice, such cases were also considered to be within the scope of the relief. The new clause will enable them to continue to qualify for relief.
      Secondly, the new clause will restrict the relief in certain cases where it may be available, but is not justified because there is no double charge to be relieved. In such cases, no 1.5 per cent. charge has been paid on the existing shares in the target company Y because they were outside the scope of the charge. A particular example is where company Y is a foreign company because the 1.5 per cent. charge applies only to shares in UK companies. Under the new provision, the issue of new shares will qualify for relief only if the existing shares in the target company Y are chargeable securities within the scope of the 1.5 per cent. charge.
      I hope that hon. Members will agree that the new clause makes desirable changes to the current rules, and I commend it to the House.
      Mr. David Heathcoat-Amory: In general, the House should disapprove of the Government introducing provisions at an extremely late stage to remedy deficiencies in legislation, especially as they have had

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      more than a year to address such problems and correct them. The House is being invited to accept a new clause to the Finance Bill, which is not only being presented at a late stage, but requires a ways and means resolution; it is a most unusual procedure which should be reserved for special circumstances.
      We have no quarrel with the substance of the new clause, as it is a relieving measure aimed at correcting a deficiency. Our complaint is that the Government looked closely at stamp duty when they were drawing up the Budget. We know that, because they used it as one of their back-door tax-raising measures. Stamp duty was increased by £500 million a year. That will be the total burden on businesses and householders when the provisions take full effect. The Chancellor, quite misleadingly, suggested in his Budget speech that the burden would be borne entirely by rich householders, when 75 per cent. of it will be borne by the corporate sector.
      Mr. John Bercow: Does my right hon. Friend agree that irritation at the Government's hurried presentation of the new clause is compounded by the fact that the Paymaster General has not thought it proper to give the House any assurance that none of his own business interests is affected either way by the proposed new clause?
      Mr. Heathcoat-Amory: We must await an assurance from the Paymaster General that his many interests have been properly declared. The stamp duty provisions will bear down heavily on the corporate sector. My hon. Friend would like to know whether that will affect the Paymaster General's business interests.
      The Conservatives want to protect the interests of corporate Britain, which is suffering grievously from a succession of tax rises. That is why investment is due to fall next year and the year after, according to the Government's figures, and why unemployment could start to rise. The last thing that business wanted or expected was a heavy burden from a dramatic 50 per cent. increase in the upper rate of stamp duty.
      It is a pity that the Government did not take sufficient trouble to spot the problems that they are creating with their tax policies. The Financial Secretary wrote to alert me to the new clause, but the letter is dated only yesterday. It is most regrettable that we have to digest, comment on and scrutinise complicated measures with only a day's notice, when the Government have had many months to prepare their Budget and the Bill.
      When did the Inland Revenue receive the legal advice? Could the matter not have been dealt with in a more timely fashion to give the House a better opportunity to scrutinise the provision?
      Mr. Edward Davey: Part of the new clause extends the relief, to ensure that it operates as intended. As the right hon. Member for Wells (Mr. Heathcoat-Amory) said, that is welcome. However, the Government have taken the opportunity of reacting to the legal advice to introduce a restriction on the relief that will affect some mergers in which one company is foreign, as the Paymaster General said. The restriction will have little effect on Exchequer revenues, but it will damage the corporate sector by affecting tax calculations
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      for mergers and will result in the holding company relating to some mergers being located outside the United Kingdom. At the moment, the tax incentive is for the holding company to be in the UK.
      We benefit from having such holding companies in this country. They bring extra tax to the Exchequer, they employ people and there are spin-off benefits. Any measure that restricts the incentive to locate in the UK must have significant and overriding grounds for being introduced. The Paymaster General did not make that case when introducing the new clause. I hope that he will come up with some stronger arguments when he replies.
      Mr. Geoffrey Robinson: The problem emerged just before the Budget. We received the legal judgment only very recently. This is a relieving measure which companies and industry clearly want. We have done well to respond so quickly. In seeking the co-operation of the Opposition to facilitate the measure, we are acting in the best interests of British companies.
      The hon. Member for Kingston and Surbiton (Mr. Davey) raised a separate point. I think that he is probably referring to the correspondence between Mr. George Ritchie of Deloitte and Touche, and my hon. Friend the Financial Secretary. We have acknowledged that there could be a problem, particularly with a UK company acquiring a United States one. Many other factors are taken into account in such situations—not just tax, but the tremendous advantages for holding companies in the UK. Those advantages have been considerably enhanced following the abolition of advance corporation tax, and there has been a problem with foreign income dividend streams. Billiton—a massive South African group—chose the UK, on balance, for those reasons. It was a reasoned correspondence with Mr. Ritchie.
      The measure has been introduced not purely on financial grounds, but on the principled basis that the tax should be paid, but not double paid—we are making that specific relief. There must be a compelling reason for the tax not to be paid. We will keep the situation under review and see what develops.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New clause 14

      FIRST-YEAR ALLOWANCES FOR INVESTMENT IN NORTHERN IRELAND
      '.—(1) In section 22 of the Capital Allowances Act 1990 (first-year allowances), after subsection (3C) there shall be inserted the following subsections—
      "(3CA) Subject to the provisions of this Part, this section applies to—

      (a) any expenditure incurred in the special relief period by a small company or a small business on the provision of machinery or plant for use primarily in Northern Ireland; and

      (b) any additional VAT liability incurred in respect of expenditure to which this section applies by virtue of paragraph (a) above.

      (3CB) For the purposes of subsection (3CA) above expenditure is incurred in the special relief period if, disregarding any effect of section 83(2) on the time at which it is to be treated as incurred, it is incurred in the period beginning with 12th May 1998 and ending with 11th May 2002.
      (3CC) Expenditure is not expenditure to which this section applies by virtue of subsection (3CA) above in so far as it is—

      (a) expenditure to which Chapter IVA applies; or

      (b) expenditure on the provision of an aircraft or hovercraft."

      (2) After subsection (6C) of that section there shall be inserted the following subsections—
      "(6D) Expenditure incurred on the provision of machinery or plant shall not be taken to be expenditure to which this section applies by virtue of subsection (3CA) above if—

      (a) at the time when the expenditure is incurred, the person incurring it intends the machinery or plant to be used partly outside Northern Ireland; and

      (b) the main benefit, or one of the main benefits, which could reasonably be expected to arise from the relevant arrangements is the obtaining of a first-year allowance, or a greater first-year allowance, in respect of the part of the expenditure that is attributable to the intended outside use.

      (6E) In subsection (6D) above—

      (a) 'the relevant arrangements' means the transaction under which the expenditure is incurred and any scheme or arrangements of which that transaction forms part;

      (b) 'the intended outside use' means so much of the use of the machinery or plant as (at the time mentioned in paragraph (a) of that subsection) the person intends will be use outside Northern Ireland; and

      (c) the reference to the part of the expenditure that is attributable to that use is a reference to so much of the expenditure in question as is so attributable on a just and reasonable basis."

      (3) In subsection (10) of that section after "this section—" there shall be inserted—
      "'hovercraft' has the same meaning as in the Hovercraft Act 1968."
      (4) After section 22A of that Act there shall be inserted the following section—
      "Withdrawal of first year allowance on change of use
      22B.—(l) Where (hut for this section) section 22 would apply to any expenditure by virtue of subsection (3CA) of that section, that section shall be deemed never to have so applied to that expenditure if, at any relevant time—

      (a) the primary use to which the machinery or plant is put is a use outside Northern Ireland; or

      (b) the machinery or plant is held for use otherwise than primarily in Northern Ireland.

      (2) In subsection (1) above 'a relevant time', in relation to any expenditure, means a time which—

      (a) falls in the period of two years beginning with the date of the incurring of that expenditure; and

      (b) is a time when the machinery or plant belongs to the person who incurred the expenditure or to a person who (within the terms of section 839 of the principal Act) is, or at any time in that period has been, connected with the person who incurred the expenditure.

      (3) All such assessments and adjustments of assessments shall be made as may be necessary in consequence of this section.
      (4) Where a person who has made a return becomes aware that anything contained in that return has, after the making of the return, become incorrect by reason of the operation of this section, he shall, within three months of first becoming so aware, give notice to an officer of the Board of the amendments that are necessitated in his return in the light of the matter of which he has become aware."
      (5) In the second column of the Table in section 98 of the Taxes Management Act 1970 (penalties in respect of certain information provisions), in the entry relating to provisions of the Capital Allowances Act 1990, after "Sections" there shall be inserted "22B(4),".
      (6) Subject to subsection (7) below, the preceding provisions of this section have effect in relation to every chargeable period ending on or after 12th May 1998.
      (7) No claim for an allowance falling to be made by virtue of subsection (1) above may be made at any time before such date as the Treasury may by order appoint; and where the period for making any such claim would (but for this subsection) have expired before the end of the period of twelve months beginning with that date, it shall expire, instead, at the end of that period of twelve months.'.—[Mr. Geoffrey Robinson.]
      Brought up, and read the First time.
      Mr. Geoffrey Robinson: I beg to move, That the clause be read a Second time.
      Madam Speaker: With this, it will be convenient to discuss the following: Government new clause 15—First-year allowances: consequential amendments etc.
      Government amendments Nos. 25 to 28.
      Mr. Robinson: The new clause is part of a package of measures announced by my right hon. Friend the Chancellor on 12 May aimed at creating a new framework of prosperity in Northern Ireland. That package included a varied range of measures covering areas such as employment, transport, education, housing, agriculture, tourism and innovation, as well as this special measure to assist small and medium-sized businesses.
      Under the clause, during the four years starting from 12 May this year, expenditure on machinery or plant incurred by a small or medium-sized business for use in Northern Ireland will be eligible for a 100 per cent. first-year capital allowance. In other words, such expenditure may be written off for tax purposes in full straight away. That extra help to speed up investment for the rest of this Parliament represents a £100 million cash flow boost to smaller business in Northern Ireland.
      As the House knows, some 99 per cent. of businesses in Northern Ireland are small and medium-sized businesses, including many in the tourism and service industry sectors. The new first-year allowances will therefore be available to a large number and wide range of businesses across Northern Ireland. I commend the new clause to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New clause 15

      FIRST-YEAR ALLOWANCES: CONSEQUENTIAL AMENDMENTS ETC.
      '.—(1) In each of subsections (4), (6B) and (6C) of section 22 of the Capital Allowances Act 1990 (first-year allowances), for "subsection (3C)" there shall be substituted "one or more of subsections (3C), (3CA) and (3D)".
      (2) In section 22A of that Act (expenditure of a small company or small business)—

      (a) in subsection (4), for the words "parent company", wherever they occur, there shall be substituted "parent undertaking"; and

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      (b) in subsection (6), for "'parent company"' there shall be substituted "'parent undertaking"'.

      (3) In subsection (8) of that section, after paragraph (b) there shall be inserted—
      "but for the purposes of this section each of those provisions shall be construed as if references, in relation to a group, to the parent company were references to the parent undertaking."
      (4) In sections 23(6), 42(9) and 50(3) and (4A) of that Act (which contain provisions relating to the temporary first-year allowances under section 22(3B) and (3C) of that Act), for the words "subsection (3B) or (3C)", in each place where they occur, there shall be substituted "one or more of subsections (3B), (3C), (3CA) and (3D)".
      (5) In sections 44(5), 46(8) and 48(7) of that Act (which also contain provisions relating to the temporary first-year allowances under section 22(3B) and (3C) of that Act), for the words "or (3C)", in each place where they occur, there shall be substituted ", (3C), (3CA) or (3D)".
      (6) In section 39(2)(a) of that Act (definition of qualifying purpose), for "subsections (2) to (3C)" there shall be substituted "subsections (2) to (3D)".
      (7) In section 43(5) of that Act (provisions relating to joint lessees in cases involving new expenditure), after "(3C)" there shall be inserted ", (3CA) or (3D)".
      (8) In section 76 of that Act (which modifies the effect of section 75 in cases where machinery or plant has not been used before a sale)—

      (a) subsection (3) shall cease to have effect; and

      (b) in subsection (4), for ", (2B) and (3)" there shall be substituted "and (2B)".

      (9) Subsections (1) and (4) to (8) above have effect in relation to every chargeable period ending on or after 12th May 1998.
      (10) Subject to subsection (11) below, subsections (2) and (3) above have effect in relation to expenditure incurred on or after 12th May 1998.
      (11) Subsections (2) and (3) above do not have effect—

      (a) for the purpose of determining whether any expenditure is expenditure to which section 22 of that Act applies by virtue of subsection (3C) of that section; or

      (b) for the purpose of determining whether any expenditure incurred in pursuance of a contract entered into before 12th May 1998 is expenditure to which that Act applies by virtue of subsection (3D) of that section.'.—[Mr. Robert Ainsworth.]

      Brought up, read the First and Second time, and added to the Bill.

    New clause 1

      REPAYMENT OF DIVIDEND TAX CREDIT TO NON-TAXPAYERS
      '.—Section 30(5)(b) of the Finance (No. 2) Act 1997 shall cease to have effect.'.—[Mr. Fallon.]
      Brought up, and read the First time.
      Mr. Michael Fallon: I beg to move, That the clause be read a Second time.
      New clause 1 is an attempt to put right an injustice that was raised in Committee. I pay tribute to my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) and to Age Concern, who have highlighted the issue. Very simply, before the abolition of dividend tax credits, non-taxpayers could claim back the tax credits up to 20 per cent. of the dividends that they received. From next April, they cannot.
      These are, perhaps, relatively small amounts of money, but they are extremely significant for non-taxpayers who are pensioners. They may be pensioners on very low fixed
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      incomes of £4,000 or £5,000 a year who now stand to lose £100, £200 or £400—sums of that order. It is just dawning on those pensioners exactly what injustice they face.
      Miss Geraldine Deery, from St. James road, Sevenoaks, came to see me at my surgery and pointed out that she is 76, has no occupational pension and is entirely dependent—apart from the state pension—on dividends from the investments that were made from the savings she had made from her salary. Next April, she stands to lose between £150 and £160 a year. After coming to see me, she wrote to me and said:
      "This may seem peanuts to Mr. Robinson but it pays, for example, for my one short annual holiday which is all I can afford after paying everyday household bills."
      Mrs. Pendleton has also written to me, pointing out that the change does not affect the amount of tax paid by taxpayers. Anybody who has an income sufficient to pay tax will not, under this change, have to pay more tax. The only people to suffer under the change are pensioners who are too impoverished to pay tax at all. That seems a double injustice.
      To be fair to the Paymaster General, when we raised the issue in Committee, he recognised the problem and undertook to pursue a solution. He was spurred on in that not only by my hon. Friends but by the hon. Member for Dudley, North (Mr. Cranston), who was also rightly concerned about the particular problem of pensioners on very low incomes and the injustice that they will face next April. I understand that, through the good offices of the Paymaster General, the matter was further considered last week. I hope that he will be able to report to the House, as he undertook to do, on the progress that he has made.
      4 pm
      It may be that the change was rushed through the House and was an inadvertent consequence of the speed with which last July's Finance Bill was considered, but no Member should be in any doubt about the consequences. Next April, around 300,000 pensioners, who, in the financial year 1995–96 claimed on average £75—in many cases, the sum was higher or lower—will lose that entire amount. In your constituency, Madam Speaker, about 400 pensioners will be affected. The change will affect about 400 pensioners in each constituency. They will soon be asking why that change was made and who authorised it. It is late in our deliberations on the Bill, but it is not too late for the Paymaster General to put right this injustice. In moving the new clause, we give him the opportunity to do so.
      Mr. Edward Davey: I do not want to detain the House for too long because I know that many hon. Members want to speak on the new clause. I set out my views in Committee last July, and my party's views were reiterated by my hon. Friend the Member for Twickenham (Dr. Cable) in Committee this May. I, too, congratulate the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) on the way in which he has pursued the matter and the hon. Member for Dudley, North (Mr. Cranston), whose intervention in Committee was important in getting the Paymaster General to promise to reconsider the change.
      We have come a long way since the Government's first Finance Bill last July, when the Economic Secretary had a much less flexible attitude to interventions by Liberal

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      Democrat and Conservative Members on this issue. I am glad that the Paymaster General was present in Committee to hear our argument, which is one of social justice. It is patently absurd that non-taxpayer pensioners, who are, by definition, the poorest pensioners in our society, should be singled out by the Government for tax increases that, as we have heard, average £75, but in some cases will be significantly higher.
      As we have heard from the hon. Member for Sevenoaks (Mr. Fallon), more than 300,000 pensioners will be affected, which is more than 400 in every constituency. This is a major issue, and it is right that the House should be debating it.
      We should remember that pensioners may have received shares not because they have been long-term investors in the stock market, but because they were made redundant or inherited them. They may have had a little flutter and bought privatisation shares issued under the previous Government. These pensioners will have received their shares not because they are sophisticated investors but by dint of happenstance and good luck. The dividend income from those shares makes a huge difference to their incomes. The average amount received, £75 a year, equates to one week's pension.
      The Government's arguments in favour of the change were rehearsed many times in Committee, but have not stood up to analysis. Their main argument is that pensioners will be protected when individual savings accounts come in towards the end of the century. We have argued strongly against that defence; it is very clear to us that the pensioners affected may be infirm and may have real worries about dealing with complicated financial affairs. They are unlikely to read the financial press or to follow the Chancellor's every move so as to know when to switch their savings to the new ISAs. When they wake up in two or three years' time to the fact that their dividend credits have not been given to them, they will realise just how badly they have been affected.
      The House should stand up for these unsophisticated savers and say no to the Government's proposals. These people deserve defending.
      Mr. Ross Cranston: As the hon. Members for Sevenoaks (Mr. Fallon) and for Kingston and Surbiton (Mr. Davey) have mentioned, I raised this issue in Committee. I was especially concerned about the poorest pensioners—non-taxpaying pensioners—who might have received a small number of shares from employers or from a privatisation issue. The income from the shares gives them a small supplement to their basic pension.
      Earlier this week, the Minister received a deputation comprising the hon. Members for Bognor Regis and Littlehampton (Mr. Gibb) and for Twickenham (Dr. Cable), two representatives from Age Concern and me. He gave us a sympathetic hearing and is fully aware of the problem. I realise that there may be technical reasons why my hon. Friend cannot accept the new clause today; I realise that there are difficulties with identifying the pensioners who will be worse off as a result of the changes. I should like the Minister to give the matter his closest attention even if he cannot announce any improvements today.
      Mr. Nick Gibb: The issue goes back to last July's Budget, which prevented non-taxpayers from reclaiming dividend tax credits from the Inland Revenue. The new clause would undo the damage done then.
      There are in this country 630,000 non-taxpayers who claim back some form of tax credit on their share income every year. They include children. Of the 630,000, 300,000 are non-tax-paying pensioners who claim an average £75 a year. Of that 300,000, 80,000 claim more than £100 a year—and many thousands claim much more than that.
      Mr. Desmond Swayne: Although these sums are not significant to us, will my hon. Friend acknowledge that they certainly are significant to the elderly pensioners among our constituents—precisely the sort of people for whom the Labour party used to care?
      Mr. Gibb: That is an important point. A non-taxpayer is, by definition, a person on a very low income. After the essential bills—rent, telephone, heat, food—have been paid, the residual income is even lower; so tax refunds on dividend income constitute a high proportion of such pensioners' disposable incomes. From April 1999, that will be removed from them.
      The Exchequer will save about £50 million a year by the measure, but, even if it were to continue to allow people to reclaim their tax credit, the amount would be halved in April 1999 in any case, because the Finance (No. 2) Act 1997 reduced the tax credit from 20 to 10 per cent. As a result, even if the Government were to accept new clause 1, pensioners and other non-tax-paying individuals would suffer a halving of the tax credit on their dividends. Therefore, the cost to the Treasury of reversing this measure would be only about £25 million.
      As it is, the Government are continuing the policy of tax-back, where non-tax-paying individuals can reclaim income tax deducted on interest income in bank accounts when the bank or building society deducts the interest at source. If the Government are continuing that scheme, it seems odd that they are not allowing pensioners, and other non-tax-paying individuals who have shares, to reclaim the tax back on that income. Age Concern, which has vigorously supported this campaign, has said:
      "Older people who have not had the opportunity to contribute to private pensions are particularly reliant on savings and investments. The loss of the tax credit will penalise them unfairly."
      Every hon. Member has received considerable correspondence on the issue from constituents. I have had an especially large number of letters from constituents of other hon. Members throughout the country. One letter, from Mr. Geoffrey Pugh of Cheshire, was published in The Times at the beginning of June. He says that, between them, he and his wife have an income of less than £10,000. He continues:
      "we own our house, drive a car, live modestly…we do not qualify for Government handouts, nor do we wish to. But the prospect of losing 20 per cent. of our modest investment income makes us wonder how we shall manage."
      I have received many letters from my constituents. Mr. Caffyn, who lives in Pagham, just outside Bognor Regis, says:
      "Apart from War Service, myself in the 8th Hussars, and my wife served as a Nurse, we have paid our taxes regularly through the media of PAYE, and to the National Pension fund…We have saved".

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      That is consistent with the statement by the hon. Member for Kingston and Surbiton (Mr. Davey) that it is not by luck that people have amassed a small share portfolio; they have saved hard. The letter continues:
      "now it appears we are going to lose 20 per cent. (that we have been claiming back over the last few years.)
      'Gobbler' Brown (as he is beginning to be known in this area) really should get himself organised, and not expect people in the no tax bracket to pay tax."
      The Treasury has received many letters on the issue. A gentleman from Cornwall says:
      "I have just received a payment from the Inland Revenue for £310 which under the new proposals would not be paid after April 99. I think this is grossly unfair when Standard rate taxpayers lose nothing."
      A lady from South Wirral says:
      "I am a 70 year old widow and have only my late husband's National Insurance contributions for my pension, so rely on my investment for income.
      This year I reclaimed £213.56 tax credit and still my income was less than the personal allowance. There must be many more pensioners in the same position."
      Many thousands of pensioners are in that position.
      A gentleman from Keighley in West Yorkshire said:
      "My wife aged 77 has received a small repayment of tax credit on her limited investments as she is a non-tax payer. Her retirement pension as a married woman is £38.70 per week…Last year she received a repayment of tax credits in the region of £250. As her annual pension amounts to only £2,012.40 this sum of £250 is a very welcome addition.
      I am 81 years of age and the shares held by us jointly are the result of steps to save for our old age."
      No luck in their share portfolio; they have worked hard for it, they have sacrificed and they have saved.
      A lady in Nuneaton in Warwickshire wrote to me:
      "As a 'non taxpaying pensioner' partly dependent upon share dividends I really am disgusted at this proposal".
      A lady in Harrogate in West Yorkshire says:
      "My own income, together with interest from investments and savings, amounts to the total 1997/98 allowance of £5,400…I have been able to reclaim £473"
      on a dividend tax credit. The lady continues:
      "The interest on Investments and Savings are the result of careful planning, modest living standards, and wise investments, and represents a 'private pension' built up over many years.
      I am appalled to think that the Government is prepared to penalise senior citizens to this extent when we ourselves have done everything possible to protect ourselves from the demands old age can bring."
      A gentleman in Ruislip in Middlesex writes:
      "The wife and I stand to lose £500. When almost every day we read of certain spendings of tax on wallpaper, tables and a certain gentleman that forgets a £200,000 fee."
      I have no idea what the last point refers to.
      A lady from Solihull in the west midlands states:
      "As a 67 year old…I have a mentally ill son of 44, and when I knew how severely ill he was and would never be able to work I set out to try and put a small nestegg away for him for his later years, and I stayed at work for an extra five years just because of it.
      As a consequence he has about £120 a year tax refund, which I use to replace things like shoes and clothing."
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      A gentleman in Dudley in the west midlands writes:
      "I am 78 years old and a war veteran…Thirty years ago I started to invest in Unit Trusts and later in Equities. Although I never earned a large wage I managed to build up a modest investment."
      That gentleman will now lose £622 as a result of the measure.
      Mr. Howard Flight: Will my hon. Friend confirm that, in addition to that penalisation, when the full measure is in operation in 2004 people who do not pay income tax will also not benefit under the new ISA arrangement? The Bill was supposed to make it more tax attractive for low-income groups to save, but it makes saving less attractive on two counts—by ending tax credits and by not replacing them with an ISA scheme from which those groups will benefit.
      4.15 pm
      Mr. Gibb: My hon. Friend makes a good point. When justifying the measure in Committee, the Government said that ISAs were the vehicle that such people could use, once the dividend tax credit repayment was abolished. However, for basic rate taxpayers, low rate taxpayers or non-taxpayers, there is no advantage in holding equities through an ISA. Low and basic rate taxpayers generally do not pay capital gains tax anyway, because they are unlikely to use up the annual capital gains allowance. The 20 per cent. tax credit reduced to 10 per cent. and repaid only until the year 2004, as we have heard, is hardly likely even to cover the charges. After 2004, even that small benefit from holding equities in an ISA will be abolished.
      I shall mention two more people briefly. A gentleman in Burwood in Dorset states:
      "In the case of my wife and self the total amount which we shall be unable to reclaim is £886 per annum. As our combined annual income is approximately £11,500, this new ruling is catastrophic to us."
      A couple in Dorset say:
      "The reason we are non-Tax payers is because we are pensioners and on a low income (hence the Non-Tax payers).
      The thought of losing the ability to reclaim Tax Credits has really upset us…Last year the total reclaim between the two of us only amounted to £118.16p, but even this small amount makes a big difference to us, we use it to help the payment of bills."
      That is a small sample of the correspondence that I have received, and an even smaller sample of the correspondence that I know the Paymaster General and other members of the Treasury team have received. I should have thought that that would prompt the Government into taking action before now.
      The only response from the Inland Revenue is a callous letter, which states:
      "It would have been anomalous to allow individuals to continue to claim payment of tax credits when such tax credits are being removed from all other investors."
      The anomaly is that basic rate taxpayers, lower rate taxpayers and higher rate taxpayers will all benefit from the dividend tax credit, but the only people who will not benefit from it are those who do not pay tax. For some reason, the Government—inadvertently, incompetently or deliberately—have decided that non-taxpayers should pay tax on their dividends, whereas every other section of society should not.

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      We went to see the Paymaster General last week. I am grateful to him for sparing the time to meet us. Both in Committee and at the meeting, he raised the difficulty over sovereign immunity—the fact that non-UK residents who have sovereign immunity would be able to continue to reclaim the tax credit.
      I am surprised that the Government cannot find a way around this technical problem. The Revenue is full of technical specialists who I am sure could find a way of dealing with that loss of revenue. Despite the fact that the Government have not tabled an amendment, I hope that the Paymaster General will give an absolute commitment—with no dilutions and no caveat attached—that the Government will move an amendment to the next Finance Bill to reverse this measure. It will take effect in April 1999, which means that tax reclaims will begin to be submitted to the Revenue after April 2000 in the run-up to the general election. The political imperatives are there and, if the Government were to give such a commitment now, it would set at rest the minds of many hundreds of thousands of non-tax-paying individuals, who could be secure in the knowledge that they will continue to be able to reclaim important income from their dividend tax credits.
      Ms Helen Southworth: The Government are already taking serious action to ensure that poor pensioners receive the help that they need. We recognise that that assistance is very important. My experience before coming to the House showed quite clearly that there are far too many poor pensioners in Britain, and that their number increased under the previous Government.
      We have taken action to reduce value added tax on fuel and have given every pensioner household winter fuel payments. I was privileged to contribute recently to policy that reduces VAT on insulation for poor pensioners. We are looking urgently at ways of reaching the 1 million pensioners on low incomes who are not claiming the benefits to which they are entitled and that they should be receiving.
      I have spoken to Ministers about this issue. I understand that there are complexities involved in identifying individual pensioners on low incomes who are affected, but I ask my hon. Friend the Paymaster General to consider seriously taking action on this matter as soon as possible.
      Mr. Philip Hammond: I add my congratulations to my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) and to Age Concern on raising public awareness of this issue. It will affect large numbers of relatively poor pensioners from next April, and many of them were not aware of it until the press coverage that accompanied my hon. Friend's campaign in Committee.
      The Paymaster General was clearly rattled by the points that my hon. Friend raised in Committee and, assisted by the intervention of the hon. Member for Dudley, North (Mr. Cranston), he gave us cause to hope that he would introduce a measure at this stage of the Bill's progress to ameliorate the impact on very poor pensioners. We are extremely disappointed that no Government amendment
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      or new clause has been tabled to give effect to the implication of the Paymaster General's comments in Committee that he was sympathetic to our concerns.
      As my hon. Friend said, many hon. Members on both sides of the House have received correspondence from pensioners who will be affected by the measure. That correspondence makes pretty heart-rending reading. In many cases, we are talking about people who stand to lose perhaps £200 or £300 a year. Those people view that money, which they have habitually reclaimed in the form of dividend credits, as the means of running a car or having a modest annual holiday. They are the small luxuries of life that those people will now have to forgo.
      The fact that hundreds of thousands of people are prepared to fill in the relatively complex paperwork required to reclaim sums averaging only £75 a year is testimony to the importance that they attach to this money. Those sums may seem small to us—and even smaller to the Paymaster General—but they are clearly very significant to those who stand to lose them. It is clear from reading the correspondence that great confusion, concern and distress have been caused.
      Even I, cynical as I may wish to be, cannot believe that it was the Government's intention openly to penalise the poorest, the non-tax-paying pensioners, by discriminating against them and putting them in a worse position than those paying standard rate or higher rates of income tax.
      I was surprised that the Paymaster General did not take the opportunity to back down gracefully. In fact, the Government's reaction has been to dig in and, despite initially showing sympathy in Committee, the Government have given no ground at all.
      In Committee, we heard that it is inconvenient and expensive for the Inland Revenue to process these many small claims, but I suggest that this is an example of the tax-collecting tail wagging the tax-paying dog. It is not good enough that this mean-minded measure should go through simply for the convenience of Inland Revenue officials.
      Mr. Edward Davey: Is the hon. Gentleman aware that the Government drafted the Finance Act 1997 in such a way as to ensure that there was no increase in the tax burden of higher rate taxpayers as a result of the move? Does the hon. Gentleman wish to comment on that?
      Mr. Hammond: The point that my hon. Friends and I would like to emphasise is that the measure discriminates against the poorest members of our society. In Committee, Labour Members, failing to understand the concerns raised by Conservative Members, attempted to paint this as some kind of fat-cats charter, but, by definition, the measure affects only those who are too poor to pay income tax. I cannot understand how a new Labour Government can believe that they are enhancing their political credentials by forcing through such a measure, creating 250,000 or so angry, disfranchised pensioners as a result of the loss of a vital chunk of income.
      The measure is not simply mean-minded, but politically incompetent. The Government put up the Paymaster General, with all the baggage that he carries, to tell the poorest pensioners that they must give up, on average, £75 each for the convenience of the Inland Revenue and because it would be too tricky for the Government to find

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      a way of allowing them that little extra bit of income without allowing foreign potentates, who benefit from sovereign immunity, to slip through a loophole.
      In Committee, the Paymaster General raised our hopes when he appeared to be sympathetic to the suggestion of my hon. Friend the Member for Bognor Regis and Littlehampton. He has now dashed those hopes and, with them, the hopes of many hundreds of thousands of pensioners throughout Britain. It is not part of my brief to recommend to the Government ways to avoid alienating 250,000 voters, but the matter is far more important than narrow party political advantage and I urge the Government, even at this late stage, not to commit this ludicrous act of mean-minded political suicide in penalising the very people whom they claim to be helping and whom it is the function of all hon. Members to seek to protect.
      Mr. John Burnett: Considerable credit goes to the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) and Age Concern for highlighting the matter, and I am happy again to pay tribute to both.
      The impact of the abolition of dividend tax credits on nil taxpayers, the poorest and most vulnerable, marked one of the low points in the Finance (No. 2) Bill. I cannot understand whether officials briefed Ministers on the consequences. By any objective assessment, the poorest and most vulnerable should pay the least tax. It is just and equitable that non-taxpayers who hold shares are not brought into taxation by the denial of the ability to recover tax credits on the meagre dividends that are paid to them. Therefore, what possible reasons do the Government have for denying this relief?
      During the debate in Committee on 14 May, the Paymaster General, who is, I believe, convinced of the argument for change, said that he would reconsider the matter which has been discussed in today's debate. Will he give the House an up-to-date account of exactly what the Government propose to overcome such a mean and unnecessary consequence of their advance corporation tax change? Is it not time to hear first hand exactly what measures they will take to relieve this unjust and unfair consequence?
      4.30 pm
      Mr. Tim Loughton: This morning, I received in the post yet another letter from a constituent on this subject. We have heard from my hon. Friends how postbags have been deluged with correspondence from constituents who are only now waking up to the implications of the measure. Along with every hon. Member, I congratulate my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) on his sterling work on the new clause, without wishing to make his head swell even more than it has already.
      A constituent in Worthing listened to "Money Box" on Radio 4 only a few weeks ago. He heard:
      "They said that the people most affected would be those on low incomes who had perhaps inherited shares. This applies to me and to my disabled sister—both of us inherited shares from our father."
      My constituent and his sister
      "feel very angry that the present Government who profess to help the not so well off, should bring about the exact opposite."
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      He went on to refer to a pamphlet that they received from Saga, which stated:
      "Tax changes punish the poor."
      The letter could equally have been written by someone who had shares because of redundancy and had invested the payment in a small number of investments, or by any of the millions of people, many thousands of whom would have been of pensionable age, who bought a modest number of shares in the privatisations.
      Mr. Swayne: There seems to be a received wisdom that people who hold shares as a means of saving are somehow financially sophisticated and able to take care of themselves. Does my hon. Friend acknowledge that many such people who have written to me, and who may have written to him, cottoned on to the change only as a consequence of the campaign that has been mounted by our hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb)? Such is their level of financial sophistication.
      Mr. Loughton: To pour further praise on my hon. Friend the Member for Bognor Regis and Littlehampton, my hon. Friend the Member for New Forest, West (Mr. Swayne) is right. Our hon. Friend and Age Concern brought the matter to the attention of the media, which resulted in mass publicity in the newspapers and on the radio, and probably on satellite television as well.
      Mr. Bercow: I am grateful to my hon. Friend for his characteristic courtesy in giving way. I hope that he will understand if I momentarily turn from praise, justified though it is, to blame. Our hon. Friend the Member for Bognor Regis and Littlehampton referred to a callous letter from the Inland Revenue, dated 11 February, which defended current Government policy. Although the Paymaster General is legitimately attacked on this matter, does my hon. Friend agree that the Financial Secretary should also be attacked on it? She is the Minister responsible for the Revenue: is it not about time that we were told whether she is in office or in power, and whether she is told what to do or whether she has the slightest influence on Government policy?
      Mr. Loughton: My hon. Friend is right: the entire Treasury team should be ashamed of that act of callousness of the worst order. To put the record straight, I should point out that the article in Age Concern's magazine referring to the callousness of the measure contained a photograph of my hon. Friend the Member for Bognor Regis and Littlehampton with the word "callous" underneath it. Of course, that referred not to my hon. Friend, but to the culprits and perpetrators of the crime, who sit on the Labour Benches. It is worth putting the record straight, because we do not want his reputation blemished for the entirely pure and philanthropic measures that he promoted so ably.
      May I return to my speech? As my hon. Friends have said, only now are people waking up to what has happened, yet the legislation was passed a year ago. Many of my hon. Friends who are here today and I were on the Finance Bill Standing Committee last year. They will remember that it was guillotined through in just five days, compared with the six and a half weeks of luxury indulgence which we have enjoyed this year. The Budget announced on 2 July passed into law by the end of July,

      169
      so organisations such as Age Concern had no time to get their act together and make proper representations to help us publicise that highly damaging measure. The measure was rushed through with undue haste, and only now are the victims of that callous act waking up to the fact that in April 1999 they will be substantially less well off.
      The measure affects more than 300,000 people of pensionable age earning less than £5,400. The cost to the Exchequer is relatively small—some £25 million to £30 million, perhaps a little more, next year. Thus it affects the poorest pensioners. I represent an area of Worthing with the highest number of pensioners in the entire country, so I feel particularly aggrieved that yet another blatant measure is discriminating against good pensioner folk. Few of the pensioners in my constituency live in comfortable luxury, and many make their way on little more than the basic pension. The poorest people are hit the hardest.
      I am sorry that the Financial Secretary would not take an intervention when she spoke a moment ago. She was dangling yet another red herring—goodness knows, we have had so many during the stages of the Finance Bill—when she said that the Government were enabling more pensioners to take advantage of more benefits. Our proposal would be much better because it would enable pensioners to stand on their own two feet and support themselves from their own investments. They could take advantage of dividends and dividend tax credits which are rightfully theirs, rather than having to rely on the welfare state. They are entitled to do that, but, if more people can make preparations for their own retirement and stand on their own feet, that is to be encouraged. This measure takes away yet another leg of support. It is a shame that the Financial Secretary did not accept that point.
      In Committee, we had an awful lot of red herrings from the Paymaster General. In replying to an amendment on this very subject, he started talking about individual savings accounts. If he is absolutely honest with himself, ISAs are of minimal, if any, attraction to that class of investor because none of them will get anywhere near the annual capital gains tax allowance. Moreover, ISAs hold few income attractions, if any, for those on low incomes. Even if there were any, they would all be gobbled up by costs. It was a real red herring—another desperate attempt to justify ISAs replacing a far better scheme. The Paymaster General should come clean on that.
      As I said in Committee, one option open to pensioners, if they are sophisticated enough to take investment advice, is to switch into bonds that pay gross dividends or into bank or building society accounts that pay interest gross. However, why should we condemn pensioners to capital growth in those accounts when we know the much greater attractions of capital growth in the equity market? Why should they be condemned to a fairly pedestrian investment portfolio of fixed interest stocks or cash investments? Their choice will be limited if the new clause is not accepted.
      We have all received many representations. I pay tribute to the bravery of the hon. Member for Dudley, North (Mr. Cranston), who did not realise that he was fundamentally undermining the Government's stance at the time and did a wonderful U-turn with great aplomb to support the amendment in Committee.
      170
      At one point in Committee, we were greatly cheered. The Paymaster General said:
      "Combined with the abolition of ACT, we have made a major improvement of the corporate taxation system. We are getting rid of the in-built bias towards paying dividends".
      He did not get off to a very good start. He then said:
      "I shall deal with ISAs."
      That was such a red herring that it was ruled out of order, and I hope that he does not repeat that error when he replies to the debate. Then things started getting better. After we had impressed on him the merits of the amendments, he said:
      "The calculations that were made by the Opposition Members and by my hon. Friend the Member for Dudley, North are pretty much correct."
      Things were looking up. We thought, "Golly, will this be the first amendment that we get accepted by the Government?" He went on:
      "Perhaps a case can be made for an overall limit on payable tax credits, which might be in the region that Age Concern described in its very good paper."
      That sounded as though the Paymaster General and his team were on the verge of accepting that sensible, common-sense amendment to prevent discrimination against the poorest people in the investment community. But then it all went wrong. He said:
      "I see at this critical moment that my right hon. Friend the Chief Secretary is invigilating."
      At that point, the Chief Secretary, who alas is not present today, appeared, and all the promises evaporated. The guarantees were suddenly not guarantees, and the promises were no longer promises. He ended up by saying:
      "I make no promises, other than to revert to the matter on Report."—[Official Report, Standing Committee E, 14 May 1998; c. 191–94.]
      What an enormous anti-climax that was.
      I hope that the Paymaster General, without the presence in the Chamber of the Chief Secretary—although the Whip is here on his behalf—will have the courage to accept this common-sense new clause, and will show that the Government are concerned about the poorest in our society. It is very late in the day, but the Government have tabled scores of amendments to their own legislation, so it would not hurt them to promise to redraft this new clause to make it acceptable.
      I hope that we are given better reasons than those given by the hon. Member for Dudley, North, who said that the amendments were unacceptable for technical reasons. We deserve better than that, and the pensioner investment community demands better. If the Paymaster General is not prepared to accept the new clause, we demand a proper explanation of why the Government continue to hit the poorest hardest.
      Mr. Quentin Davies: For all the Government's failings, shortcomings, incompetence and insensitivity, for which I and many Opposition Members have berated them in the past year, I never expected that they would get into this mess. I hesitated before trying to catch your eye, Mr. Deputy Speaker, because I expected the Paymaster General to pre-empt the debate by declaring that the Government had come up with a solution that would protect the interests of the

      171
      poorest savers. The Government may feel that I have been unfairly critical of them, but even I gravely overestimated them.
      It is clear that the Paymaster General has no intention of announcing that the Government will come up with a solution to this problem. It is a human problem, and, ultimately, that is what is important. The hon. Gentleman and the Financial Secretary have constituents, and I cannot believe that they have not seen the shine in the eyes of a poor pensioner who has received a cheque from the Inland Revenue for a small amount of money, which to some people on the Treasury Bench may be a derisory amount, but which to that pensioner is of enormous consequence.
      Unless the Government change their mind or we succeed in defeating them on the new clause, the pleasure and happiness that very poor people derive from receiving such an exciting and unexpected bonus—they live on the margin and have only £100 or £200 in hand—will be replaced by tears. Labour Members will see those people in their surgeries, as we will in ours. No doubt they are more hard-hearted than we are and will be less moved when that happens, but happen it most certainly will.
      4.45 pm
      I shall move from human appeals to the more rigorous analysis that we are used to when discussing fiscal matters. I ask for a little more rigour in the Government's analysis, too. When the Paymaster General replies to the debate, he should not use the three arguments that I understand he used in Committee, none of which will wash. First, he should not talk about the feasibility and desirability of relieving the poorest savers from the need to pay tax, because that would not be the effect of the new clause.
      Unfortunately, such is the effect of the abolition of advance corporation tax and the dividend tax credit that everyone who holds shares in British companies, directly or indirectly, will now pay tax. The argument is about whether the poorest pensioners and savers should pay double tax. The rest of us, whether we hold shares directly or through institutions and pension funds, will now pay double tax. The companies of which we are shareholders will pay corporation tax, and we will be taxed on the distributed profits. The issue is not whether, by means of the new clause, we should relieve the poorest savers from paying tax; t is whether we should relieve them of the burden of paying double tax.
      The second point that I hope the hon. Gentleman will not make is that, for technical reasons, it is impossible to accept the new clause or to devise an equivalent measure to relieve the poorest savers—who are so poor that their incomes do not reach the income tax threshold—from the need to pay double tax on dividends from their investments. That cannot be true, because the Government have already introduced such a measure giving charities precisely the relief that we want for the poorest pensioners and savers. It will not wash to argue that there is no effective means of providing such relief, because the Government have condemned themselves by protecting charities from the abolition of the dividend tax credit.
      The third argument, which has already been effectively demolished by some of my hon. Friends, is that the poorest savers can switch into the Government's new individual savings account. That argument will not wash
      172
      either. As my hon. Friends have already said, the small savers involved are most unlikely to be able to benefit from the capital gains tax provisions of ISAs, because their capital gains will probably not exceed the individual allowance in any one year.
      The major benefit of ISAs is the relief from capital gains tax liability. ISAs are not a solution to the problem of paying tax on dividends, because people will have to pay a management fee, and other commissions and charges, for the privilege of having an ISA. People will have to pay a fee to the intermediary who holds the franchise and who sets up the ISA: that is what these tax-advantaged savings vehicles are all about.
      For people who pay tax at the standard rate of 23 per cent. or at the higher marginal rate of 40 per cent., it may be sensible to pay the fees required to join an ISA and to shelter part of their portfolio. Let me make the arithmetic simple. Let us say that the average dividend yield of the equities in an ISA is 4 per cent., and that tax is being paid at a marginal rate of 23 per cent. Roughly one of those four percentage points will be lost in tax. Someone who joins an ISA will probably pay 1 per cent. of the value of the fund by way of a management fee. In other words, what that person is not paying to the Revenue he will be paying to the financial intermediary who set up the ISA.
      Opposition Members, at least, are concerned with the interests of poor savers. I am extremely sorry that that concern is not shared by Labour Members—apart from the hon. Member for Dudley, North (Mr. Cranston), to whom I pay tribute for his individuality and courage. By definition, poor savers are not currently paying tax. For them, the choice will be between paying a tax that they do not currently pay—and, in my view, ought not to pay—and paying the same amount to an intermediary for the privilege of putting their shares into an ISA. Either way, they lose, and whether the Revenue or the manager of the ISA gains is a somewhat academic question for them. As I said earlier, an apparently small financial loss may be disproportionately grave in terms of the sum of such people's happiness.
      I hope that we shall hear none of those three arguments this afternoon. I hope that we can now concentrate on whether it is fair, and economically sensible, to penalise the poorest savers—those who may begin to save modest amounts from the lowest incomes—by imposing a double taxation regime on them. That is what the new clause is about. If the Government reject it—notwithstanding all the unpleasant, cruel and callous things that they have done so far, and the many more that they will no doubt do in future—their action will be written high up on their tombstone. It will remain in the minds of the electorate—not just those on the lowest incomes who will be directly affected, but all in our country who believe that taxation should be fair and just, and that those with the lowest incomes should be expected to pay proportionately the lowest share of the country's collective tax costs.
      Mr. Andrew Tyrie: I cannot do better than say how much I agree with what I have just heard from my hon. Friend the Member for Grantham and Stamford (Mr. Davies). It was a typically eloquent and impressive exposition of the arguments, referring to all the key points, including those which I hope we shall not hear later from the Paymaster General—who, I must say, has looked rather bored during our proceedings so far. He

      173
      has looked at his watch no fewer than three times, and has sat with his arms folded in a rather uninterested manner for most of the debate.
      Let me begin by praising my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), who is a neighbour of mine down in West Sussex and who first alerted me to this issue. Had he not done so, I would not have twigged—at least, not for a long time—that this change was in the Finance Bill. It was, of course, hidden away. It is a hidden consequence of the decision to make a grab on pension funds. The Labour party, which pushed the measure through at the time of the last Budget, had not thought it through at all. Many aspects of the legislation have had to be repaired: the sticking plaster has had to come out, and the Government have had to make emergency adjustments so that it looks right.
      I have wondered why that is, and I think that the resignation of Sir Terry Burns gives us at least a bit of the answer. Sir Terry Burns is one of the best and most senior advisers in the Treasury. I would not mind betting that the policy on the pensions grab was thought out when Labour was in opposition, and was foisted on the Treasury without its having the opportunity to think it through carefully. That is why all the unintended consequences are now coming out of the woodwork—consequences that need to be dealt with.
      I hope that Treasury Ministers will now begin to learn that it really does help to use the official machine rather than trying to bypass it. The press reports stating that the Chancellor works without properly consulting his official advisers, using an inner coterie instead, appear to have some credibility when we consider the effects of legislation such as this.
      What exactly are those unintended consequences? My hon. Friend the Member for Bognor Regis and Littlehampton spelled them out very eloquently. They are very bad news for non-taxpayers, the people whom Labour purports to want to help most. We know that Labour does not help taxpayers, but we now also know that it does not want to help non-taxpayers either.
      As I understand it, non-taxpayers used to be able to claim tax credits on dividend income, but they will soon be unable to do so. There are 300,000 people over 65 in that category—some are my constituents—and they will be deeply angered by the change. One of them came to see me about it before I understood the issue. Until he sat down and described it to me, I did not have a clue what it was about: I had not grasped the significance of the change. Several more people have written to me expressing their concern.
      Incidentally, when I write to the Paymaster General, I rarely receive answers to my letters inside two to three months. He is not listening now, as is so often the case when people try to make points to him. I have a whole batch of letters—
      Mr. Hammond: My hon. Friend may be interested to know that some members of the Standing Committee are still waiting for letters that the Paymaster General promised to write to them during the Committee stage.
      Mr. Tyrie: That does not surprise me at all. I am flabbergasted by the time it takes to get a reply from the Paymaster General on this or any other issue.
      174
      As my hon. Friend the Member for Bognor Regis and Littlehampton pointed out, the average amount involved may seem small—£75, although it may be appreciably more in some instances—but it is a significant sum for non-taxpayers, to whom such small amounts matter a great deal. That is why Age Concern, among other organisations, has decided to make such an issue of the change. We have heard at least one quotation from an Age Concern document this afternoon. Age Concern is right to be worried, because the poor will be hit hardest. As I understand it, taxpayers will continue to obtain the benefit of the tax credit, but non-taxpayers will not. That will be the fundamental anomaly and injustice in the legislation, unless the Government make a last-minute decision to find a way out of this hole.
      At present, the vast majority of those who will be affected—two thirds of a million altogether, including 300,000 pensioners—do not know about the measure. They have no reason to know, and no way of finding out whether the change will happen. They do not follow the Finance Bill. I am sure that those who drafted the Bill did not know about it at the time. How, then, can those people be expected to know? The time will come, however, when they will know, and they will resent it very much.
      I said that the change was unintended. That may be a charitable view, but it is probably accurate. I gave an explanation of why it was unintended: Treasury Ministers do not listen to their own officials, although I think they are beginning to listen to them a little more than they did when they first arrived. Some of their best officials pushed off immediately; others waited a year out of politeness.
      This afternoon, we shall find out whether this is an unintended measure that the Government want to put right, or a measure for which they should henceforth be squarely blamed. If they refuse to accept the new clause, we will know that this is something that they intend and want to do. They will have had ample time to reverse it and to think through what to do. They will be judged on the decision that they take.
      Mr. Geoffrey Clifton-Brown: Is my hon. Friend aware that anyone earning up to the new personal allowance threshold of £4,195, or just £80 a week, will be hit by this measure, which will thus affect some of the poorest in the land? Does he not think that that is highly reprehensible?
      Mr. Tyrie: I did not know the exact numbers. I do find it highly reprehensible. I find it highly reprehensible, too, that Treasury Ministers are not even bothering to listen to the points that are being made to them.
      If Treasury Ministers ignore and sweep away the new clause, we—and hundreds of thousands of people throughout the land—will know that it was their intention effectively to reduce the income of some of the poorest people, including pensioners.
      5 pm
      Mr. Geoffrey Robinson: There has been a good deal of cross-party support on this matter. I think that that was evidenced at the meeting that I was pleased to have with Age Concern, with the hon. Members for Torridge and West Devon (Mr. Burnett) and for Bognor Regis and Littlehampton (Mr. Gibb), and with my hon. Friend the Member for Dudley, North (Mr. Cranston). I think that

      175
      they made a powerful case. I think that the case in the country, and the feelings that have been conveyed, are considerable. I am sympathetic to that case. I have listened hard to it, but hon. Members will obviously be aware that we have not tabled a new clause at this stage and that, from our point of view, the matter is still under review. I am taking a deep personal interest in it.
      Most hon. Members have made pretty much the same points during this debate as were made in Committee. I do not think there are any new points that particularly require addressing by me. As always, I welcome the hon. Member for Grantham and Stamford (Mr. Davies) to our debates. I am pleased that he is not deterred by his new onerous responsibilities from attending them. He is always a welcome figure.
      Some points were quite irrelevant. The hon. Member for Chichester (Mr. Tyrie) made some remarks regarding some senior civil servants leaving early and others leaving now. Nothing could be further from the truth. We work extreme closely with civil servants. All the policies are worked out with civil servants in the Treasury, in Customs and Excise and at the Inland Revenue itself, so the hon. Gentleman need not worry about that. There is plenty of contact, and I am happy to have such good relations with the most senior and the most junior officials in the Department.
      Mr. Quentin Davies: The hon. Gentleman is trying to muffle my fire by throwing up a smokescreen of compliments in my direction; in all honesty, that will not work. May I ask him to address the specific point about charities? If it is possible to devise a solution to protect charities, why is it so technically difficult to devise a solution to protect the poorest savers?
      Mr. Robinson: That is a fair point. We have had good responses from the charities for what we did there, which was, as the hon. Gentleman knows, unprecedentedly generous: when the Conservatives removed tax credits, they gave a much shorter period. With regard to pensioners and non-taxpayers, the matter is more complicated. I say this to Conservative Members, including the hon. Member for Bognor Regis and Littlehampton, who has led the campaign from the Opposition Benches: it will not be issues of sovereign immunity that will stop us doing this. It is not a question of the convenience of the Inland Revenue. There are certain things that we are looking at. We are looking at alternatives, as we did when we went into the consultation period following the initial ending of tax credits, and deciding which way to go on company taxation policy overall with regard to ACT.
      I can give no commitment today and I have not brought a solution to the House; we would not be having this sort of debate if I had. I am aware also of the growing anxiety among poorer non-taxpayers who have been hit by the measure, so I know that we need to make our position utterly clear as quickly as possible. I am working to that end.
      Mr. Fallon: May I reply to the debate and thank all those who have participated? I think almost everyone who has spoken has shown some sympathy with the new clause. I am particularly grateful for the support from the Liberal Democrat Benches. My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), with the
      176
      eloquence and precision that we have come to expect of him, made the case again: in this matter, he is the pensioners' champion. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) pointed out that the sums involved make a difference to the quality of life for some of our poorest pensioners. I am grateful, too, for the support of my hon. Friends the Members for East Worthing and Shoreham (Mr. Loughton), for Grantham and Stamford (Mr. Davies) and for Chichester (Mr. Tyrie).
      No one defended the Government's position on the new clause. The hon. Member for Dudley, North (Mr. Cranston) gave us his usual cameo of the Paymaster General's learned junior and said that there was something defective about the new clause, but I think he has some sympathy with, and is perhaps a secret supporter of, the new clause.
      Then we heard, most surprisingly of all, from the hon. Member for Warrington, South (Ms Southworth). I am told that she was a member of the Standing Committee and that she sat upstairs with us for six weeks. She was certainly silent for six weeks, yet now she suddenly appears in the House and tells us that she has had a word with the Paymaster General. That parliamentary effort seems to have exhausted her—she has now disappeared—but we wait to see what effect that will have. We shall be judging the effort that is put in by Labour Members on this matter.
      To the Paymaster General, I would say, "We expected a bit more than that." He has had six weeks to correct this injustice and to come up with an amendment of his own. Yesterday, there were amendments on the Order Paper to help the casinos. Perhaps he is more interested in the casinos than in the lives of our poorest pensioners. He has had six weeks to draft an amendment. He has admitted tonight that drafting such an amendment is not impossible—that there may be technical difficulties, but that they can be overcome. Indeed, he has said that he has listened sympathetically and has the matter under review.
      The Government brought about this injustice a year ago. They have had plenty of time to review it. This was slipshod, inadvertent drafting, for which the Financial Secretary was responsible a year ago. Little wonder that she was not put up to answer the debate, and that it was left up to the Paymaster General instead.
      There are two choices before the House. We can—at one point I was considering doing this—give the Paymaster General the benefit of the doubt, as we have done quite a lot, on quite a number of matters, over the past few months, or we can place on record our opposition to one of the meanest tax increases of all. We could put a marker down now, while he works away on his amendment, to the effect that we are opposed to the measure on behalf of 300,000 of the poorest pensioners—people who have put something aside, who have not claimed benefit, who have saved for their old age and who now find a Labour Government are robbing them of sums of £75 or £100. It is right that we press the new clause, and I invite my hon. Friends to support it.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 171, Noes 284.

      Division No. 318]

      [5.8 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Hamilton, Rt Hon Sir Archie

      Allan, Richard

      Hammond, Philip

      Amess, David

      Hancock, Mike

      Arbuthnot, James

      Harris, Dr Evan

      Ashdown, Rt Hon Paddy

      Harvey, Nick

      Atkinson, David (Bour'mth E)

      Hawkins, Nick

      Baker, Norman

      Hayes, John

      Ballard, Jackie

      Heald, Oliver

      Beggs, Roy

      Heath, David (Somerton & Frome)

      Bercow, John

      Heathcoat-Amory, Rt Hon David

      Beresford, Sir Paul

      Hogg, Rt Hon Douglas

      Body, Sir Richard

      Horam, John

      Boswell, Tim

      Howard, Rt Hon Michael

      Bottomley, Peter (Worthing W)

      Hughes, Simon (Southwark N)

      Brady, Graham

      Hunter, Andrew

      Brake, Tom

      Jack, Rt Hon Michael

      Brand, Dr Peter

      Jackson, Robert (Wantage)

      Brazier, Julian

      Jenkin, Bernard

      Browning, Mrs Angela

      Johnson Smith, Rt Hon Sir Geoffrey

      Bruce, Ian (S Dorset)

      Bruce, Malcolm (Gordon)

      Jones, Nigel (Cheltenham)

      Burnett, John

      Kennedy, Charles (Ross Skye)

      Burns, Simon

      Key, Robert

      Cash, William

      Kirkbride, Miss Julie

      Chapman, Sir Sydney (Chipping Barnet)

      Kirkwood, Archy

      Laing, Mrs Eleanor

      Chope, Christopher

      Lait, Mrs Jacqui

      Clappison, James

      Leigh, Edward

      Clark, Rt Hon Alan (Kensington)

      Letwin, Oliver

      Clarke, Rt Hon Kenneth (Rushcliffe)

      Lewis, Dr Julian (New Forest E)

      Lidington, David

      Clifton-Brown, Geoffrey

      Lilley, Rt Hon Peter

      Collins, Tim

      Livsey, Richard

      Colvin, Michael

      Lloyd, Rt Hon Sir Peter (Fareham)

      Cormack, Sir Patrick

      Llwyd, Elfyn

      Cotter, Brian

      Loughton, Tim

      Cran, James

      Luff, Peter

      Curry, Rt Hon David

      MacGregor, Rt Hon John

      Dafis, Cynog

      McIntosh, Miss Anne

      Davey, Edward (Kingston)

      MacKay, Andrew

      Davies, Quentin (Grantham)

      McLoughlin, Patrick

      Davis, Rt Hon David (Haltemprice)

      Major, Rt Hon John

      Dorrell, Rt Hon Stephen

      Maples, John

      Duncan, Alan

      Maude, Rt Hon Francis

      Duncan Smith, Iain

      May, Mrs Theresa

      Emery, Rt Hon Sir Peter

      Michie, Mrs Ray (Argyll & Bute)

      Evans, Nigel

      Moore, Michael

      Ewing, Mrs Margaret

      Morgan, Alasdair (Galloway)

      Faber, David

      Moss, Malcolm

      Fallon, Michael

      Nicholls, Patrick

      Fearn, Ronnie

      Norman, Archie

      Flight, Howard

      Öpik, Lembit

      Forth, Rt Hon Eric

      Ottaway, Richard

      Foster, Don (Bath)

      Paice, James

      Fowler, Rt Hon Sir Norman

      Paterson, Owen

      Fox, Dr Liam

      Pickles, Eric

      Fraser, Christopher

      Prior, David

      Garnier, Edward

      Redwood, Rt Hon John

      George, Andrew (St Ives)

      Rendel, David

      Gibb, Nick

      Robathan, Andrew

      Gill, Christopher

      Robertson, Laurence (Tewk'b'ry)

      Gillan, Mrs Cheryl

      Rowe, Andrew (Faversham)

      Goodlad, Rt Hon Sir Alastair

      Ruffley, David

      Gorman, Mrs Teresa

      Russell, Bob (Colchester)

      Gorrie, Donald

      St Aubyn, Nick

      Green, Damian

      Sanders, Adrian

      Greenway, John

      Sayeed, Jonathan

      Grieve, Dominic

      Shephard, Rt Hon Mrs Gillian

      Gummer, Rt Hon John

      Shepherd, Richard

      178

      Simpson, Keith (Mid-Norfolk)

      Wallace, James

      Soames, Nicholas

      Walter, Robert

      Spicer, Sir Michael

      Wardle, Charles

      Stanley, Rt Hon Sir John

      Waterson, Nigel

      Streeter, Gary

      Webb, Steve

      Stunell, Andrew

      Whittingdale, John

      Swayne, Desmond

      Wigley, Rt Hon Dafydd

      Swinney, John

      Wilkinson, John

      Syms, Robert

      Willetts, David

      Tapsell, Sir Peter

      Willis, Phil

      Taylor, Ian (Esher & Walton)

      Wilshire, David

      Taylor, John M (Solihull)

      Winterton, Mrs Ann (Congleton)

      Taylor, Matthew (Truro)

      Winterton, Nicholas (Macclesfield)

      Taylor, Sir Teddy

      Woodward, Shaun

      Tonge, Dr Jenny

      Yeo, Tim

      Townend, John

      Young, Rt Hon Sir George

      Trend, Michael

      Tyler, Paul

      Tellers for the Ayes:

      Tyrie, Andrew

      Sir David Madel and

      Viggers, Peter

      Mr. Stephen Day.

      NOES

      Ainger, Nick

      Coleman, Iain

      Ainsworth, Robert (Cov'try NE)

      Connarty, Michael

      Alexander, Douglas

      Cook, Frank (Stockton N)

      Anderson, Janet (Rossendale)

      Corbett, Robin

      Armstrong, Ms Hilary

      Corbyn, Jeremy

      Ashton, Joe

      Corston, Ms Jean

      Atkins, Charlotte

      Cousins, Jim

      Austin, John

      Cranston, Ross

      Banks, Tony

      Crausby, David

      Bayley, Hugh

      Cummings, John

      Beard, Nigel

      Cunliffe, Lawrence

      Begg, Miss Anne

      Cunningham, Jim (Cov'try S)

      Benn, Rt Hon Tony

      Dalyell, Tam

      Bennett, Andrew F

      Darling, Rt Hon Alistair

      Benton, Joe

      Darvill, Keith

      Berry, Roger

      Davey, Valerie (Bristol W)

      Betts, Clive

      Davidson, Ian

      Blears, Ms Hazel

      Davies, Rt Hon Denzil (Llanelli)

      Blizzard, Bob

      Davies, Geraint (Croydon C)

      Boateng, Paul

      Davies, Rt Hon Ron (Caerphilly)

      Borrow, David

      Davis, Terry (B'ham Hodge H)

      Bradley, Keith (Withington)

      Dawson, Hilton

      Bradley, Peter (The Wrekin)

      Dean, Mrs Janet

      Bradshaw, Ben

      Denham, John

      Brinton, Mrs Helen

      Dismore, Andrew

      Brown, Rt Hon Nick (Newcastle E)

      Dobbin, Jim

      Brown, Russell (Dumfries)

      Donaldson, Jeffrey

      Browne, Desmond

      Donohoe, Brian H

      Buck, Ms Karen

      Doran, Frank

      Burden, Richard

      Drew, David

      Burgon, Colin

      Eagle, Maria (L'pool Garston)

      Byers, Stephen

      Ellman, Mrs Louise

      Campbell, Alan (Tynemouth)

      Ennis, Jeff

      Campbell, Mrs Anne (C'bridge)

      Etherington, Bill

      Campbell, Ronnie (Blyth V)

      Fatchett, Derek

      Cann, Jamie

      Field, Rt Hon Frank

      Caplin, Ivor

      Fitzpatrick, Jim

      Casale, Roger

      Flint, Caroline

      Caton, Martin

      Flynn, Paul

      Chapman, Ben (Wirral S)

      Foster, Rt Hon Derek

      Chaytor, David

      Foster, Michael Jabez (Hastings)

      Chisholm, Malcolm

      Foster, Michael J (Worcester)

      Clapham, Michael

      Gapes, Mike

      Clark, Rt Hon Dr David (S Shields)

      Gardiner, Barry

      Clark, Dr Lynda (Edinburgh Pentlands)

      George, Bruce (Walsall S)

      Gerrard, Neil

      Clark, Paul (Gillingham)

      Gibson, Dr Ian

      Clarke, Charles (Norwich S)

      Gilroy, Mrs Linda

      Clarke, Tony (Northampton S)

      Godman, Dr Norman A

      Clelland, David

      Goggins, Paul

      Clwyd, Ann

      Golding, Mrs Llin

      Coaker, Vernon

      Gordon, Mrs Eileen

      Coffey, Ms Ann

      Grant, Bernie

      Cohen, Harry

      Griffiths, Jane (Reading E)

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      Griffiths, Nigel (Edinburgh S)

      Marshall, David (Shettleston)

      Grocott, Bruce

      Marshall, Jim (Leicester S)

      Grogan, John

      Marshall-Andrews, Robert

      Gunnell, John

      Martlew, Eric

      Hain, Peter

      Meacher, Rt Hon Michael

      Hall, Mike (Weaver Vale)

      Meale, Alan

      Hamilton, Fabian (Leeds NE)

      Merron, Gillian

      Hanson, David

      Michael, Alun

      Harman, Rt Hon Ms Harriet

      Milburn, Alan

      Heal, Mrs Sylvia

      Miller, Andrew

      Healey, John

      Mitchell, Austin

      Henderson, Ivan (Harwich)

      Moffatt, Laura

      Heppell, John

      Morgan, Ms Julie (Cardiff N)

      Hewitt, Ms Patricia

      Morgan, Rhodri (Cardiff W)

      Hill, Keith

      Morris, Ms Estelle (B'ham Yardley)

      Hinchliffe, David

      Mudie, George

      Hodge, Ms Margaret

      Mullin, Chris

      Hoey, Kate

      Murphy, Jim (Eastwood)

      Home Robertson, John

      O'Brien, Bill (Normanton)

      Hood, Jimmy

      Olner, Bill

      Hoon, Geoffrey

      O'Neill, Martin

      Howarth, Alan (Newport E)

      Organ, Mrs Diana

      Hoyle, Lindsay

      Osborne, Ms Sandra

      Hughes, Ms Beverley (Stretford)

      Palmer, Dr Nick

      Hughes, Kevin (Doncaster N)

      Pearson, Ian

      Humble, Mrs Joan

      Pendry, Tom

      Iddon, Dr Brian

      Pickthall, Colin

      Illsley, Eric

      Pike, Peter L

      Jackson, Ms Glenda (Hampstead)

      Plaskitt, James

      Jackson, Helen (Hillsborough)

      Pope, Greg

      Jenkins, Brian

      Pound, Stephen

      Johnson, Alan (Hull W & Hessle)

      Powell, Sir Raymond

      Jones, Mrs Fiona (Newark)

      Prentice, Ms Bridget (Lewisham E)

      Jones, Ieuan Wyn (Ynys Môn)

      Prentice, Gordon (Pendle)

      Jones, Jon Owen (Cardiff C)

      Primarolo, Dawn

      Jones, Dr Lynne (Selly Oak)

      Prosser, Gwyn

      Jones, Martyn (Clwyd S)

      Purchase, Ken

      Jowell, Ms Tessa

      Quinn, Lawrie

      Kaufman, Rt Hon Gerald

      Radice, Giles

      Keeble, Ms Sally

      Rammell, Bill

      Keen, Alan (Feltham & Heston)

      Reed, Andrew (Loughborough)

      Keen, Ann (Brentford & Isleworth)

      Reid, Dr John (Hamilton N)

      Kennedy, Jane (Wavertree)

      Robertson, Rt Hon George (Hamilton S)

      Khabra, Piara S

      Kidney, David

      Robinson, Geoffrey (Cov'try NW)

      Kilfoyle, Peter

      Roche, Mrs Barbara

      King, Andy (Rugby & Kenilworth)

      Rooker, Jeff

      Kingham, Ms Tess

      Ross, Ernie (Dundee W)

      Kumar, Dr Ashok

      Rowlands, Ted

      Ladyman, Dr Stephen

      Roy, Frank

      Lawrence, Ms Jackie

      Ruddock, Ms Joan

      Lepper, David

      Russell, Ms Christine (Chester)

      Leslie, Christopher

      Ryan, Ms Joan

      Lewis, Terry (Worsley)

      Salter, Martin

      Liddell, Mrs Helen

      Savidge, Malcolm

      Linton, Martin

      Sedgemore, Brian

      Livingstone, Ken

      Shaw, Jonathan

      Lloyd, Tony (Manchester C)

      Sheerman, Barry

      Lock, David

      Sheldon, Rt Hon Robert

      Love, Andrew

      Simpson, Alan (Nottingham S)

      McAllion, John

      Singh, Marsha

      McAvoy, Thomas

      Skinner, Dennis

      McCabe, Steve

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      McCafferty, Ms Chris

      McDonagh, Siobhain

      Smith, Llew (Blaenau Gwent)

      McDonnell, John

      Smyth, Rev Martin (Belfast S)

      McFall, John

      Soley, Clive

      McGuire, Mrs Anne

      Southworth, Ms Helen

      McKenna, Mrs Rosemary

      Spellar, John

      McNulty, Tony

      Steinberg, Gerry

      MacShane, Denis

      Stevenson, George

      Mactaggart, Fiona

      Stewart, Ian (Eccles)

      McWilliam, John

      Stoate, Dr Howard

      Mahon, Mrs Alice

      Stott, Roger

      Marek, Dr John

      Strang, Rt Hon Dr Gavin

      Marsden, Paul (Shrewsbury)

      Stringer, Graham

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      Stuart, Ms Gisela

      Wareing, Robert N

      Sutcliffe, Gerry

      Watts, David

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      White, Brian

      Whitehead, Dr Alan

      Temple-Morris, Peter

      Wicks, Malcolm

      Thomas, Gareth R (Harrow W)

      Williams, Alan W (E Carmarthen)

      Touhig, Don

      Winnick, David

      Trickett, Jon

      Wood, Mike

      Truswell, Paul

      Woolas, Phil

      Turner, Dennis (Wolverh'ton SE)

      Wright, Anthony D (Gt Yarmouth)

      Turner, Dr Desmond (Kemptown)

      Wright, Dr Tony (Cannock)

      Turner, Dr George (NW Norfolk)

      Wyatt, Derek

      Twigg, Derek (Halton)

      Vaz, Keith

      Tellers for the Noes:

      Vis, Dr Rudi

      Mr. David Jamieson and

      Walley, Ms Joan

      Mr. Jim Dowd.

      Question accordingly negatived.

    New clause 5

      SPECIAL REGARD TO TRADING PATTERNS OF THE RETAIL INDUSTRY
      '.—After section 59DA of the Taxes Management Act 1970 (payment of corporation tax under self-assessment) there shall be inserted—
      "59F In making any regulations under section 59E above, the Treasury shall have special regard to the trading patterns and profitability of the retailing industry".'.—[Mr. Heathcoat-Amory.]
      Brought up, and read the First time.
      Mr. Heathcoat-Amory: I beg to move, That the clause be read a Second time.
      New clause 5 is an attempt to correct one of the main deficiencies in the Government's corporation tax system, specifically the payment method provided for in the Bill. However, so that I might describe fully the intention behind new clause 5, I hope that it will be in order if I explain to the House some of the problems and—in all fairness—what the Government have tried to achieve in changing the method of taxing companies.
      In the past year, we have moved away from the imputation system of corporation tax, which has, for some years, been a familiar part of the taxation landscape. The system was a good one, as it avoided double taxation of profits—in the hands both of companies and of shareholders. However, the Government decided—I can appreciate at least in part their motive for doing so—to switch from that system, abolishing dividend tax credits, to a system of periodic payment of corporation tax.
      Our quarrel with the Government is that they have used the change to introduce very large increases in effective taxation. We witnessed an example of such an increase last year, when the abolition of tax credits dealt an enormous blow to the pensions industry by instituting a £5 billion annual raid on pension funds.
      Last year was a particularly stupid time to tax savings, as the Government were themselves becoming alarmed at inflationary pressures in the economy. Taxing savings rather than consumption was therefore the most short-sighted action. It was also in conflict with everything that the Government were saying about the need to build up a savings culture in the United Kingdom, to encourage people to provide for their own retirement and generally to increase self-reliance.
      I think that the Government understood that the only realistic alternative to welfare dependency was private savings. However, as usual with the Government, there

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      was a huge gap between Ministers' rhetoric and their action. By withdrawing dividend tax credits, they sent a clear message to those who save and have private pensions: "Do not bother to save. If you do, the Government will come along and change all the rules, and tax the very savings and pension funds that you have built up."
      Withdrawing dividend tax credits was another short-sighted action, as an acknowledged strength of the United Kingdom is the fact that we have an enormous and successful private pensions industry. It has been calculated that the total sum of pension assets under management in the United Kingdom exceeds the sum for the rest of the European Union combined. On the continent, perhaps only the Netherlands has a comparable private pensions industry. Governments in other countries, particularly some southern European ones, have colossal off-balance-sheet debt. When they promise pensions to their electorate, all they are doing is hoping that a future generation of taxpayers will meet those obligations.
      Mr. Nicholas Soames: Will my right hon. Friend speculate on why the Government should have done such a stupid thing? Although it is easy for Opposition Members to understand why the Government abolished tax relief on health insurance—it was out of pure spite and malice—it seems inexplicable that they could have done such a stupid thing with savings.
      Mr. Heathcoat-Amory: I am genuinely at a loss to give my hon. Friend an answer to his question. We have racked our brains to try to determine why the Government should have done something that was not only wrong in macro-economic terms, as I explained, but contradicted their express desire to get people off welfare and on to private provision and self-reliance. I can only speculate that their action was due to ignorance and, perhaps, the instinctive reaction of a Labour Government to tax, which is to try to tax their way out of any difficulty.
      Mr. Hammond: Does my right hon. Friend agree that the Government may have hoped that those who were bearing the tax might not notice that they were bearing it? It was a back-door tax which many pensioners did not appreciate they were paying until Conservative Members drew their attention to it.
      Mr. Heathcoat-Amory: I think that my hon. Friend has part of the answer—that the Government hoped that no one would notice. They thought that instead of taxing people directly, they could tax corporations and pension funds, which do not themselves have votes. However, millions of people who rely on those pension funds now know perfectly well that the Government effectively conducted a £5 billion-a-year-raid on pensioners and contributors to pension funds.
      Last year's Budget, therefore, will always be known as the Robert Maxwell memorial Budget. That is entirely appropriate as at least two of the Ministers conducting that raid had first-hand experience of how the late Robert Maxwell handled his business affairs. So the Government did not get away with it, but the damage created by that Budget will be with us for many more years. It was compounded this year when the Government returned to
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      the subject and used the change in the system of corporation tax to smuggle in a back-door tax increase, borne this time by corporations and the larger business sector in particular.
      5.30 pm
      When we debated the economy yesterday, the Chief Secretary to the Treasury again asserted that the Government had cut the rate of corporation tax. That may be true in nominal terms, although the Government have a long way to go before they match our record. In 1979, we inherited a corporation tax rate of 52 per cent. and by gradual degrees, year upon year, we reduced it. All the Labour Government have done is to signal that there will be a further 1 per cent. reduction, which will not take effect until next April.
      Companies and the Confederation of British Industry are concerned that, despite a nominal reduction, there has been an actual increase in the burden of corporation tax. I am not making an allegation or giving the House an opinion; I invite hon. Members to consult page 18 of the Budget statement, which shows that the abolition of advance corporation tax and the introduction of quarterly payments will increase tax by £100 million in the current financial year, by £1,600 million next year and by a full £2 billion in the year 2000–01.
      Mr. Hammond: Are not the Government engaged in utterly cynical manipulation? They are bringing forward in a one-off shift tax revenues that would have been enjoyed later so that they can spend them during the period of this Government and, hopefully from their point of view, buy their way back into power at the next general election?
      Mr. Heathcoat-Amory: Yes. My hon. Friend is entirely right. It is particularly short-sighted because the Government are relying on those same larger companies to provide the extra jobs that they need for their so-called welfare-to-work programme. If they persist in taxing those companies, it will rapidly turn into a work-to-welfare programme. There is already evidence that the labour market is turning, and investment is also affected. The same Red Book published in March shows a steady and continuing reduction in investment, particularly by the business sector. That can only be a consequence of the increased tax burden that businesses are expected to bear.
      Mr. Quentin Davies: Could not the position get even worse? Not only will companies be less inclined to invest because of the extent to which the tax burden on them is increased, but if the economy continues to turn down as a direct result of Government action and inaction—manufacturing is already in recession—will not that additional £2 billion a year of cash-flow burden on British industry make all the difference to the survival or the collapse and bankruptcy of British businesses? Therefore, there may be an escalating effect. The Government may be launching a vicious circle which will be damaging to output and to employment for a long time.
      Mr. Heathcoat-Amory: Yes. My hon. Friend makes a good point. The measures are pro-cyclical; they are reinforcing what is already an emerging recession. The

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      effective increases in corporation tax will hit companies precisely when they are already experiencing a recession. The damage has not yet become entirely apparent.
      Another issue concerns our general competitiveness and our position in the European Union and in the wider world. One of the great—and, we hope, lasting—achievements of the previous Conservative Government is that we established a low-taxation structure. We are the envy of Europe. Indeed, the Chancellor of the Exchequer in one of his disguises goes round the European Union lecturing other countries about the problems of high taxes, particularly on labour, and the need for them to introduce flexible labour markets. At the same time he is undermining precisely those achievements at home, so it is little wonder that he is now excluded from Euro X and the other committees on which such matters are discussed. They have spotted a degree of hypocrisy. The Chancellor is telling them to do what he is failing to do at home.
      We hope that tomorrow we shall be debating the increase in indirect taxation on transport fuel, for example, which is eroding the competitiveness of our haulage industry, but at least we thought that we had entrenched a competitive advantage for Britain in terms of business taxes which makes us a beneficiary of inward investment from the European Union and the rest of the world.
      Mr. Soames: Is my right hon. Friend aware that the competitive advantage which, indeed, was well entrenched, has become eroded in such a way—even within the past year—that in my constituency and neighbouring constituencies, quite substantial numbers of jobs are already beginning to flow out of manufacturing industry? What does my right hon. Friend have to say for the future when the impact of the ill-thought-out and ill-conceived changes to corporation tax will further hit manufacturing industry?
      Mr. Heathcoat-Amory: My hon. Friend is entirely right. The damage is already apparent, and we have not yet had the full impact of the changes in corporation tax. The figures that I quoted from the Red Book show that what is a problem today is in danger of becoming a catastrophe tomorrow unless avoiding action is taken. New clause 5 goes some way towards at least drawing the teeth of the change in corporation tax and bringing relief to some sectors of British industry that are faced with effective tax increases.
      The Government have abolished advance corporation tax, but replaced it with a system of interim payments whereby larger companies will have to make payments on account, which represent an effective tax increase.
      Mr. Andrew Love: I have listened to my right hon. Friend for the past five or seven minutes, and have yet to hear any recognition from the Opposition that, when corporation tax is reduced by 1 per cent. next year, it will be at its lowest rate ever.
      Mr. Heathcoat-Amory: Yes, but the hon. Gentleman has not understood my point. Businesses are not concerned about the nominal headline rate of corporation tax if the actual tax that they pay goes up. Labour's world is all about theory. When Labour Members see a cut of 1 per cent., they assume that all the companies in their
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      constituencies will pay less corporation tax. The hon. Gentleman may have been nodding off when I quoted from the Red Book. Even the Chancellor's own arithmetic shows that there is an effective increase in the tax burden on companies in Britain of £2 billion a year. Does the hon. Gentleman not understand that simple point? If he will not accept it from me, will he do the House the honour of spending the next few minutes reading the Chancellor's Budget statement, which sets that point out with commendable clarity?
      Mr. Oliver Letwin: Does my right hon. Friend agree that the position is even worse than he has described? He has been describing the stagnation part of inflation, but by directing their attentions to corporate taxation and interest rates, which have been shown increasingly to have a greater effect on the corporate sector than on the personal sector, the Government are not addressing inflation.
      Mr. Heathcoat-Amory: My hon. Friend is right. I hope that he will catch your eye later, Mr. Deputy Speaker, to elaborate on that point.
      I should like to establish the fact—this is not a contestable opinion—that the Government are smuggling in a real increase in the burden of corporation tax suffered by corporate Britain. When investment falls, as it is due to do, and unemployment increases, the Government will have only themselves to blame.
      Mr. Geraint Davies: The right hon. Gentleman is confusing cash flow with tax burden. The changes will bring forward tax revenues, but the net present value of tax due by UK plc has gone down. He should welcome that, not try to confuse issues—or is he the one who is confused?
      Mr. Heathcoat-Amory: The hon. Gentleman has missed the point. Bringing forward a tax payment is an effective increase in tax, hitting the cash flow of companies and costing them money. If the hon. Gentleman had to pay his tax bill a year earlier than he had been used to, he would resent the change and regard it as a burden on his finances and his ability to spend on other items. The two Labour interventions simply underline our arguments.
      If the Government had wanted the change to be tax-neutral, they could have taken the advice of the CBI and put back the payment dates for corporation tax by two months. They did not do that, because they wanted the exercise to raise tax. That is what we are complaining about. The consequences will be long-lasting and very damaging.
      The Government are asking companies to predict their profits. Companies will have to pay tax on estimated profits, which may well change. Many companies make unexpected capital gains or losses, perhaps towards the end of their accounting period.
      Mr. Derek Twigg: On a point of order, Mr. Deputy Speaker. The new clause is specifically about

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      the retail industry, which the right hon. Gentleman has not mentioned. I wonder when he will speak to the new clause.
      Mr. Deputy Speaker: The right hon. Gentleman is responsible for his speech. So far I have found him to be in order.
      Mr. Heathcoat-Amory: The hon. Gentleman thinks that he can do your job better than you can, Mr. Deputy Speaker, but we heard almost nothing from him in Standing Committee. Many times we had to do his job for him, trying to stand up for the interests of businesses in his constituency about which he was silent. He failed to do his job upstairs and now he thinks that he can do your job better. I am grateful for your confirmation that everything that I have said is fully in order.
      There is something seriously wrong with the system of the interim payments introduced by the Bill. The intention behind the new clause is to do something about that. Companies will have to predict their profits, which will be very difficult, particularly for those with marked seasonal variations in their profits. Leisure and tourism is a big industry in my constituency. Almost by definition, it is highly seasonal, with profits tending to be made in the summer. Similarly, many retailing companies, particularly the larger ones, make most of their profit in the run-up to Christmas. That is particularly true of companies that sell discretionary items such as jewellery or greetings cards.
      The system of corporation tax payments laid down in the Bill makes no provision for seasonal variations. If a company makes most of its profits towards the end of the financial year, it will be asked to pay tax on profits that it has not yet earned.
      5.45 pm
      Mr. Geraint Davies: Why does the new clause refer specifically to the retailing industry, and not to industries with seasonal variations in profitability, including tourism? Does that have anything to do with the fact that the shadow Chancellor has an interest in retailing, as do other hon. Members who were on the Standing Committee?
      Mr. Heathcoat-Amory: That was not a tremendously telling intervention. As the hon. Gentleman will remember, we discussed seasonality in Committee. I regretted very much at the time that the hon. Gentleman failed to participate in the debate. I am glad that we can, perhaps, look forward to a contribution from him now. We are restricted in the new clauses that we can table on Report. We have chosen the retailing sector to illustrate the problem. If, as I hope, the Paymaster General accepts what we have in mind, he can easily widen the concept to bring relief to manufacturing, processing and service companies that are similarly affected. We have chosen the retail sector because it illustrates particularly well the problem that we are trying to deal with.
      It is accepted that many companies have a seasonal variation in their profits. The requirement to make interim regular payments that bear no relation to how the profits are made is inequitable, forcing companies to pay tax on profits that they have not yet earned.
      Mr. Hammond: Does my right hon. Friend agree that the provision might require a company to borrow money
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      to pay tax if its revenue pattern was highly seasonal and it did not have great reserves out of which to make the payments?
      Mr. Heathcoat-Amory: That is indeed the case. Such companies may make little or no profit during the first six or nine months of the financial year and they will have to borrow money to fund their tax payments. In the final three months of the year, when they make most of their profits, they will be able to repay the money, but they will have lost the interest.
      When we debated the issue, the Paymaster General seemed sympathetic to our case. He correctly pointed out that the regulations on the mechanism and timing of payments are out for consultation; that consultation period does not end until 15 July. However, we do not need to wait until 15 July to know what companies want. The British Retail Consortium has already submitted its ideas for relieving its members of the burden.
      We have learnt the hard way during the passage of the Bill that, although the Government may express sympathy in Committee, they do nothing about the problem on Report. New clause 1, which we have just debated, was a good example of that. The Paymaster General said that he entirely understood the plight of poorer, non-taxpaying pensioners who were not receiving their dividend tax credits. He said that something would be done about that and that he would return to the issue on Report, but he did not. No amendments or new clauses were tabled until we raised the subject, in an attempt to get the Government to deliver on the sympathetic noises that they made upstairs.
      We are in the same danger in this debate. In Committee, the Paymaster General said that he was minded to look at the British Retail Consortium's suggestions, and might respond in due course. Here is an opportunity to make him do so. If not, the consultation period will end, the Government will make up their mind and they will propose regulations that this House will never scrutinise in any way because they do not provide for any affirmative vote by this House or any scrutiny by any Committee.
      A theme of the Bill—on which we have commented many times—is that there is far too much reliance on Treasury regulations, promulgated by the Treasury according to its own assessment of the situation, which may or may not bear some relation to assurances given earlier. We shall never again have an opportunity to express an opinion, let alone to vote on the matter.
      Mr. Love: I apologise to the right hon. Gentleman for inadvertently calling him "my right hon. Friend" earlier. I assume that he will take that comment in the spirit in which it is meant. Does he consider the new clause to be woolly, in that it refers to having
      "special regard to the trading patterns and profitability of the retailing industry"?
      What are we supposed to make of that? Will not the net effect of the new clause simply be to increase the complexity of the regulations about which the Opposition are complaining?
      Mr. Heathcoat-Amory: No, that is not the case. The British Retail Consortium would not have proposed the idea unless it thought that it would be of advantage to its

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      members. Retailers do not believe that the measure will bring additional and unnecessary complexity. This is a modest way in which the Government can respond to the corporate sector and undo some of the damage that the rest of their corporation tax proposals will do.
      Mr. Hammond: Does my right hon. Friend recall the hon. Member for Edmonton (Mr. Love) complaining in Committee about woolly clauses in the Bill, requiring reams of regulation to be proposed by the Government thereafter?
      Mr. Heathcoat-Amory: My hon. Friend is absolutely right.
      The question of regulation is a constitutional issue. It has been noticed by outside commentators that there is greater reliance on the use of secondary legislation in the Bill, and that is highly undesirable. The Law Society commented that, in some cases, it was unprecedented. A new source, which we have not quoted—because I have only seen its submission recently—is the Institute of Chartered Accountants of Scotland, which said:
      "A reading of this Finance Bill results in the feeling that much of it is missing. Continually, clauses simply provide for a delegated authority to permit regulations to be drawn up."
      It points out that substantive issues of taxation—the amount of tax, when it is to be paid and by whom—are not in the Bill either. They are delegated to subsequent secondary legislation which, in most cases, will never be debated at all. The institute expressed
      "very strong reservations about the wider use of regulations."
      If that outside commentator expresses strong reservations, how much more should we—as Members of a Parliament that came into existence to guard the taxation of the people and to ensure that it did not fall into arbitrary hands?
      Mr. John Swinney: Is the right hon. Gentleman aware that the Institute of Chartered Accountants of Scotland expressed similar concerns about the attitude of the Government during the passage of the Scotland Bill? It was concerned that many aspects of the Bill were being left to regulations, including important points such as, for example, the definition of who would be eligible to be a taxpayer under the Scottish Parliament. That matter was left in a rather woolly state by the end of the passage of the Bill, and it is the subject of regulations that we have not seen.
      Mr. Deputy Speaker: Order. We would be going somewhat wide of the amendment if we started to discuss that intervention.
      Mr. Heathcoat-Amory: I had better not be drawn too far down that line, but I think that it would be in order to relate that point to the new clause, which attempts to correct exactly the problem to which the hon. Member for North Tayside (Mr. Swinney) has drawn our attention—the use of primary legislation to give delegated powers to the Government to propose secondary legislation which will never be scrutinised.
      The measures have been called Henry VIII clauses, and we debated them in Committee. Henry VIII used the statute of declarations to ensure that pretty well anything he said had the force of law. He could amend or repeal
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      any statute simply by issuing a proclamation. The Government are getting perilously close to that in the Bill—and, indeed, in the clause dealing with corporation tax. They give to the Treasury almost unparalleled powers to amend any statute which it sees fit to bring into the new system of corporation tax.
      Clause 30(5) states that regulations under the section
      "may make such modifications of any provision of the Taxes Acts, or … may apply such provisions of the Taxes Acts, as the Treasury think necessary or expedient for or in connection with giving effect to the provisions of this section."
      That is an extraordinarily wide provision. It is really saying that the Treasury can do what it likes if it thinks that it is bringing the system of corporation tax into effect. The point is that we shall never have a further opportunity to give an opinion on the matter, still less to vote on it.
      Mr. Gibb: Are not the regulations in connection with quarterly corporation tax payments different from other Treasury regulations, which deal with the administration of tax, in that the details of the regulations will determine the burden of tax that will be paid by companies? The timing of the payments is part and parcel of the burden, and, therefore, the regulations go much wider than previous Treasury regulations.
      Mr. Heathcoat-Amory: My hon. Friend is, characteristically, entirely accurate. The £2 billion extra burden of taxation, to which I have referred, is not provided for in the Bill, and is contingent on regulations that we have not seen. How can this House pass a Bill which apparently gives effect to the Government's arithmetic, but does not include it?
      I urge the House seriously to consider accepting the new clause, which would go some way towards correcting the problem by creating the possibility of future regulations. We would then, at least in one small way, lay down in the Bill what the Government must do to relieve the burden on the retailing sector of the economy. That is a modest request. It does not go nearly far enough to correct the damage in the Bill but, at the very least, it would bring relief to a sector of the economy that will suffer because of a failure by the Government to understand the seasonal pattern of its trading activities.
      Mr. Derek Twigg: Given the fact that the right hon. Gentleman has shares in a retailer, and the shadow Chancellor is a director of Asda, how seriously can we take their comments? Are they in someone's interests, or is the right hon. Gentleman speaking to a genuine new clause on the retail industry?
      Mr. Deputy Speaker: Order. Right hon. and hon. Members are responsible for declaring their own interests. It is not a matter for debate here in the Chamber.
      Mr. Heathcoat-Amory: That was a stupid intervention by the hon. Member for Halton (Mr. Twigg)—something that is becoming characteristic. It might interest hon. Members to know that the hon. Gentleman has said more during this debate than he did during the entire Committee proceedings when we scrutinised a 400-page Bill, which closely affects his constituents and on which he remained completely silent. We debated retirement relief and matters of taxation adversely affecting small and medium businesses in his

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      constituency—we know that because letters from them were copied to us—and the hon. Gentleman remained silent. Now he pops up to make an entirely irrelevant remark about a new clause tabled by the Opposition.
      Mr. Deputy Speaker: Order. The matter before us is not what happened in Committee, but the new clause. We must discuss the new clause.
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      Mr. Heathcoat-Amory: You are right, Mr. Deputy Speaker, and I was mistaken in giving way to the hon. Member for Halton. I shall not make that mistake again in this debate. However, I shall respond directly to his point. It may interest him to know that food retailing companies would probably be the last to get a concession from the new clause because their business is less seasonal than most. Any company selling goods will of necessity probably not experience highly seasonal variation. Companies that show a marked increase in sales around Christmas will probably chiefly benefit.
      I hope that the House will give serious consideration to a modest measure to repair at least some of the damage caused by the Bill.
      Mr. Flight: New clause 5 would not only protect retail industries but put the Treasury on notice in forming its regulations to consider all seasonal industries and protect their cash flow from the effects of moving to the new pattern of seasonal payments. The quarterly payments of corporation tax will have to be made in the third and fourth quarters of the current financial year before many companies have earned the profits to pay them. As we have heard, many companies will have to base their payments on predictions.
      As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) has pointed out, the new clause is a minor attempt to correct the poor history of this Government wading into massive reform of the corporation tax system without considering all the implications. First, foreign income dividends were forgotten about, and, in changing the system, the Government proposed quarterly payments. In doing so, they forgot that such payments would bring forward the payment of tax, and that many businesses have extremely seasonal patterns of trading.
      Mr. Gibb: My hon. Friend is generous to the Government in saying that they forgot that the proposal would mean bringing forward corporation tax receipts. I put it to him that the Government did not forget; they were fully aware of that by-product of the measure and they wanted the revenue.
      Mr. Flight: I am sure that the Government do want the revenue and, as I shall describe, the objective of the measures is massively to boost revenue without the citizens at large being aware that that is occurring. I suggest also that the professionals in the Treasury often have to work on these matters in haste without thinking through all the detailed implications of the changes. I refer in particular to the failure to consider the effect on foreign income dividends, which my hon. Friend described in great detail when we considered the previous Finance Bill.
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      One intended effect of new clause 5 would be to allow firms simply to pay less corporation tax in the first and second instalments and more in the later instalments. That is analogous to the system that obtains in the USA.
      The crucial point is not only the additional tax that will be paid—I shall move on to the total of that later—but that we are moving into a phase of economic downturn. We do not know whether that will be a recession, but it is unwise of the Government to impose additional, major cash-flow burdens on business after they have already substantially put up taxation in other ways. It has been pointed out that it is also pro-cyclical and is likely to encourage the worst aspects of the economic cycle.
      The problem that new clause 5 aims to tackle arises also from the Chancellor's penchant for disingenuous headline grabbing when presenting the Budget. He made a bold announcement in the House that corporation tax was coming down by one percentage point. Only later did we learn that the true effect—the cash flow effect and the figures recorded in the Red Book—is a substantial increase in the taxation being paid by companies. The measure adds £1.6 billion of taxation in 1999–2000, £2 billion in 2000–01 and £3.1 billion in 2001–02, which is a total of £6.7 billion over those three years. Substantially more taxation will be paid than will be cut by the reduction in corporation tax by 1 percentage point to 30 per cent.
      Mr. Love: The hon. Gentleman quoted from figures for the next three years, but did not quote those for the following years when the net effect will be to reduce the burden on companies. Perhaps he could set the record straight.
      Mr. Flight: Self-evidently, the effect on the rate of corporation tax will eventually be that it is 30 per cent. rather than 31 per cent., but, equally self-evidently, for the next three to four years, there will be a substantial increase in the burden of taxation paid by companies. I repeat that the increase is being imposed at a point in the economic cycle when it may be extremely negative for employment and investment.
      Mr. Gibb: Another point is that the Government's guarantee that they will not increase corporation tax extends only to the end of this Parliament, so by the time the measure becomes revenue-neutral or begins to give back money to the companies, the Government—if they are re-elected—could easily raise the rate of corporation tax.
      Mr. Flight: My hon. Friend makes an important point. We hope that the country will be saved from the re-election of a Government who mess around with our tax system as foolishly as they have done over the past two years. My hon. Friend is correct to point out that, faced with potentially deteriorating tax revenues as the cycle turns negative, there is no guarantee that, if re-elected, this Administration would not increase the rate of corporation tax. He is correct: the net effect can be judged only between now and the next election, and it will be a substantial increase in the amount of taxation paid by companies.
      As my right hon. Friend the Member for Wells pointed out in describing the background to the changes, they arise from the sad change to the imputation system of taxation

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      and the consequent substantial tax on savings. It has been doubly unfortunate that the tax on savings has produced a fall of almost 2 per cent. in the rate of savings at a time when any economist would say that we need a rise in savings. That fall has produced a rise in consumption.
      Mr. Deputy Speaker: Order. We really must keep to the new clause.
      Mr. Flight: Thank you, Mr. Deputy Speaker.
      We are trying to correct one of the minor mistakes resulting from the changes to corporation tax that have been introduced over the past two years. Those changes have had a negative impact on the economy, and threaten to have a negative micro-impact on seasonal industries such as the retailing and tourist sectors, which will suffer from the new quarterly payments of corporation taxation. Reforms introduced in a hurry and designed to raise revenue have ended up creating the sort of problems with which the new clause is intended to deal.
      Neither the new system of payment nor the increase in corporation taxation has attracted much attention—the public are scarcely aware of them. The corporate sector has been cash-rich for the past three years; its cash flows have been able to absorb the rise in taxation that has been imposed. But over the next two years, companies' cash flows will swing the other way. It is then that these corporation tax measures will really bite. It is then that retailers and their employees will pay the price for the changes. The very least we can do to counteract what the Government have been doing is to endorse the new clause, which attempts to cushion the cyclical industries from a tax change that will be a major cause of unemployment.
      Mr. Derek Twigg: The hon. Gentleman has referred several times to cyclical industries, in the plural. Why, then, does the new clause relate only to retailers? That question was not answered when it was asked earlier.
      Mr. Flight: The answer has already been given: the new clause is specific and refers to how the new quarterly payment system will be brought into effect by the Treasury. The intention is to persuade the Treasury to draft the relevant regulations with reference to all cyclical industries, retailing being the main one.
      Mr. Edward Davey: The debate has wandered fairly wide of the subject matter so far. Both the right hon. Member for Wells (Mr. Heathcoat-Amory) and the hon. Member for Arundel and South Downs (Mr. Flight) knocked around the issues surrounding the introduction of a new system of corporation tax payments. Indeed, they reminded me of some of the world cup football matches in which the back lines have played for time during the last five minutes of the game. Of course we hope that the England team will be doing just that in a few hours' time—playing for time before their victory.
      The debate has been enlivened by a few lunges from the Government Benches which proved in the end rather untimely. One such lunge was made by the hon. Member for Croydon, Central (Mr. Davies), who is not in his place, at the right hon. Member for Wells. The intervention concerned cash flows, but the hon. Gentleman completely missed the point.
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      The introduction of the new system has been driven by financial motives. The Government have realised that there is a time cost for tax payments, and have sought to recoup it for themselves. They will get the benefit of this revenue, and the corporate sector will be the worse for it. In Committee, the hon. Member for Croydon, Central told us of his experience of multinational companies, so he will know how many companies have built their profits on float income. The time cost of capital is an important factor in any business operation, as the Government have apparently realised—although they now seek the benefit for themselves.
      The short-term financial motives of the Government apart, there is nothing wrong in principle with the new system; but the way in which the Government have introduced it has given rise to suspicions of their motives. A new system throws up new problems—problems of implementation, problems for the corporate sector, problems that were not relevant to the previous system. It may throw up problems that the civil servants have never before had to consider.
      6.15 pm
      The new clause highlights just such a problem which did not occur under the old system—the problem of seasonal profits. Profits vary throughout the year, and the new system of corporation tax payment will serve to highlight that fact, particularly for businesses that generate most of their profits in the second half of the year: most notably, retail companies that make most of their profits in the last quarter.
      The new system of paying corporation tax in even quarterly instalments, based on forecast taxable profits for the current year, penalises seasonal businesses such as retailers that do not earn their profits evenly. Because they will have to pay tax up front, they will be required to pay it even before the profits have been earned. That may force them to borrow, which will be a significant extra cost. Therefore, the new system discriminates against companies whose business activities happen to be seasonal, and there would seem to be no justification for such discrimination—we heard no grounds for it in Committee.
      The cost of borrowing will be much higher for private sector firms than it would be for the Government. Companies with seasonal profits may be given a higher risk assessment because it will not be known whether Christmas, for instance, will turn out to be a good trading period.
      The right hon. Member for Wells mentioned businesses whose profits are linked primarily to the festive season—jewellers, for instance. My hon. Friends and I have been approached by Signet plc, a holding group for a number of high street jewellers whose profits are earned almost entirely in the last two or three months of the year. They will be particularly affected by the new payment system. Toy retailers and companies selling cards and Christmas decorations fall into the same category. Fireworks manufacturers, who would not be covered by the new clause, as they are not retailers, will also be adversely affected by the failure to take seasonality into account in the new system.
      Mr. David Ruffley: Is the hon. Gentleman aware of the argument of some Labour critics that it would be open to retail industries, especially those

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      who rely on big Christmas sales, simply to change their year end to get around the seasonality problem? Will he explain why that argument is so fallacious and defective?
      Mr. Davey: As I understand it, the payments must be made in equal amounts in the four quarters, so changing the year end would not get around the problem.
      Other industries are affected by seasonality—tourism has been mentioned. I do not understand why such firms should be punished because they operate in a specific marketplace and undertake a particular business activity. The state takes money from individuals and businesses to finance its activities on behalf of the community, and it should make it as easy as possible for companies and individuals to pay tax. It should not discriminate against some individuals or some businesses in the way it does.
      The right hon. Member for Wells said that draft regulations were out to consultation. We have heard that, in different places, the Paymaster General has expressed sympathy for those who will be affected by the problems that are being outlined and highlighted in the debate. He said:
      "We shall re-examine the draft regulations in the context of the"
      British Retail Consortium's
      "proposals and we shall inform the House of our view."—[Official Report, Standing Committee E, 19 May 1998; c. 254.]
      I hope that tonight we shall hear not just sympathetic words, but promises of action. The consultation period may end on 15 July, but the Paymaster General must have heard many representations—not only tonight, but well before tonight—about people's worries about his proposed system of payment. He would not exceed his remit if he gave a hint of the Government's thinking. If he feels unable to do so, will he tell us when the Government will publish their response to the consultation? Will it be in the depths of the summer, when the House is in recess, so that the House cannot hold the Government to account? We should like a date from him.
      The Paymaster General may want to accept new clause 5 tonight, but I doubt it. He may argue that it is a partial solution to the problem that he is apparently so sympathetic about; I am sure that Conservative Members would admit that it is indeed partial. However, at least he could respond to the spirit of the new clause. I have often argued that Ministers should answer the spirit of the debate, and he should do so tonight.
      Mr. Gibb: Given that the new clause merely enables the Government to draft their regulations on the basis of the words in the new clause—that is, it enables them to include some indication that they are taking into account the seasonal effects of retail industry—surely there is no technical reason why the Paymaster General cannot accept the new clause. All the details and planning that the Government need to do can still be done in the regulations.
      Mr. Davey: The hon. Gentleman has a point, but it is important that we do not allow the Government to get away with limiting allowances for seasonality to the retail industry; other industries also suffer from the problem.
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      I hope that, in reviewing the regulations and replying to the debate, the Paymaster General will address some of his comments not only to new clause 5, but to the system proposed by the British Retail Consortium. That proposed add-on to the Government's new system of corporation tax payments suggests that the Government lay down some criteria that would help us determine seasonality, possibly borrowing from the United States system, so that if 70 per cent. of a company's profits were earned in the latter half of the year, that would enable it to elect to pay its corporation tax on actual, not forecast, profits. That 30:70 per cent. split works in the United States; I cannot see why the Government cannot borrow from the way in which that system operates.
      The Government may argue that the United States corporation tax system is famous—or infamous—for its other complexities, and that it imposes heavy burdens on United States companies. We are not arguing for borrowing the United States corporation tax system lock, stock and barrel. We would not want the onerous burdens that it places on United States companies to be imposed on British companies, but it would be missing the point to use that argument against borrowing something like the 30:70 criterion. A small element borrowed from the United States system would significantly improve the proposed system of corporation tax payments. We believe that there is no need to imitate the US system point by point; one can borrow the best and leave the worst.
      I have spoken to members of the British Retail Consortium, who are in no doubt that they would be more than happy to bear any extra burden placed on them by giving them the option to elect to pay on the basis of actual, not forecast, profits. We are talking about companies that have professional tax departments. In the main, they are large companies, which are more than capable of dealing with any extra burden. To use the words that the Economic Secretary is most likely to utter on the subject, it would be "nae bother" for them to deal with such burdens.
      The Government have said that they are anxious that the system that they propose retains simplicity—that we do not complicate it. That argument is not well founded, given the Government's other actions on the Bill. They have introduced complexities into tax legislation, especially with their proposal on capital gains tax, and those complexities must be handled by individuals. The complexities that would be needed to give some sort of seasonality in the system for corporation tax payments would be simple by comparison with the complexities that the Government are introducing on CGT. The argument that the Government need to retain simplicity in the system does not stand up to examination.
      I urge the Minister to say that the Government retain an open mind on seasonality, and that they will consider the issue, as it is a serious one for many of our country's largest and most successful companies.
      Mr. Quentin Davies: This has been an extremely interesting debate. It has revealed something very significant about the Government's thinking, and it has strongly confirmed an impression that many of us have gained about the Government's fiscal policy. It has revealed that the Government do not understand the concept of cash flow. A most revealing intervention by a Labour Member made that absolutely clear.

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      Companies are more likely to fail for cash flow reasons than for any other reason. Cash flow is vital to a company's success, and cash flow planning is especially vital to the success of any small or growing company. Therefore, the idea that one can, with complete levity, say, "Oh, the £2 billion additional burden is just a cash flow burden; actual rates of tax have not changed," reflects, I am afraid, a complete lack of familiarity with some of the essential elements of business management, which is very disturbing in a Government in any country, especially in our own.
      Mr. Hammond: My hon. Friend cannot know this and will be disappointed to hear it, but the hon. Member for Croydon, Central (Mr. Davies), who made that intervention—he is not in his place—is one of the few Labour Members who claim to have real experience in business. Is it not utterly depressing that he displayed such a lack of understanding?
      Mr. Davies: My hon. Friend has said it all, but, with respect to him, I do not think that we should crow unduly. It may give Opposition Members cause for satisfaction and reassurance to see the Government's obvious failings and shortcomings, but the country will pay the price for that incompetence and inexperience, and I am afraid that the price will be paid by a very large number of businesses, and by those employees and investors whose futures depend on them.
      What the Government are doing is comparable to what would happen if, for example, a company suddenly said that it would double, unilaterally and arbitrarily, the period of settlement of its invoices. That would create a great cash flow problem for the company's suppliers. Alternatively, the company might demand that all its customers pay in advance. That would create cash flow problems for its customers. In competitive markets, it might not matter unduly if a company behaved in that way, because the suppliers would decline to supply it or would supply it only on more onerous terms, and the customers would place their business elsewhere.
      6.30 pm
      However, if a monopoly business behaved in that way, and could enforce on its suppliers or its customers whatever payment terms it chose arbitrarily from time to time to enforce, the situation would be exactly comparable with that of a Government—a tax-raising authority—who arbitrarily said that all tax payments must be brought forward, and the hell with the resulting cost to the companies paying the tax.
      That is a serious matter, which leads directly to the second point on which the debate has been particularly revealing. It has strongly confirmed a clear impression that the whole country has begun to appreciate: that the Government believe in surreptitious taxation. They have launched a sinister tradition of surreptitious taxation. It is easy to see that that will lead to fiscal and other forms of tyranny. It is arbitrary and means that the British taxpayer, who, on the whole, believes that Governments act in reasonable good faith and that Government pronouncements can be taken at face value, in accordance with the normal meaning of the English language, is learning that he was wrong. What you see is not what you get with this Government.
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      The Government believe that they have found a way of taxing the public and taxing business, and then being able to deny that any taxation has taken place. That was the basis of the pensions tax—the abolition of the dividend tax credit. The Government thought that they were extremely clever. They get £5 billion a year, which they are indeed taking, out of pension funds, and they thought that the public would not quite understand that their prospect of receiving a pension in retirement had been reduced by exactly the same figure.
      We have seen the same thing today. The Government try to deny that companies face an annual burden of £2 billion more of corporation tax, even though, as my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) pointed out, that figure derives from the Government's Red Book. They say that corporation tax has not been increased—indeed, that it has been reduced. The debate has provided a depressing insight, but we should be realistic and recognise how the Government have operated over the past year, and how they no doubt intend to continue for the rest of their mandate.
      Two anomalies and unfairnesses arise from the changes in corporation tax, the abolition of advance corporation tax and the decision to levy quarterly payments on companies to replace the existing system of corporation tax. They are two sources of economic problems, both potential burdens on business. Although they are related, they are separate and should be considered separately.
      The first is the issue of predictability. The Paymaster General and I had an earlier exchange on the subject. I suggested that, however clever one was and however well run one's business was, it was not possible to predict how things would work out over the next year. The hon. Gentleman, who has great faith in his business abilities, said that all companies produce business plans. There was something of the dialogue of the deaf proceeding between us.
      The Paymaster General must acknowledge that, however well managed a company is, and however convincing its business plan may be on the basis of assumptions made before the beginning of a financial year, that plan is only as good as the assumptions on which it is based. If the assumptions change as a result of some exogenous and unpredicted event, the business plan may no longer be valid.
      Who could have predicted the collapse in Asia? Is the hon. Gentleman going to tell us that he predicted it? I shall be happy to give way, if he wants to tell the House that he knew a year ago that the Asian markets would collapse and the Asian countries would devalue massively. That is an example of an unpredicted and exogenous shock. There could be many more shocks much nearer home, of a more sectorally or geographically limited kind, which the hon. Gentleman can no doubt think of as well as I can.
      The issue of predictability arises immediately, if companies must make payments on the basis of their anticipated net revenues and, therefore, taxable income for a given year, when those predictions may prove to be unsound retrospectively. That is a pro-cyclical attack on the company. My right hon. Friend the Member for Wells sometimes corrects me for using technical language in Finance Bill Standing Committee debates, but I am glad that he used that term earlier. It is not a particularly technical term, but it is the right one.

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      A pro-cyclical burden means that, if the company's profits are less than anticipated because of some unpredictable event, they will be further reduced because the tax charge is excessively high, by virtue of the mechanism that the Government deliberately and thoughtlessly introduced into our tax system. Pro-cyclical burdens are a very bad thing. It is extraordinary that one should have to give the Government such an elementary lecture.
      It should be the concern of a good Government to avoid pro-cyclical burdens, whether in macro-economic management, which the Government have utterly failed to do—I shall not be drawn down that line as it is not directly germane to the new clause—or in the micro-economic area. We know that tax changes are enormously important because of their impact on the micro-economy, where the essential decisions on investment, resource allocation and wealth creation are made. The issue of predictability is important. It is fundamentally unsound to make tax payments premised on any assumption at all about future revenues.
      The second issue, which has not always been separated in the discussion, is seasonality. Seasonality may be entirely predictable for a retail business. As has been pointed out in several contributions, not only retail businesses are seasonal—the tourist industry is a clear example. Under the measures proposed by the Government, the fact that seasonality is predictable will give businesses no relief from making an excessive tax payment early in the year, when their cash flow may be weak or even negative.
      A perfectly sound business may make no money at all in January, February and March, but will still be forced to make a substantial tax payment, because it expects to make some money between October and Christmas. That is pro-cyclical. It places a larger cash flow burden on the company than it would naturally face as a result of operational conditions. That cannot be sensible. I beg the Government, even at this eleventh hour, to think again.
      My hon. Friend the Member for Arundel and South Downs (Mr. Flight) referred to the way in which the Americans addressed the matter. They have never had an advance corporation tax system, so they have lived for a long time with the issues that the Government now face. They have a system under which, I gather, there is a 30:70 criterion. My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) is the expert in these matters. Companies that expect to make more than 70 per cent. of their profits in the second half of the year can opt to make tax payments that are loaded at the back end of the year.
      Will the Paymaster General, for once, give us clear answers to some serious questions? To what extent did the Paymaster General look at the American system and other systems around the world before he took a decision on this matter? What would be the cost to the Revenue in this country of implementing a system along the American lines? Let us assume that we introduced the American system exactly: a 70:30 breakdown. What would it cost? I am sure that the Paymaster General's officials have calculated that figure—if they have not, the Government have not done their homework and we
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      should hear about that before we vote on the measure. When we know the answer to that question, it will give us a clue about the heart of the matter.
      This measure is about advancing the Government's revenue in this Parliament, and hang the consequences for British industry, for the British economy and for our future wealth, prosperity and employment. It happens to be convenient—I wonder why—for the Labour Government to garner all the resources they can in the next two or three years in order to affect a greater measure of economic competence and a better record of economic achievement than the facts will justify under any circumstances.
      Mr. Hammond: I shall add some brief comments to those of my hon. Friends. [HON. MEMBERS: "Hear, hear."] I see that I have managed to introduce a note of consensus into the debate, as my announcement meets the approval of Government Members.
      Whatever the Government say, the changes to the corporation tax system are revenue-driven. The Government talk about modernising the system, but it is clear that that is a sham and a smokescreen for an exercise in building a war chest through a one-off shift in the pattern of revenue, bringing forward into this Parliament revenues that Government would otherwise have enjoyed later. The measures that we have considered in Committee will require companies to make payments quarterly. As my hon. Friends have outlined, that gives rise to two quite distinct and separate problems. First, there is the problem of estimation. Companies will be required to make payments throughout the year based on their predicted profits for the whole year.
      My hon. Friend the Member for Grantham and Stamford (Mr. Davies) explained eloquently the difficulties involved in doing that. The Paymaster General told us in Committee that all businesses are able to predict their profits and that they have mechanisms for doing so. However, if the Paymaster General reflects carefully, he will acknowledge that many companies have failed to predict their profits accurately and effectively. Retailers who depend heavily on seasonal profits are one notable group that have failed, as a result of the large fluctuations that occur at the year's end, to predict accurately the profits that they will enjoy over the whole year.
      If a retailer gets it wrong, overestimates his profits and begins to pay substantial corporation tax earlier in the year, only to find that, because of a downturn in business, he is squeezed later in the year, he will be doubly jeopardised. He will have to live with the cash flow burden of having made those payments earlier in the year. However, if a retailer makes the opposite mistake and underestimates his likely profits for the year, he will face a penal regime which requires him to pay additional penalties when making up those payments later. Companies will be required to perform an exact and precise exercise in an area where history and experience suggest that it is not possible to do so with any accuracy.
      The second problem that companies will face is much more obvious—the impact on their cash flow. The proposed new clause focuses particularly on the retail sector, in which a substantial number of companies have seasonal patterns of cash flow and profitability. Those companies that make advance corporation tax payments during the earlier part of the year will not only face

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      making those payments but, because of the seasonal nature of their businesses, typically invest large sums to build up stocks for their busy period.
      Companies involved in the jewellery, toy, Christmas card or Christmas decoration businesses do not operate for only two or three months: they operate all year round. Christmas crackers are manufactured in January and February and are financed and stockpiled. That stockpiling represents a heavy drain on the cash flows of those companies. The Government propose to pile an additional burden on that cash flow strain by requiring those companies to make payments during a lean time in anticipation of profits that they may or may not make later in the year. According to my definition, that amounts to kicking a man when he is down.
      The hon. Member for Croydon, Central (Mr. Davies) apparently failed to understand—although my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) did his best to explain it in simple terms-that, if we ask a company to pay £X million to the Treasury in January or June, that is £X million that that company cannot spend on investment in plant and equipment or on working capital for its business, thus generating jobs and prosperity in the economy. That is common sense, and it is not much to expect of the Government that they should make special provision in the most exceptional cases for companies that have seasonal cash flow and profitability patterns.
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      We know that the draft regulations are out to consultation. The Paymaster General will no doubt tell us in a moment that, when he has completed that consultation, he will amend the draft regulations if he believes that there is a case to answer. However, we are anxious that the Government should state in fairly broad terms in the Bill that they intend to have regard to the special circumstances of seasonal retailers. It is not good enough that the regulations procedure is being used once again—even at the draft stage—to avoid scrutiny in the House of the Government's proposals. The Government will be allowed to do their dirty work behind the scenes at the regulations level. I urge the Government, even at this late stage, to rethink the measure.
      Mr. Gibb: I shall explain briefly the problem that the Government have created. Quarterly payments must be paid in months seven, 11, 14 and 17. That means that, in month seven of the current accounting period, a company must determine the profits on which its corporation tax is payable. It must then apply all the corporation tax rules, including the deductible and non-deductible items, to determine its tax bill—and it is still only seven months into the current accounting period. The company must then pay its first quarter amount based on a quarter of the bill.
      The problem facing the retail sector is that much of the activity that determines its profits will not have occurred in month seven—or indeed in months eight or nine—of the accounting period. [Interruption.]
      Mr. Deputy Speaker (Sir Alan Haselhurst): Order. If Labour Members wish to conduct a conversation, I would prefer that they did so outside the Chamber.
      Mr. Gibb: Thank you, Mr. Deputy Speaker.
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      The figures of retail companies, whose profits are determined in the last two or three months of the year, could fluctuate wildly. It is imperative that, in drafting the regulations, the Government come up with a new method that enables the retail sector to have some flexibility when calculating its profits for the full year. The profits that are determined in November or December could differ wildly from those estimated at the beginning of the year when companies must make their calculations.
      My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) quizzed the Liberal Democrat spokesman, the hon. Member for Kingston and Surbiton (Mr. Davey), about why companies do not simply change their year end. That would be a way around the problem because, if their busy period were at the beginning of the accounting period, companies would know what their profits were by month seven. The determinant period—for example, January and February or November and December—would be at the beginning of the accounting period and companies would know what had happened in that busy time.
      The problem is that the stock exchange will want to see quoted retail groups' results for that busy period—which will determine the whole year's profits—as soon as possible after the event. Many retail groups have January year ends and, if such companies were to change that to another period, their value on the stock exchange would markedly decline because of the uncertainty inherent in having to wait a full year before the profits were reported to the exchange.
      For those reasons, I urge the Government, when they have finished their consultation process, to take into account the serious concerns of the British Retail Consortium and the retail industry throughout Britain.
      Mr. Geoffrey Robinson: We have had a long and wide-ranging debate on new clause 5. I hope to emulate the consensual approach of the hon. Members for Runnymede and Weybridge (Mr. Hammond) and for Bognor Regis and Littlehampton (Mr. Gibb) in the brevity of my speech and by sticking closely to the issue.
      The right hon. Member for Wells (Mr. Heathcoat-Amory) went off into his usual wide-ranging ineffectual attack on the Government's long-term measures to put right what a previous Conservative Government did wrong in the economy. However, I notice that he seems finally to have accepted the principle of the changes and is now down to criticising their implementation. I am not sure whether the same can be said for the hon. Member for Grantham and Stamford (Mr. Davies). However, generally, the Conservative party is no longer seriously suggesting that, in the unlikely and impossible event of its ever being in government again, it would repeal the changes that we have introduced, be it the independence of the Bank of England, the code for fiscal stability or the abolition of tax credits to make a level playing field to encourage investment.
      The Government have largely won the argument. There is no real argument for going back to an imputation system. No one will do that. There is no real argument for ending the operational independence of the Bank of England and returning its powers to the Treasury. The issue before us is the narrow point in new clause 5. Before I deal with that, there are one or two other things that I must say, particularly on secondary regulation, a matter to which Conservative Members return with boring regularity.

      201
      All we have had—it is a pity that the quality of debate among Conservative Members has sunk to this—is a rehash in general and in detail of everything that was said in Committee on the Floor of the House and upstairs. We have had no new ideas from them whatever, other than a grudging final acceptance of the correctness of our approach to these matters. [Interruption.] The hon. Member for Bognor Regis and Littlehampton shakes his head, but is he seriously saying that he would rather we returned to a system of tax credits and advance corporation tax?
      Mr. Gibb: The hon. Gentleman has completely ravaged Britain's corporation tax system solely because, in July, the Government wanted to raid Britain's pension funds to the tune of £5 billion a year. That is what we are paying for with these new complex provisions.
      Mr. Robinson: The stock market is standing higher than on the day we took office, and the country continues to do well.
      The Conservative Government's last three Finance Bills provided more than one dozen sets of regulation-making powers covering direct taxes alone. That is the extent of regulation under the previous Government. Three quarters of those regulations included powers to modify existing provisions in the taxes legislation. We need no lessons from Conservative Members on secondary regulations. I beg them to grow up in that respect and see that we are a Government who respect the proper prerogatives of this Parliament. The hon. Member for Bognor Regis and Littlehampton well knows that, although the regulations will be introduced under the negative resolution procedure, hon. Members can pray against them.
      The hon. Member for Grantham and Stamford has a captivating interest in the American system. If we were to adopt that system en bloc, a high proportion of companies would pay the whole of their tax within the year, instead of just half of it as happens under the system that we have adopted. We considered the American system, but we have gone for one that is much better from that point of view. Moreover, our system includes a relatively small number of companies. We consulted on who should come within it and excluded the small and medium sectors.
      I am looking to see whether Conservative Members have made any new points to which I should reply, but I cannot find any.
      The new clause simply returns to an issue with which we dealt during the debate on new clause 30 in Committee of the whole House and again during the debate on amendment No. 8 to clause 36 in Standing Committee. As I made clear on both those occasions, the regulation-making power provided by clause 30 is already sufficiently wide to allow for the regulations governing the payment by large companies of their corporation tax
      202
      by instalments from 1999 to include special rules for companies with seasonal trades. Therefore, the new clause is unnecessary, otiose and as useless as the Opposition.
      Mr. Hammond: Is the Paymaster General, then, giving the House a commitment now that those regulations, when they are finalised, will include special provisions for retailers with highly seasonal patterns of profitability?
      Mr. Robinson: No, I am not saying that. I am saying that the regulations are capable of doing that, so we do not need the new clause.
      Much has been made by the Opposition of the alleged plight of retailers and others with businesses that have seasonal peaks and troughs in their profits, but many retailers do not have particularly seasonal trades. For example, I understand that supermarkets selling food—in fairness, this point was made by Conservative Members—earn their profits fairly evenly during the year, and many other retailing businesses are carried on by small or medium companies or by individuals, and so are not affected by the introduction of instalments.
      I am aware that some large companies with retail businesses are quite highly seasonal, with sales, and therefore profits, peaking around Christmas and at sale times. The hon. Member for Runnymede and Weybridge mentioned some of them and obviously knows something about that sector. If that causes them to get their instalments wrong so that they pay their corporation tax late, they will be charged interest, but that will just reflect their late payment of corporation tax, and their use for a while of money that should have been paid over to the Exchequer. Similarly, if they pay too much corporation tax by instalments, they will get the extra back with interest. As Opposition Members know, the ratio of interest between what the Government pay and are paid has been brought into close, reasonably commercial proximity.
      The Opposition have suggested that companies with seasonal profits should be allowed to pay their instalments based on actual tax-adjusted results for the previous six months. I think that that is the suggestion of the British Retail Consortium, which would confine it to companies consistently making less than 30 per cent. of their profits in their first half year. However, that would help few large companies, because few can consistently make upwards of 70 per cent. of their profits in the second half of the year, and it would be difficult to police.
      This is simply another attempt by the Opposition to return to an issue that has already been thoroughly explored. I have said before that I am anxious to keep the instalment regime as simple as possible. It is no good the hon. Member for Kingston and Surbiton (Mr. Davey) saying that, because the Government could not obtain in aspects of other legislation the simplicity that we would have wanted, it does not matter in this case. That is a perverse argument. The hon. Gentleman would be surprised at the extent to which we have achieved simplification in many areas, and, if we can obtain it, we must clearly go for it.
      Introducing special rules for retail companies would inevitably add considerable complexity to the instalment rules while benefiting only a relatively small number of companies. However, we have received representations on the point which we are continuing to consider, along with

      203
      all representations received during the consultation period, ending on 15 July, on the draft regulations. We shall take all those into account and let the House know our decision.
      Mr. Heathcoat-Amory: These debates are achieving a sort of regularity. Conservative Members put up an unanswerable case and the Paymaster General blusters and flusters. On this occasion, he ended up virtually accepting our case, but he spoilt it all by saying that new clause 5 was unnecessary because the regulations under the Bill already make the same provision. However, we have learnt not to accept Government intentions but to try to tie them down so that they deliver on some of their words. We debated earlier this evening a new clause which we introduced precisely because the Government had failed to deliver on an expressed sympathy for the low-paid and poorer pensioners who had been hit, and continue to be hit, by the withdrawal of dividend tax credits in the Bill. We shall press the new clause to a vote to ensure that the Government deliver on their intentions.
      7 pm
      Mr. Clifton-Brown: Does my right hon. Friend agree that one of Labour's hidden tax rises will be affected if the Government do not accept the new clause? In the tourism industry, for example, large hotels in my constituency with variable profit fluctuations will have to pay higher corporation tax or file higher corporation tax returns than they would otherwise have done because of the interest penalties that will endure. It will be cheaper to pay the tax in advance—which is, in effect, a cost—rather than endure the penalties.
      Mr. Heathcoat-Amory: My hon. Friend has given a good example of the difficulties that businesses will face because of the Finance Bill as it stands. Our new clause would, in a modest way, relieve the ravages of Labour's high tax policy for a small sector of corporate Britain. We want to include it in the Bill, and this is our last chance to make that happen. The Paymaster General did not even refer to the fact that parts of the Bill will never be debated again because they will be relegated to secondary legislation.
      I repeat that there is in the Chancellor's own Budget arithmetic a £2 billion a year increase in the effective rate of corporation tax, consequential on these quarterly payments. That is specified on page 18 of the Red Book, but it is not specified in the Bill, and hon. Members will not find any clause laying down how that sum is to be raised and who is to pay it.
      Those who were Members of Parliament before us would be amazed that we are authorising a £2 billion a year increase in taxation which is to be laid down later in regulations that the House will never have a chance of debating, approving or voting against. We will betray the traditions of the House if we allow the Government to increase taxes in such a way, without giving ourselves any opportunity to express an opinion.
      In a small way, through our new clause, we are ensuring that the parts of the retail sector that experience seasonal profits will have their interests at least partly protected. We have had a proper debate, which we have won, and we shall put the new clause, which should be incorporated in the Bill, to the test of a vote.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 175, Noes 276.

      Division No. 319]

      [7.2 pm

      AYES

      Allan, Richard

      Gummer, Rt Hon John

      Amess, David

      Hamilton, Rt Hon Sir Archie

      Ancram, Rt Hon Michael

      Hammond, Philip

      Arbuthnot, James

      Hancock, Mike

      Ashdown, Rt Hon Paddy

      Harris, Dr Evan

      Atkinson, David (Bour'mth E)

      Harvey, Nick

      Atkinson, Peter (Hexham)

      Hawkins, Nick

      Baker, Norman

      Hayes, John

      Ballard, Jackie

      Heald, Oliver

      Bercow, John

      Heath, David (Somerton & Frome)

      Beresford, Sir Paul

      Heathcoat-Amory, Rt Hon David

      Body, Sir Richard

      Hogg, Rt Hon Douglas

      Boswell, Tim

      Horam, John

      Bottomley, Peter (Worthing W)

      Hughes, Simon (Southwark N)

      Brady, Graham

      Hunter, Andrew

      Brake, Tom

      Jack, Rt Hon Michael

      Brand, Dr Peter

      Jackson, Robert (Wantage)

      Brazier, Julian

      Jenkin, Bernard

      Browning, Mrs Angela

      Jones, Ieuan Wyn (Ynys Môn)

      Bruce, Ian (S Dorset)

      Jones, Nigel (Cheltenham)

      Bruce, Malcolm (Gordon)

      Kennedy, Charles (Ross Skye)

      Burns, Simon

      Key, Robert

      Cable, Dr Vincent

      Kirkbride, Miss Julie

      Campbell, Menzies (NE Fife)

      Kirkwood, Archy

      Cash, William

      Laing, Mrs Eleanor

      Chapman, Sir Sydney (Chipping Barnet)

      Lait, Mrs Jacqui

      Lansley, Andrew

      Chidgey, David

      Leigh, Edward

      Chope, Christopher

      Letwin, Oliver

      Clappison, James

      Lidington, David

      Clark, Rt Hon Alan (Kensington)

      Lilley, Rt Hon Peter

      Clarke, Rt Hon Kenneth (Rushcliffe)

      Livsey, Richard

      Lloyd, Rt Hon Sir Peter (Fareham)

      Clifton-Brown, Geoffrey

      Llwyd, Elfyn

      Collins, Tim

      Loughton, Tim

      Colvin, Michael

      Luff, Peter

      Cormack, Sir Patrick

      MacGregor, Rt Hon John

      Cotter, Brian

      McIntosh, Miss Anne

      Cran, James

      MacKay, Andrew

      Curry, Rt Hon David

      Maclean, Rt Hon David

      Dafis, Cynog

      McLoughlin, Patrick

      Davey, Edward (Kingston)

      Major, Rt Hon John

      Davies, Quentin (Grantham)

      Maples, John

      Davis, Rt Hon David (Haltemprice)

      Maude, Rt Hon Francis

      Day, Stephen

      May, Mrs Theresa

      Donaldson, Jeffrey

      Michie, Mrs Ray (Argyll & Bute)

      Dorrell, Rt Hon Stephen

      Moore, Michael

      Duncan, Alan

      Morgan, Alasdair (Galloway)

      Emery, Rt Hon Sir Peter

      Moss, Malcolm

      Evans, Nigel

      Nicholls, Patrick

      Ewing, Mrs Margaret

      Norman, Archie

      Fallon, Michael

      Öpik, Lembit

      Fearn, Ronnie

      Ottaway, Richard

      Flight, Howard

      Page, Richard

      Forth, Rt Hon Eric

      Paice, James

      Foster, Don (Bath)

      Paterson, Owen

      Fox, Dr Liam

      Pickles, Eric

      Fraser, Christopher

      Prior, David

      Garnier, Edward

      Redwood, Rt Hon John

      George, Andrew (St Ives)

      Rendel, David

      Gibb, Nick

      Robathan, Andrew

      Gill, Christopher

      Robertson, Laurence (Tewk'b'ry)

      Gillan, Mrs Cheryl

      Rowe, Andrew (Faversham)

      Gorman, Mrs Teresa

      Ruffley, David

      Gorrie, Donald

      Russell, Bob (Colchester)

      Gray, James

      St Aubyn, Nick

      Green, Damian

      Sanders, Adrian

      Greenway, John

      Sayeed, Jonathan

      Grieve, Dominic

      Shephard, Rt Hon Mrs Gillian

      205

      Shepherd, Richard

      Tyler, Paul

      Simpson, Keith (Mid-Norfolk)

      Tyrie, Andrew

      Smyth, Rev Martin (Belfast S)

      Viggers, Peter

      Soames, Nicholas

      Wallace, James

      Spicer, Sir Michael

      Waterson, Nigel

      Stanley, Rt Hon Sir John

      Webb, Steve

      Steen, Anthony

      Wells, Bowen

      Streeter, Gary

      Welsh, Andrew

      Stunell, Andrew

      Whittingdale, John

      Swayne, Desmond

      Wigley, Rt Hon Dafydd

      Swinney, John

      Wilkinson, John

      Syms, Robert

      Willetts, David

      Tapsell, Sir Peter

      Willis, Phil

      Taylor, Ian (Esher & Walton)

      Wilshire, David

      Taylor, John M (Solihull)

      Winterton, Mrs Ann (Congleton)

      Taylor, Matthew (Truro)

      Winterton, Nicholas (Macclesfield)

      Taylor, Sir Teddy

      Woodward, Shaun

      Tonge, Dr Jenny

      Yeo, Tim

      Townend, John

      Tredinnick, David

      Tellers for the Ayes:

      Trend, Michael

      Sir David Madel and

      Mrs. Caroline Spelman.

      NOES

      Adams, Mrs Irene (Paisley N)

      Colman, Tony

      Ainger, Nick

      Connarty, Michael

      Ainsworth, Robert (Cov'try NE)

      Cook, Frank (Stockton N)

      Alexander, Douglas

      Corbett, Robin

      Anderson, Janet (Rossendale)

      Corston, Ms Jean

      Armstrong, Ms Hilary

      Cousins, Jim

      Ashton, Joe

      Cranston, Ross

      Atkins, Charlotte

      Crausby, David

      Austin, John

      Cummings, John

      Banks, Tony

      Cunliffe, Lawrence

      Beard, Nigel

      Cunningham, Jim (Cov'try S)

      Begg, Miss Anne

      Dalyell, Tam

      Bennett, Andrew F

      Davey, Valerie (Bristol W)

      Benton, Joe

      Davidson, Ian

      Berry, Roger

      Davies, Rt Hon Denzil (Llanelli)

      Betts, Clive

      Davies, Geraint (Croydon C)

      Blears, Ms Hazel

      Davies, Rt Hon Ron (Caerphilly)

      Blizzard, Bob

      Davis Terry (B'ham Hodge H)

      Borrow, David

      Dawson, Hilton

      Bradley, Keith (Withington)

      Dean, Mrs Janet

      Bradley, Peter (The Wrekin)

      Denham, John

      Bradshaw, Ben

      Dismore, Andrew

      Brinton, Mrs Helen

      Dobbin, Jim

      Brown, Rt Hon Nick (Newcastle E)

      Donohoe, Brian H

      Brown, Russell (Dumfries)

      Doran, Frank

      Browne, Desmond

      Drew, David

      Buck, Ms Karen

      Eagle, Maria (L'pool Garston)

      Burden, Richard

      Ellman, Mrs Louise

      Burgon, Colin

      Ennis, Jeff

      Byers, Stephen

      Etherington, Bill

      Caborn, Richard

      Fatchett, Derek

      Campbell, Alan (Tynemouth)

      Field, Rt Hon Frank

      Campbell, Mrs Anne (C'bridge)

      Fitzpatrickc, Jim

      Campbell, Ronnie (Blyth V)

      Flint, Caroline

      Cann, Jamie

      Flynn, Paul

      Caplin, Ivor

      Foster, Rt Hon Derek

      Casale, Roger

      Foster, Michael Jabez (Hastings)

      Chapman, Ben (Wirral S)

      Foster, Michael J (Worcester)

      Chaytor, David

      Foulkes, George

      Chisholm, Malcolm

      Gapes, Mike

      Clapham, Michael

      Gardiner, Barry

      Clark, Rt Hon Dr David (S Shields)

      George Bruce (Walsall S)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Gibson, Dr Ian

      Gilroy, Mrs Linda

      Clark, Paul (Gillingham)

      Godman, Dr Norman A

      Clarke, Tony (Northampton S)

      Goggins, Paul

      Clelland, David

      Golding, Mrs Llin

      Clwyd, Ann

      Gordon, Mrs Eileen

      Coaker, Vernon

      Grant, Bernie

      Coffey, Ms Ann

      Griffiths, Jane (Reading E)

      Cohen, Harry

      Griffiths, Nigel (Edinburgh S)

      Coleman, Iain

      Grogan, John

      206

      Gunnell, John

      Michael, Alun

      Hain, Peter

      Milburn, Alan

      Hall, Mike (Weaver Vale)

      Miller, Andrew

      Hamilton, Fabian (Leeds NE)

      Mitchell, Austin

      Hanson, David

      Moffatt, Laura

      Heal, Mrs Sylvia

      Morgan, Ms Julie (Cardiff N)

      Henderson, Ivan (Harwich)

      Morgan, Rhodri (Cardiff W)

      Heppell, John

      Morris, Ms Estelle (B'ham Yardley)

      Hewitt, Ms Patricia

      Mudie, George

      Hill, Keith

      Mullin, Chris

      Hinchliffe, David

      Murphy, Jim (Eastwood)

      Hoey, Kate

      O'Brien, Bill (Normanton)

      Home Robertson, John

      O'Brien, Mike (N Warks)

      Hood, Jimmy

      Olner, Bill

      Hoon, Geoffrey

      O'Neill, Martin

      Howarth, Alan (Newport E)

      Osborne, Ms Sandra

      Hoyle, Lindsay

      Palmer, Dr Nick

      Hughes, Ms Beverley (Stretford)

      Pearson, Ian

      Hughes, Kevin (Doncaster N)

      Pendry, Tom

      Humble, Mrs Joan

      Pickthall Colin

      Hutton, John

      Pike, Peter L

      Iddon, Dr Brian

      Plaskitt, James

      Illsley, Eric

      Pope, Greg

      Jackson, Ms Glenda (Hampstead)

      Pound, Stephen

      Jackson, Helen (Hillsborough)

      Powell, Sir Raymond

      Jenkins, Brian

      Prentice, Ms Bridget (Lewisham E)

      Johnson, Alan (Hull W & Hessle)

      Prentice, Gordon (Pendle)

      Jones, Mrs Fiona (Newark)

      Primarolo, Dawn

      Jones, Jon Owen (Cardiff C)

      Prosser, Gwyn

      Jones, Dr Lynne (Selly Oak)

      Purchase, Ken

      Jones, Martyn (Clwyd S)

      Quin, Ms Joyce

      Jowell, Ms Tessa

      Quinn, Lawrie

      Keeble, Ms Sally

      Radice, Giles

      Keen, Alan (Feltham & Heston)

      Rammell, Bill

      Keen, Ann (Brentford & Isleworth)

      Reed, Andrew (Loughborough)

      Kennedy, Jane (Wavertree)

      Reid, Dr John (Hamilton N)

      Khabra, Piara S

      Robertson, Rt Hon George (Hamilton S)

      Kidney, David

      Kilfoyle, Peter

      Robinson, Geoffrey (Cov'try NW)

      King, Andy (Rugby & Kenilworth)

      Roche, Mrs Barbara

      Kingham, Ms Tess

      Rooker, Jeff

      Kumar, Dr Ashok

      Rooney, Terry

      Ladyman, Dr Stephen

      Ross, Ernie (Dundee W)

      Lepper, David

      Rowlands, Ted

      Leslie, Christopher

      Roy, Frank

      Lewis, Terry (Worsley)

      Ruddock, Ms Joan

      Liddell, Mrs Helen

      Russell, Ms Christine (Chester)

      Livingstone, Ken

      Ryan, Ms Joan

      Lloyd, Tony (Manchester C)

      Salter, Martin

      Lock, David

      Savidge, Malcolm

      Love, Andrew

      Sedgemore, Brian

      McAllion, John

      Shaw, Jonathan

      McAvoy, Thomas

      Sheerman, Barry

      McCabe, Steve

      Sheldon, Rt Hon Robert

      McCafferty, Ms Chris

      Simpson, Alan (Nottingham S)

      McDonagh, Siobhain

      Singh, Marsha

      McDonnell, John

      Skinner, Dennis

      McGuire, Mrs Anne

      Smith, Rt Hon Andrew (Oxford E)

      McKenna, Mrs Rosemary

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      McNulty, Tony

      MacShane, Denis

      Smith, Llew (Blaenau Gwent)

      Mactaggart, Fiona

      Soley, Clive

      McWilliam, John

      Southworth, Ms Helen

      Mahon, Mrs Alice

      Spellar, John

      Mandelson, Peter

      Squire, Ms Rachel

      Marek, Dr John

      Steinberg, Gerry

      Marsden, Gordon (Blackpool S)

      Stevenson, George

      Marsden, Paul (Shrewsbury)

      Stewart, Ian (Eccles)

      Marshall, David (Shettleston)

      Stoate, Dr Howard

      Marshall, Jim (Leicester S)

      Stott, Roger

      Marshall-Andrews, Robert

      Strang, Rt Hon Dr Gavin

      Martlew, Eric

      Stringer, Graham

      Maxton, John

      Stuart, Ms Gisela

      Meacher, Rt Hon Michael

      Sutcliffe, Gerry

      Meale, Alan

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Merron, Gillian

      207

      Temple-Morris, Peter

      White, Brian

      Thomas, Gareth R (Harrow W)

      Whitehead, Dr Alan

      Timms, Stephen

      Wicks, Malcolm

      Touhig, Don

      Williams, Alan W (E Carmarthen)

      Trickett, Jon

      Winnick, David

      Truswell, Paul

      Wood, Mike

      Turner, Dennis (Wolverh'ton SE)

      Woolas, Phil

      Turner, Dr Desmond (Kemptown)

      Wright, Anthony D (Gt Yarmouth)

      Twigg, Derek (Halton)

      Wright, Dr Tony (Cannock)

      Vaz, Keith

      Wyatt,Derek

      Vis, Dr Rudi

      Walley, Ms Joan

      Tellers for the Noes:

      Wareing, Robert N

      Mr. Jim Dowd and

      Watts, David

      Mr. David Jamieson.

      Question accordingly negatived.

    New clause 7

      DEFINITION OF NATIONAL DEBT
      '.—For the purposes of sections 152 and 153—
      The "National Debt" shall be taken to include the principal amount of any non-governmental debt to the extent that such debt is guaranteed by the Government or by any organisation under its effective control or management and the amount of Government borrowing in any one year shall be calculated accordingly.'.—[Mr. Heathcoat-Amory.]
      Brought up, and read the First time.
      Mr. Heathcoat-Amory: I beg to move, That the clause be read a Second time.
      The new clause attempts to incorporate into the Bill a tighter definition of what the Government mean by national debt. The matter has assumed greater importance since the publication, some two weeks ago, of the Government's public expenditure plans, which signal a marked increase in public expenditure under a smokescreen of fiscal rectitude.
      The talk has been about imposing a discipline on the national account, but the reality underneath is that public expenditure is signalled to rise from next year and in every subsequent year by at least 2.75 per cent. in real terms. We estimate that the figure will be greater than that, once account is taken of all the changed definitions at the margin.
      Thus, the question of definitions is important, particularly the frontier between capital and current expenditure. Those of us who have laboured in one of the professions thought that we understood the distinction between capital and revenue expenditure, but I do not think that the Government do. I tabled a simple question to the Chancellor of the Exchequer about whether
      "he plans to classify expenditure on hospital repairs as current or capital spending."
      Any first-year accountancy student can answer that. Repairs are revenue, whereas alterations or additions are capital expenditure. However, the Chief Secretary answered, after some delay:
      "Expenditure on hospital repairs will follow the classification rules for the national accounts."—[Official Report, 29 June 1998; Vol. 315, c.29.]
      Therefore, either he does not know or it is still to be determined. A simple question received a very muddled response.
      Mr. Barry Gardiner: Will the right hon. Gentleman inform me—I am genuinely ignorant
      208
      about this—on whether exchanging the old shadow Chancellor for a new one is considered a repair or an alteration?
      Mr. Heathcoat-Amory: If the hon. Gentleman wants to make a better attempt at a witty intervention, I hope he will catch your eye, Mr. Deputy Speaker, so that we can hear him develop that point, because it will obviously be very humorous. I am attempting to ask a serious question.
      Are the Government adhering to normal accountancy rules in classifying expenditure? Judging by the reply that I have elicited, they have not made up their mind. That is a pity, because they have put enormous weight on the so-called golden rule under which the Government promise to borrow only for capital expenditure. If they are able to capitalise expenditure, they can meet that golden rule with almost any increase in overall public expenditure.
      We tabled the new clause, which is modest in intent, to urge the Government to ensure that any off-balance-sheet lending is properly classified as national debt, if they extend a guarantee. The best example that we can think of is the channel tunnel rail link. Perhaps the Paymaster General can enlighten us, but it appears that the Government have extended a guarantee so that no risk, or not sufficient risk, has been transferred from the public sector. If so, the borrowing should surely be classified as national debt. The Government have every incentive to remove borrowing from the national debt so that they can, in effect, engage in public expenditure without it showing up in debt or breaching the golden rule, or the secondary rule, which places a limit on the ratio of debt to gross domestic product.
      There is much confusion in this area. Changing a definition does not make something different. In the space of only three months, the Government have given up their objective of repaying national debt. The Red Book, which is only three months old, shows that, even under the most lax option of public expenditure, they had a clear intention of repaying debt. On page 121, it refers to the fact that the Government's calculations reflect
      "the projected debt repayment over the medium term."
      In the expenditure statement issued less than three months later, all that was gone. There is now no provision for repaying national debt.
      In government, things can move quickly. Promises and intentions made perhaps in good faith at Budget time are abandoned a few months later under the impact of a few broken promises. The Government are in difficulty over class sizes, they have broken their promises on hospital waiting lists, they have been panicked into taking the brakes off public expenditure, and they are reverting to tax and spend policies. The principles of national accounting should remain sacrosanct. They should not be able to manipulate the picture by changing definitions, particularly the definition of capital expenditure and revenue expenditure, simply to suit the political imperative.
      New clause 7 would at least ensure that any debt guaranteed by the Government, or by any organisation under their control, would be classified as national debt. I do not seriously see how the Paymaster General can object to that, and I await his reply with interest.
      Mr. Cranston: We had the usual trip around the houses with the right hon. Member for Wells (Mr. HeathcoatAmory). He spoke about the Government's confusion, but I think that he is totally confused. He moved a new clause that proposes a change in the definition of national debt to include
      "the principal amount of any non-governmental debt … guaranteed by the Government".
      I suggest that that is incoherent.
      If a guarantor guarantees an amount, there is a contingent liability, which depends, for example, on the risk of default by the principal debtor. One certainly does not attribute to the guarantor a debt for the full amount guaranteed. It is a contingent liability.
      Mr. Gibb: If a bank guarantees a loan, it is obliged to account for the full extent of that guarantee as a liability on its balance sheet.
      Mr. Cranston: We are talking about the definition of national debt, which is an entirely different concept.
      The new clause would include in the definition of national debt any debts incurred by any other organisation under the Government's control or management. There is a legal argument as to whether the Export Credits Guarantee Department gives guarantees or grants insurance. The ECGD is under the control of the President of the Board of Trade. Is any debt guaranteed by ECGD to be taken into account in the national debt? That would be ludicrous.
      The new clause is a typically incoherent amendment moved with the usual rhetoric by the right hon. Member for Wells. It signifies nothing, and I am sure that it will be rejected.
      Mr. Gibb: The new clause is important, because the Government have consistently and deliberately attempted to manipulate the national accounts. On the private finance initiative, for example, there is a dispute between the Treasury and the Accounting Standards Board about exposure draft FRS5. The Government claim that the liability should not be on their balance sheet, but on the private sector.
      The Accounting Standards Board accept that the liability should not appear on the Government's books, but only if the risk is transferred to the private sector. It is right. If it were to give in to pressure from the Treasury, the same accounting standards would apply to the private sector, and a swathe of debt would disappear from private sector balance sheets, which would lead in due course to company bankruptcies. The people to blame for that would be the auditors who had not applied sensible accounting methods to those companies' accounts.
      Mr. Cranston: I should like to ask the hon. Gentleman a question about banking, as he invited me to do so earlier. Is not the aim of securitisation to get assets off the bank's balance sheet? It is a typical commercial practice.
      Mr. Gibb: Yes—and it is important that, when securitisation takes place, there is a genuine transfer of the risk. That is why the integrity of organisations such as the ASB is so important, and why it is wrong for the Treasury to put pressure on the ASB to change its rules simply to suit the Treasury's convenience in getting debt off its own balance sheet.
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      That is the first way in which the Government are manipulating the accounts. We have also seen the accounting treatment of family credit. There has been almost a deliberate decision to replace family credit with working family tax credit, in order to take £1 billion from Government expenditure by reclassifying an element of a benefit as a tax credit. Its classification as tax forgone rather than expenditure wipes £1 billion, with one sweep of the pen, from the Government's accounts.
      7.30 pm
      The third element, to which my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) alluded, involves the debate about capital versus revenue, and about what those words mean. The Government have set great store by the introduction of the golden rule that states that they can borrow only to finance capital expenditure; but what is capital expenditure? My right hon. and hon. Friends have sought to discover the definition, but have been rebuffed by the Government in all quarters, because the Government cannot provide a definition enabling us to be certain about what they mean by capital.
      Does a repair to a school, for example, count as revenue expenditure, or does it count as an improvement to the school, and therefore as capital? In the private sector, a repair is treated as revenue for accounting purposes, but, responding to a question, the Paymaster General said that it would depend on the level of repair. If the repair improved the building, it would be treated as capital; if it merely repaired the building, it would not. That is too uncertain a definition. We must have certainty in national accounts; we cannot allow such a level of subjectivity.
      David Clementi, one of the Government's representatives on the Monetary Policy Committee of the Bank of England, said in evidence to the Treasury Select Committee:
      "It can be quite hard to decide what counts as investment and what is current expenditure."
      It is difficult—which is why William Buiter, another member of the Monetary Policy Committee, has dismissed the golden rule altogether as a method of assessing the correct level of debt for a Government. In evidence to the Select Committee, he said that many countries that supposedly operate the golden rule—as Germany has to do under its constitution—find
      "creative accounting ways of emasculating it when this needs to be … you can always reclassify 'current' as 'capital' if you twist the arms of your accountants".
      That is precisely what the Government are seeking to do. We have seen it with the ASB, and we are seeing it with the golden rule. The new clause would put into legislation a definition of what is capital and what is not—of what is debt and what is not.
      The fourth area in which we have seen manipulation of the accounts is the guarantee. We saw it with the guarantee of the loan that the channel tunnel rail link consortium needs to finance the link—a £3.8 billion Government guarantee. Yes, it is a contingent liability; it has not been drawn down on the Government. But, even under the Government's current rules, in assessing whether an item ought to be included as a liability or debt, the Government must consider the level of risk. If the Government consider it sufficiently likely that the debt will be drawn down, under their current rules that debt will be regarded as part of Government debt.

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      In a parliamentary question, I asked about the guarantee. The Chief Secretary to the Treasury replied:
      "The Government believe that the amount of finance required for the Channel Tunnel Rail Link is such that the financial markets would have been unable to provide the credit support which Government are to give."—[Official Report, 29 June 1998; Vol. 315, c.28.]
      The Government are providing a guarantee, not to reduce the cost of finance, but to provide a loan that no one in the private sector is prepared to give. If that is not an admission that this is a very risky venture, I do not know what is. Even according to the Government's own current definition, they should include the channel tunnel rail link guarantee as part of debt.
      We have seen four examples of the way in which the Government are manipulating the accounts. It is vital that that element is removed.
      Mr. Love: The hon. Gentleman has referred to the difficulty and complexity of decisions of this type. He has mentioned the ASB and the Government. He will know that earlier this year, during discussions on the rules on a true and fair view, the ASB was able to persuade the Treasury to accept that element in the new accounts. Does he agree that such complex and difficult issues should be left to those who can negotiate and discuss them, rather than our trying to deal with them in a catch-all clause such as this?
      Mr. Gibb: The "true and fair view" debate was about the Government's imposing on small businesses all the paraphernalia of statements of standard accounting procedures, which has never been done before. SSAP 9, for example, requires an element of overheads to be included in the valuation of stock. That imposes an unbearable burden on small businesses.
      The hon. Gentleman is right to say that the ASB should not be bullied by Government. It should not be forced to change its principles and procedures simply to accommodate the Government's desire to shift debt from the balance sheet. That is why the new clause is so vital: it will give the world outside the Government—the City of London, and people who read Government accounts—certainty about what constitutes repair, what constitutes capital and what constitutes debt.
      I hope that the Government will either accept the principle of the new clause, or set out the precise definitions of capital, revenue and what they regard as debt. I hope that they will also explain why the channel tunnel rail link guarantee of £3.8 billion is not being included in the balance sheet as a liability, notwithstanding the Chief Secretary's admission that it is such a risky venture that no one in the private sector would lend us money for it.
      Dr. Vincent Cable: It is difficult to see anything objectionable in the new clause. I consider it a matter of general public interest for the public accounts to feature as much transparency as possible. That is desirable not just for public scrutiny purposes, but because the markets increasingly require exacting standards in regard to both public and private borrowing.
      I do not think, however, that we should become too excited. It is not at all clear that the new clause constitutes an enormous advance in our understanding of the problem of public debt. The real problem—as has been revealed by the crisis in Asia over the past year—is not the difference
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      between guaranteed and non-guaranteed debt, but the difference between implicit and explicit debt. In Asia, enormous amounts in private loans have been raised by private agents, and the markets chose not to believe that those were purely private transactions. There was an implicit assumption that the Governments would underwrite them. Similarly, the British economy has a large amount of implicit debt that is not guaranteed, and would never be picked up by a measure of this kind.
      I am sure that Conservative Members are well aware of an obvious instance. I refer to the legacy of privatisation of the utilities. If, for example, a highly geared water utility were to make itself insolvent as a result of mismanagement, it is difficult to believe that the Government of the day—whatever their politics—would allow taps to be turned off for months on end while the question whether guarantees were implicit or explicit, and the relationship with creditors, were sorted out. It would be a Government responsibility to act immediately, and an implicit guarantee would be associated with that utility because it was a utility. Simply having explicit guarantees does not take us forward very far. Inevitably, there is a vast murky area in which the Government effectively underwrite the liabilities of large parts of the private sector.
      None the less, the new clause has taken us forward a little. It also enables us to raise a few more fundamental questions about what the Government hope to achieve with their debt objectives. In a sense, they have only themselves to blame for the fact that they are now being caned for a lack of precision on debt, because they have chosen to elevate their public debt target to such a high level.
      It is not clear why public debt has become such an obsession for them. It can be seen from the latest relative public-debt ratios achieved by countries in the Organisation for Economic Co-operation and Development that we have a lower gross debt ratio to gross domestic product than any other G7 country—lower even than the United States—and that our net debt-to-GDP ratio, which we are now targeting, is lower than that of any other OECD country except Japan, which has the special problems of pension funding. We do not have a seriously aging population, so why is there this preoccupation with public debt?
      The Government's reasoning is that they have a problem with interest payments, but the reason why we have an interest problem on public debt is because of the extremely high rate of interest on long-term debt, which is the highest in the G7. That is in large part because of the inflation expectations of the market, which now rates Britain as a greater inflation risk than Italy; it has done so for some time, not just under this Government. Therefore, the issue about public debt seems to have been grossly inflated.
      I should like to pose one question, and I hope that the Minister will deal with it in his answers. What is the implication—the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) has already touched on this—of the two rules that the Government have set for themselves: the golden rule and the public debt rule? How do those two things interact?
      At first sight, the golden rule is—I disagree with the hon. Gentleman on this—sensible. It provides for balanced budgeting, but allows the Government to borrow

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      up to whatever the limits are in terms of viable projects producing a good social return, but the question arises: supposing the Government do follow the golden rule and borrow heavily for good, useful public sector projects and that drives public debt upwards, how do the Government reconcile what would then be inconsistent objectives? What takes priority—the golden rule or the debt target, and why should the golden rule be overridden if there were a particular worry about public debt that is created by good public sector projects?
      I pose that question, which might seem a little academic, in the context of two specific industries: the Post Office and the London Underground. Those are two good examples of seriously under-capitalised utilities that clearly need to borrow substantial amounts for investment. It would almost certainly be economically sensible for them to do so. It would produce good returns for the public sector. In our view and in, I think, that of most Labour Members, they should remain within the public sector, so why should they not borrow, and why would it matter if that drove up to a modest level the debt-to-GDP ratio?
      I thank Conservative Members for raising this issue; it does seem important. I do not think that they take us enormously far forward, but this seems a useful addition to the collection of statistics. Perhaps it is a good opportunity to help the Minister to take us a little forward in debating his thinking on public debt management.
      Mr. Flight: The new clause is extremely important because it airs an issue, in a changing world, about which Governments, of both political complexions, have scarcely thought. In the past, the general principle has been that any material liabilities that were being guaranteed should be covered by the reserves, but I think it is correct to say that there have not been clear rules on the matter to date.
      The issue is important for the reasons referred to by the hon. Member for Twickenham (Dr. Cable) and my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb). As we move out of an age in which much—particularly in the utility and other sectors—was within the Government sector anyway, and into an age of many more private finance initiative deals and many more Government-private partnerships, it is inevitable that the amounts that are explicitly guaranteed by Government will grow—before we even reach the more difficult issue of what is implicitly underwritten by Government.
      The new clause makes the explicit, transparent requirement that anything that is guaranteed by Government, Government agency or body related to Government, should be included within the national debt total. That could logically be interpreted as meaning that two different lots of figures should be produced: the national debt total ex such guarantees, and the national debt total cum such guarantees, with such liabilities as have been guaranteed potentially being classified by their assessed risk.
      The Government's present posture seems to be somewhat cavalier, particularly in relation to the £3.8 billion-worth of London and Continental Railways bonds that have been guaranteed. I believe that I am correct in saying that the view of the Deputy Prime
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      Minister was, "There is less than a 20 per cent. chance that the liability will be called, so forget it." That is not at all adequate, for the reasons to which my hon. Friend the Member for Bognor Regis and Littlehampton drew attention. Whatever the risk, the money could not have been raised without that Government guarantee. If the Government are going to move forward with their private sector partnerships and with PFI activities, the issue is going to come up much more.
      As has been pointed out, this touches on wider issues—for example, what do the Government mean by their definition of the factors underlying the golden rule? It is also correct to make comparisons with the private sector. As has been pointed out, in looking at a bank's capital adequacy, contingent liabilities, where guarantees have been given, have to be taken into account. In relation to any other financial services business that has capital adequacy requirements, the same is true, although, interestingly, contingent liabilities are given weightings, depending on the degree of risk involved.
      7.45 pm
      This is an issue in regard to which there may be scope for pan-European clarification. Certainly, the statistics that are kept by the countries of Europe—indeed, by EU member states—seem to be all over the place. If this country simply ignores this important issue, we move into what I refer to as Italian-Franco territories. Much though I love both countries, they are notorious for fiddling their national statistics, so that we do not know what the real situation is.
      I was astonished to discover that the famous Italian debt ratio, on which the whole of the EMU went ahead, is not, in fact, based on the official Italian national income—the national income has been inflated by an estimate of Italy's black economy, thus serving to reduce the debt ratio from what would otherwise be about 150 per cent. to close to 110 per cent. I repeat: there is much to be said for having pan-European, agreed rules on what Government statistics should comprise, what should be published and what the divisors for certain ratios should be.
      The hon. Member for Twickenham rightly raised the important issue of implicit as well as explicit potential liabilities. I think that it is impossible to define rules for the quantification of that, but it is a fair point that, in relation to the problems in Asia, the expectation that there was implicit Government support has been an important cause of some of those problems. The point at issue is not so much the explicit wording of the new clause as the fact that there need to be agreed, clear rules on this issue. Pan-European rules would be useful in enabling us to understand the true financial situation of all EU member states.
      In addition to dealing with the extent to which Governments' liabilities that have been guaranteed should be set down and there should be transparency, the new clause raises the issue of future unfunded Government liabilities, which should also be explicitly quantified. What are the unfunded pension liabilities of Germany? What are the potential liabilities of the UK's national insurance arrangements? Without such data, any comparison of economies is meaningless.
      Given the combination of the change in definition from the public sector borrowing requirement to the public sector net cash requirement; the issue of how to define

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      capital and current expenditure to implement the golden rule; and the wider issue of whether we are going to organise expenditure wholly within the state sector or within privat and state allowances, I fear that the Government are deliberately seeking to ensure that the statistics can be manipulated to suit whatever story they want to be told. The current economic situation means that that is easier to do than it has been in the past.
      I strongly support the new clause and all that goes with it. If the Government do not accept it, I hope that they will come forward with sensible proposals on how the true figures of our national accounts can be recorded, and on the possibility of having a pan-European standard.
      Mr. Nick St. Aubyn: I, too, welcome this debate. Viewers of the parliamentary channel may be debating whether they dare switch over to watch the match at 8 pm. We are debating a vital issue that will affect all our futures, so I hope that viewers will stay with us.
      As this is a debate about the national debt, I should like to put to rest once and for all the canard that we have heard so often from Labour Members—I hope that we will not hear it again tonight—that the previous Government doubled the national debt. That is totally misleading. The previous Government halved the national debt in their first 10 years in office.
      I am grateful to the authors of the Chancellor's fiscal strategy report for pointing out that, during the first 10 years of the previous Government, the level of debt fell from 49 to 27 per cent. of gross domestic product. It is true that, in the following recession, it rose again to 45 per cent. of GDP, but that was still below the level that we inherited from the profligate previous Labour Government. However, there was a benefit even there, because one of the effects of the recession, difficult though that period was, was that it delivered a very low sustainable rate of inflation and, with that, a much lower rate of Government borrowing on Government bonds, of which, of course, this Government have been the beneficiary. This Government really did have a golden inheritance. Unfortunately, not all that glitters is gold.
      Mr. Christopher Leslie: The spectre of the golden legacy stirred me into action again. If the legacy was so golden, what explanation would the hon. Gentleman give to his constituents of the £25 billion used to pay interest charges on the national debt which still hang around the necks of all taxpayers in this country? Does he not realise that many people feel that the previous Government should be surcharged for such profligacy?
      Mr. St. Aubyn: I am surprised that the hon. Member for Shipley (Mr. Leslie) is not embarrassed by his own question. At this stage in the previous economic cycle, the Conservative Government repaid Government debt and reduced Government interest charges. This Government have changed their tune within a year of being in office and have no intention of repaying a single pound of debt. The debt is going up year on year. That will be the tarnished legacy that we will inherit in a few years' time. The Paymaster General may smile, but we have to ask what the golden rule means.
      I re-examined the figures in the Chancellor's report. It is interesting that capital expenditure under the last Labour Government accounted for more than four fifths
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      of the level of their borrowing. We all know that borrowing under that Labour Government was at an absurdly high and unsustainable level, yet most of it was what this Government would call capital expenditure and would therefore come close to their golden rule. As my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) pointed out, it is no wonder that the golden rule is next to meaningless when it comes to judging how truly prudent a Government have been.
      We have heard about the bonds in respect of the new rail link to the channel tunnel. Only this morning, the Financial Times pointed out how imprudent it is of the Government not even to count that guarantee as a contingent liability, let alone subject it to the more rigorous system that we are proposing, whereby the sum would be stated up front, as it were, on the Government's balance sheet.
      Let us consider the Export Credits Guarantee Department. We all support the idea of guarantees for exports. It is a thoroughly sound idea, and it underpins the strength of the economy that we bequeathed to the present Government. However, there is always room to consider the cost of what we are doing for exports. If we know the true figures, we can get clearer information and a better idea of that cost.
      Of course, there is a cost associated with all the guarantees that the Government are giving. They mean that the paper in the market is effectively Government paper. As we know, the more Government paper there is in the market, the higher will be the cost of raising additional funds for the Government. There is a cost to all taxpayers for the guarantee of the channel tunnel link funding, and that cost will be in the form of higher interest rates or all Government debt. Again, the hon. Member for Shipley should have been too embarrassed to get out of his seat.
      My hon. Friend the Member for Arundel and South Downs (Mr. Flight) alluded to another problem. I am grateful to the Library for coming up with some information from the International Monetary Fund on pension fund liabilities. The IMF report states:
      "For many industrial countries, net pension liabilities exceed current overall national debt."
      In fact, in Japan, Germany and France—according to the IMF figures—the level of unfunded pension debt alone is more than 100 per cent. of GDP. In other words, as my hon. Friends have said, there are myriad ways of measuring the obligations of Governments.
      We should not be blinded by the fact that the Minister will no doubt allude to the Maastricht definition. The Maastricht definition makes no reference to the level of unfunded pension liabilities which are so high in Germany and France but which, according to the same report, are less than 5 per cent. of GDP in this country. There is a dramatic difference between the strong Government debt position inherited by the Labour Government and that in any other country in Europe—and, indeed, in almost any other country in the world.
      The new clause is simple and would have a very clear effect. Above all, if the Government accepted it, it would show that they took their liabilities seriously. It would show that they did count the cost, and merely by demonstrating that, would go some way to mitigating the profligacy that we have already witnessed on the part of the Government, in respect not only of the channel tunnel funding but of student loans.

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      By the end of this Parliament, there will not only be £3.5 billion-worth of guarantees of channel tunnel funding but about £6.5 billion-worth of student loans guaranteed by the Government. That debt will be in the market, and the Government are ultimately responsible for it. The Government are using guarantees as a way to supplement their borrowing powers in every way they can. In the process, they are undermining the very claims to prudence set out in the report that we received from the Chancellor earlier this month.
      Mr. Geraint Davies: New clause 7 is a clear example of Conservative Members' financial illiteracy. The obvious point about the £400 billion national debt has already been made in this debate, as has the point about the cost of paying for that debt. The basic point that I want to make is one of financial literacy—that a contingent liability is not borrowing.
      The Export Credits Guarantee Department has been mentioned in the debate. In simple terms, that department gives a guarantee—to Midland Bank, for example—to underpin a credit facility for an exporter, who in 99 per cent. of cases will later be paid by an importer. Therefore, that contingent liability never becomes borrowing. The idea of including such a liability on the balance sheet is therefore wrong. It is a situation in which a contingent liability never becomes a debt.
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      I can see the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) thinking about that, and about the fact that it is facile and stupid to include contingent liabilities with borrowing. That liability will not become debt, although it is risk.
      Mr. St. Aubyn rose—
      Mr. Flight rose—
      Dr. Cable: Will the hon. Gentleman give way?
      Mr. Davies: I shall give way in a moment.
      We therefore cannot simply club together those items, which are apples and pears. A comparison of that prescription with private sector practices, in companies and in balance sheets, would reveal that—although a company would have company borrowing on its balance sheet—a contingent liability, such as a guarantee to an associated company, would be in the footnotes of the accounts and not in the balance sheet. The reason for the practice is that that contingent liability may not be realised as a borrowing or debt obligation.
      The Government issue Treasury bills and are obliged to pay for them; that is borrowing. Converely, if they give various guarantees but there is no real prospect of having to pay out on them—a contingent guarantee—it would be completely irrational to add contingent liabilities to actual borrowing to come up with a concept of debt.
      Therefore, new clause 7 underlines a fundamental misunderstanding of public accounts.
      Several hon. Members rose—
      Dr. Cable rose—
      Mr. Davies: I wonder why, if the new clause is such a good idea, the previous Government did not introduce
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      such a measure during their 18 years in office. There seems to be a whole queue of hon. Members waiting to get involved in the debate.
      Dr. Cable: Does the hon. Gentleman include the World bank in his definition of financial illiteracy? As a matter of course, that bank regards publicly guaranteed private debt as part of external public debt for the 130 countries that it reviews.
      Mr. Davies: I was simply saying that one cannot combine borrowing with contingent liability and come up with a figure. No one is saying that we should not assess the level of the Government's exposure to risk. If one has, for example, a credit guarantee for £100 million here and one for £100 million there, and if one of them is a very highly geared, high-risk guarantee whereas the other is as safe as houses, we simply cannot add together the two and produce a meaningful figure. The idea that we can then add on to that figure an actual borrowing liability is ridiculous.
      Those who tabled new clause 7 are trying to suggest that we should enrich our understanding with a more detailed breakdown of the different types of our exposure—which would include the private finance initiative, for example. If that were really the objective of the new clause, we would be having quite a different debate. However, it is facile seriously to expect the House to pass such a simplistic new clause.
      Mr. St. Aubyn: It is evident that both a guarantee and a loan are a use of credit and a use of the Government's good name. They are very similar uses of credit, and we therefore need a common measure of both of them.
      Mr. Davies: That is ridiculous. If the Government borrow money, they borrow money and have an obligation to repay it, underpinned by taxpayers' money. Conversely, it is a quite different kettle of fish if they give a guarantee covering, for example, a credit failure by an exporter, or by an importer to pay an exporter in a foreign market. If the hon. Gentleman cannot understand that difference, he should not have served on the Committee considering the Bill.
      Sir Michael Spicer: I had not planned on speaking in this debate, but was inspired to do so by the final remarks of the hon. Member for Croydon, Central (Mr. Davies). He said that borrowing is borrowing—which I totally agree with—but he should speak to the Chancellor of the Exchequer about that. The Chancellor has invented a new definition of borrowing, which is that it has to be related to capital expenditure and not to current expenditure.
      I caught only the end of the speech by my hon. Friend the Member for Guildford (Mr. St. Aubyn), when he mentioned the golden rule. The golden rule is constantly being mentioned—I think mistakenly—as some act of great prudence.
      Mr. Geraint Davies: Will the hon. Gentleman give way?
      Sir Michael Spicer: I shall finish these comments—I might forget them—and then I shall certainly give way.

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      The golden rule breaks the point that the hon. Member for Croydon, Central made about borrowing being borrowing. It is quite wrong to try to disguise that fact.
      Secondly, somehow or other, the golden rule has been used as some type of fig leaf for prudence. Yesterday, the Chief Secretary to the Treasury argued in the House with my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) about evidence given by Professor Buiter—one of the members of the Monetary Policy Committee—to the Treasury Select Committee, of which I am a member. Professor Buiter argued effectively—for very much the same reasons given by the hon. Member for Croydon, Central—that the golden rule was rubbish. The Chief Secretary said that that was not quite true, because the Government were actually interested in prudence. However, prudence—which is related to a second completely false conception, that I shall deal with now that I am speaking in the debate—is meaningless.
      It is mistaken to argue that the golden rule, which is a new definition of borrowing, is somehow more prudent than a belief—as the hon. Member for Croydon, Central seemed to argue—that all borrowing is related to prudence.
      Mr. Davies: I should like to make it clear that the golden rule is not a definition of borrowing, but a prescription for sound and prudent financial management. One borrows only against capital investment and not to pay for consumption. That is very sensible practice and is not a definition of borrowing. We all know that borrowing is simply taking money and spending it on whatever. The golden rule is a quite different proposition. I commend and support wholeheartedly the Chancellor's actions on debt management, the golden rule and separating capital and revenue. However, I completely reject new clause 7.
      Sir Michael Spicer: I think that the hon. Gentleman and I agree on some points. The problem is that, as a definition of prudence, the golden rule is not a very good one. All precedent in public spending has shown that any increase in capital spending is usually accompanied by a pretty massive current expenditure commitment, even if it is argued that it is for capital expenditure. The relationship between capital expenditure and current expenditure has been well established as an economic concept.
      Mr. Davies: Surely the point is that the revenue costs of capital investment should be paid from revenue and not from borrowing. One can borrow to invest in capital expenditure. Although there will be a knock-on revenue cost, that should be paid for out of tax. The points are quite consistent.
      Sir Michael Spicer: As the hon. Gentleman said, all borrowing is borrowing. The fact is that there is not such a thing as "distinct borrowing for capital expenditure" that can somehow be identified as different from borrowing for current expenditure, in terms not only of prudence, but of practical fact.
      I do not understand why there is such a fuss about the new clause. I should say, partly in response to a comment by the hon. Member for Croydon, Central, that one of the reasons why the previous Government did not make such practices particularly explicit is that there was never any
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      doubt that attaching some type of public sector guarantee—as there would be, for example, if a company had a Government stake of more than 50 per cent. as some form of guarantee and, therefore, there was a distortion in how it was allowed to borrow in the market—should attract the application of public sector borrowing requirement rules.
      Mr. Hammond: Does my hon. Friend agree that the hon. Member for Croydon, Central (Mr. Davies) fails to see that almost all borrowing by public bodies could be replaced by private sector borrowing with the backing of a Government guarantee? Therefore, his position is ludicrous. The Government could wipe hundreds of millions of pounds off the PSBR at a stroke. That is why guarantees and borrowing are similar in their effect.
      Sir Michael Spicer: That is certainly a very important point. Another important principle, which I thought was shared by hon. Members on both sides of the House, was that if any institution, corporate or otherwise, entered the market for money with the backing of a Government guarantee, not only would it have the effect that my hon. Friend has just mentioned, but it would be highly distorting and very unfair to others in the marketplace borrowing at their own risk. It is a fundamental principle and until now, it seemed unnecessary to spell it out in legislation.
      However, a number of initiatives and pronouncements by the new Government and some of the spins that have been put on them suggest that, for instance, they might be prepared for a company with a 49 per cent. private shareholding and a 51 per cent. Government shareholding to borrow in a way that ignored the PSBR rules, that was outside the definition of public sector borrowing and that unfairly distorted the borrowing process. The fact that such a prospect is in the political air makes it necessary to spell out exactly what fits into public sector borrowing—not only by means of figures, but in respect of any potential distortion in the capital markets, which are highly important and should not under any circumstances be neglected.
      The fact that, apparently, we have a new ethos, makes it suddenly necessary to spell out exactly what is within the PSBR rules and what is not. We have not had to do so in the past because no Conservative Government would have dreamed of breaking the rules. We know that to distort the marketplace in such a way would be not only unfair, but disruptive and inefficient in terms of the best use of capital. In future, however, such a definition may well be needed. The more that Labour Members talk about no premium being attached to borrowing by people who have some guarantee—either because of a public sector majority shareholding or through another guarantee—the more it becomes necessary in terms of equity and the most efficient distribution of capital.
      Unless the Government can guarantee that there is no question of there being any distortion or any public sector guarantee leading to the PSBR rules being broken, the new clause is absolutely essential as part of the new regime.
      8.15 pm
      Mr. Geoffrey Robinson: I should make two declarations of interest. First, I am not an accountant and secondly, I have an interest in football, so I hope that we shall make some progress on what is a particularly arcane issue.

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      The Opposition appear to be developing a new leitmotif along the lines that, under Labour, the Inland Revenue has taken much greater licence in secondary legislation—although the figures show that the same occurred as much if not more, and on equally vital issues, under previous Tory Administrations. They are also developing the line that there has been some weakening in the standards of our national accounts classification rules. The hon. Member for Arundel and South Downs (Mr. Flight) mentioned other countries fiddling their figures. I shall ensure that his remarks are brought to the attention of the Governments of the appropriate countries where, no doubt, he will be a welcome visitor this summer. However, in our case the rules have not changed.
      Some Opposition Members are succumbing to what could be described as professional recidivism. In a sense we appear to be turning into accountants instead of legislators. We made it clear in Standing Committee that we could not accept a proposal along the lines of new clause 7, as it would make the Chancellor and the Government of the day accountable to the law courts, with all that that would involve, instead of to the people of this country, as we intend to remain the case.
      Mr. Hammond: Will the Minister give way?
      Mr. Robinson: I shall give way in a moment. I sense that the hon. Gentleman does not share my interest in making progress.
      The hon. Member for Twickenham (Dr. Cable) asked what was so wrong with building up a high level of borrowing. We would prefer a prudent level, and he should bear in mind that one cannot get complacent about borrowing. In one year—the pre-Budget year of 1992—the Conservative Government increased the PSBR by £50 billion. When we took office, the interest burden was about £25 billion a year, which is more than we spend on schools and hospitals. Having said that, if we are to invest prudently for the future, we must stick to the golden rule and balance the books over the economic cycle in revenue terms. If the burden of that investment in the future is paid for in future by those for whom we are investing—our children—it has a certain fairness and symmetry.
      The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) repeatedly asks how we deal with repairs and what is the difference between substantial repairs and additions. The right hon. Member for Wells (Mr. Heathcoat-Amory) gave us quite a good definition. He said that repairs to schools were usually paid for out of revenue, but that substantial additions or improvements were partly capitalised. It is a normal accounting process. We are in no way trying to understate the need for capital investment or the required level of capital investment. We realise only too clearly the great neglect there has been under previous Governments of all colours. When there is a cash problem, the immediate solution is to cut back on capital spending and keep going on revenue. That results in under-investment in services such as London Underground, to which the hon. Member for Twickenham referred. It is clear from the current state of affairs that there has been under-investment throughout the public sector, which is a crying shame.
      Several Opposition Members raised the same two or three issues, so I shall not reply to them individually. In respect of the channel tunnel rail link, instead of admitting
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      that it was a complete mess from the beginning, having been pushed through with bad financial arrangements and for political reasons by the former Deputy Prime Minister, and saying, "We made a mess of it; thank goodness the Labour Government have managed to get it back on the rails and make a success of it," they are attempting to say that we are doing something wrong.
      The Government guarantee was examined by the Office for National Statistics, which then decided not to include it as a contingent liability. Opposition Members may disagree with the ONS; from time to time, no doubt they will. It is true that we are using the financial reporting standard—on the exposure draft. We are having a vigorous debate with Professor Tweedie and his colleagues and are trying to reach an agreement. However, that is not unusual for Governments. The idea that we are doing things that are more risqué—bending the rules and twisting the interpretations further than would be reasonable—is quite wrong.
      The Conservatives hate the fact that we have found a way in which to make a success of the PFI. We have done more in our first year than they did in the previous five years. Apart from the channel tunnel rail link, which was a flop, they achieved hardly anything. We have made a success of the idea organisationally and practically. Building programmes on a Victorian scale for schools and hospitals are under way because we have got the PFI right within a year, after the Conservatives spent five years messing around and getting nowhere.
      That puts the CTRL and the PH into context. We are examining ways in which to strengthen the role of the ONS and the National Audit Office. The normal accounting principles continue as before. We have not changed anything; we have been far too busy for that. Instead of congratulating the Government on moving towards welfare tax reform—a major reform that the Conservatives did nothing about in all their years of power, except intensifying dependency—
      Mr. St. Aubyn rose—
      Mr. Robinson: I shall give way in a moment. If I am being unreasonable, I hope that hon. Members will understand. I should like to make progress if possible.
      The Government are getting on with their plans and succeeding. Our golden rule is well understood in the country. We want a prudent level of debt, and we are publishing our code of fiscal stability. That is what is necessary. The new clause would merely make the Chancellor report through the courts for his actions and result in the Government's economic policies being judged by lawyers, who, for all their immense contribution to our national well-being, are not cut out for that role. We cannot accept the new clause. I hope that good sense will prevail all round and that the Opposition will not press the issue to a vote.
      Mr. Heathcoat-Amory: The purpose of the new clause was to get some assurances from the Government that they would respect the ground rules in the presentation of the national accounts. The Paymaster General's response added to our alarm. However, we do not intend to divide the House. We are aware that there is a football match taking place somewhere else and we would not wish some team or other to score when we are otherwise engaged. Hon. Members in all parts of the Palace can relax on that score.

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      We had hoped for some assurances. We are fully aware that the Government have two fiscal rules, which they are proud of. We wanted to know how the rules will be policed. The golden rule is all very well, and supposedly ensures that the Government borrow only for capital expenditure. If that is the case, it is important that the Government maintain discipline in allocating expenditure to capital or revenue. There might be a natural temptation for them to allocate expenditure to capital so that they can claim to be keeping to the golden rule while letting expenditure increase almost without limit. That is why we have asked some routine questions about whether the Government will keep to normal accounting rules.
      The Paymaster General has given us some assurances. His understanding of the distinction between repairs and improvements is familiar. That makes it all the odder that, when asked the same question, the Chief Secretary gave an evasive reply that amounted to little more than, "We will make up the rules as we go along." That is why we were suspicious. The Paymaster General at least gave us an outline assurance.
      The second discipline is that the Government say that they will keep a limit on debt as a proportion of gross domestic product, but there is another possible fudge on that. They can reclassify debt as private rather than national debt, even if it is guaranteed by the Government, who retain all the risk. That would be a clear evasion. The Paymaster General said that the private finance initiative was now a great success. It is easy to make a success of the idea if all the risk remains with the Treasury.
      As the Register of Members' Interests shows, I am a director of two companies. My fellow directors and I will take on any PFI project, borrowing enormous sums and undertaking any Government contract, if the Treasury guarantees the loan and all the risk remains with the Government. It is easy to make a success of PFI if the Government take the borrowing off their balance sheet, but retain the risk. That is the problem that we were attempting to explore and that would be prevented by the new clause.
      Sir Michael Spicer: Is not what my right hon. Friend is saying particularly important in the context of the Government's macro-policy on public spending, bearing in mind that public spending may go through the roof—or at least go considerably higher than we had planned? If the Government do not raise taxes, they will have to fudge public sector borrowing, as my right hon. Friend is saying. Those are issues of the highest importance.
      Mr. Heathcoat-Amory: My hon. Friend is right. Our request is simply that the published projections and the national accounts should give a true and genuine picture of the state of borrowing. My hon. Friend is familiar with the problem in other countries that have huge contingent liabilities that are not disclosed.
      My hon. Friend made a notable speech in the debate on the convergence criteria and the single currency. Several of us observed that it was risky for the single European currency to start when the constituent economies did not show the true extent of public borrowing. Italy, for example, has a gigantic unfunded public pensions liability, which amounts to little more than a hope that a future generation of taxpayers will honour the promises made by the Italian Government today. We have contrasted that with the happy position in this country,
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      where the majority of pension liabilities are represented by assets that are audited and are a visible expression of where future pensioners can expect to have their pensions paid from.
      The reliability of public accounts is very important, not just domestically but in international comparisons. We are not satisfied with the way in which the Paymaster General has dealt with the issue. We shall return to it on another occasion. We greatly regret the fact that a new clause tabled in a positive and constructive spirit has not found favour, but we know that we have won the argument. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New clause 8

      STAMP DUTY ON TRANSFERS OF LAND TO DEALERS IN OR DEVELOPERS OF LAND
      '.—Where a transfer of land to a dealer or developer of land takes place and the instrument effecting that transfer is liable to stamp duty at the rate specified in either subsection (1)(d) or subsection(1)(e) of section 55 of the Finance Act 1963 and the dealer in or developer of land intends either:—

      (a) to transfer to an unconnected third party the same parcel of land within six months without improvement or,

      (b) to develop the land and transfer to third parties or dedicate to the highway every part of the land within a period of two years from the date of transfer

      he may indicate such intention by notice in writing to the Inland Revenue and provided that in the case of (a) above the land is so transferred within six months and the instrument effecting the transfer is duly stamped within the time allowed by statute for such purpose and evidence of such is produced by him to the Inland Revenue, or in the case of (b) above the land is developed (within the meaning of the Town and Country Planning Act 1947) and every part of the land is so transferred or dedicated to the highway within two years of the date of transfer and the instrument or instruments effecting such transfer or transfers are duly stamped within the time allowed by statute for such purpose and evidence of such is produced by him to the Inland Revenue, then the Inland Revenue shall repay to him the full amount of the stamp duty paid by him on transfer of the land to him.'.—[Mr. Whittingdale.]
      Brought up, and read the First time.
      Mr. John Whittingdale: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss the following amendments: No. 45, in clause 147, page 137, line 14, after '£500,000', insert
      'in the case of a transfer of a dwelling house or £5,000,000 in the case of any other transfer'.
      No. 70, in page 137, line 15, leave out
      'for "£1.50" there shall be substituted "£2"'
      and insert—

      '(a) for "£1.50" there shall be substituted "£1 for every £100 or part of £100 of the consideration up to £250,000, and at a rate of £2" and

      (b) after "consideration" there shall be inserted "in excess of £250,000".'.

      No. 71, in page 137, line 16, leave out
      'for "£2" there shall be substituted' "£3"'
      and insert—
      '(a) for "the rate of £2" there shall be substituted—

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      "(i) the rate of £1 for every £100 or part of £100 of the consideration up to £250,000.

      (ii) the rate of £2 for every £100 or part of £100 of the consideration over £250,000 but below £500,000, and

      (iii) the rate of £3" and

      (b) after "consideration" there shall be inserted "over £500,000".'.
      No. 46, in page 137, line 17, at end insert
      'and after "£500,000", insert "in the case of a transfer of a dwelling house or £5,000,000 in the case of any other transfer".'.
      Mr. Whittingdale: I realise that this is perhaps not the most opportune moment at which to be moving a new clause. I accept that there are other distractions, and I hope that the attendance in the Chamber does not denote the fact that hon. Members do not regard this as an important matter—it is an important matter on which we should spend a little time.
      The purpose of the new clause is to provide a measure of relief to dealers or developers of land who will be worst hit by the Government's swingeing increase in stamp duty. It is worth remembering that this is the second substantial increase in stamp duty since the Government came to power. The last Conservative Government significantly reduced the impact of stamp duty by abolishing it on the transaction of shares, and by substantially raising the value of properties on which it became payable.
      Within a few months of the election of the Government, the Chancellor chose to increase stamp duty by 50 per cent., from 1 per cent. to 1.5 per cent. on property sales above £250,000, and by 100 per cent., to 2 per cent., on property sales above £500,000. At that time, the Chancellor said that the measure was necessary to reduce volatility in the housing market. He said in his Budget statement last year:
      "I will not allow house prices to get out of control and put at risk the sustainability of the recovery. I have therefore decided that it is right to take measures aimed at stability in the housing market."—[Official Report, 2 July 1997; Vol. 297, c. 313.]
      As we said at the time, that had little to do with stability in the housing market. It was a spurious excuse for what was, plain and simple, a tax rise.
      Mr. Swayne: Has my hon. Friend considered the possibility of a wider agenda, in that the Chancellor may be seeking to attack our fondness for owning properties—particularly housing—because that is one of the principal causes of our economic cycle being out of sync with the rest of the European norm?
      8.30 pm
      Mr. Whittingdale: My hon. Friend makes a good point. There is a real concern that this is not the last such increase that we shall see. The levels of stamp duty elsewhere in Europe are considerably above those in this country, and that may not be unconnected with the fact that we have much higher levels of house ownership.
      Nine months later, in the second Budget of this Administration, the Chancellor abandoned his previous attempts to justify rises in stamp duty on economic grounds. In the Budget in April, the Chancellor increased stamp duty again to 2 per cent. on property sales above £250,000, and to 3 per cent. on property sales of more than £500,000. At that time, he made no mention of the
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      need for stability in the housing market. The only justification that the Chancellor was prepared to offer was that 98 per cent. of house transactions would be unaffected.
      The implication of that statement was clear—this would be a tax increase affecting only the rich living in expensive houses. The truth, as we have sought to show, is different. The real burden of the tax rise does not fall on a few rich house owners who, it might be argued, can afford to pay. The real burden falls on the commercial sector of businesses and on those who invest in properties. It is hardly surprising that the Institute of Directors said:
      "We deplore the increases in stamp duty on high-value properties. While very few house purchases will be affected, a far higher proportion of purchases of business premises (and of goodwill and patents) will be affected. Insurance companies, pension funds and property unit trusts will bear the brunt of the direct impact of increases in stamp duty, because most commercial properties are owned by such investors and then leased. The millions of people who invest in insurance, pensions and unit trusts will therefore suffer."
      it is to meet that concern that we have tabled amendment no. 45, which deals with that point by restricting the £500,000 limit to the transfer of a dwelling house, and applying a £5 million limit to other transfers.
      Moreover, the effect of the increase in stamp duty is likely to be highly distorting. As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) has pointed out, stamp duty is imposed on a slab system, not a slice system. As a result, if a property sells for £249,999, stamp duty is payable at the lower rate of 1 per cent. However, if its price increases by £1, stamp duty becomes payable on the entire amount. As the Chartered Institute of Taxation has pointed out, at the £250,000 limit the duty on an additional £1 of consideration will lead to an additional amount due of £2,502—thus giving a marginal rate of duty of 2,502 per cent. At the £500,000 limit, the marginal rate for the extra pound of consideration is 5,003 per cent.
      For all those reasons, we would much rather that the increases in duty did not take place. The purpose of new clause 8 is to seek to provide at least some protection for those who will be among the hardest hit. The Chancellor attempted to claim that 98 per cent. of house transactions would be unaffected by the increase, but that is simply not the case. Like many hon. Members, I suspect, I have seen substantial developments of new estates in my constituency in recent years. A large proportion of house sales are conducted by those buying new houses from builders and developers.
      Although few of those individual transactions may amount to more than £250,000, the original purchase by the developer of the land almost certainly does amount to more than that. In most cases, developers will buy land for building in parcels worth considerably more than £500,000, and the additional cost to the developer of the increase in stamp duty is simply likely to be passed on in higher prices of the homes which he then goes on to sell. The result is that the tax increase will hit far more than 2 per cent. of house transactions.
      The measure is likely to fuel house price inflation and will add to the cost of many first-time buyers and those starting a family who wish to move to a bigger home. In many cases, the value of the purchase will be far less than £250,000, but nevertheless the buyers are likely to be paying more as a direct result of the measure imposed by the Chancellor.

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      On top of that, developers and those who buy houses from them will have to pay stamp duty twice. It will be charged on the original purchase of land by the developer and it will then be paid again by those who come to buy properties from the developer. In Committee, the Paymaster General moved new clause 10, which was to provide for relief from double stamp duties. That measure was made necessary by the repeal of the Government of Ireland Act 1920, and was a sensible measure to ensure that people did not have to pay stamp duty twice as a result of the repeal of that Act.
      In this instance, the consequence may well be that people will have to pay stamp duty twice. They will pay it indirectly through the increased cost of their homes, because the developer has had to pay it. They will then pay it again, directly, on the cost of the house that they purchase. That is serious enough at the present rates, but our fear is that it will become more serious if stamp duty increases again. In his two Budgets so far, we have seen the Chancellor's willingness to use stamp duty as a means of increasing tax and revenue.
      As my hon. Friend the Member for New Forest, West (Mr. Swayne) pointed out, we have a far higher level of home ownership and far lower levels of stamp duty than exist on the continent. I should be interested to know whether it is the Government's intention to have further increases in stamp duty in coining Budgets, and whether there might be an agenda to move towards a harmonisation of stamp duty levels across Europe. I am glad to see the Financial Secretary in her place. She has a particular interest in harmonisation, and I should be interested to hear whether that future harmonisation is under consideration.
      As I said, the effect of the amendments is not to remove the increase—although, ideally, that is what we should like—but to remove the increased cost of stamp duty from developers and restrict it to the sale of houses worth over £250,000. It is the Chancellor's declared intention that people selling such properties should have to pay it. If the Paymaster General wants to ensure that the measure applies only to those people, who were specifically mentioned by the Chancellor when he introduced the measure in the Budget, he should accept our amendments.
      Mr. Hammond: I declare an interest in this matter, which is included in the Register of Members' Interests, in that I am a director of a small house-building and development company. I speak to the new clause not because I expect personally to benefit from the proposed change. As my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) ably pointed out, the developer or dealer will not ultimately bear the incidence of this potential double taxation; the end purchaser will inevitably pay this tax.
      Until the two Budgets under this Government, stamp duty was largely an irritant to people in the property development business and those buying and selling houses. At 1 per cent. on properties over £60,000, it had to be paid, but was not likely to be a determinant of people's behaviour in their transactions. Stamp duty on transfers of land valued at above £500,000 is now levied at 3 per cent. and, as my hon. Friend the Member for Maldon and East Chelmsford has pointed out—I know that the Paymaster General has acknowledged this problem—we have the slab, rather than the slice, system. That produces ludicrously high marginal rates of taxation, which create
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      artificial distortions in the property market and effectively make it certain that no house will ever be sold for £249,000 or £499,000. Anything that introduces artificial distortions into the market is greatly to be deplored.
      As my hon. Friend said, when the measure was announced in the Budget speech, the Chancellor led the public to believe that it applied only to houses and then only to the houses of the few. The purpose of the new clause is to draw attention to the fact that land at every stage in the cycle of transactions will be subject to the stamp duty. To describe the effect at its simplest, a £1 million parcel of land that is sold to a developer will attract stamp duty at 3 per cent., which is a levy of £30,000. That land might be used to build low-cost housing units, which would sell for less than £60,000. People who bought those houses might think that they had escaped the Chancellor's attack on the tax-paying public because they were paying no stamp duty. However, the price of the house that they bought, as determined by the developer, would inevitably include the cost of the 3 per cent. stamp duty on the land which he had been obliged to bear.
      Typically across the UK, land makes up something like a third of the price of new houses. The measure will be unequal in its impact because in certain parts of the UK, such as London—which is the most extreme example—and the south-east, high land values mean that land can represent a much higher percentage of the price of a property. In London, land could represent as much as three quarters of the value of a property. It does not take a mathematician to work out that if land is bought subject to a 3 per cent. stamp duty and dwellings are built on it which are then sold for over £500,000 each, which is not unusual in central London, the ultimate incidence of stamp duty in the final purchase price could easily amount to 5 per cent. We must ask the Government openly to acknowledge that, with stamp duty being charged on every step of the transaction, multiple tiers of stamp duty will be included in the end price.
      As I said earlier, at 1 per cent., stamp duty was an irritant and did not cause major concern, but at 3 per cent. it becomes a significant factor. As my hon. Friend the Member for Maldon and East Chelmsford made clear, it has an impact not only on houses but on factories, shops, offices and any kind of development or property that is bought and sold in the marketplace. Where land is purchased and then developed, our new clause would reduce the phenomenon of double dipping.
      8.45 pm
      The Chancellor said in his 1997 Budget speech that he had increased stamp duty to control inflation in the housing market. As my hon. Friend noted, he did not make a similar comment in the 1998 Budget speech when he increased stamp duty on larger transactions. Will the Paymaster General tell the House whether the Government intend to reduce stamp duty if the housing market, or the property market in general, shows a marked downturn, suggesting that it is need of such a counter-balancing stimulus?
      It would also be interesting to know whether the Government's longer-term intentions are to use stamp duty as a means of applying a hand on the tiller of the housing market. We hear that the Government are determined to ensure convergence with the economies of

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      our European partners, as a prerequisite to joining economic and monetary union. We have not so far seen very much in the way of convergence on interest rates. Indeed, the trend under this Government has been entirely in the opposite direction.
      The Government have lost direct control of interest rates and have an avowed policy of seeking convergence with the economies of our European partners, although they know full well that the structure of the UK housing market is very different from that prevailing in all other European economies. Short-term interest rates have a much greater impact on individuals—that is to say, not to put it too cynically, on voters—in the UK than they do in any other country in the European Union. Do the Government intend to use stamp duty as a method of regulating the housing market, in the absence of any other controls being available to them within economic and monetary union, if and when the UK joined? In that case, what sort of rates of stamp duty might the British public expect to be imposed?
      Mr. Love: The hon. Gentleman referred to convergence in Europe. I attended a conference yesterday organised by the Council of Mortgage Lenders, at which a speaker made European comparisons. First, unlike what Opposition Members are saying, the UK is not at the top—[Interruption.]
      Mr. Deputy Speaker (Mr. Michael Lord): Order. When hon. Members enter the Chamber, they must be aware of what is occurring. At the moment, the hon. Member for South Derbyshire (Mr. Todd) is making an intervention.
      Mr. Love: I am Mr. Andrew Love, Mr. Deputy Speaker. However, like my hon. Friend the Member for South Derbyshire, I have a moustache, so I accept that mistakes can be made.
      As I was saying, the first comparison revealed that, unlike what Opposition Members are saying, the UK is not at the top of the owner-occupier league in Europe, although it is close to the top. The more interesting comparison revealed that countries that have a higher rate of owner-occupation are the least wealthy countries in the European Community. Is that the kind of convergence that the hon. Member for Runnymede and Weybridge (Mr. Hammond) wants?
      Mr. Hammond: It is not simply the percentage of owner-occupation that is important, but the way in which it is financed. I suggest to the hon. Gentleman that the United Kingdom has the greatest vulnerability to short-term interest rates as an influence on the housing market.
      The Paymaster General knows of my concern with this issue; we have discussed it before. I end by asking him whether, as part of the single currency package that the Government are putting together, the people of Britain are to look forward to stamp duty approaching or reaching continental rates, and being used regularly by the Government, in a downward or upward direction, to
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      regulate fluctuations in the housing market, thereby controlling that important element of demand in the economy.
      Mr. Clifton-Brown: This measure is expected to yield £390 million in 1998–99, £470 million in 1999–2000 and more than £520 million in 2001. This is no longer a minor tax: it is a severe tax.
      I declare an interest, as one of only two chartered surveyors in the House.
      Pension funds have been raided by the withdrawal of advance corporation tax, and now they are being raided still further, because their property assets will have to be devalued in the Royal Institution of Chartered Surveyors' red book valuation. Until one has proper market comparatives, properties will have to be devalued. Property is always compared with equities, which retain a stamp duty rate of 0.5 per cent; property now faces a savage 100 per cent. increase in respect of values of more than £500,000—hence it will become an unattractive investment class.
      It has been estimated by the well-known property consultants BTZ that there was £417 million-worth of overseas property investment in the UK in 1997, double that of 1996. The concern in the property industry is that if these swingeing increases in stamp duty continue, they will reduce the attractiveness of the UK property industry as an inward tax haven of the kind that was so successful in the golden years of Conservative economic management.
      My hon. Friends have already commented on the unprogressive nature of stamp duty—it is a lumpy tax. In future Budgets, the Government might like to consider making the tax more evenly progressive. A property currently sold for £499,000 would attract stamp duty, at 2 per cent., of £9,980; whereas a similar property negotiated for sale at £1,000 more, or £500,000, attracts the 3 per cent. rate—a staggering £15,000. That amounts to a marginal rate of tax of around 5,000 per cent.
      It would be interesting to know the Government's intentions for this tax. It is all very well increasing taxes in a bull market, but the property market is beginning to stagnate—house prices in London and commercial property prices throughout the UK are slowing down. On behalf of the property industry, I urge the Paymaster General to shed light on the Government's thinking.
      Mr. Geoffrey Robinson: I must begin by explaining to the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) that the Government measure debated in Committee referred to double taxation on the same transaction only—a different set of considerations altogether.
      I can tell the hon. Member for Cotswold (Mr. Clifton-Brown) that I am perfectly happy to consider slicing instead of slabbing—one can see the attractions of that, although the current system is well established. I should add that the change could be effective—given sound reasons for making it—only if the overall tax take did not diminish. Even with a more progressive system, there will be bunching and other anomalies. That is why we cannot accept the new clause's attempt in that direction.
      The cost of the proposals contained in amendments Nos. 70 and 71 would be £250 million in a full year—perhaps rather more than Conservative Members intended,

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      although the amendments may be purely illustrative. At the £60,000 and above threshold, the amendments would cost about £700 million. These are orders of magnitude that we could not contemplate.
      If Opposition Members would prefer a progressive, slicing system, I should be prepared to consider it; but I certainly cannot deal with that at this stage of a Finance Bill's progress.
      The new clause aims to provide relief from stamp duty for land dealers and developers. If they have paid duty of 2 or 3 per cent. on a purchase of land, they would get the duty repaid if they sold the land without improvement within six months, or developed and sold it within two years. The new clause gives no relief where the dealer or developer has paid duty at the 1 per cent. rate.
      The proposed relief would have a revenue cost; other things being equal, the rates of duty proposed in the Budget would have to be increased to make up the lost yield. More specifically, that would involve making some arbitrary distinctions between cases qualifying for relief and cases that would not. The same sort of bunching problem would recur.
      For example, a dealer selling unimproved land after five months would qualify, but one selling after seven months would not. If the land passed through the hands of a number of dealers in succession, the clause would appear to allow each in turn to claim repayment of duty on his purchase when the land was sold on to the next dealer. A whole series of transactions could result in only one stamp duty charge ultimately being payable.
      Similarly, the proposed relief for developers would have arbitrary limits. A development that took longer than two years to complete would not qualify; that would impose arbitrary constraints and distort commercial decisions—not in the best tradition of Tory free-market thinking: more like old Labour. It is much better to impose general rates of duty that apply across the board.
      Mr. Hammond: Can the Minister see any really good reason, apart from revenue raising, why a piece of land that changes hands three or four times in a year should be subject to stamp duty at 3 per cent. on each transaction?
      Mr. Robinson: There must be a very good reason for the land to pass through three pairs of hands in six months; a profit must be made on it in each case, and, if that is the case, the tax should be levied. That is how markets work. In case the hon. Gentleman does not understand, that is what market economics is: each transaction is taxed, even if there are three or six transactions in a given period. It is much better to let a market work in that way. I accept that we may have differences about the level of tax, but it is not sensible arbitrarily to interfere with markets.
      Regrettably, I cannot accept new clause 9, amendments Nos. 70 and 71 or, for that matter, amendments Nos. 45 and 46. The latter two amendments would alter the application of the new top rate of 3 per cent. for stamp duty on transfers of land and buildings. There would be no change for residential property, but, for commercial property, the 3 per cent. would apply only to transfers over £5 million instead of £500,000. The implication is clear that the Opposition believe that the 3 per cent. rate is damaging the commercial property market, but no hon. Member made a convincing case for that in the debate.
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      I say to the hon. Member for Runnymede and Weybridge (Mr. Hammond)—the subject was also raised in earlier debates—that there is no hidden European agenda to bring our stamp duty rates up to the European level. The equivalent taxes in other European countries are a great deal higher—I gave the figures in the previous debate. Some of them are extraordinarily high. In Belgium, there is a 12.5 per cent. registration tax; in France, registration duty is 8.6 per cent; in Germany, the rate is 3.5 per cent. of purchase price across the board, as far as I can see—no graduation there. In Greece, the rates are 9.3 and 11.3 per cent. In Italy, the rate is 8 per cent; in Luxembourg, 5 per cent. of sales price; in the Netherlands, 6 per cent. of market value of property.
      Traditionally, those countries have very high levels of such taxes—higher than ours, and their markets are differently structured. We have no agenda to move to those levels, but—I again address my remarks to the hon. Member for Runnymede and Weybridge—I would not prejudge the Budget judgment that the Chancellor of the Exchequer might wish to reach in any year about the level of stamp duty, given the condition of the property market and the overall state of the economy, and the hon. Gentleman could not realistically expect me to do so.
      One thing that we do want to prejudge and avoid, however, is boom-bust in the property market. We had the saddest, most disheartening boom and bust, when young people—especially young couples—were caught in awful negative equity traps as a result of such mismanagement. We certainly want to get away from that. That is why all that we do is geared toward stability, and the taxes that we are debating are part of that.
      Amendments Nos. 45 and 46 would cost us £130 million, and, for that reason alone, we cannot accept them. I am sorry that it is no on all counts. I hope that there is no need to press the amendments to a Division, but that decision rests with the Opposition.
      9 pm
      Mr. Whittingdale: We should be grateful for small mercies. The Paymaster General has conceded that the present system of the slab operation of stamp duty has the absurd effect of giving rise to incredibly high marginal rates, and he has suggested that he might be prepared to consider that. I hope that we may return to that subject when we debate future Finance Bills; we look forward to debating it then.
      The Paymaster General has given us several reasons why he considers our amendments to be deficient, and I understand those reasons. The amendments did not constitute our ideal solution. We should have preferred it if the increases had not been introduced. Our preferred option was that the Paymaster General would tell us that he would not be proceeding with them, but obviously he is not prepared to do so.
      The Paymaster General has not entirely reassured us about his future intentions. He has told that us that there is no European agenda to move toward the harmonisation of stamp duty rates, and I suppose that we should be grateful for that, but he has obviously not told us that there will be no intention in future to make further increases in stamp duty. My hon. Friends and I retain a considerable suspicion that the Chancellor now views that as an easy way to increase taxes and raise money.

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      We have sought to show that, although the Chancellor may try to suggest that the measure hits the rich and affluent—the owners of large houses—exactly the reverse is the case. It will have an impact throughout the housing market, and many of those young first-time buyers, whom the Paymaster General mentioned, may end up paying more as an indirect result of the measure.
      However, as I have suggested, I do not believe that this is the occasion on which to press new clause 8 to a Division, so I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New clause 9

      AMOUNT OF INHERITANCE TAX CHARGED IN HERITAGE CHATTELS WHICH DO NOT MEET THE AMENDED HIGHER THRESHOLD TEST
      Notwithstanding the provisions in section 140 of and Schedule 25 to this Act (amending section 31 of the Inheritance Tax Act 1984 introducing a new higher threshold for chattels qualifying for heritage exemption), for those chattels which do not qualify as preeminent, the rate of tax will be based on the value at the date when the original heritage exemption was agreed between the owner and the Inland Revenue.—[Mr. Woodward.]
      Brought up, and read the First time.
      Mr. Shaun Woodward: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to discuss the following: New clause 10—Lower corporation tax for art sales—
      '.—(1) This section applies to any company whose business consists primarily of the sale of objects, properties and assets (hereinafter referred to as a "qualifying sale of art") which (i) come within group 11 of Schedule 9 to the Value Added Tax Act 1984 and (ii) are effected by or through such company acting as a recognised agent (as defined in sub-paragraph (4) below) where such recognised agent is liable to account for any amount of corporation tax in respect of a quarterly period (hereinafter referred to as a "qualifying tax payment").
      (2) The recognised agent shall be deemed to have paid the full amount of his qualifying tax payment in respect of any quarterly period even though he deducted from that full amount a sum equivalent to 40 per cent. of the amount due (the "permitted deduction").
      (3) The amount of the permitted deduction shall be calculated for each quarterly payment period, and a permitted deduction may not be carried back or forward for offset in any other quarterly payment period.
      (4) For the purposes of this section, a recognised agent means any auctioneer or any person carrying on a trade of dealing in any description of moveable property, or of acting as an agent or intermediary in dealings in any description of moveable property. In respect of any qualifying sale of art there shall be not more than one recognised agent for the purposes of this section within any period of six months who in the event of dispute shall be determined by the Commissioners of the Inland Revenue.
      (5) This section shall come into effect on 1st October 1998.'.
      New clause 11—Corporation tax relief for art sales—
      '.—(1) This section applies to any sale of objects, properties and assets (hereinafter referred to as a "qualifying sale of art") which (i) is within Group 11 of Schedule 9 to the Value Added Tax Act 1984 and (ii) is effected by or through a recognised agent (as defined in sub-paragraph (4) below) where such recognised agent is liable to
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      account for any amount of Corporation Tax in respect of the quarterly period during which the sale takes place (hereinafter referred to as a "qualifying tax payment").
      (2) The recognised agent shall be deemed to have paid the full amount of his qualifying tax payment in respect of any quarterly period even though he deducted from that full amount a sum equivalent to 1¼ per cent. of the proceeds of the sale (the "permitted deduction") in respect of qualifying sales of art occurring in that period.
      (3) The amount of the permitted deduction shall be calculated for each quarterly payment period, and the amount of the permitted deduction shall not exceed the amount of the qualifying tax payment for the quarterly payment period to which it relates. A permitted deduction may not be carried back or forward for offset in any other quarterly payment period.
      (4) For the purposes of this section, a recognised agent means any auctioneer or any person carrying on a trade of dealing in any description of moveable property, or of acting as an agent or intermediary in dealings in any description of moveable property. In respect of any qualifying sale of art there shall be not more than one recognised agent for the purposes of this section within any period of six months who in the event of dispute shall be determined by the Commissioners of the Inland Revenue.
      (5) This section shall come into effect on 1st October 1998.'.
      Amendment No. 72, in clause 39, page 23, line 1, at beginning insert—
      '(1) Save as provided in subsection (2),'.
      Amendment No. 73, in page 23, line 6, at end insert—
      '(2) Sections 26 and 27 of the Taxes Act 1988 shall continue to have effect in respect of the estate and maintenance funds which cover heritage properties receiving an audited number of visitors of 5,000 or more per year.'.
      Mr. Woodward: New clause 9 and amendments Nos. 72 and 73, which stand in my name, are obviously about heritage, tourism, access, fairness and a fair tax regime. The Bill is unfair and will damage our tourism and heritage business very much.
      Sir Richard Eyre's report for the Government, published today, states:
      "Every Government since the War has been committed in principle to the belief that the arts are important…and each Government is at some time obliged to ask itself how important".
      It is sad that, in the Bill, the Government pay no regard to the importance of our tourism industry or our heritage. At a time when we face the outcome of the comprehensive review of expenditure, Sir Richard Eyre says:
      "Whatever the structural outcome, there must be a more positive and constructive approach to delivering arts policy objectives."
      The amendments attempt to make sense of a strategy for the arts and tourism that at best is muddled, and at worst—and more likely—is symbolic of the fact that the Department for Culture, Media and Sport is irrelevant in the eyes of the Government, and the Secretary of State has no weight in determining Government policy. The Treasury has won on every count. The purpose of the new clauses and amendments is to ask the Government at this late stage to recognise the considerable damage that will be caused to the arts and the tourism industry.
      Amendments Nos. 72 and 73 seek recognition of the importance of heritage properties that attract an audited figure of 5,000 visitors a year. Despite the fact that millions of people enjoy access to those properties, clause 39 would almost certainly deprive many of those people of access to some of the buildings of greatest historical and architectural importance in our country.

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      This is not the place to rehearse the Government's thinking behind the clause, but I shall give the House an idea of the damage that will be done. The Historic Houses Association calculated that its 64 members who will be affected by the proposal face routine recurring repairs set off against income over the past five years of about £11.4 million. They will have major repairs set against income over the past five years of £6 million. The estimated additional tax that will be payable over the next five years, after the concession is withdrawn, is £8.7 million.
      The Treasury is chasing a relatively small sum, but the damage that it will do to public access and to the tourism industry which feeds off access to those houses is considerable. The Historic Houses Association estimates that, every year, 2.7 million people visit the properties that will be affected, and an even greater number enjoy their parks and gardens. Those 2.7 million people will be disappointed so that the Treasury can meanly chase £1.7 million in taxation.
      If one of those houses were handed over to the National Trust for it to look after, the cost to the public sector would be around £10 million a year. The problem with clause 39 is that it is certain that some of the 64 houses open to the public will be withdrawn from public access, because the owners will no longer be able to run the properties. The homes will go into the hands of people who may have a great deal of money and who can afford to run the houses without opening them to the public and without taking advantage of one estate election.
      Although in their rhetoric the Government are committed to access, in practice they are removing it. The tourism industry, which is on the back of that business, will be brutally damaged. It is sad that, in the clause, the Government are showing that they do not care about the tourism industry. That is clearly summed up in the Culture, Media and Sport Select Committee report, which pointed out that the Secretary of State does not value tourism. The report recommended that tourism should be the lead responsibility of a Minister in the Department, yet there is no sign from the Government that they recognise the importance of that. The report goes on to say:
      "We note the Department's commitment to enhance its influence within Whitehall and to highlight the economic and cultural importance of the sectors which it sponsors. However, a commitment is not an achievement and unfortunately the Department has not enhanced its influence in the way it says it would like to do."
      That is the point: the Secretary of State has totally failed the heritage and tourism industries. The purpose of amendments Nos. 72 and 73 is to try, at this late stage, to put right the considerable damage that is being done.
      Last night, in a token effort to acknowledge the arts industry, the Prime Minister held a seminar at No. 10 Downing street in which many of the new Labour peers and others were invited to take part. The Secretary of State for Culture, Media and Sport told us today about the significance of the "arts summit", as it has been called. He told the Evening Standard that culture would be
      "written into the core script".
      I am sorry, but, unless the hon. Lady shows willing and accepts the amendments and new clauses, it will expose the Prime Minister's meeting last night as mere rhetoric.
      Referring to the Prime Minister, the Secretary of State told the Evening Standard:
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      "I think he really does care. The idea that he is uninterested in the arts is very wide of the mark."
      The proof of that statement lies in the Bill's clauses and in whether the hon. Lady will accept the amendments. The magazine Country Life recently said:
      "Hidden in the Finance Bill, a Disaster for Heritage."
      [Interruption.] I am sorry that Government Back Benchers are unable to acknowledge with any sense of decorum a magazine such as Country Life. That shows rather ably and fitly what callous contempt they have for rural life, for country life, for heritage and for tourism. It demonstrates also how ineffective the Secretary of State has been in making a case on behalf of the arts.
      The Government intend to treat the private owner in a callous manner that runs completely counter to what the Secretary of State said last year when he addressed a meeting of the Historic Houses Association and praised the role of the individual owner. The Government will resort to type by taxing those private owners whom, in their rhetoric, they value, but, in their practice, they wish to tax. The consequences will be a forced sale of houses and unemployment for the several thousand people who are directly engaged in running those houses and for the many tens of thousands of people who are in associated tourism sectors such as hotels, shops and cafes.
      It is conspicuous that Labour Members did not speak up once in Committee on behalf of their constituents and others who work in sectors related to historic houses. Not once have Labour Members spoken on behalf of the tourism industry that is related to those houses. Labour Members have failed totally to stand up and protect the interests of their constituents. It is significant also that, despite these amendments, not one member of the Heritage team is present in the Chamber. If they had been told about it, those Ministers might have liked to attend. However, I am sure that they were not told, because the Treasury team simply does not care about tourism or culture in our country.
      There is no coherent policy: the left hand is taking taxes while the right hand pretends that it cares. One solution in such cases is to conduct a review. However, I am afraid that the Secretary of State for Culture, Media and Sport will be rather disappointed by his latest review, the Eyre report. He will find that he will have to go to the Chancellor to ask for an extra £15 million subsidy for the Royal Opera house. From where will the money come? If that money is found, it will probably come from our heritage of historic houses and from arts sales. The Treasury is in charge of the Department for Culture, Media and Sport. The Treasury is vandalising our heritage, pilfering here and pilfering there; it is squandering a thousand years of history. Access will be lost.
      The plundering extends not just to our houses. The purpose of new clause 9, which would result in an important change to the Bill, is to put right a bad and mean-spirited clause which will have far-reaching effects—far-reaching because 20,000 objects on the Victoria and Albert list, otherwise known as the register of conditionally exempt objects, will be affected by the clause.
      9.15 pm
      Every major auction house in Britain reckons that the consequence of the clause will be a dramatic number of sales of some of the most important architectural, historic,

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      prized national assets, simply because the Treasury lighted on a report from the National Audit Office in 1993 which said that £1 billion had been lost in revenue during the previous 10 years because of the effects of the then current legislation. Labour in opposition regarded the area as a loophole for the rich, and it has moved in to grab the money.
      Sadly, it is the public and those who work in the related industries who will suffer. It is a great shame that a Government who wish to kick into touch, by a review, everything that is a problem do not wish to take notice of those who have themselves conducted a review of the clause and those who are behind the thinking of the new clause—bodies such as the Museums and Galleries Commission, the National Trust and the Historic Houses Association, all of which feel that the new rules will severely damage Britain's arts, culture and heritage.
      The Government are changing the rules. They are changing the rules so that, for example, the 70-year-old pensioner who has, until now, enjoyed the benefits of conditional exemption, will suddenly be told that she must open up her flat, or wherever else she may live, and give public access—that appointments will not do. It is ludicrous to expect a 70-year-old to open up what might be a small two-bedroomed flat to anyone who wishes to come by. Doubtless, if she did, the Home Secretary would be here in a few weeks telling us what a scandal it was. But the Treasury does not speak to any other Department. The Treasury here is on a smash-and-grab raid to hurt people and to rob them of their heritage, and to rob Britain of its heritage by this mean-spirited clause.
      The purpose of new clause 9 is to recognise the damage, strain and stress that the retrospective nature of the breach of rules will cause. We are suggesting that the valuation should not be a current valuation but that, if the rules are to be changed underneath people's feet, the valuation should be based on the value of the item when it was inherited. During the past few years, the value of art objects has increased enormously. It is interesting that, again, the Treasury spots an opportunity, goes in, takes the highest value possible and extracts as much taxation on the back of that as possible.
      It is interesting that auction houses such as Sotheby's and Christie's, which might benefit from the sales that will undoubtedly follow as a result of the legislation, say that we should not do this, that it is unfair. They say that their business is not only the sale of works of art but their management. A great deal of their time is devoted to caring for and preserving collections.
      Unless the Government accept the new clause, the Bill will ruthlessly damage Britain's art and historic heritage. It is not by chance that the Museums and Galleries Commission made a last-minute plea to the Government to recognise the importance of flexibility. I am sorry that, unlike on amendments Nos. 72 and 73, it has not been possible to meet Ministers on the new clause.
      I pay tribute to the Paymaster General because at least he—despite, I think, pressure from some of his colleagues not to have a meeting with regard to one estate election—was prepared to meet the Historic Houses Association and listen to its arguments, and I believe that he was persuaded that there was a real problem. Contrary to what we have heard from the Financial Secretary, I think that
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      he believes that there is a real prospect that damage will be done. I have to give him credit for listening, at the last minute.
      Although the Financial Secretary will, sadly, not tell us that there will be significant changes to the Bill, she will have to acknowledge that, as a consequence of the debates in Committee and on the Floor of the House, the Inland Revenue should be asked to consider sympathetically the plight of the most affected houses. This is a sad day for the tourism business and for our country's heritage industry. I can only hope that, instead of showing brazen cheek and being unprepared to consider strong arguments from heritage bodies, she will have the grace at least to recognise the damage that the Bill will do if it is not amended.
      Sir Patrick Cormack: I shall speak briefly and, although I applaud what he said, in a slightly more conciliatory spirit than my hon. Friend the Member for Witney (Mr. Woodward). I declare two interests: first, I am chairman of the all-party arts and heritage group, which is the largest all-party group, and, secondly, I am a member of the Royal Commission on historical manuscripts.
      When we last had a Labour Government, there was a proposal for a wealth tax. A number of hon. Members, from both sides of the House, were worried about the impact that that might have on heritage, so we formed the all-party arts and heritage group. We met Ministers, and the most helpful was the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who was then a Treasury Minister and is now the deputy chairman of the all-party group. He has been one of its most steadfast supporters, and has spoken to the Financial Secretary about these matters. Although he is not in the Chamber, I know that I speak for both of us when I say that I hope that the Government will respond positively, as did the previous Labour Government.
      I also hope that the Government will realise that the Bill will do great damage to heritage properties if it is enacted unamended. With great force in a robust speech, my hon. Friend the Member for Witney suggested some of that damage, but I know from 28 years' experience in the House that hon. Members on both sides of the House share my love of and concern for our enduring heritage. I hope that the Financial Secretary's response will prove that she is of our number.
      Enough of that—I want to say a few words about objects. My hon. Friend the Member for Witney discussed objects being seen without an appointment being necessary, which is the most important aspect of the changes. If heritage objects, which are often in small and vulnerable properties, could be seen without appointment by people who turned up and demanded to see them, and if they were listed in such a way that anyone would know where they were, a thieves charter would be created.
      The Financial Secretary to the Treasury (Dawn Primarolo): The hon. Gentleman is making an important point. I want to be sure, therefore, that he understands what the Government are trying to do. We are not saying that appointments to view objects should be abolished; we are saying that there should be a review of a system where there is appointment-only access to a certain category of object, even though some objects in that category should

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      not be viewed by appointment only. There will still be cases, however, where an appointment will be necessary for the very reasons that the hon. Gentleman has outlined: security, sensitivity and an object's fragility. That was made clear in Committee.
      Sir Patrick Cormack: I am glad that the hon. Lady has sought to emphasise that on the Floor of the House.
      The Historic Houses Association, which has been cited in evidence and with which I have had many conversations, as I know the hon. Lady has, is anxious to work with the Government as it worked with the previous Government. It knows that there are grounds for changing the current rules, but it is extremely concerned about the "by appointment" aspect. The Royal Commission on historical manuscripts is primarily concerned with historical manuscripts, which are among the most fragile of all objects, and I know that the commission and the Museums and Galleries Commission share the same concerns.
      Although I am grateful for the assurance given at the Dispatch Box, which will, to a degree, reassure many people, the hon. Lady must recognise that the Bill is not entirely in line with what she said. I therefore ask her to look at the matter carefully. Next week, the right hon. Member for Ashton-under-Lyne and I will see the Minister for Arts and we shall discuss some of the heritage implications. The matter is crucial because, whatever else the Government do, they must not damage an all-party accord that has served our heritage well over the past quarter of a century or more.
      My final plea to the hon. Lady is that she build on what has been achieved over the past quarter of a century, and does not damage or jeopardize it.
      Mr. St. Aubyn: I wish to speak to new clauses Nos. 10 and 11. We have heard how the Government's deafness to my hon. Friends' pleas may lead to the sale of a great deal of art. I wish to outline proposals to deal with the problem for the London art market. The sales may be a last hurrah, unless we deal with a fundamental threat facing that market today.
      More than 20,000 people are directly employed in the art market in this country, and its turnover is about £2 billion a year. Half that trade comprises works of art that enter the country and then leave it. More than £1 billion of art is imported and nearly £1 billion is exported. By far the largest sources for those imports are Switzerland and the United States, and those countries are also by far the largest markets for exports. Unless the problems that I am about to describe are addressed, at least half the art market, in London in particular—a world art market and undoubtedly the leading art market in Europe—will go not just outside this country but outside the European Union, back to Switzerland and the United States.
      Christie's, one of the world's leading auction houses, recently acquired the Rockefeller Centre in New York. It is preparing for the fact that the London art market, where it has been since its foundation, may be about to leave its historic shores. The problem that faces Christie's is that of VAT harmonisation, and the purpose of the new clauses—I would welcome any suggestion that the Financial Secretary has to improve them—is to mitigate the effect of that threat on art houses and the art market in the UK.
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      Until five years ago, there was no VAT on imports of works of art. The change was introduced by the previous Government, after a great deal of pressure from our EU partners. A concessionary rate of 2.5 per cent. on the cost of those imports was agreed, but after five years it was agreed that that rate of VAT would rise to 5 per cent. In Switzerland and the United States, there is no import duty on such works of art.
      9.30 pm
      We have evidence that, as a result of the imposition of a 2.5 per cent. rate of VAT, the amount of art coming into this country has reduced, and there is every indication from the art world that, if the duty goes up to 5 per cent., the market in the UK will be destroyed.
      I am grateful to the British Art Market Federation, of which my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) is president, for the information that it has supplied on this serious issue. If the Government take no action, 10,000 jobs are at risk. In its report, the BAMF says:
      "Markets take years to develop but can be lost very quickly."
      It is in no doubt that, if action is not taken, the Government will share responsibility for that.
      It is highly fitting that we are debating this issue on 30 June, at the end of the UK presidency of the European Union. How much time did the Minister or any of her colleagues spend during the past six months addressing the problem of the real threat to the 10,000 jobs directly affected?
      Mr. Love: The trend in the international art market in recent years has resulted in a major shift of focus from Europe to the United States. A number of the major companies that the hon. Gentleman mentioned are now under American ownership. How can he persuade us that it is that trend at work, and not a spurious problem in Europe?
      Mr. St. Aubyn: The hon. Gentleman gives me an opportunity to declare an interest. It so happens that my brother-in-law is chairman of the fifth largest auction house in this country, Brooks auctioneers, which specialises in classic cars. It was the first London auction house to be started for 200 years, and it has established itself as a world leader in the field of classic cars. That company would undoubtedly like to retain London at the heart of its business, but it is being forced to open up in Switzerland and in the United States precisely because of the threat that affects not only classic works of art, but classic cars.
      I am grateful to my brother-in-law for pointing out the example of Australia, which introduced a system of duty on imports that led to the complete collapse of its market. He tells me that non-EU buyers account for about 30 per cent. of sales in classic cars. That trade will move out of this country if the Government do not confront and deal with the issue of harmonisation.
      What would be the effect of our new clause? We cannot change VAT rates in a Finance Bill debate. Without the will of the Government, we cannot change what has been agreed by other member states, although when the harmonisation deal was struck five years ago, it was agreed that the European Union would undertake an

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      investigation into the effects of harmonisation. We are now six months from the end of 1998, by which time, at the very latest, that study should have been carried out, and there is still no evidence that the EU is putting its mind to this issue. How much time and effort did the Minister and her colleagues give during our presidency to getting this study under way, so that the matter can be addressed by the EU?
      We have had to react to the current situation. The Government's total inaction has put 10,000 jobs at risk. We must come up with a local solution to the problem. The local solution is to provide a form of tax rebate on corporation tax. No doubt the Minister will tell us that that would cost a great deal of money: in a full year, it may cost more than £10 million. I draw her attention to the study by the eminent economist Peter Oppenheimer, "VAT in the UK Art Trade", which pointed out the tremendous fiscal advantages to the UK Exchequer of increasing the market through the encouragement of imports. Since he undertook that study 11 years ago, we have seen the London market develop, strengthen and grow.
      We are not talking about a case in which it may cost the Government £10 million in lost revenue to mitigate the effects on imports; we are talking about the loss of the entire market, the loss of all the VAT receipts and the loss of all the corporation tax. Furthermore, there are the indirect losses—the losses to London's tourist trade, its hotels and its major shops. When people visit an art market auction in London, they do so to enjoy themselves. They spend money, and fructify London's economy at the same time. If the Minister and her colleagues fail to accept and meet the challenge, they will not only damage the art market, but fail London—and far more than 10,000 jobs will be lost.
      I do not pretend that the new clauses and amendments are perfect. As I have said, they constitute an attempt to raise an issue and ask Ministers key questions, and it is in that spirit that I seek answers.
      Mr. Swayne: I shall be brief, but I wish to speak in favour of amendments Nos. 72 and 73. In doing so, I shall quote from a letter from my constituent Sir Edward Hulse, who farms at Breamore house near Fordingbridge and who opens the house to the public.
      In the interests of brevity, I shall not read out the entire letter, but it begins with the heading "One Estate Election", and continues:
      "The removal of this concession is particularly dangerous for the small house, (houses who have less than 50,000 visitors a year). In 1954 we had c. 40,000 visitors but now have c. 14,000. The competition has increased out of all proportion to the number of people requiring leisure…
      I estimate maintenance at £15,000 pa. There are of course times when this is exceeded. If One Estate Election is withdrawn maintenance would have to be reduced as less cash would be available. In my case at least £2,500 pa."
      I think that the House will agree that that is a staggering reduction in the amount of maintenance.
      Sir Edward's letter continues:
      "but if farm profits rose these would be partially used to catch up with the backlog of maintenance."
      It is, I think, a pious hope that farm profits would increase in this climate. That alone should be an argument for the Government to show some sympathy.
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      The letter goes on:
      "I do find maintenance a major problem but it must be in the national interest"—
      in the national interest, that is, for Sir Edward to receive help. He writes:
      "I admit this concession is helpful."
      He continues:
      "There is a lot of talk about public access and we open on average five days a week (three in April and everyday in August). The point is this costs money particularly in April. Consideration would have to be given to reducing the season if we are to have less money available for maintenance. My first priority must be to the House".
      Sir Edward's second priority, he writes, must be his visitors.
      In this age of fascination with the millennium, the 21st century and the age of "cool", we are perhaps less mindful of our heritage; but I am sure that we all agree on the importance of our link with the past. The most vital element in the maintenance of that link is the private owner. Indeed, the Secretary of State for Culture, Media and Sport said only recently:
      "The private owner remains the most effective economic guardian of this sector."
      I believe that the private owner is undermined by clause 39, and that amendments Nos. 72 and 73 go some way towards remedying the situation.
      The simple fact is that, if we treat listed buildings and country houses as ordinary businesses, they will become uneconomic. The ability to set maintenance costs against income is vital. It is nonsense to pretend that the money for maintenance could be found out of tax income.
      As Sir Edward Hulse points out, opening the house to the public only barely covers the costs. What will be the consequences of the clause if it is unamended? Repairs will be put off, public access will be curtailed and restricted, contents will be sold, collections will be broken up and valuable works of art will be lost to the nation. Eventually, houses will be sold and the doors will be closed to the public. Far from removing one estate election, the Government need to extend it to all existing owners. That would be the proper way in which to end this anomaly.
      Mr. Peter Brooke: The Whips kindly released me for this evening. I have returned from the engagement that I had with my constituents elsewhere because of the importance of the issues that my hon. Friends the Members for Witney (Mr. Woodward) and for Guildford (Mr. St. Aubyn) have relevantly and admirably raised in the debate.
      I declare an interest, to which my hon. Friend the Member for Guildford has referred. I am president of the British Antique Dealers Association. As I record in the Register of Members' Interests, I receive an uncovenanted case of wine at Christmas, which is not in any sense part of any contract that I have with it. As my hon. Friend also said, I am president of the British Art Market Federation, which was created in the last year of the previous Government because they said that it would be much easier if they could deal with the art market as a whole, and not deal with 15 or 16 different parts. My hon. Friend the Member for South-West Hertfordshire (Mr. Page) was the Minister who engaged in that dialogue, and I am delighted to see him in the Chamber.

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      To deal with the matters relating to the British Art Market Federation, my hon. Friend the Member for Guildford has dealt with the state of the market cogently. I shall not rehearse those issues again, even though it is only early in the night, except to congratulate him warmly on the comprehensiveness with which he has set out the problems, of which I am certain the two Treasury Ministers who are present are vividly aware.
      I acknowledge that the problems are created for us from elsewhere in the European Union—they are not totally under the control of this Government—but it is extremely important that Treasury Ministers fight strenuously and robustly on our behalf, otherwise the sad consequences to which my hon. Friend the Member for Guildford referred, are likely to come to pass.
      As my hon. Friend the Member for Witney has said, the Government have got themselves into some difficulty with the arts in general, which the Prime Minister, who has been substantially responsible for that development, is seeking to repair. It has already, I fear, been commonplace in relevant circles that the Government do not care much for the heritage. I find that a disappointment, given my recollection—I was in the House at the time of the previous Government; indeed I have served on a Committee that considered the Finance Bill in the time of that Government.
      I am sorry about the Government's policy, as it contradicts the tradition that had been observed by previous Labour Governments. The Treasury, particularly during the passage of Finance Bills, worked constructively with the heritage lobby in terms of its preservation. I am genuinely surprised that it should be through the Finance Bill that the Government should have launched the assault on the heritage, and there is no question but that there is an element of assault about it, although the Financial Secretary may be able to reassure us at a later date.
      There was a major move of British works of art out of this country at the time of the Reformation because of what happened to the churches during that era. Happily, as the almighty is even-handed, in the earliest part of the 19th century, with the reign of Pugin and neo-Gothicism, much art came back into this country's churches, but the changes to taxes in the 1880s, particularly in relation to aspects of entail and inheritance tax, were responsible for major sales by British families in historic houses, and many works of art crossed the Atlantic during that period, which we can now admire in American museums. It is sad that the collections that were sold were not replenished with contemporary art in the late 19th century, or, indeed, in the 20th century. The collections of British historic houses are nothing like as impressive in terms of the art of the last 100 years as they are in terms of art from the five previous centuries.
      9.45 pm
      I am not laying the blame for that at the Government's door, but they are threatening us with the deluge onto the art market to which my hon. Friend the Member for Witney referred. Like my hon. Friend the Member for South Staffordshire (Sir P. Cormack), he alluded to the potential threat of burglary. There have been relatively recent convictions of organised gangs which simply used "Who's Who?" as a way to identify houses around the country where there might be rich pickings. Some
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      exceptionally disagreeable violence was involved in the burglaries. That causes great anxiety to the owners of historic houses who fear that, under the Government's regulations, they may be under similar threat of burglary and violence because their details will be readily available.
      Mr. Love rose—
      Mr. Brooke: I will give way to the hon. Gentleman, not least because that will enable me to respond to something that he said earlier in an intervention.
      Mr. Love: I have listened carefully to the right hon. Gentleman's reasonable remarks, as I did to those of the hon. Member for South Staffordshire (Sir P. Cormack), but I have not yet heard any criticism from the Opposition about conditional access agreements, or any recognition that things had to change.
      Mr. Brooke: The hon. Gentleman intervened earlier on my hon. Friend the Member for Guildford who was explaining why tax changes in the European Union are threatening to move the art market out of Europe. I shall come back to the hon. Gentleman's most recent intervention in a moment. The hon. Gentleman said previously that a number of powerful houses had passed into American hands, but they did so because American investors could see the virtue and value of those houses. The present chief executive of Sotheby's learned her trade in these activities sitting in the offices in New Bond street, which was to the great good of Anglo-American trade.
      Mr. Woodward: I am sure that my right hon. Friend agrees that it is terribly important that the record shows that no one is saying that there should not be some change. All the relevant bodies recognise the great importance of bringing regulations up to date, but the phrase that is consistently used is "a sledgehammer to crack a walnut".
      Mr. Brooke: I am grateful to my hon. Friend. He has helped me to respond to the latest intervention by the hon. Member for Edmonton (Mr. Love).
      Over the past five or 10 years, we have of course been aware of comments and, it is fair to say, criticisms about the existing arrangements. It is not for me to speak for the Opposition. Indeed, my name is not even attached to the new clause, and it is for my Front-Bench colleagues to respond. However, I have no difficulty in recognising the need for the intelligent interaction that there has been in the past.
      The Financial Secretary said that these matters had been fully discussed in Committee. I must confess that I was disappointed and distressed to find how unavailable Ministers had been to talk to the Historic Houses Association.
      Dawn Primarolo rose—
      Mr. Brooke: I shall gladly give way to the hon. Lady, but she has to stand by what is on the record from Committee.
      Dawn Primarolo: What the right hon. Gentleman says is not true. The Historic Houses Association met

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      representatives from the Treasury, and it is as a result of that meeting that the abolition of the one estate election was delayed for three years. There was a meeting on 24 June, and the HHA said in its newsletter that it has no complaints about access to the Treasury or its Ministers. I shall return to that point when I reply to the debate.
      Mr. Brooke: I am grateful to the hon. Lady for saying that, although there seemed to have been some difficulty in Committee for a Minister even to be available, except on a telephone. However, if she assures me on the matter, I shall of course take her words in good faith.
      The whole purpose of my speaking in this debate was to say that I hope that the Government will do more than they have so far been able to do, to reassure not only the Historic Houses Association but those who have such properties across the country that the situation will not deteriorate sharply. As my hon. Friend the Member for Witney said, the Department for Culture, Media and Sport—which once upon a time was called the Department of National Heritage—has passed effectively into the hands of the Treasury. If the situation does deteriorate sharply and many notable works of art are put on the market, it will be very unfortunate if that flood reaches the market at precisely the moment that the Treasury has decided that the amount of money available to the national heritage memorial fund is to be reduced.
      Mr. Heathcoat-Amory: My right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) has spoken with great authority on the subjects dealt with by the new clauses and amendments. I hope that the Financial Secretary will deal very seriously with the points that have been made.
      I should like to support my hon. Friends on conditionally exempt heritage assets, and to endorse particularly the speeches by my hon. Friends the Members for Witney (Mr. Woodward) and for South Staffordshire (Sir P. Cormack). Although they differed in their tone, their message was the same: the current system works very well. Exemption from inheritance tax for those assets keeps them in private hands and relieves the state of a great deal of expenditure. If the assets were taken into public collections, they would have to be looked after, insured and secured at public expense.
      The current system therefore saves the Exchequer a good deal of money, while allowing perfectly reasonable public access. I am not aware of any tide of discontent among connoisseurs or those interested in the arts and heritage who feel that the current system denies them the chance of looking at and studying those objects. I hope that the Government will at the very least implement the legislation with great sensitivity.
      I congratulate my hon. Friend the Member for Guildford (Mr. St. Aubyn) on his extreme ingenuity not only in tabling a new clause on the second issue—VAT on art imports—but on the new clause being in order, as VAT is not usually debated during consideration of a Finance Bill. He and other hon. Members have drawn attention to the acute threat that will be faced by the British art market if, as planned, VAT on art imports is doubled next year. The industry employs more than 50,000 people. Although we are not supposing that the
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      industry will disappear—there will always be a domestic market for the exchange of works of art—the international market, on which London, but also very many provincial dealers, depend, will be gravely weakened if the VAT rate on imports is doubled.
      Quite simply, art sent to London for sale will be diverted to other centres outside the European Union. Therefore, not only will the United Kingdom suffer, but the European Union as an institution will witness a decline in art sales. Such an action is also particularly stupid when we are trying to encourage repatriation to Europe and to the United Kingdom of works of art that were dispersed during previous waves of art exports, wars and revolutions.
      When my noble friend Lord Cope was a Treasury Minister, he secured a review of such a tax threat before it took effect. I should like to ask the Minister what action the Government have taken to express the British Government's point of view to the Commission during the review period. Specifically, what discussions with other member states have been held during the British presidency?
      We are supposed to have unparalleled influence in the European Union—that is what the Prime Minister tells us. We should like some evidence of that. What steps has he taken to defend a precious, almost unique national asset—the highly successful international market based in the United Kingdom which is threatened at best by erosion and at worst by a wholesale decampment to other non-EU centres such as Geneva and New York? Perhaps the Financial Secretary will bring us up to date on what the British Government are doing to protect our national interests in relation to the art market.
      Dawn Primarolo: This has been an important debate, although some speeches have exaggerated somewhat the Government's attempts to secure public access to certain items of national heritage. Let me start by responding directly to the sentiments expressed by the hon. Member for South Staffordshire (Sir P. Cormack) as chairman of the all-party arts and heritage group, and the right hon. Member for Cities of London and Westminster (Mr. Brooke) in respect of balancing the need to secure public access to items of value and importance to our heritage with other interests. They acknowledged that the previous regime is not immune to criticism in respect of access by members of the public to particular items.
      The Government propose that access by appointment only should be abolished and that access by appointment coupled with a measure of open access should remain. The maintenance and preservation needs of assets will remain key factors in deciding the level and type of access. That was made clear in Committee, and I make it clear again now.
      The principle is that, with the conditional exemption, taxpayers' money will be provided to secure reasonable access to the items in question. That is what we are seeking to achieve. We are not talking about forcing anyone to do anything. The outrageous propositions that were made in Committee, and again this evening, about the likely outcome of our proposals are wrong, and amount to scaremongering. We would all wish to send a clear message from the House to that effect.
      Mr. Woodward: Will the Minister give way?
      Dawn Primarolo: Let me finish responding to the point that the hon. Gentleman raised in his speech.

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      Some owners will be worried about what open or extended access might mean. Let me emphasise again to the hon. Gentleman before I take his intervention that our primary objective is certainly not to force people out of the exemption scheme or jeopardise security of assets. It is to ensure that the public have proper access to tax-exempt assets. The new arrangements do not affect the basic requirement that access has to be reasonable.
      Mr. Woodward: Will the Financial Secretary clarify an issue on that point? Let us consider the case of a 70-year-old lady who lives on her own in her flat and has enjoyed conditional exemption for a particular antique. Currently, individuals may come to see that, object by appointment. Under the changes, viewing by appointment only will not suffice. The onus will now be put on the 70-year-old lady to ensure that the object can be made available to the public. If she is unable to find a library, museum or gallery that will take it, will the current by-appointment arrangements still stand, ensuring that the 70-year-old lady will not be required to open her house to the public?
      10 pm
      Dawn Primarolo: I made it clear to the hon. Gentleman in Committee and shall make it clear again that access has to be reasonable. How it is decided will be the subject of the agreement reached between the Inland Revenue and the individual. If there is a dispute, the special commissioners will have the final say on whether access arrangements are reasonable. The hon. Gentleman knows that we have chosen our words to secure a balance between public access to an asset for which we are paying and the continued preservation of the item.
      An owner will not be able to say that it is inconvenient for them ever to allow access to the item while requiring the conditional exemption. If taxpayers' money is taken for a conditional exemption, there must be a clear understanding that reasonable access to the item will be provided for the public. The fears about there being a flood of goods on to the market and a mass exodus of items will not materialise. We are not removing or applying any new tests to the assets that currently have the conditional exemption. We are ensuring that the access to which owners committed themselves when they accepted the arrangements for conditional exemption is reasonable and works.
      Mr. Brooke: Will the Financial Secretary say a word about how she will monitor what happens? She says that my hon. Friend the Member for South Staffordshire (Sir P. Cormack) and I are exaggerating the potential. If we turn out to be right, how will she measure what is happening, and what will she do about it?
      Dawn Primarolo: I did not include the right hon. Gentleman in my remarks about exaggeration. He and the Member for South Staffordshire made reasonable and measured contributions to this important debate. The Government have allowed a six-month period for negotiations with owners on access to assets. We have acknowledged that there are security issues and that there could be problems with the fragility of items such as manuscripts that would determine what might be considered reasonable access. We have agreed all the issues of access to an asset, but we have made it clear—
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      as, I think, the right hon. Member agrees—that if taxpayers' money is provided for conditional exemption to protect heritage and to give access to members of the public to enjoy that heritage, reasonable access must be available. Frankly, it is not in all cases at present.
      There have been Adjournment debates and early-day motions on the matter, and repeated questions have been raised with me as the Minister. To my knowledge, at least two television programmes have been heavily critical of the scheme and have given specific examples where the current reasonable access arrangements are not in operation. As both the right hon. Member for Cities of London and Westminster and the hon. Member for South Staffordshire acknowledged, the scheme needs to be updated and improved.
      That is all we are seeking to achieve with the measures. We are being understanding and sensitive to the issues. Therefore, amendments Nos. 72 and 73 are unnecessary. In fact, it is unacceptable that we should give a further tax reduction to those who may now decide that they perhaps never wanted to provide reasonable access, and were never forced to do so. Now, faced with reasonable access, they no longer want the conditional exemption, and they say that they want a tax deduction as well. That is what the amendments would do. That is not acceptable to the Government, and I ask the House to reject the amendments.
      I would say in addition to the right hon. Member for Cities of London and Westminster that, in moving to the new reasonable public access arrangements by agreement, there is no requirement for an asset to have a test or to be requalified. Therefore, there is no reason why people should be forced out of the conditional exemption scheme. If they choose to leave it, that is up to them, but they will not get additional tax help from the Government on the basis of the value of that asset, and therefore the taxes liable to be paid on it.
      I wish to refer to the one estate election. I have a letter from the Historic Houses Association, dated 26 June 1998, which shows the positive relationship that exists between the HHA and the Government. The letter states:
      "I read that further amendments…have been tabled by the Opposition, I imagine to be taken at Report stage of the Finance Bill. The Association would wish it to be on the record that these amendments have not been promoted by the HHA."
      The letter continues:
      "On One Estate Election, whilst the Association's concerns also remain, they have been recorded both in writing to Ministers and at a meeting with the Paymaster General, for which the HHA was grateful."
      The HHA met officials after it was announced that we were to abolish the one estate election. As a result of its representations, the abolition was delayed for three years, to 2001.
      My hon. Friend the Paymaster General met the association on 24 June. It was clear that, although about 700 farms and various other pieces of estate were covered by the one estate election, there was a question whether 60 or 70 houses could be in some difficulty. It was agreed that the HHA would go away, work on the proposals, discuss them with the Government and come back to the Government to see how we could make progress on the matter. The association entirely accepts that one estate election should be abolished, that the relief is not suitable and that it was never intended to be a heritage relief.

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      Therefore, we need to continue the discussions with the association. Given that the abolition of one estate election takes place in 2001, we have time to work with the association on that.
      I turn now to new clauses 10 and 11 and the possible increase in VAT on the art market from 2.5 per cent. to 5 per cent. I share hon. Members' concerns about the possible impact of that change, particularly on the London art market. All hon. Members will want to ensure that we do all that we can to protect that valuable and important market.
      I know that the right hon. Member for Wells (Mr. Heathcoat-Amory) is particularly knowledgeable on this subject because of his personal interest. He has recently written a number of articles about the importance of the art market. He reminded the House that, in 1994, his predecessor as Paymaster General negotiated with the European Union a derogation on the imposition of VAT on the art market. The rate is 2.5 per cent. and is due to rise to 5 per cent. by 1999.
      The right hon. Gentleman also referred to the review process. The officials at Customs and Excise have been actively involved in meetings and correspondence with the Commission about the terms and scope of the review that is to take place. The Department has been working closely with representatives of the art market. As I am sure the House expects, the Government are determined to ensure that we properly represent and defend the interests of the London art market. We are actively pursuing this matter. The right hon. Gentleman will know that we have been arguing about the review's terms of reference, and I am sure that he accepts that it is crucial to get those right before we allow the review to commence. That has been the focus of our work, and we shall continue with that work.
      I congratulate the hon. Member for Guildford (Mr. St. Aubyn) on his new clause, but it will not work. It is drafted very narrowly, and I am sure that he would not want to damage the art market that he says he wants to protect. In tabling the new clause, he has enabled the House to have an important debate and the Government to put on record the value that we continue to place on the art market. In the negotiations on the review, we shall pursue the best interests of the Government, the country and the London art market. If the hon. Gentleman will not withdraw his new clause, I must recommend that the House votes against it and new clause 11.
      Mr. Woodward: I am grateful to the Financial Secretary for those comments and the spirit in which they were made. None the less, as the hon. Lady put on record a letter from the Historic Houses Association, it is important that the record also records the sequence of events.
      The committee met on Tuesday 19 May. One month later, it wrote to the Chairman of the Culture, Media and Sport Committee, saying;
      "Against the background of what we see as a clear case and compelling arguments, we are dismayed that to date the Paymaster General has not agreed to see us, that Chris Smith and his Ministers are not inclined to support our arguments, nor have our letters either been answered or acknowledged."
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      The hon. Lady stands before the House and says how reasonable her Department and officials have been, and I make no criticism whatever of her officials, but it is important that she does not let other people take the blame for a matter that is effectively her responsibility.
      We should give credit to the Paymaster General, who allowed a meeting—albeit only last week. As a result of the meeting, the Inland Revenue has agreed to discuss the problem of open houses over the coming months. It is crucial, however, that the Financial Secretary is not allowed to suggest that all this was always going to happen. That was certainly not the case when HHA representatives telephoned the Paymaster General's office and were told, despite what was said in Committee in May, that the office was too busy and that the matter should be dealt with on the telephone. It is only thanks to the Paymaster General's efforts that the meeting took place at all.
      This evening several changes and clarifications of how access to the V and A list will operate have been offered. We are grateful to the Financial Secretary for having listened to our proposals, and for the fact that they are now being implemented. It is significant, though, that the Government are still unable to produce the guidelines necessary for all the heritage bodies concerned. We look forward to seeing them in due course. In the meantime, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New clause 16

      TAX CREDIT COMPENSATION FOR CHARITIES WITH INVESTMENTS IN MIXED FUNDS
      '.—For section 29 (2)(b) of the Finance (No. 2) Act 1997 there shall be substituted—
      "(b) to any part of the qualifying distribution which, were it not for section 469 (2) of the Taxes Act 1988, falls to be regarded as income of section 505 bodies.".'.—[Mr. Fallon.]
      Brought up, and read the First time.
      10.15 pm
      Mr. Fallon: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following: Amendment No. 53, in clause 47, page 26, line 22, leave out '31st December 2000' and insert '31st March 2001'.
      Government amendments Nos. 1 to 3.
      Amendment No. 54, in page 27, line 44, leave out '31st December 2000' and insert '31st March 2001'.
      Mr. Fallon: I begin, perversely, with the Government amendments, which we welcome. I acknowledge, on behalf of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) who raised the point in Committee, how far the Government have gone to extend the definition of what can be supplied in kind as medical equipment. My hon. Friend has another engagement, but he wanted me to convey his thanks to the Minister for meeting us on that point.
      As for amendments Nos. 53 and 54, the Economic Secretary will recall our discussion in Committee on these points. Incidentally, I declare an interest, in that I am an

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      unremunerated director of a charity that may benefit from the amendments. The issue here was simple: the date at which this new and welcome extension of charitable relief was to begin was intended to allow for a two-and-three-quarter year period. It was proposed initially to bring it into operation on 1 April this year; its implementation has now been delayed until some time after Royal Assent. As the exemption is designed to end on 31 December 2000, charities have been given less than two and a half years. That also means that the exemption ends, rather uncomfortably, three quarters of the way through the tax year.
      I suggested to the Minister in Committee that it might be helpful to let the exemption run on for the final three months—January, February and March of 2001. She kindly agreed to consider the matter, which is why we have tabled these amendments.
      The purpose of new clause 16 is to help a different group of charities, such as the Thalidomide Trust, which are still disadvantaged by the withdrawal of tax credit relief for UK equity dividends. The withdrawal was in two stages: for pension funds and the like it was put into effect immediately, on the day of last July's Budget; but foreseeing the impact on charities, the Government allowed a breathing space until April 1999. A compensation scheme with a tapered relief for five years was also introduced.
      The problem comes for those charities that invested in mixed funds. The Thalidomide Trust was one of the charities that invested in the Aquila funds. These were unit trusts specially created to facilitate efficient investment pooling for pension funds and their charity clients. That worked well because both types of client were entitled to the same tax exemption.
      Before investing in those funds, the Thalidomide Trust checked very carefully with the Inland Revenue. On 16 December 1996, it was told that
      "the proposed investment in Aquila Funds would be accepted as 'qualifying' for"
      the exemption. However, as a result of the subsequent July Budget, the pension fund lost relief; charities whose investment was pooled with it lost the relief at the same time—a relief to which they would otherwise have been fully entitled.
      You may wonder, Mr. Deputy Speaker, why we raise the matter almost a year after the deed was done. We do so because, on 22 June 1998, the Thalidomide Trust wrote to us, having had little joy from the Government. On 21 January 1998, the charity wrote to the Revenue; it wrote again on 30 March, and then it wrote to the Chancellor. Receiving no satisfaction, it wrote to us.
      We took up the matter immediately. I raised it with the Financial Secretary to the Treasury at Question Time last Thursday, 25 June. My hon. Friends will now understand why the Financial Secretary has left the Chamber; they will recall that, when I raised the matter, she advised us not to make "cheap points". To be fair, perhaps she said that on the rebound. It certainly is not a cheap point to the Thalidomide Trust, which stands to lose some £75,000 because of the inadvertent drafting of a clause—or so it was led to believe.
      The Thalidomide Trust wrote to the Chancellor earlier this month because, in the final correspondence that the charity had with the chairman of the Board of the Inland
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      Revenue, he made it clear that the compensation scheme to which I referred—the relief scheme—was not wholly drawn up by the Revenue, but had been expressly decided on by Ministers. In Mr. Montagu's letter to the Thalidomide Trust—he is the chairman of the Board of the Inland Revenue—he revealed that Ministers were aware of the position of charities that had invested in mixed funds. Apparently, the legislation had to be narrowly drawn in order to avoid complexity—not something that the Government were successful in avoiding elsewhere in the Finance (No. 2) Act 1997. However, I put that to one side.
      The consequences were clear. The Thalidomide Trust—other charities may well be in such a position—has lost about £70,000. That is a serious loss because, in a few years' time, the trust will receive no further capital payments. The House needs no reminding that more than 400 people were disabled by the thalidomide drug. They have continuing and very expensive needs.
      The previous Government recognised the special difficulty of charities such as the Thalidomide Trust. When, in 1996, it was apparent that the trust had insufficient capital to maintain the distributions to beneficiaries at existing levels, the previous Conservative Government chipped in some £7 million. Tonight, we are talking about £70,000 being taken from it. That is not a huge sum. I should have thought that it was perfectly possible, with all the technical expertise that is available to the Inland Revenue, for the compensation scheme to be adjusted. I very much hope, therefore, that the Minister will reconsider.
      Mr. Gibb: As events unfold since the July Budget last year, more and more injustices are becoming apparent from the decision taken last July to end the repayment of dividend tax credits. We are already aware that, as a result of that one decision, pension funds—the funds that will give rise to the incomes of elderly people in their retirement—have been robbed to the tune of £5 billion a year. That means that, unless people increase their contributions to their pension funds, they will lose substantial sums on retirement.
      There is considerable evidence that people are not aware of what the Government did to their pension funds last year, and they will have a nasty shock in 20 years if they have not increased their pension contributions, or their employers have not increased their contributions by about 11 per cent. on average. Those pension funds will be inadequately funded, and people's pensions in retirement will be less than they would otherwise have been, and less than people expected.
      We have also heard of the injustice arising from the decision taken last July about non-taxpaying pensioners—300,000 of them—who, on average, will be £75 a year worse off as a result of that measure. Earlier today, we heard from constituents throughout the land who will suffer real hardship next April when the measure comes into force, and people will no longer be able to reclaim £100, £200, £300 or £400 a year from their dividend income.
      We know already of the injustice being faced by charities generally as a result of the measure taken last July to end the repayment of dividend tax credits. Charities will lose £400 million a year, despite the taper, because tapers eventually taper to an end. At that time,

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      charities will lose significant income. Some will suffer very badly indeed, especially those that rely on their investment income from endowments established over the years.
      As a result of a letter from the Thalidomide Trust, a further injustice has become apparent, which arises for charities that have invested in mixed funds. One wonders how many further injustices will arise from that one measure. We have seen the wholesale restructuring of the corporation tax regime as a result of a measure taken in the Finance Act last year.
      The Thalidomide Trust is a worthwhile organisation which helps to deal with the children affected by the thalidomide drug 30 years ago. As a person of 37 years of age, born at the time that the drug was about, but for the grace of God, I could easily have been one of those children. Contemporaries of my mother took the drug, and people of my age are acutely aware of the damage that it did to so many people in this country. As a result of a measure taken in July 1997, the Thalidomide Trust will lose £70,000 a year.
      The matter has been handled callously; there seems to be no sensitivity on the Government's part. It seems that they are so determined to fulfil their pledge of winning two election terms that they intend to fulfil their spending pledges by stealthily taxing pension funds and charitable organisations. They do not care about the consequences for non-taxpaying individuals—the 300,000 pensioners. They do not care what effect their measures will have on the real value of pension funds. Judging from correspondence from the Revenue, the Government clearly do not care about the effect on the Thalidomide Trust.
      I quote from another letter from the chairman of the Inland Revenue to the Thalidomide Trust. He states:
      "I am afraid that there is nothing I can helpfully add. Ministers took their policy decision in full knowledge of the implications and it is for us to give effect to it."
      Ministers knew what they were doing; it was not an error or oversight. Their action has caused enormous damage to the Thalidomide Trust, and I hope very much that the Minister will tell the House tonight that she intends to reverse the decision and accept the amendments, or propose another measure that will alleviate the £70,000 loss endured by that important charitable trust.
      The Economic Secretary to the Treasury (Mrs. Helen Liddell): I shall begin with the three Government amendments. I am grateful for the acknowledgement by the hon. Member for Sevenoaks (Mr. Fallon) of the line that the Government took in Committee. We chose to introduce three new amendments this evening in order to make incontrovertibly clear what I said in Committee about extending the scope of the benefit that marks the millennium. In Committee, I explicitly read the Government's view on to the record. However, in order to give those who are so generous as to support charity in this way the added reassurance that medical provision would be included, we thought that it would be wise to introduce the three new amendments. I am grateful for the support of Opposition Members.
      In relation to amendments Nos. 53 and 54, we had a lengthy discussion in Committee about the date of the millennium. I must admit that we had some fun in
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      Committee discussing the millennium date definition advanced by the hon. Member for Kingston and Surbiton (Mr. Davey). He seemed to think that the millennium was a movable feast and that perhaps, like the synod of Whitby, we could convene and discuss a date that would be the millennium. As a consequence, both the Government and the official Opposition reached rare agreement about the date of the millennium.
      10.30 pm
      I said that I would reconsider the case made by the hon. Member for Sevenoaks (Mr. Fallon) for extending the provision for three months beyond the date of the millennium. However, I do not think that the case has been made for that extension. The measure is designed to focus giving for a specific purpose on one specific date: it allows people to mark the millennium by assisting those who are in poverty in less advantaged parts of the world. The scheme must have a cut-off date, and that date coincides logically with the millennium.
      I remind the hon. Gentleman, as I did earlier in Committee, about the continuing investigation into the future of charities taxation. Anything we do in relation to this millennium giving does not prejudge in any way what could happen under the review of charities taxation. There is no reason to believe that there will be a less advantageous system for giving after the millennium because of the ending of this millennium project about which the Chancellor feels so strongly. For those reasons, I hope that the hon. Gentleman will not press the amendments. That would be unfortunate, given our commonality of purpose in relation to this scheme, which would allow the generous people of this country to mark the millennium in a way that gives the greatest benefit to the poorest in our world.
      I turn to proposed new clause 16. The Opposition have introduced an exceptionally narrow point on Report which, as the hon. Gentleman pointed out, is concerned with investments by charities through mixed unauthorised unit trusts. The new clause is not very robust technically, but I will not concentrate on its technical aspects. I turn to the substantive argument to answer the hon. Gentleman's points.
      The wider point is that charities have a range of options when investing their money. We made quite sure that the advisers to charities had a year to digest the implications of our proposals last year for tax credits on dividends. What is more, we have given them almost as long again to prepare for next April when the proposals come fully into force. Therefore, charities have the opportunity to put their funds into investments in such a way as to maximise tax benefits while maximising their returns.
      The hon. Gentleman referred to the Thalidomide Trust and, surprisingly, introduced some rather unfortunate inaccuracies in relation to that trust. I have in front of me the first letter received by Ministers in relation to that matter dated 22 June 1998, eight days ago—a letter to my right hon. Friend the Chancellor of the Exchequer. That correspondence relates to the contact that there has been between the Thalidomide Trust and the Revenue.
      The point at issue about the advice that the Revenue gave to the Thalidomide Trust relates to events in December 1996, when the Thalidomide Trust contacted the Revenue to ensure that its investments were in no way part of a tax avoidance scheme. The Revenue's response

      255
      was the kind of confirmation that it required. But there is no way in which the Revenue could give any guarantees about future tax treatment, particularly as this happened under the previous Government. There was a general election, and the present Government decided to correct the anomaly that had existed in relation to tax credits.
      I have specifically asked Revenue officials whether they have evidence of any other charities that have encountered the same difficulty, and we know of none. The Revenue cannot be responsible for the nature of the decisions that charities make about how to invest their funds. We have deliberately gone to considerable lengths to allow charities the opportunity to arrange their portfolios in such a way that they maximise the benefits to themselves.
      Mr. Peter Bottomley: The hon. Lady rightly confirms what my hon. Friend the Member for Sevenoaks (Mr. Fallon) said about 1996, when the Revenue confirmed that the tax would not be levied on the charity's investment, and she rightly confirms that this month, Ministers received a letter. Will she give the House her view on what my hon. Friend said about the chairman of the Revenue, Mr. Montagu, informing the charity that six months ago, Ministers knew the effects of what they were doing on the charity's investment?
      Mrs. Liddell: The hon. Gentleman may not have been present during debates on the previous Finance Bill when these matters were extensively debated. The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), with his technical expertise, has long waxed eloquent on these matters. We recognised at that time that there would be an impact on charities, which is why preferential treatments for charities were built into that legislation to give them an opportunity to rearrange their portfolios in such a way that they could maximise the benefits to themselves.
      That was a rational and clear-cut way in which to behave, given that an anomaly in the taxation system had to be corrected. It was the Conservative Government who began the process of the correction of tax credits. Therefore, one regrets that the decisions that the Thalidomide Trust took in relation to its investments have meant that it was liable for more tax than it thought. At the end of the day, however, the advice given to the Thalidomide Trust by the Revenue related to a specific inquiry, before the election of this Government, about whether the trust was becoming involved in a tax avoidance measure.
      The Conservative case is not well made in relation to this matter. The Government, in giving charities the opportunity to seek independent advice on how they should place their investments, gave charities as much opportunity as possible to take the right kind of advice so that they could configure their portfolios in the most appropriate way. Therefore, I cannot accept the new clause, because it would mean making a one-off provision merely to take into account a single sort of investment. Charities will be able to find a range of secure and productive homes for their money. I urge the hon. Gentleman to withdraw new clause 16 so that we can continue with the consensus that we have enjoyed in respect of this important part of the Bill.
      Mr. Fallon: With the leave of the House, Mr. Deputy Speaker. In respect of amendments Nos. 53 and 54, may
      256
      I tell the Economic Secretary that she is, as we know, a hard lady? We have tried to put our point three times, and each time she has resisted, so I shall happily withdraw it.
      In respect of new clause 16 and the problems that the Thalidomide Trust faces, her response was not at all satisfactory. First, she suggested that there were inaccuracies in what I said. I made it clear that the advice from the Revenue was given in December 1996. There is no dispute about that: I have the words, and I quoted them, so I hope that she will withdraw any suggestion that I was implying that the advice was given in a different December.
      Mrs. Liddell: I am glad that the hon. Gentleman has clarified the situation, and I am happy to accept his point. If I have misunderstood him, I am happy to withdraw my remarks, but I hope that he will withdraw his remarks about the Government not being concerned about the matter, and about Ministers failing to respond, given that we received the letter only on 22 June.
      Mr. Fallon: I shall deal with that point in a moment, but let me make it clear that I said at the start of my remarks that the date was December 1996, and it was. I am glad that the Economic Secretary has withdrawn the suggestion that that was inaccurate.
      Ministers may have been informed about the issue only on 22 June; so were we, but we have been doing something about it. We raised the issue at Question Time last week, and have had a new clause drafted and debated within seven days of receiving the Thalidomide Trust's letter. The hon. Lady, with all her officials in the Treasury, could have tabled a new clause, so it is nonsense to suggest that she has not had time to consider the matter.
      Mrs. Liddell: I am sorry, but I am afraid that the hon. Gentleman is still obscuring the main point. I am not saying that the Government have not had time to consider the point. My general point is that we received correspondence from the Thalidomide Trust on 22 June; my substantive point relates to the fact that the new clause would introduce a narrow change for a specific sort of investment. That is the substance of my remarks and, for that reason, I ask hon. Members to oppose the new clause, if the hon. Gentleman will not withdraw it.
      Mr. Fallon: The Economic Secretary is now playing for time and flannelling. The plain fact is that she is not prepared to do anything in respect of the Thalidomide Trust. She has confessed that this is the only case of which the Treasury is aware; if it is the only case, it is a good one. For the sake of £70,000 for one of the most deserving charities, which has been taken away by the Government, I ask my hon. Friends to support the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 171, Noes 279.

      Division No. 320]

      [10.42 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Baker, Norman

      Allan, Richard

      Ballard, Jackie

      Amess, David

      Beggs, Roy

      Ancram, Rt Hon Michael

      Bercow, John

      Arbuthnot, James

      Beresford, Sir Paul

      Atkinson, David (Bour'mth E)

      Body, Sir Richard

      Atkinson, Peter (Hexham)

      Boswell, Tim

      257

      Bottomley, Peter (Worthing W)

      Kirkwood, Archy

      Brady, Graham

      Laing, Mrs Eleanor

      Brake, Tom

      Lait, Mrs Jacqui

      Brand, Dr Peter

      Lansley, Andrew

      Brazier, Julian

      Leigh, Edward

      Breed, Colin

      Letwin, Oliver

      Brooke, Rt Hon Peter

      Lewis, Dr Julian (New Forest E)

      Browning, Mrs Angela

      Lidington, David

      Bruce, Ian (S Dorset)

      Lilley, Rt Hon Peter

      Bruce, Malcolm (Gordon)

      Livsey, Richard

      Burnett, John

      Lloyd, Rt Hon Sir Peter (Fareham)

      Burns, Simon

      Llwyd, Elfyn

      Campbell, Menzies (NE Fife)

      Loughton, Tim

      Cash, William

      Luff, Peter

      Chapman, Sir Sydney (Chipping Barnet)

      MacGregor, Rt Hon John

      McIntosh, Miss Anne

      Chidgey, David

      MacKay, Andrew

      Chope, Christopher

      Maclean, Rt Hon David

      Clappison, James

      McLoughlin, Patrick

      Clark, Rt Hon Alan (Kensington)

      Maples, John

      Clifton-Brown, Geoffrey

      Maude, Rt Hon Francis

      Collins, Tim

      May, Mrs Theresa

      Cormack, Sir Patrick

      Michie, Mrs Ray (Argyll & Bute)

      Cotter, Brian

      Moore, Michael

      Cran, James

      Morgan, Alasdair (Galloway)

      Curry, Rt Hon David

      Moss, Malcolm

      Davey, Edward (Kingston)

      Nicholls, Patrick

      Davis, Rt Hon David (Haltemprice)

      Norman, Archie

      Day, Stephen

      Öpik, Lembit

      Dorrell, Rt Hon Stephen

      Ottaway, Richard

      Duncan, Alan

      Page, Richard

      Duncan Smith, Iain

      Paice, James

      Emery, Rt Hon Sir Peter

      Paterson, Owen

      Evans, Nigel

      Pickles, Eric

      Ewing, Mrs Margaret

      Prior, David

      Faber, David

      Randall, John

      Fallon, Michael

      Redwood, Rt Hon John

      Fearn, Ronnie

      Rendel, David

      Flight, Howard

      Robathan, Andrew

      Forth, Rt Hon Eric

      Robertson, Laurence (Tewk'b'ry)

      Foster, Don (Bath)

      Ross, William (E Lond'y)

      Fox, Dr Liam

      Rowe, Andrew (Faversham)

      Fraser, Christopher

      Ruffley, David

      Garnier, Edward

      Russell, Bob (Colchester)

      George, Andrew (St Ives)

      Sanders, Adrian

      Gibb, Nick

      Sayeed, Jonathan

      Gill, Christopher

      Simpson, Keith (Mid-Norfolk)

      Gillan, Mrs Cheryl

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

      Gorman, Mrs Teresa

      Soames, Nicholas

      Gorrie, Donald

      Spicer, Sir Michael

      Gray, James

      Spring, Richard

      Green, Damian

      Stanley, Rt Hon Sir John

      Greenway, John

      Steen, Anthony

      Grieve, Dominic

      Streeter, Gary

      Gummer, Rt Hon John

      Stunell, Andrew

      Hamilton, Rt Hon Sir Archie

      Swayne, Desmond

      Hammond, Philip

      Swinney, John

      Hancock, Mike

      Syms, Robert

      Harris, Dr Evan

      Tapsell, Sir Peter

      Harvey, Nick

      Taylor, Ian (Esher & Walton)

      Hawkins, Nick

      Taylor, John M (Solihull)

      Hayes, John

      Taylor, Sir Teddy

      Heald, Oliver

      Townend, John

      Heath, David (Somerton & Frome)

      Tredinnick, David

      Heathcoat-Amory, Rt Hon David

      Trend, Michael

      Hogg, Rt Hon Douglas

      Tyler, Paul

      Horam, John

      Tyrie, Andrew

      Hunter, Andrew

      Viggers, Peter

      Jack, Rt Hon Michael

      Wallace, James

      Jackson, Robert (Wantage)

      Wardle, Charles

      Jenkin, Bernard

      Waterson, Nigel

      Johnson Smith, Rt Hon Sir Geoffrey

      Webb, Steve

      Wells, Bowen

      Jones, Nigel (Cheltenham)

      Welsh, Andrew

      Key, Robert

      Whittingdale, John

      Kirkbride, Miss Julie

      Widdecombe, Rt Hon Miss Ann

      258

      Wilkinson, John

      Young, Rt Hon Sir George

      Willetts, David

      Willis, Phil

      Tellers for the Ayes:

      Wilshire, David

      Sir David Madel and

      Woodward, Shaun

      Mrs. Caroline Spelman.

      Yeo, Tim

      NOES

      Adams, Mrs Irene (Paisley N)

      Cummings, John

      Ainger, Nick

      Cunliffe, Lawrence

      Ainsworth, Robert (Cov'try NE)

      Cunningham, Jim (Cov'try S)

      Alexander, Douglas

      Dalyell, Tam

      Anderson, Janet (Rossendale)

      Davey, Valerie (Bristol W)

      Armstrong, Ms Hilary

      Davidson, Ian

      Ashton, Joe

      Davies, Rt Hon Denzil (Llanelli)

      Atkins, Charlotte

      Davies, Rt Hon Ron (Caerphilly)

      Austin, John

      Davis, Terry (B'ham Hodge H)

      Ballard, Jackie

      Dawson, Hilton

      Banks, Tony

      Dean, Mrs Janet

      Bayley, Hugh

      Denham, John

      Beard, Nigel

      Dismore, Andrew

      Beckett, Rt Hon Mrs Margaret

      Dobbin, Jim

      Begg, Miss Anne

      Donohoe, Brian H

      Bennett, Andrew F

      Doran, Frank

      Benton, Joe

      Dowd, Jim

      Bermingham, Gerald

      Drew, David

      Berry, Roger

      Eagle, Angela (Wallasey)

      Betts, Clive

      Eagle, Maria (L'pool Garston)

      Blears, Ms Hazel

      Ellman, Mrs Louise

      Blizzard, Bob

      Ennis, Jeff

      Boateng, Paul

      Etherington, Bill

      Borrow, David

      Field, Rt Hon Frank

      Bradley, Keith (Withington)

      Flint, Caroline

      Bradley, Peter (The Wrekin)

      Foster, Rt Hon Derek

      Bradshaw, Ben

      Foster, Michael Jabez (Hastings)

      Brinton, Mrs Helen

      Foster, Michael J (Worcester)

      Brown, Rt Hon Nick (Newcastle E)

      Foulkes, George

      Brown, Russell (Dumfries)

      Galbraith, Sam

      Browne, Desmond

      Gapes, Mike

      Buck, Ms Karen

      Gardiner, Barry

      Burden, Richard

      George, Bruce (Walsall S)

      Burgon, Colin

      Gibson, Dr Ian

      Byers, Stephen

      Gilroy, Mrs Linda

      Caborn, Richard

      Godman, Dr Norman A

      Campbell, Alan (Tynemouth)

      Goggins, Paul

      Campbell, Mrs Anne (C'bridge)

      Golding, Mrs Llin

      Campbell, Ronnie (Blyth V)

      Gordon, Mrs Eileen

      Cann, Jamie

      Grant, Bernie

      Caplin, Ivor

      Griffiths, Jane (Reading E)

      Casale, Roger

      Griffiths, Nigel (Edinburgh S)

      Chapman, Ben (Wirral S)

      Grogan, John

      Chaytor, David

      Gunnell, John

      Chisholm, Malcolm

      Hain, Peter

      Clapham, Michael

      Hall, Mike (Weaver Vale)

      Clark, Rt Hon Dr David (S Shields)

      Hamilton, Fabian (Leeds NE)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hanson, David

      Heal, Mrs Sylvia

      Clark, Paul (Gillingham)

      Henderson, Ivan (Harwich)

      Clarke, Charles (Norwich S)

      Heppell, John

      Clarke, Tony (Northampton S)

      Hewitt, Ms Patricia

      Clelland, David

      Hill, Keith

      Clwyd, Ann

      Hinchliffe, David

      Coaker, Vernon

      Hoey, Kate

      Coffey, Ms Ann

      Home Robertson, John

      Cohen, Harry

      Hoon, Geoffrey

      Coleman, Iain

      Howarth, Alan (Newport E)

      Colman, Tony

      Howarth, George (Knowsley N)

      Connarty, Michael

      Hoyle, Lindsay

      Cook, Frank (Stockton N)

      Hughes, Ms Beverley (Stretford)

      Corbyn, Jeremy

      Hughes, Kevin (Doncaster N)

      Corston, Ms Jean

      Humble, Mrs Joan

      Cousins, Jim

      Hutton, John

      Cranston, Ross

      Iddon, Dr Brian

      Crausby, David

      Illsley, Eric

      259

      Jackson, Ms Glenda (Hampstead)

      Pike, Peter L

      Jackson, Helen (Hillsborough)

      Plaskitt, James

      Jamieson, David

      Pope, Greg

      Jenkins, Brian

      Pound, Stephen

      Jones, Mrs Fiona (Newark)

      Powell, Sir Raymond

      Jones, Dr Lynne (Selly Oak)

      Prentice, Ms Bridget (Lewisham E)

      Jones, Martyn (Clwyd S)

      Prentice, Gordon (Pendle)

      Jowell, Ms Tessa

      Primarolo, Dawn

      Keeble, Ms Sally

      Prosser, Gwyn

      Keen, Alan (Feltham & Heston)

      Purchase, Ken

      Keen, Ann (Brentford & Isleworth)

      Quin, Ms Joyce

      Khabra, Piara S

      Quinn, Lawrie

      Kidney, David

      Radice, Giles

      Kilfoyle, Peter

      Rammell, Bill

      King, Andy (Rugby & Kenilworth)

      Reed, Andrew (Loughborough)

      Kingham, Ms Tess

      Reid, Dr John (Hamilton N)

      Kumar, Dr Ashok

      Robertson, Rt Hon George (Hamilton S)

      Ladyman, Dr Stephen

      Lepper, David

      Roche, Mrs Barbara

      Leslie, Christopher

      Ross, Ernie (Dundee W)

      Lewis, Terry (Worsley)

      Rowlands, Ted

      Liddell, Mrs Helen

      Roy, Frank

      Linton, Martin

      Ruddock, Ms Joan

      Livingstone, Ken

      Russell, Ms Christine (Chester)

      Lloyd, Tony (Manchester C)

      Ryan, Ms Joan

      Lock, David

      Salter, Martin

      Love, Andrew

      Savidge, Malcolm

      McAllion, John

      Sedgemore, Brian

      McAvoy, Thomas

      Shaw, Jonathan

      McCabe, Steve

      Sheerman, Barry

      McCafferty, Ms Chris

      Sheldon, Rt Hon Robert

      McCartney, Ian (Makerfield)

      Short, Rt Hon Clare

      McDonagh, Siobhain

      Simpson, Alan (Nottingham S)

      McDonnell, John

      Singh, Marsha

      McFall, John

      Skinner, Dennis

      McGuire, Mrs Anne

      Smith, Rt Hon Andrew (Oxford E)

      McKenna, Mrs Rosemary

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      McLeish, Henry

      McNulty, Tony

      Smith, Llew (Blaenau Gwent)

      MacShane, Denis

      Soley, Clive

      Mactaggart, Fiona

      Southworth, Ms Helen

      Mahon, Mrs Alice

      Spellar, John

      Mandelson, Peter

      Squire, Ms Rachel

      Marsden, Gordon (Blackpool S)

      Steinberg, Gerry

      Marsden, Paul (Shrewsbury)

      Stevenson, George

      Marshall, David (Shettleston)

      Stewart, Ian (Eccles)

      Marshall, Jim (Leicester S)

      Stoate, Dr Howard

      Marshall-Andrews, Robert

      Stott, Roger

      Martlew, Eric

      Strang, Rt Hon Dr Gavin

      Maxton, John

      Stringer, Graham

      Meacher, Rt Hon Michael

      Stuart, Ms Gisela

      Meale, Alan

      Sutcliffe, Gerry

      Merron, Gillian

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Michael, Alun

      Milburn, Alan

      Temple-Morris, Peter

      Miller, Andrew

      Thomas, Gareth R (Harrow W)

      Mitchell, Austin

      Timms, Stephen

      Moffatt, Laura

      Touhig, Don

      Morgan, Ms Julie (Cardiff N)

      Trickett, Jon

      Morgan, Rhodri (Cardiff W)

      Truswell, Paul

      Morris, Ms Estelle (B'ham Yardley)

      Turner, Dennis (Wolverh'ton SE)

      Mudie, George

      Turner, Dr Desmond (Kemptown)

      Mullin, Chris

      Twigg, Derek (Halton)

      Murphy, Jim (Eastwood)

      Vaz, Keith

      O'Brien, Bill (Normanton)

      Vis, Dr Rudi

      O'Brien, Mike (N Warks)

      Walley, Ms Joan

      Olner, Bill

      Wareing, Robert N

      O'Neill, Martin

      Watts, David

      Organ, Mrs Diana

      White, Brian

      Osborne, Ms Sandra

      Whitehead, Dr Alan

      Palmer, Dr Nick

      Wicks, Malcolm

      Pearson, Ian

      Williams, Alan W (E Carmarthen)

      Pendry, Tom

      Winnick, David

      Pickthall, Colin

      Wood, Mike

      260

      Woolas, Phil

      Tellers for the Noes:

      Wright, Anthony D (Gt Yarmouth)

      Jane Kennedy and

      Wright, Dr Tony (Cannock)

      Mr. Jon Owen Jones.

      Question accordingly negatived.

    New clause 18

      CAPITAL ALLOWANCES FOR SEA GOING VESSELS
      'After subsection (6) of section 38B of the Capital Allowances Act 1990 (which provides for expenditure excluded from the application of the Chapter), there shall be inserted the following subsection:—
      "(7) For the purposes of subsection (3)(a) above, a ship shall not be an offshore installation if it is a floating production storage and offtake unit or drillship being a mobile vessel engaged in the exploration, exploitation, storage or transportation of mineral resources".'.—[Mr. Burnett.]
      Brought up, and read the First time.
      Mr. Burnett: On this melancholy evening, I beg to move, That the clause be read a Second time.
      The object of the new clause is to remove the uncertainty and discrimination that have impacted on the British shipping industry and our shipyards since the Finance Act 1997—the last Conservative Finance Act. That Act reduced from 25 to 6 per cent. the rate of writing-down allowances on what are defined as long-life assets.
      I am delighted to declare a constituency interest. My constituency is fortunate enough to contain Appledore Shipbuilders. The company has a skilled and dedicated management and work force; it is a company of not just regional but national and, indeed, international importance. The House will be surprised to learn that it is one of only two medium-sized shipyards left in the country, the other being Ferguson in Port Glasgow. I am happy to see that the hon. Member for Greenock and Inverclyde (Dr. Godman) is present: he has a great interest in, and much knowledge of, the shipbuilding industry, and many of his constituents work at Ferguson.
      British shipyards need orders, and they need them now. In February 1997, when he was shadow Minister for energy and industry, the current Minister for Science, Energy and Industry—the hon. Member for Leeds, West (Mr. Battle)—spoke of the Labour party's positive vision for the United Kingdom sector of the continental shelf, and of the vital industries and jobs that support that sector. One of those crucial industries is shipbuilding, which is heavily dependent on the construction of floating production storage and offtake facilities—FPSOs—and other assets such as drill ships.
      The capital allowance rules in the Finance Act 1997, which reduced capital allowances for long-life assets to 6 per cent., are on machinery and plant which, when new, are expected to have a useful economic life of at least 25 years. Sea-going ships continue to qualify for the 25 percent. writing-down allowances. Unfortunately, for these purposes "sea-going ship" excludes any ship that is or would be an offshore installation under the Mineral Workings (Offshore Installations) Act 1971.
      According to the previous Financial Secretary, the right hon. Member for Fylde (Mr. Jack), ships and railway assets were to be excluded from the long-life assets rule to promote investments in shipping and the rail industry.

      261
      Before the Finance Act 1997, British shipyards were becoming increasingly dependent on the offshore oil and gas industry for work. Last year, Harland and Wolff was constructing one FPSO, two drill ships and two rig conversions. Appledore was constructing two offshore vessels, Ferguson four offshore vessels and Kvaerner in Govan six offshore vessels. A total of 17 offshore vessels were under construction last year in British shipyards.
      That is important work, but it is in jeopardy as a result of the restricted capital allowances for offshore sea-going vessels. Under the new rules, capital allowances on long-life assets are extremely meagre—6 per cent. on a reducing-balance basis. Therefore, for every £100 invested, 6 per cent., or £6, is claimable in year one. In year two, it is not the £6 again; it is 6 per cent. of what is left over—£94. It takes an age to write off the cost of the asset for tax purposes. It is not done even on a straight-line basis—that is, 6 per cent. of the total sum in each year.
      Therefore, although bringing the allowances for the offshore vessels back to the old basis would be far better, it would still be only 25 per cent. on a reducing-balance basis—in year one, for every £100 invested, £25 would qualify; in year two, 25 per cent. of the residual sum, which is £75, would qualify, and so on. With my new clause, it is still going to take at least eight years or so to write off the asset for tax purposes.
      Mr. John Wilkinson: The hon. Gentleman is making an important point and a significant speech because the long-life asset provisions of the Finance Act 1997 are damaging the offshore rig industry, and so on, and also doing considerable damage to the air transport industry. He will be aware that I introduced an Adjournment debate on that subject. I hoped that the Liberal Democrat party might have pursued that area of interest, which is crucial not just for air transport, but for the air manufacturing industry.
      11 pm
      Mr. Burnett: I am grateful to the hon. Gentleman for making that point. He is correct, and I am delighted to associate myself and my party with his concerns about further problems in relation to the aircraft industry; but the new clause relates to sea-going industries. If he wishes to table an amendment—I am afraid that it is probably too late now, but it might be possible for next year's Finance Bill—I am sure that we will see fit to support it.
      The Institute for Fiscal Studies has cast doubt on whether the projected yields from the introduction of long-life assets would ever be achieved. In any event, the new clause will account only for a small fraction of the anticipated revenue. I hope that the House will support it.
      Dr. Norman A. Godman: I offer my compliments to the hon. Member for Torridge and West Devon (Mr. Burnett). Speaking as an ex-shipyard worker, a shipwright by trade, I confirm that the yard in his constituency, Appledore, is first class. Unfortunately, from time to time, it has won orders at the expense of shipyards in my neck of the woods—the lower and upper Clyde—but it is an important new clause.
      262
      My hon. Friend the Economic Secretary knows well the two yards on the Clyde that the hon. Member mentioned—Ferguson on the lower Clyde and Kvaerner in Govan, Glasgow; some of her constituents work in both yards. I reckon that some several hundred of my constituents, highly skilled workers, are employed at Ferguson and Kvaerner. For that constituency reason, I am keen to offer my sympathy to the new clause.
      It is important that owners of offshore supply vessels such as those that the hon. Member for Torridge and West Devon mentioned, are given support because, in fairness to them, they almost always place their orders in UK shipyards, unlike many other UK vessel owners, who go overseas, where there are often hidden subsidies that enable those yards to secure orders against our yards. Those offshore support vessel owners have a fine record in placing their orders in our constituencies. I wish that they would place more orders in mine than in the hon. Gentleman's, but we defend our own corners.
      The hon. Gentleman mentioned 17 such vessels. Kvaerner, which is notable for its specialist skills in the building of liquefied petroleum gas tankers, is now building these vessels. If I had had the opportunity, I would have tabled an amendment to the new clause to the effect that no support should be given to shipowners who place their orders overseas. The House will have to forgive me for being ethnocentric about this, but I think that we should look after our own shipyards. Whenever I have met shipowners, I have told them that, if they are seeking our assistance to argue the case in the House for the kind of financial help that they receive in other countries—especially the Scandinavian countries—they have to give us an assurance in return that they will make every attempt to place their orders in our yards.
      The new clause refers to
      "a floating production storage and offtake unit".
      The hon. Gentleman mentioned Harland and Wolff in Belfast, which is an important employer in that bedevilled Province. It employs about 1,800 men and women, I think. In my constituency, UIE of Clydebank is converting such a vessel—and it is a vessel. The hon. Gentleman is right to say that it is more than a production platform. I hope that my hon. Friend the Minister will take that on board—I should not have said that, but I hope that the House will forgive the pun—because these contracts are superb contracts to win. Let me give an example. The vessel being built now in Greenock is employing upwards of 1,000 highly skilled men. I hope that UIE of Clydebank will secure more of those orders.
      I can see that the Government Whip is getting a bit anxious. Perhaps he is gloomy because his team went down tonight. I cannot do anything about that, being a Scots Member of Parliament, but he has my commiserations.
      Surely some sympathy must be shown to shipowners who place their orders in UK shipyards. We all benefit if they do. It should be emphasised that it is not only maritime communities that benefit from these orders but communities miles away from the coastline—for example, the communities that provide the electronic equipment that goes into making these vessels. I simply plead for sympathy from the Minister, and I hope that my brief speech pleases the grumpy Whip.
      Mrs. Liddell: This has been a brief but very interesting debate. I commend the hon. Member for Torridge and West Devon (Mr. Burnett) for raising this issue. I especially commend my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) for his contribution. As he knows, I live but two miles from the Ferguson yard in Port Glasgow and about six miles from the Kvaerner yard in Govan. My constituents do indeed work in both yards.
      The first few years of my working life were connected with trying to secure the long-term future of shipbuilding on the Clyde. As a young economist, and with my right hon. Friend the Secretary of State for Defence, I spent probably two to three years dealing with the problems being experienced on the Clyde as a consequence of the rundown of shipbuilding and with the problems of Upper Clyde Shipbuilders. I therefore approach the issue with some sympathy, but I am not able to accept the new clause. [Interruption.] I hope that hon. Gentlemen will allow me to finish this serious point. I am not able to accept the new clause, but I hope that I may be able to provide some information that is of comfort to the hon. Member for Torridge and West Devon and to my hon. Friend the Member for Greenock and Inverclyde.
      The aim of the long-life asset measure was to improve the neutrality of the tax system by bringing the tax treatment of such assets more closely into line with the actual rate of depreciation. Ships and railways were both exempted until 2010 because of the special circumstances in each of those sectors. Long-life assets qualify for capital allowances at a rate of 6 per cent. a year, whereas, as the hon. Gentleman said, other plant and machinery qualify for allowances at a rate of 25 per cent. a year.
      The exclusion was aimed at the merchant shipping sector, and it would be very difficult to extend it to cover floating production storage and off-take units or drilling rigs. Annual capital allowances at 25 per cent. would write off nearly half the cost of an asset in the first two years, and three quarters of the cost in the first five years—which clearly is not neutral treatment for assets that have a working life of more than 25 years. The capital allowances would outstrip by far the actual depreciation rate.
      If a floating production storage and off-take unit or a drilling rig has an expected economic life of more than 25 years, it is clearly right that it should not qualify for the 25 per cent. capital allowances. Conversely, if the asset has an expected economic life of less than 25 years, it will already be outside the scope of the long-life asset rules.
      This may be where I can give the hon. Member for Torridge and West Devon some comfort. We have not seen any current evidence that the provisions are discouraging investment in the North sea. However, the Inland Revenue has made it clear to the oil industry that it is prepared to agree in advance the economic life of assets that are used in the industry, and that each asset will be considered individually, to arrive at a reasonable estimate of expected economic life. Given the overall aim of the long-life asset rules, that is an appropriate way of dealing with the units that he mentioned—floating production storage and off-take units and drilling rigs.
      264
      I hope that, with that comfort, the hon. Gentleman might choose to withdraw his new clause. If not, I regret to say that I shall have to ask the House to resist it.
      Mr. Burnett: Liberal Democrat Members are grateful for the Minister's comments. The problem is that, even using my amended capital allowance system, it would take a considerable time—eight years—to ride out for tax purposes the cost of an asset. That is a long time. Even with my amendment, the allowances available in the United Kingdom compared with those available abroad put us right at the back of queue. We do not sufficiently encourage our shipbuilding and shipping industries. It is with regret that we have to force the matter to a vote.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 37, Noes 272.

      Division No. 321]

      [11.12 pm

      AYES

      Allan, Richard

      Hughes, Simon (Southwark N)

      Baker, Norman

      Jones, Nigel (Cheltenham)

      Ballard, Jackie

      Kirkwood, Archy

      Brake, Tom

      Livsey, Richard

      Brand, Dr Peter

      Llwyd, Elfyn

      Bruce, Malcolm (Gordon)

      Michie, Mrs Ray (Argyll & Bute)

      Burnett, John

      Moore, Michael

      Campbell, Menzies (NE Fife)

      Morgan, Alasdair (Galloway)

      Chidgey, David

      Öpik, Lembit

      Cotter, Brian

      Rendel, David

      Davey, Edward (Kingston)

      Russell, Bob (Colchester)

      Ewing, Mrs Margaret

      Sanders, Adrian

      Fallon, Michael

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

      Foster, Don (Bath)

      Swinney, John

      George, Andrew (St Ives)

      Tyler, Paul

      Hancock, Mike

      Wallace, James

      Harris, Dr Evan

      Webb, Steve

      Harvey, Nick

      Welsh, Andrew

      Heath, David (Somerton & Frome)

      Tellers for the Ayes:

      Mr. Andrew Stunell and

      Mr. Donald Gorrie.

      NOES

      Adams, Mrs Irene (Paisley N)

      Browne, Desmond

      Ainger, Nick

      Buck, Ms Karen

      Ainsworth, Robert (Cov'try NE)

      Burden, Richard

      Alexander, Douglas

      Burgon, Colin

      Anderson, Janet (Rossendale)

      Byers, Stephen

      Armstrong, Ms Hilary

      Caborn, Richard

      Ashton, Joe

      Campbell, Alan (Tynemouth)

      Atkins, Charlotte

      Campbell, Mrs Anne (C'bridge)

      Austin, John

      Campbell, Ronnie (Blyth V)

      Banks, Tony

      Cann, Jamie

      Beard, Nigel

      Caplin, Ivor

      Begg, Miss Anne

      Casale, Roger

      Bennett, Andrew F

      Chapman, Ben (Wirral S)

      Benton, Joe

      Chaytor, David

      Bermingham, Gerald

      Chisholm, Malcolm

      Berry, Roger

      Clapham, Michael

      Betts, Clive

      Clark, Rt Hon Dr David (S Shields)

      Blears, Ms Hazel

      Blizzard, Bob

      Clark, Dr Lynda (Edinburgh Pentlands)

      Boateng, Paul

      Borrow, David

      Clark, Paul (Gillingham)

      Bradley, Keith (Withington)

      Clarke, Charles (Norwich S)

      Bradley, Peter (The Wrekin)

      Clarke, Tony (Northampton S)

      Bradshaw, Ben

      Clelland, David

      Brinton, Mrs Helen

      Coaker, Vernon

      Brown, Rt Hon Nick (Newcastle E)

      Coffey, Ms Ann

      Cohen, Harry

      Brown, Russell (Dumfries)

      Coleman, Iain

      265

      Connarty, Michael

      Hoon, Geoffrey

      Cook, Frank (Stockton N)

      Howarth, Alan (Newport E)

      Corbyn, Jeremy

      Howarth, George (Knowsley N)

      Corston, Ms Jean

      Hoyle, Lindsay

      Cousins, Jim

      Hughes, Ms Beverley (Stretford)

      Cranston, Ross

      Hughes, Kevin (Doncaster N)

      Crausby, David

      Humble, Mrs Joan

      Cummings, John

      Hutton, John

      Cunliffe, Lawrence

      Iddon, Dr Brian

      Cunningham, Jim (Cov'try S)

      Illsley, Eric

      Dalyell, Tam

      Jackson, Ms Glenda (Hampstead)

      Davey, Valerie (Bristol W)

      Davidson, Ian

      Jackson, Helen (Hillsborough)

      Davies, Rt Hon Denzil (Llanelli)

      Jamieson, David

      Davies, Rt Hon Ron (Caerphilly)

      Jenkins, Brian

      Davis, Terry (B'ham Hodge H)

      Jones, Mrs Fiona (Newark)

      Dawson, Hilton

      Jones, Dr Lynne (Selly Oak)

      Dean, Mrs Janet

      Jones, Martyn (Clwyd S)

      Denham, John

      Keeble, Ms Sally

      Dismore, Andrew

      Keen, Alan (Feltham & Heston)

      Dobbin, Jim

      Keen, Ann (Brentford & Isleworth)

      Donohoe, Brian H

      Doran, Frank

      Khabra, Piara S

      Dowd, Jim

      Kidney, David

      Drew, David

      Kilfoyle, Peter

      Eagle, Angela (Wallasey)

      King, Andy (Rugby & Kenilworth)

      Eagle, Maria (L'pool Garston)

      Kingham, Ms Tess

      Ellman, Mrs Louise

      Kumar, Dr Ashok

      Ennis, Jeff

      Ladyman, Dr Stephen

      Etherington, Bill

      Lepper, David

      Field, Rt Hon Frank

      Leslie, Christopher

      Flint, Caroline

      Lewis, Terry (Worsley)

      Flynn, Paul

      Liddell, Mrs Helen

      Foster, Rt Hon Derek

      Linton, Martin

      Foster, Michael J (Worcester)

      Livingstone, Ken

      Foulkes, George

      Lloyd, Tony (Manchester C)

      Galbraith, Sam

      Lock, David

      Gapes, Mike

      Love, Andrew

      Gardiner, Barry

      McAllion, John

      George, Bruce (Walsall S)

      McAvoy, Thomas

      Gibson, Dr Ian

      McCabe, Steve

      Gilroy, Mrs Linda

      McCafferty, Ms Chris

      Godman, Dr Norman A

      McCartney, Ian (Makerfield)

      Goggins, Paul

      McDonagh, Siobhain

      Golding, Mrs Llin

      McDonnell, John

      Gordon, Mrs Eileen

      McFall, John

      Grant, Bernie

      McGuire, Mrs Anne

      Griffiths, Jane (Reading E)

      McKenna, Mrs Rosemary

      Griffiths, Nigel (Edinburgh S)

      McLeish, Henry

      Grogan, John

      McNulty, Tony

      Gunnell, John

      MacShane, Denis

      Hain, Peter

      Mactaggart, Fiona

      Hall, Mike (Weaver Vale)

      Mahon, Mrs Alice

      Hamilton, Fabian (Leeds NE)

      Mandelson, Peter

      Hanson, David

      Marsden, Gordon (Blackpool S)

      Heal, Mrs Sylvia

      Marsden, Paul (Shrewsbury)

      Henderson, Ivan (Harwich)

      Marshall, David (Shettleston)

      Heppell, John

      Marshall, Jim (Leicester S)

      Hewitt, Ms Patricia

      Marshall-Andrews, Robert

      Hill, Keith

      Martlew, Eric

      Hinchliffe, David

      Maxton, John

      Hoey, Kate

      Meacher, Rt Hon Michael

      Home Robertson, John

      Meale, Alan

      266

      Merron, Gillian

      Sheerman, Barry

      Michael, Alun

      Short, Rt Hon Clare

      Milburn, Alan

      Simpson, Alan (Nottingham S)

      Miller, Andrew

      Singh, Marsha

      Mitchell, Austin

      Skinner, Dennis

      Moffatt, Laura

      Smith, Rt Hon Andrew (Oxford E)

      Morgan, Ms Julie (Cardiff N)

      Morgan, Rhodri (Cardiff W)

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Morris, Ms Estelle (B'ham Yardley)

      Smith, Llew (Blaenau Gwent)

      Mudie, George

      Soley, Clive

      Mullin, Chris

      Southworth, Ms Helen

      Murphy, Jim (Eastwood)

      Spellar, John

      O'Brien, Bill (Normanton)

      Squire, Ms Rachel

      O'Brien, Mike (N Warks)

      Steinberg, Gerry

      Olner, Bill

      Stevenson, George

      O'Neill, Martin

      Stewart, Ian (Eccles)

      Organ, Mrs Diana

      Stoate, Dr Howard

      Osborne, Ms Sandra

      Stott, Roger

      Palmer, Dr Nick

      Strang, Rt Hon Dr Gavin

      Pearson, Ian

      Stringer, Graham

      Pendry, Tom

      Stuart, Ms Gisela

      Pickthall, Colin

      Sutcliffe, Gerry

      Pike, Peter L

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Plaskitt, James

      Pope, Greg

      Temple-Morris, Peter

      Pound, Stephen

      Thomas, Gareth R (Harrow W)

      Powell, Sir Raymond

      Timms, Stephen

      Prentice, Ms Bridget (Lewisham E)

      Touhig, Don

      Trickett, Jon

      Prentice, Gordon (Pendle)

      Truswell, Paul

      Primarolo, Dawn

      Turner, Dennis (Wolverh'ton SE)

      Prosser, Gwyn

      Turner, Dr Desmond (Kemptown)

      Purchase, Ken

      Quin, Ms Joyce

      Twigg, Derek (Halton)

      Quinn, Lawrie

      Vaz, Keith

      Radice, Giles

      Vis, Dr Rudi

      Rammell, Bill

      Walley, Ms Joan

      Reed, Andrew (Loughborough)

      Wareing, Robert N

      Reid, Dr John (Hamilton N)

      Watts, David

      Robertson, Rt Hon George (Hamilton S)

      White, Brian

      Whitehead, Dr Alan

      Roche, Mrs Barbara

      Wicks, Malcolm

      Ross, Ernie (Dundee W)

      Williams, Alan W (E Carmarthen)

      Rowlands, Ted

      Winnick, David

      Roy, Frank

      Wood, Mike

      Ruddock, Ms Joan

      Woolas, Phil

      Russell, Ms Christine (Chester)

      Wright, Anthony D (Gt Yarmouth)

      Ryan, Ms Joan

      Salter, Martin

      Wright, Dr Tony (Cannock)

      Savidge, Malcolm

      Tellers for the Noes:

      Sedgemore, Brian

      Jane Kennedy and

      Shaw, Jonathan

      Mr. Jon Owen Jones.

      Question accordingly negatived.
      Further consideration adjourned.—[Mr. Robert Ainsworth.]
      Bill to be further considered tomorrow.

  RAF Northolt
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert Ainsworth.]
  11.23 pm
  Mr. John Wilkinson: I am grateful for the opportunity to raise the future of RAF Northolt. To many, not least to my constituents, it is incredible that the future of such an historic air force station—which fulfils its current role so well, and which is so warmly appreciated by those who work there, live nearby or benefit from its services—should be called into question.
  It is little wonder that RAF Northolt is appreciated. Founded as a Royal Flying Corps station in 1915, it was in the thick of the battle of Britain, No. 303 Polish Squadron achieving more kills than any squadron in Air Chief Marshal Dowding's order of battle. Today, its proud traditions are maintained and heightened by the presence of No. 32 (The Royal) Squadron, which has assumed the duties of the Queen's Flight and provides invaluable communications flying for Ministers, service chiefs, senior civil servants and diplomats—as well as, of course, for the royal family.
  Nearby national and North Atlantic Treaty Organisation headquarters, like those at Northwood, High Wycombe and Bentley Priory, benefit from having such an Air Force-controlled facility on the doorstep, as do those in the royal palaces, Whitehall, Westminster, allied embassies and military staffs who need a secure specialist unit and a transport facility of their own on which they can totally rely, not only in peacetime but in time of national emergency or war—a unit that will always give priority to their requirements. It should be remembered that RAF Northolt houses other distinguished units, including No. 1 Maritime headquarters unit of the Royal Auxiliary Air Force and the air information development unit.
  There has been a tendency for RAF Northolt to acquire additional units as small military establishments in London are closed, which makes good economic and military sense. It is the happy partnership between the station and the local community that makes RAF Northolt so special. People remember well the late 1940s and early 1950s when Northolt was an airport for London, and the home of British European Airways. However, the jet era is very different from the age of piston-engined DC3 Pionairs and Vikings, and local people definitely do not want RAF Northolt to become a civil airport again—ever.
  The physical constraints to the aerodrome are far too great. I have seen an old photograph of a twin piston-engined aircraft that crashed on to a Ruislip rooftop. The driver of a van on the A40 last August—whose vehicle was struck by a Spanish Lear jet which overran the 5,400 ft runway—will not forget the experience. I expect that he was glad that it was not a big airliner.
  The present co-existence of military flights with a strictly limited number of civil movements is tolerated by the local community. Any relaxation in the limitations for civil aircraft will be unacceptable to local people, and they and their elected representatives, at local and national level, have repeatedly said so to the Government with complete consistency and unanimity, regardless of party affiliation.
  268
  The limits on civil flights at Northolt are from 0800 to 2000 local time; by prior permission only, with a maximum of 28 movements a day, Monday to Friday; no noisy aircraft; no aircraft with more than 30 seats; and, above all, no scheduled services. Those sensible restrictions have been upheld by successive Defence and Transport Ministers. The only change was a six-month trial, from 1 October 1996 to 31 March 1997, of an 0700 hours opening for civil flights, after which trial the old regime was wisely restored.
  There have been periodic scares over the years. The Transport Committee, in its report on UK airport capacity in the 1995–96 Session, said:
  "RAF Northolt might be employed as a satellite of Heathrow which, because of its small size, would provide capacity which could only be used by small aircraft of the sort that, particularly on UK regional flights, are being crowded out of Heathrow. We realise that ATC problems make intensive use of Northolt's existing runways difficult as it is near Heathrow and its runways are not fully parallel to those at Heathrow; flight paths of aircraft therefore cross those of aircraft using Heathrow.
  However it was suggested that it would be possible to build a new runway at Northolt, parallel to those at Heathrow, which as far as ATC was concerned could be treated as a third Heathrow runway. We support the use of Northolt as a 'feeder reliever' airport for Heathrow. The Government should make funds available to NATS to study how the ATC difficulties of using Northolt could be overcome. Redhill aerodrome might also have a useful role as a 'feeder-reliever' for Gatwick."
  The Committee's wholly unrealistic recommendations were lifted uncritically from a memorandum to the Committee from SH and E Air Transport Consultants, which amazingly proposed in paragraph 5.11 of its submission:
  "Taken together the development of Redhill for Gatwick and Northolt for Heathrow would increase the capacity of the premier London airports by 30 million passengers per annum or more."
  I wonder which commercial interest inspired SH and E's wild hyperbole. It proposed in paragraph 5.6:
  "The eventual aim would be for both Northolt and Redhill to be marketed as an integral part of Heathrow and Gatwick…By way of illustration the distance between the two would be approximately five miles or eight minutes by road."
  In fact, the journey through the rush-hour traffic between Heathrow and Northolt can easily be half an hour or more.
  No wonder the Government's official observations in House of Commons paper 644, on the Select Committee's report, were dismissive of the Committee's proposals. They said:
  "The Government does not consider that Northolt is a suitable site for the development of a civil airport on the scale that would be necessary to provide significant relief to Heathrow. It does not therefore consider it worthwhile to invite NATS to undertake a study of ATC constraints. The Government considers that Northolt does have the potential to provide useful if limited facilities for business aviation, and in parallel with this response it will set out its plans to increase the attractiveness of the facilities for business aviation, taking account of local interests. An earlier consultation on the possibility of a civil enclave for business aviation suggested that privatisation is not likely to be a realistic proposition for such a small-scale and limited civil operation."
  Those were the observations of a Conservative Administration.
  There matters should have rested. Luton airport, now with commercial management, will expand its already growing traffic for airline and business traffic alike, while in a few days' time, a public inquiry will begin into opening Farnborough, supported by Rushmoor council, to

  269
  21,000 air transport movements a year from Farnborough's long runway. That is three times the current annual limit of movements for RAF Northolt, with its very short runway.
  I took a delegation of Labour councillors from Northolt's local authority—Hillingdon—to meet the Minister for Transport in London on 9 February this year. In a briefing note on the civil use of RAF Northolt, Hillingdon council stated:
  "Hillingdon is opposed to any further increase in civil use at Northolt including a permanent increase in operating hours from 7 am, any civil use at weekends, an increase above the 7,000 annual civil transport movements, an increase in the size of civil aircraft using Northolt over 30 seats."
  One might expect a Labour Government to accede to representations from a Labour council, but it was merely told to await the outcome of the strategic defence review. We heard later, not then, that the Department of the Environment, Transport and the Regions had sponsored consultants to do a study of business aviation in the south-east of England.
  Then Stagecoach, which owns Prestwick airport, rolled on to the scene this summer with proposals put to the Transport Committee which, if the press is to be believed, resurrected the proposals for Northolt previously submitted to, and regurgitated by, the Transport Committee two years ago—proposals that were rightly rejected by the Government for sound technical and environmental reasons.
  Interestingly, following my oral defence question to the Minister for the Armed Forces, whom I see on the Front Bench—a question about RAF Northolt put on 22 June—I received an unsolicited letter dated 26 June from the chairman of the European Business Aviation Association, Mr. Brian Humphries:
  "Like you, we do not want Northolt to be developed and expanded to take larger aircraft and scheduled services. As such, we are totally opposed to the kind of plans which Stagecoach are allegedly putting forward to turn Northolt into a satellite of Heathrow."
  The future of RAF Northolt is a test case. The USA has a military air force base, Andrews, beside the capital, Washington DC. France has Villacoublay beside Paris. RAF Northolt should similarly be retained with no change to its status or role.
  Mr. Stephen Pound: I have received a similar letter from Brian Humphries, whom the hon. Gentleman quotes correctly. What is your opinion—
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman must realise that he is now addressing the Chair.
  Mr. Pound: I do beg your pardon, Mr. Deputy Speaker. Would the hon. Gentleman care to comment on the other question posed in the letter? It asks: if military use is declining, what would be the possibility of an increase of executive jet usage of the airport?
  Mr. Wilkinson: The letter did not put it in those terms; it mentioned spare capacity, and I took that to mean that the 7,000 permitted civil movements a year were not fully taken up.
  270
  The environment of west London is under constant threat, with seemingly endless traffic jams, much excessive ambient noise, and insidious urbanisation of the few open spaces that remain. RAF Northolt and the small patches of green belt alongside are about the last remaining semi-rural areas left between Marble Arch and the M25.
  Unemployment in my constituency is the lowest in Greater London—jobs are not, at least for the time being, a problem. Preserving an acceptable residential environment is, however, a constant challenge. RAF Northolt has seen off the dangerous challenge of the Luftwaffe in the past. The threat is more insidious today: the ambitions of those who want to impose on the site a three-runway London airport. It would take in a significant chunk of west London, regardless of the wishes of local people, and regardless of the irreparable damage to a swathe of residential Middlesex which would ensue.
  I beg to suggest to the Minister that he keep RAF Northolt as it is. That would best suit the interests of the Ministry that he represents, and the interests of my constituents and those who live around the airfield.
  10.38 pm
  The Minister for the Armed Forces (Dr. John Reid): I always listen with interest to the remarks of the hon. Member for Ruislip-Northwood (Mr. Wilkinson) on matters relating to the Royal Air Force, but I listened with particular interest this evening, and at Defence questions on Monday 22 June, when he drew attention to the subject of the future of Royal Air Force Northolt. Obviously, Northolt and its future are matters of great interest to him: he is a staunch defender of and doughty fighter for his constituency interests, and he has wider concerns about the operational effectiveness of the Royal Air Force—in which he has a deep interest—and the contribution that Northolt makes to it.
  The views of the hon. Member for Ruislip-Northwood on the subject are by no means confined to one hon. Member or to one party. My hon. Friend the Member for Brent, North (Mr. Gardiner), whose constituents are on the flight path, has expressed similar concerns to me, and obviously my hon. Friends the Members for Ealing, North (Mr. Pound) and for Harrow, West (Mr. Thomas) and a number of other hon. Members have similar feelings.
  Mr. John McDonnell: As my hon. Friend said, this is not an isolated concern of the hon. Member for Ruislip-Northwood (Mr. Wilkinson); it is a concern of all the Hillingdon Members of Parliament. My hon. Friend needs to confer with his colleagues in the Department of the Environment, Transport and the Regions because, in my constituency, we are facing the environmental blight of the potential development of Northolt, sandwiched with the environmental threat of terminal 5, and even a third runway, obliterating the villages in the south of my constituency. All those factors need to be taken into account in any decision on the future of Northolt airport. We need to take into account the environmental degradation of our constituencies by the airport industry
  Dr. Reid: I shall mention the wider consideration of those matters that is being undertaken by the Department that my hon. Friend mentioned.

  271
  Hon. Members on both sides of the House know that, as was said, the principal task of Royal Air Force Northolt is to support the requirement for operational communications flying and VIP flying. As the hon. Member for Ruislip-Northwood said, that requirement is met by No. 32 (The Royal) Squadron. As he also said, several other units are based at RAF Northolt, including a bomb disposal unit, the headquarters of the south-east region of the air cadets, the aeronautical information documents unit and one or two units which the hon. Gentleman mentioned. That is not all that takes place. In line with my Department's policy of public access to the defence estate, RAF Northolt allows civil use of its irreducible spare capacity—the capacity which it is necessary to keep on the books and in the ambit of the defence budget, but which is not fully used at all times.
  I am pleased to report that the civil use of RAF Northolt also generates significant receipts for the defence budget and, obviously, for the taxpayer. Indeed, for the financial year 1997–98, receipts amounting to about £948,000 were generated by civil use at Northolt—a more than 20 per cent. increase on the previous year.
  I hope that the hon. Member for Ruislip-Northwood will be assured that my Department is well aware of concerns about the impact of flying—especially civil aviation—on the local environment at RAF Northolt, in light of responses which I gave him when he raised the matter previously. Indeed, in view of those concerns, the Ministry of Defence, as he said, has restricted civil use of RAF Northolt to the hours between 8 am and 8 pm, mainly on weekdays. Civil use at weekends is allowed only when the station is open for operational reasons.
  We have also set a limit of 7,000 civil movements in the year. That figure includes business aviation and other civil operations, but excludes movements on Ministry of Defence or other Government business. The latest figures that we have show that, during 1997, there were 6,958 such civil movements—slightly fewer than the number of military movements in and out of Northolt last year. The care that the Department has taken in those restrictions is testimony to our awareness of the impact on the local community and the feelings of local people.
  In addition to restrictions on the times at which civilian aircraft may operate and the number of movements allowed, we allow only quieter civil aircraft to use Northolt. Only civil aircraft that can carry a maximum of 30 passengers are normally allowed use of the airfield.
  On the main question about the future of RAF Northolt, it is true that, as part of the Government's strategic defence review, we have been considering the future of Northolt as an RAF station and the wider implications. That should not be taken as a unique study, as the strategic defence review, the results of which we shall hear in the near future, was a scrutiny of all defence assets. There is no sense in which RAF Northolt was chosen again for consideration. It was part of a wide-ranging scrutiny by Ministers and officials.
  Although it would be premature to comment in detail on the outcome of the defence review, no options have been discounted as regards RAF Northolt. Much work remains to be done in considering them, and no imminent decisions on RAF Northolt are likely to be sprung on the House.
  Mr. John Randall: The Minister can gauge the strength of feeling from the number of hon. Members
  272
  present who represent surrounding areas. Can he give us an assurance that, if a decision was taken to change the status of RAF Northolt, there would be wide public consultation? That would show the strength of feeling against any change in the current status of RAF Northolt.
  Dr. Reid: I know that the hon. Gentleman has an interest in the subject, and we have discussed these matters before. I shall come to such an assurance shortly.
  As my hon. Friend the Member for Hayes and Harlington (Mr. McDonnell) pointed out in his intervention, there are many factors to be taken into account before proposals can be considered. For my Department there is the work, not only of the strategic defence review, but of the strategic development plan for the defence estate in the Greater London area, which will include RAF Northolt. There is also the work that my right hon. Friend the Secretary of State for the Environment, Transport and the Regions has set in hand on business aviation in the south-east, and the forthcoming integrated transport White Paper that will provide a framework for subsequent work on airports policy.
  Those various factors mean that early proposals on the future of RAF Northolt are highly unlikely. I can assure hon. Members that the concerns of the local community will be an important consideration in all this on-going work. It could not be otherwise.
  The hon. Member for Ruislip-Northwood mentioned the trials held between 1 October 1996 and 31 March 1997, in the last year of the previous Conservative Government. A trial was conducted into extending RAF Northolt's opening hours. The Ministry of Defence and the Department of Transport had jointly identified possible changes to working arrangements at RAF Northolt that might improve services offered to users, in view of pressures on existing runway capacity.
  The hon. Gentleman identified the changes that were made during that period. The opening of the airport at 7 am on weekday mornings, instead of the usual time of 8 am, attracted 153 additional civil movements over the six-month trial period. Eighty of those movements were new business, and the remaining 73 were movements that would otherwise have taken place within standard opening hours.
  Consideration of much wider aspects is now taking place. I know that it will raise concerns, and I am trying to assuage the fears of local Members and their constituents that anything will be done without maximum consultation, or that anything is likely to be done imminently. The consideration may take several months, perhaps until the beginning of next year, and possible effects over a long time scale are being examined.
  Mr. Barry Gardiner rose—
  Dr. Reid: Before I give way, I stress that any emerging proposals will be subject to full consultation not only with local individuals and Members of Parliament but with those local authorities and local communities that could potentially be affected. In the meantime—I hope that this assures hon. Members—I am prepared to guarantee tonight that, while the work is going on, there will be no increase in the current ceiling of 7,000 civil movements a year. I am also prepared to guarantee that the airfield's

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  opening hours will remain as they are now and will not be extended. Any change countenanced at any stage would involve the fullest consultation.
  Mr. Gardiner: I am grateful to the Minister for giving way on that point and for delaying my intervention. That guarantee is extremely welcome to my constituents from Roe Green, Kingsbury, Kenton and Sudbury who are affected by aircraft movements and who have made representations to me. The Minister will be aware of the question that I tabled about the reduction of the defence estate in London. I know that he is aware also of the response that his Department provided to me earlier today. Will he give an assurance that the existing studies—particularly those relating to RAF Northolt—will be taken into account in the strategic defence review and in the reduction of the defence estates review in London?
  Dr. Reid: I assure my hon. Friend that, if those studies were not taken into account, they would be the only studies in the past 10 years that were not involved in the strategic defence review scrutiny. I assure my hon. Friend that we have spent many days, weeks and indeed months—up until, literally, the past few hours—compiling the finest details of the strategic defence review. Other matters, such as this one, will emanate from it and will require further study. I know that my hon. Friend received a response this morning from the Under-Secretary of State for Defence, my hon. Friend the Member for Warley (Mr. Spellar), and I hope that that has gone some way towards allaying his fears.
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  We are well aware of the opposition of local authorities and local communities to extended opening, and we have taken careful note of the representations that they have made about the matter. I repeat that no decision has been taken to extend the arrangements under the trial to a more permanent footing.
  As I told the House at Defence questions last Monday, my Department has received a number of unsolicited approaches about the use of spare capacity at RAF Northolt. Most of those approaches were very tentative. I have answered written questions about the specific approach that was raised, but I reassure all hon. Members that no one from the Ministry of Defence—or any other Department, to my knowledge—has been going around soliciting offers for the extension or the transformation of RAF Northolt.
  I hope that my few remarks and the guarantees that I have given tonight have assuaged people's fears and assured the hon. Member for Ruislip-Northwood, and others who are deeply interested in the issue, that the fullest consideration will be given to their views if any change were countenanced. No decision is likely in the near future—we are thinking perhaps about the end of this year or the beginning of next year—and, even after that, there will be maximum consultation.
  In the interim, there will be no change to the hours in the morning as per the last trial, and no extension to the number of civil movements. I hope that the fact that I have given those guarantees and assurances and the spirit in which my Department has acted is testimony to how seriously we take the hon. Gentleman's points.
  The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at seven minutes to Twelve midnight.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Heavy Goods Vehicles
  Mr. Crausby
  To ask the Secretary of State for the Environment, Transport and the Regions what evaluation his Department has made of the spray suppression procedures for heavy goods vehicles in(a) Portugal, (b) France, (c) Belgium, (d) Germany and (e) Holland. [47768]

  Ms Glenda Jackson
  None; however, spray from goods vehicles is a problem recognised by several EU member states. Discussions are planned by the European Commission to look at the whole problem.

  Mr. Crausby
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to deal with problems arising from spray emanating from heavy goods vehicles; what assessment he has made of the adequacy of current procedures; and if he will make a statement. [47766]

  Ms Glenda Jackson
  The UK has led the way in the development of spray suppression equipment. Indeed, the standards for EC Directive 91/226EC, on spray suppression, were largely based on the UK requirements. Further development of spray suppression devices has proved difficult because of the problems in accurately measuring spray which makes the assessment of the efficiency of the equipment difficult to gauge. However, spray from goods vehicles is a problem recognised by several EU Member States. Discussions are planned by the European Commission to look at the whole problem.

  Mr. Crausby
  To ask the Secretary of State for the Environment, Transport and the Regions when he expects to announce the findings of the research undertaken by the Transport Research Laboratory on the measurement of spray from vehicles and its effect on vision. [47767]

  Ms Glenda Jackson
  A published version of the Report on the research carried out by the Transport Research Laboratory into spray suppression will be available within the next six months. A copy will be placed in the House of Commons Library.

  Nuclear Discharges
  Mr. Fearn
  To ask the Secretary of State for the Environment, Transport and the Regions what new measures he proposes to improve the monitoring of discharges into the Irish Sea from the United Kingdom's nuclear facilities. [47695]
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  Angela Eagle
  Radioactive discharges from UK nuclear sites are subject to rigorous and stringent monitoring requirements under the Radioactive Substances Act 1993. Nuclear site operators must take and analyse samples of effluent for radioactivity.

  The Environment Agency and the Scottish Environment Protection Action (SEPA) take independent samples for analysis as a check. The operators' results and those of the environment agencies are made available to the public.

  In addition, the Ministry of Agriculture, Fisheries and Food (MAFF) has carried out extensive monitoring of the marine environment since the early 1960s and each year the monitoring programme is scrutinised to ensure that it is effectively targeted. Monitoring methodology is constantly reviewed, so that the most appropriate techniques are used. Research work is also carried out into the various chemical and physical processes that affect the pathways of radioactivity back to man.

  A summary of the main findings of the Environment Agency's monitoring programmes is published annually in a report called Radioactivity in the Environment. The last report published covered the year 1996. The results of the radioactivity monitoring programmes undertaken by MAFF and SEPA are published jointly in a report called Radioactivity in Food and the Environment. The last report published covered the year 1996. Copies of both reports can be found in the Library of the House.

  Concessionary Fares
  Mr. Kidney
  To ask the Secretary of State for the Environment, Transport and the Regions what initiatives his Department is supporting for pensioners' concessionary fares for travel by bus and rail. [47677]

  Ms Glenda Jackson
  Concessionary fares are a matter for individual local authorities. All but a few have a scheme for pensioners which covers travel by bus; a number of schemes provide for travel on local trains. The franchise agreements which govern the provision of rail services protect the price and the benefits of the Senior Railcard, which offers a one-third discount on a wide range of rail fares nation-wide. The question of concessionary fares is being considered as part of the review of integrated transport policy.

  Carbon Dioxide Emissions
  Mr. Stunell
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what measures are planned by his Department to achieve(a) the EU 12.5 per cent. target and (b) the national 20 per cent. target to reduce carbon dioxide emissions in each of the sectors identified in the European Commission's First Analysis report; [47575]

  (2) to what extent his target of a 20 per cent. reduction in carbon dioxide emissions by 2010 will be realised by combined heat and power generation. [47576]

  Angela Eagle
  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. legally binding commitment from Kyoto as well as considering how we might move beyond that towards our domestic aim of a 20 per cent. reduction in CO2 emissions

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  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. Combined heat and power (CHP) will also play an important part in helping us meet our targets. We have published a report which shows the economic potential for CHP is between 10,000 and 17,000 Megawatts (MW), depending on the assumptions made on future energy prices, users' required rate of return on investment, and other factors. Every 1,000 MW of CHP can reduce carbon emissions by up to 1 million tonnes per year. We will set a firm target as part of the new UK Climate Change Programme.

  Combined Heat and Power
  Mr. Stunell
  To ask the Secretary of State for the Environment, Transport and the Regions what measures he proposes to promote investment in combined heat and power generation; and if he will make a statement. [47577]

  Angela Eagle
  The government strongly promote the widest use of combined heat and power (CHP), for its environmental, business and other benefits to the country. CHP is encouraged through my Department's Energy Efficiency Best Practice Programme, the Energy Saving Trust, the Private Public Partnership, the Capital Receipts Initiative, and other programmes.

  The Government's provisional proposals for electricity generation consent, following the Review of Energy Sources, reflect the importance they attach to the environmental and other benefits of CHP.

  Local Authority Bus Companies
  Jane Griffiths
  To ask the Secretary of State for the Environment, Transport and the Regions if he will give those local authority bus companies whose finances are sufficiently sound freedom from controls in respect of borrowing for capital investment. [48012]

  Ms Glenda Jackson
  The only such controls concern the terms on which Public Transport Companies may borrow from the owning local authority; there are no plans for change. Otherwise there are no controls on borrowing by a PTC on the strength of the business.

  Government Policies
  Mr. Fabricant
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the projects undertaken by his Department since 1 May 1997 to research public reaction to(a) Government policies and (b) potential new policies; and if he will place the results of the research in the Library. [46683]

  Angela Eagle
  Each of the queries has been divided into regular surveys (carried out annually unless otherwise stated) and ad-hoc or one-off surveys. They are listed by alphabetic order of the division involved in the survey. 'Potential New Policies' is a wide brief—all reviews/research into guidance have been included. Surveys begun prior to 1 May 1997 but not completed until after that date are included with a note; some of the later research is not yet completed.

  The majority of these surveys are not to the general public, but to the Local Authorities and Businesses concerned in the use and implementation of policies; they
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  do all, however, relate to the perceived reaction from the public. Some of the listed surveys relate to just one survey carried out, others to two or more surveys carried out under the same project.
  (a) Government policies
  (i) regular surveys

  Making a Corporate Commitment—measures top management attitudes to energy efficiency policies

  Survey of Municipal Waste Management—monitors progress towards targets set for recovery and recycling of municipal waste

  Sales of Non-Toxic Shot—monitoring the results of an initiative for the voluntary phasing out of lead shot

  (ii) ad-hoc surveys

  Take up & Workings of Night Noise Offence—investigating the use of powers to deal with noise offences

  Use of s137 Powers by Principal Local Authorities—investigating use of, and perceived inadequacies in, powers under s137 of the Local Government Act 1972

  Effectiveness of PPG 13—evaluation of Planning Policy Guidance note 13 Transport, implemented 1994–96

  Operation and Effectiveness of the Structure Planning Process—evaluation in the context of changes introduced by the Planning Compensation Act 1991

  Surveys of Users/Sellers of Peat & Peat Substitutes—DETR has a requirement to monitor the use of Peat & Peat Alternatives in order to frame advice issued under MPG13

  Cycle Policy Initiative—Various surveys have been carried out with children and adults, on facilities, health and distance travelled, to support government 'cycling to school/work' initiatives

  Attitudes to Traffic Calming—Various studies in different locations as to need for and effectiveness of traffic calming initiatives

  (b) Potential new policies(i) regular surveys Deflators for Construction Output (quarterly)—this survey monitors current policy and will advise future policy in the construction industry both environmentally and economically Impact Assessment of the Best Practice Programme on Buildings—monitoring trends & attitudes to maximise the effectiveness of energy efficiency initiatives(ii) ad-hoc surveys

  Audible Intruder Alarms—London LAs have extra powers to deal with alarms; an order to give other authorities similar powers is being researched before introduction

  Cost Recovery Charging Effectiveness for Water Abstraction & Effluent Discharge—to inform the 1999 review into the water charging system

  Citizens Charter Survey, CITES Licensing Section—review of service before applying for a Chartermark (begun prior to May 97)

  Best Value Pilot Evaluation—monitoring the pilot areas where Compulsory Competitive Tendering has been replaced by the Best Value requirement before confirming the change in policy countrywide

  Enhancing Public Participation in Local Government—to establish extent & help develop guidance on new initiatives to increase public participation in local democracy Mixed Use Development Survey—to inform on the extent of the effect of Authority's powers on Local plans

  Evaluation of National Tenant Training Programmes—identifying options and thus contributing to development of strategy for future training

  Safer Cities—Evaluation of 'Safer City' areas to advise future policy

  Customer Preferences to Environmental Improvement—to inform the 1999 review into the water charging system.

  Channel Tunnel Rail Link
  Mr. Howard
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the adequacy of the rail links between Ebbsfleet and Charing Cross to carry both Channel Tunnel and other services between the completion of stages 1 and 2 of the Channel Tunnel Rail Link; and if he will make a statement. [48200]

  Ms Glenda Jackson
  After completion of the first section of the Channel Tunnel Rail Link to Fawkham Junction, scheduled for 2003, Eurostar services will run not between Ebbsfleet and Charing Cross but via the Section 1 infrastructure and then existing domestic lines between Fawkham Junction and Waterloo. These domestic lines will have been subjected to upgrading works to increase capacity to 4 trains per hour in each direction and, as a result, there will be no adverse impact on existing domestic passenger services.

  Gloucestershire Structure Plan
  Mr. Laurence Robertson
  To ask the Secretary of State for the Environment, Transport and the Regions what discussions he has had with the South West Regional Planning Conference regarding Gloucestershire's Structure Plan; if he plans to accept Gloucestershire's revised allocation of 50,000 houses between 1991 and 2011; and if he will make a statement. [47748]

  Mr. Caborn
  The then Secretary of State issued Regional Planning Guidance for the South West (RPG 10) in 1994 which included a provision for Gloucestershire of 53,000 houses on the advice of the South West Regional Planning Conference. The Conference is currently preparing a draft strategy for the period to 2016 and officials of the Government Office for the South West attend as observers on behalf of the Secretary of State.

  The requirement for housing will be tested at the forthcoming Structure Plan inquiry which is due to begin on 8 September.

  Thameslink 2000
  Mr. Gapes
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on Railtrack's application for an order under the Transport and Works Act 1992 in respect of the Thameslink 2000 Project. [48434]

  Ms Glenda Jackson
  My right hon. Friend the Secretary of State for the Environment, Transport and the Regions announced on 3 June 1998,Official Report, columns 367–84, that agreement had been reached on a statement of principles that will ensure the completion of the Channel Tunnel Rail Link. The new Thameslink 2000 station is an integral part of work on the CTRL at St. Pancras and in order to take full account of the continuing detailed contractual and financial arrangements the Secretary of State has decided to defer until 29 January 1999 the date by which he must give notice of an intention to hold a public inquiry into the proposed Railtrack (Thameslink 2000) Order. I hope that it will be possible to take a decision before that date and it will not be delayed unnecessarily. London and Continental Railways and Railtrack remain contracted to complete the Thameslink 2000 Project, subject to obtaining the necessary consents.

CULTURE, MEDIA AND SPORT

  Lyric Theatre
  Ms Hodge
  To ask the Secretary of State for Culture, Media and Sport when he will publish Sir Richard Eyre's report on the future of lyric theatre in London. [48433]

  Mr. Chris Smith
  Sir Richard Eyre's report on the future of lyric theatre in London is published today and copies have been laid before both Houses.

  Seaside Tourism
  Mr. Sanders
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his answer of 1 June 1998,Official Report, column 45, which aspects of British seaside tourism the forum working groups are examining. [46094]

  Mr. Tom Clarke
  The Domestic Working Group is looking particularly at resort regeneration, but as with all the other Working Groups, much of the work is as relevant to seaside tourism as to other parts of the industry. For example, the Domestic Tourism Working Group is also looking at ways of improving standards of accommodation and hospitality; meeting consumer needs; how the domestic market is packaged and promoted; the image of England as a holiday destination; the dissemination of information; barriers to taking domestic holidays; and visitor management.

  The Working Groups, their Chairmen and summaries of their areas of interest are as follows:
  List of tourism forum working groups
  Business Tourism Working Group
  Chair: Michael Hirst, Chairman, Joint Hospitality Industry Congress. Looking at what action might be taken to enhance the contribution of business tourism to the UK tourism industry and the wider economy.
  Communications Strategy Working Group
  Chair: Charles Allen, Chief Executive, Granada Group. Undertaking a review of the image of the industry with key audiences including young people, the media and potential investors.
  Domestic Tourism Working Group
  Chair: Councillor John Price, Local Government; Vice-Chair: Mrs. Dorothy Naylor, Chief Executive, North West Tourist Board. Looking at issues affecting domestic tourism, focusing on encouraging more Britons to take holidays in England. Three sub-groups: Distribution; Quality; Sustainability.
  People Working Group
  Chair: Peter Moore, ETB Board member and Managing Director of Center Parcs. Considering how to improve the way the industry recruits, manages, motivates, and equips its people with the skills they need to provide excellent customer service.
  Presentation of Heritage and Culture Group
  Chairman: David Quarmby, BTA/ETB Chairman. Not a Forum Working Group as such; pre-dates creation of Forum. Looking at presentation of our heritage and culture, especially to attract overseas visitors.
  Visitor Attractions Working Group
  Chairman: John Lee, ETB Board member and Chairman of the Association of Leading Visitor Attractions. Set up to identify ways to maximise the value to tourism of the visitor attractions sector.

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  Whitehall Issues Working Group
  Chairman: Ken Robinson, Director of the Tourism Society and Operations Director of the New Millennium Experience Company. Established to consider how policy issues affecting the industry in various Government Departments might be influenced, but has not met.
  Widening Access Working Group
  Chairman: Jeremy Logie, Chief Executive, British Hospitality Association. Considering what action the industry might take to improve accessibility to all people with a desire to experience UK tourism.
  Strategic Planning Working Group
  Chaired by the Secretary of State. Looking at the development of tourism in the longer term.

  Miss Geraldine Smith
  To ask the Secretary of State for Culture, Media and Sport what overseas marketing the British Tourist Authority has carried out of British seaside resorts as tourism destinations in the past three years. [46720]

  Mr. Tom Clarke
  In the last three years, the BTA has conducted hundreds of different campaigns and marketing activities, many of which have a seaside element. Seaside resorts feature in BTA's own print and in the print of others, distributed to overseas customers through BTA's network of 43 overseas offices.

  Action Zones
  Mr. Llwyd
  To ask the Secretary of State for Culture, Media and Sport if he will list the initiatives undertaken by his Department since 1 May 1997 which have involved the establishment of(a) action zones and (b) pilot schemes limited to particular geographical areas, indicating the name of the programme and the action zone or pilot scheme areas covered in each instance. [47053]

  Mr. Tom Clarke
  This Department has not undertaken any such initiatives since 1 May 1997.

  Single Occupancy Supplement
  Mr. Hoyle
  To ask the Secretary of State for Culture, Media and Sport if he will introduce legislation to limit or abolish the single occupancy supplement in hotels in the United Kingdom. [48006]

  Mr. Tom Clarke
  [holding answer 29 June 1998]: The Government have no plans to introduce such legislation.

  Mr. Hoyle
  To ask the Secretary of State for Culture, Media and Sport what representations he has received about the single occupancy supplement; and if he will list them. [48005]

  Mr. Tom Clarke
  [holding answer 29 June 1998]: My right hon. Friend the Secretary of State and I have received a number of representations from hon. Members, members of the public and organisations, including the Single Travellers Action Group. Ministerial colleagues at the Department of Trade and Industry have received similar representations.

  Sustainable Tourism Initiatives
  Mr. Fearn
  To ask the Secretary of State for Culture, Media and Sport what proposals he has to promote sustainable tourism initiatives. [47699]
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  Mr. Tom Clarke
  The Government have recently undertaken a nationwide consultation exercise on sustainable tourism. We have received over 300 responses and these are currently being analysed. They will feed into the development of the new strategy for tourism which my Department will launch later this year and will help update the UK Sustainable Development Strategy which will be published by the Department of the Environment, Transport and the Regions, also later this year.

  Television Licence Fees
  Mr. Kidney
  To ask the Secretary of State for Culture, Media and Sport if his review of the future funding of the BBC will include consideration of a scheme for a universal pensioners' concessionary television licence fee. [47679]

  Mr. Fisher
  The forthcoming review of the arrangements for funding the Corporation after March 2002 will include a detailed consideration of all the options for concessions, both for pensioners and others.

  Government Policies
  Mr. Fabricant
  To ask the Secretary of State for Culture, Media and Sport if he will list the projects undertaken by his Department since 1 May 1997 to research public reaction to(a) Government policies and (b) potential new policies; and if he will place the results of the research in the Library. [46690]

  Mr. Chris Smith
  We have undertaken consultation exercises on the following subjects. It is our policy to place the results of the consultations in the Library where appropriate.
  Broadcasting Events of National Significance (on criteria to guide the listing of events under the Broadcasting Act 1990)"The People's Lottery" for comments on the Bill and later for general comments Access to Museums and Galleries—Consultation Paper on Draft Code of Practice Television: the Digital Future (jointly issued by DCMS and the DTI's Radiocommunications Agency)Provision of an additional bank holiday to mark the Millennium Definition of a British Film (included in the Film Policy Review Group Report)Tourism—Towards Sustainability.

  New Opportunities Fund
  Mr. Caplin
  To ask the Secretary of State for Culture, Media and Sport what arrangements have been made to allow the New Opportunities Fund and the National Endowment for Science, Technology and the Arts to undertake preparatory work before the passage of the National Lottery Bill [Lords]. [48315]

  Mr. Chris Smith
  The National Lottery Bill, currently awaiting Royal Assent, will establish the New Opportunities Fund (NOF) and the National Endowment for Science, Technology and the Arts (NESTA).

  NOF will be the distribution body for the new good cause for health, education and the environment. In its first three initiatives, it will support healthy living centres, out of school hours learning and childcare, and training in

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  information and communications for teachers and public library staff, along with the creation of digital learning materials.

  The aim of NESTA will be to promote talent, creativity and innovation by helping talented people reach their full potential, helping turn good ideas into marketable products and services, and raising public appreciation of the value of science, technology and the arts.

  Parliamentary approval for the preparatory costs of these new services will be sought in the main Estimate for the Department for Culture, Media and Sport (Class X, Vote 1, Section I). Pending that approval, urgent expenditure estimated at £525,000 will be met by repayable advances from the Contingencies Fund.

  Public Registers
  Mr. Cohen
  To ask the Secretary of State for Culture, Media and Sport if he will list the public registers which his Department has responsibility for. [47362]

  Mr. Chris Smith
  [holding answer 29 June 1998]: The Department has responsibility for the following, which could be described as public registers:
  Statutory List of Buildings of Architectural or Historic Interest
  Schedule of Ancient Monuments.

DEFENCE

  Data Protection
  Mr. Cohen
  To ask the Secretary of State for Defence if he will list the areas for which the Government intend to apply an exemption to the right of access to personal data, as defined in the Data Protection Bill 1998; and if he will make a statement. [47381]

  Mr. Spellar
  Since the Ministry of Defence is a large organisation which holds many different types of records on individuals, a number of the exemptions contained in the Bill will apply from time to time. One of the exemptions, the Combat Effectiveness exemption contained in Schedule 7 part 2, applies exclusively to the Armed Forces. This exemption is unlikely to be widely employed. The MOD also intend to apply the exemption in Section 27 of the Bill, which has as its purpose the safeguarding of national security. We anticipate that most Service personnel will have access to much of the information we hold about them, providing it is held on a relevant filing system as defined in the Bill, and provided that granting access does not compromise the rights of third parties.

  Horizon 2000 Frigates
  Mr. Wilkinson
  To ask the Secretary of State for Defence what is his estimate of the total cost of the project definition, development and production of the full complement of Horizon 2000 common new generation frigates to the Royal Navy; what were the original estimates; when the acceptance of the first of class by the Fleet is due to take place; and what was the date originally planned. [47807]

  Mr. Spellar
  It is currently expected that 12 Horizon class frigates will be ordered for the Royal Navy, although this is, of course, subject to the outcome of the Strategic 130
  Defence Review. The Horizon programme MOU signed by the three nations (UK, France and Italy) in 1994 originally envisaged an in service date of 2002. The current tri-national in service date is 2004, although this is kept under review. The estimated programme cost to the UK is commercially confidential, but we expect the entire programme, including full production of 22 ships for the three nations, to remain within the original cost estimate of some £6 billion to £8 billion. The contract for completion of the design and build of the three first of class Horizon frigates, i.e. one for each nation, is expected to be placed next year.

  Exercise Proper Watch
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence what was the scenario of the exercise, Proper Watch, in 1989; on what dates and where it took place; if the United States Department of Defense took part; and if he will place a copy of the results of the exercise in the Library. [46819]

  Dr. Reid
  Exercise Proper Watch took place at RAF Bentwaters in May 1989. The exercise tested the procedures in place for responding to the crash of a US transport aircraft carrying nuclear weapons. The United States response forces participated in this exercise. A classified report on the exercise does exist, but for the reasons my hon. Friend the Under-Secretary of State for Defence gave to the hon. Member on 31 July 1997,Official Report, column 470, and under Exemption 2 of the Code of Practice of Access to Government Information, I am not prepared to release the report.

  Strategic Defence Review
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence, pursuant to his answer of 7 May 1998,Official Report, column 437, if he will assess the advantages of publishing the digest of the submissions by (a) Service and (b) Ministry of Defence civilian personnel earlier than the publication of the White Paper on the Strategic Defence Review. [46816]

  Mr. George Robertson
  A digest of submissions from Service personnel and MOD civilian staff to the Strategic Defence Review is being prepared. It will provide a context for some of the decisions in the Review. I therefore see no advantage in publishing the digest earlier than the White Paper.

  Mr. Blunt
  To ask the Secretary of State for Defence, pursuant to his answer of 25 June 1998,Official Report, column 569, for what reasons it was not possible to publish the Strategic Defence Review in the first half of the year. [48167]

  Mr. George Robertson
  It was not possible to publish the Strategic Defence Review in the first half of the year because final decisions had not been taken.

  Permanent Joint Headquarters
  Mr. Bruce George
  To ask the Secretary of State for Defence how many(a) operations and (b) exercises Permanent Joint HQ has (i) planned and (ii) taken an active role in executing since it was established. [47300]
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  Mr. George Robertson
  Since its establishment in April 1996 the Permanent Joint Headquarters has planned 31 operations and overseen the execution of 23. It has also participated in 15 major exercises, of which it had the lead in planning 6.

  Bosnia
  Mr. Bruce George
  To ask the Secretary of State for Defence on what date British ground forces were first deployed in Bosnia as part of UNPROFOR. [47299]

  Mr. George Robertson
  The main body of the United Kingdom ground forces were first deployed in Bosnia on 18 November 1992. However, reconnaissance, activation and advance parties had arrived several weeks earlier.

  Police Training
  Mr. Bruce George
  To ask the Secretary of State for Defence what is his Department's involvement in international police training, with particular reference to that in countries seeking to re-establish democratic systems; and what is his Department's budget for this work. [47301]

  Mr. George Robertson
  The Ministry of Defence gives assistance to the police forces of other countries from time to time, mainly through the provision of places on training courses in the United Kingdom or through training by members of the UK Armed Forces.

  Requests for assistance are considered in the light of the Government's wider foreign policy, and we take account of the human rights and ethical records of the requesting nation's police and armed forces. All training provided by the MOD reflects the principles of the rule of law, good government, civilian control of military forces and support to democracy.

  My Department has no budget dedicated specifically to international police training, although on occasion overseas police assistance has been funded from the Defence Military Assistance Fund.

  RAF Chicksands
  Mr. Sayeed
  To ask the Secretary of State for Defence what plans his Department has to allow empty houses at the RAF base at Chicksands in Bedfordshire to be used for local authority housing. [47702]

  Mr. Spellar
  The potential Service requirement for vacant Service Families Accommodation at RAF Chicksands is currently under review. A decision on this will be made once the outcome of the Strategic Defence Review is known. Based on this decision Annington Homes, which own the properties, will be in a position to decide their future use.

  Defence Committee Report
  Mr. Bruce George
  To ask the Secretary of State for Defence when he expects to make his response to the Second report from the Defence Committee on the draft Visiting Forces and International Headquarters (Application of Law) (Amendment) Order 1998 (HC 521). [47611]

  Mr. George Robertson
  The response was sent to the Committee yesterday.

  Defence Estate (London)
  Mr. Gardiner
  To ask the Secretary of State for Defence what plans he has to reduce the defence estate in London. [48484]

  Mr. Spellar
  We have been considering the scope for further rationalisation of our property holdings, in London and elsewhere, in the context of the Strategic Defence Review. In continuation of that work, my Department will be drawing up a Strategic Development Plan for the defence estate in the Greater London area. Work on the plan will involve a thorough examination of site values and costs, linked to their condition and utilisation, with a view to identifying opportunities to meet defence requirements more cost-effectively. Any specific proposals for unit moves that may arise from this work will be subject to further study and consultation in the normal way. Existing studies, such as those relating to RAF Northolt and RAF Uxbridge, will be fully taken into account.

  Challenger 2
  Mr. MacShane
  To ask the Secretary of State for Defence, pursuant to his answer to the hon. Member for Rotherham of 17 November 1997,Official Report, column 72, if he will make a statement on the current status of the Challenger 2 programme. [48596]

  Mr. Spellar
  I am pleased to announce that The Royal Scots Dragoon Guards have become the first regiment to be fully equipped with the Challenger 2 main battle tank. This is a significant milestone in the Challenger 2 programme.

NORTHERN IRELAND

  Emergency Provisions Act
  Mr. Wicks
  To ask the Secretary of State for Northern Ireland when she intends to publish the report by Mr. J. J. Rowe QC on the operation during 1997 of the Northern Ireland (Emergency Provisions) Act 1996; and what conclusions she has reached concerning the future of the Act in the light of Mr. Rowe's report. [48481]

  Marjorie Mowlam
  I have received Mr. Rowe's report. It is being published today and copies are being placed in the Library of both Houses. I note that Mr. Rowe is of the firm view that the provisions of the Act are still needed, and am reassured that he concludes that the security forces have operated the powers properly and carefully.

  Mr. Rowe fulfils a very important role and I am most grateful to him for his work. The Government agree that the powers are still necessary; Parliament too has endorsed this view by the enactment in April of the Northern Ireland (Emergency Provisions) Act 1998, which extends the life of the 1996 Act and obviates the need this year for Continuance debates.

  However, under powers vested in me by section 62 of the 1996 Act I may, by order approved by resolution of each House, lapse any of the temporary provisions of the Act at any time. Therefore I will, as always, keep the continuance of the provisions under review.
  133
  Mr. Rowe's Report on the operation of the Act during 1997 will inform Parliament's considerations when the Act, or any of its provisions, is next debated.

  Training and Employment Agency
  Mr. Darvill
  To ask the Secretary of State for Northern Ireland what targets have been set for the Training and Employment Agency for Northern Ireland for the period 1998 to 2001. [48482]

  Mr. Worthington
  The following targets have been set for the Agency:

  1. All 16 and 17-year-olds leaving school will be offered the opportunity of a training place; 65 per cent. of those leaving the Jobskills programme will transfer to employment or to other education or training opportunities; and 65 per cent. of entrants to the programme will achieve a qualification at NVQ level 2 or equivalent.

  2. 25 per cent. of 16 to 24-year-olds involved in an Agency training programme will initially enter a Modern Apprenticeship or transfer to a Modern Apprenticeship on completion of level 2 training.

  3. To publish a skills survey each year of the Corporate Plan.

  4. To ensure that CDP projects increase the achievement rate of their agreed productivity targets from 65 per cent. in 1998–99 to 85 per cent. in 2000–2001.

  5. To increase the number of local organisations achieving Investors in People (IiP) status from 120 to 300.

  6. To ensure that overall Agency spend in Training and Social Needs areas is no less than 60 per cent. of Agency programme budget.

  7. To achieve a score of 500 against the Business Excellence Model by the year 2001.

  8. To maintain the Agency's IiP standard and accreditation following reassessment in August 1998.

  Current membership

  Experience

  Total fees (£) paid since 1 April 19971

  Total travel and subsistence costs (£) incurred since 1 April 19971

  Lord Neill of Bladen, QC

  Extensive legal experience. Former Chairman of the Bar

  22,000

  25,609.50

  Council, Warden of All Souls College, Oxford and Vice

  Chancellor of Oxford University. Chairman of numerous high

  level committees and enquiries.

  Sir Clifford Boulton, GCB

  Former Clerk of the House of Commons.

  4,945.00

  682.85

  Sir Anthony Cleaver

  Chairman of AEA Technology plc. Extensive business

  360.00

  —

  experience. Academic interests. Involvement with various

  public sector committees.

  Lord Goodhart, QC

  Legal and political experience. Liberal Democrat Peer.

  4,860.00

  25,309.80

  Frances Heaton

  Director, Lazard Brothers, and Bank of England. Legal, civil

  1,980.00

  24,916.90

  service and private sector background.

  Professor Anthony King

  Academic. Professor of Government, Essex University.

  3,785.00

  882.40

  The right hon. John

  Extensive political experience Conservative Member of

  3—

  430.65

  MacGregor, OBE MP

  Parliament.

  The right. hon. the Lord Shore

  Extensive political experience. Labour Peer.

  1,055.00

  668.90

  of Stepney

  Sir William Utting, CB

  Extensive experience in social work. Former Chief Inspector

  3,015.00

  —

  of Social Services.

  Ms Diana Warwick

  Chief Executive, Committee of Vice Chancellors and

  5,450.00

  48.50

  Principals. Trades Union background. Member of various

  public and private sector boards.

  1 Relates to all transactions recorded on the Cabinet Office Resource Accounting System at 24 June 1998

  2 Total includes overseas study trips. Lord Neill visited Germany, Sweden, Canada and the USA, and was accompanied by Lord Goodhart (except Sweden), and Frances Heaton (except Germany)

  3 John MacGregor receives payment from the public purse as a Member of Parliament.

  134

  9. The Agency will contribute to the achievement of the national targets set for New Deal in terms of employment outcomes and employability. We will publish details as soon as they become clear.

  10. The Agency will set targets for lifelong learning on an annual basis as the initiatives under lifelong learning emerge and develop.

  Copies of the Targets have been placed in the Library of the House.

LORD CHANCELLOR'S DEPARTMENT

  Legal Services Ombudsman
  Dr. Iddon
  To ask the Parliamentary Secretary, Lord Chancellor's Department when the Legal Services Ombudsman intends to publish her seventh Annual report. [48314]

  Mr. Hoon
  The Legal Services Ombudsman has today published her seventh Annual Report, and copies have been placed in the Libraries of both Houses.

DUCHY OF LANCASTER

  Committee on Standards in Public Life
  Mr. Dismore
  To ask the Chancellor of the Duchy of Lancaster if he will list the names, qualifications and experience of the Chairman and members of the Committee on Standards in Public Life; and if he will state the amount paid by way of expenses, allowances and fees to each of them for the last 12 months. [47610]

  Dr. David Clark
  [holding answer 29 June 1998]: The information requested is set out in the table.

  Public Service Delivery
  Mr. Russell Brown
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on his plans for improving the delivery of public services. [48477]

  Dr. David Clark
  I am pleased to inform the House that I am announcing today, as part of my wider Better Government initiative, the launch of Service First—the new Charter programme. Service First is the Government's programme to improve public service delivery. It places a new emphasis on promoting responsiveness, quality, effectiveness, and cross-sectoral working. It has been designed to meet the real needs of people, following an extensive and wide-ranging consultation exercise over the last twelve months into the future of the Citizen's Charter programme. Details of the new programme have been placed in the Library of the House.

  Local Authorities (Pilot Schemes)
  Mr. Burstow
  To ask the Chancellor of the Duchy of Lancaster if he will list the pilot schemes announced since 1 May 1997 by his Department that involve local authorities in a lead or partnership capacity; if he will list each of the local authorities involved in each case; and what revenue and capital funding each local authority will receive through the pilot in (i) 1997–98, (ii) 1998–99, (iii) 1999–2000 and (iv) 2000–2001. [46391]

  Mr. Kilfoyle
  [holding answer 18 June 1998]: The Better Government for Older People programme, launched on 5 June, aims to improve public services for older people by better meeting their needs, listening to their views, and encouraging and recognising their contribution. The programme seeks to promote partnership at both a national and local level and is being co-funded by a consortium of five organisations—the Cabinet Office (OPS), Age Concern, the Anchor Trust, the Carnegie Third Age Programme, and the Warwick University Local Authorities Research Consortium.

  The programme has established 28 local pilots across the UK. Each pilot is led by a local authority but includes partners from central Government and the voluntary, community and private sectors. The pilot authorities are:

  Bolton Metropolitan Borough Council

  Bury Metropolitan Borough Council

  Coventry City Council

  Devon County Council

  Hartlepool Borough Council

  London Borough of Hackney

  London Borough of Hammersmith and Fulham

  London Borough of Harrow

  Royal Borough of Kensington and Chelsea

  London Borough of Lambeth

  Middlesbrough Borough Council

  City of Newcastle upon Tyne

  North Yorkshire County Council

  Nottinghamshire County Council

  Oxfordshire County Council

  Sheffield City Council

  Solihull Metropolitan Borough Council

  Warwick District Council

  Watford Borough Council

  Waverley Borough Council

  136

  Wolverhampton Metropolitan Borough Council

  City of York Council

  Scottish Borders Council

  South Lanarkshire Council

  Stirling Council

  Isle of Anglesey County Council

  Rhondda Cynon Taff County Borough Council

  North Down Inter-Agency Partnership.

  The aim of the programme is to develop best practice. As such the pilots will receive no revenue or capital funding. However, small grants, or 'seed money' may be available to fund specific activities aimed at encouraging community involvement in the pilots.

ATTORNEY-GENERAL

  Government Policies
  Mr. Fabricant
  To ask the Attorney-General if he will list the projects undertaken by his Department since 1 May 1997 to research public reaction to(a) Government policies and (b) potential new policies; and if he will place the results of the research in the Library. [46688]

  The Attorney-General
  There have been no such projects in my Department.

PRIME MINISTER

  Policy Reviews
  Mr. Waterson
  To ask the Prime Minister how many of the policy reviews initiated by the Government since May 1997 have been completed within the planned timetable. [45443]

  The Prime Minister
  The timetables of Government reviews are often subject to change to take account of changes in remit or circumstance and are a matter for the responsible Ministers. An up to date list of Government reviews has been placed in the Library. Of the 146 reviews, 63 have already been completed, 40 within the originally planned time-scale.

  Millennium Compliance
  Mr. David Atkinson
  To ask the Prime Minister if he will list the summits and EU ministerial meetings over which the United Kingdom has presided in 1998; what discussions on the millennium compliance of computer systems took place at each; and if he will make a statement on the initiatives that were decided on. [46646]

  The Prime Minister
  A list of the Councils being held under the UK's Presidency of the European Union was deposited in the Library of the House earlier this year. The UK has also presided over the G8 Summit and Foreign Ministers' meetings, and the Asia-Europe summit.

  The Government attach great importance to tackling the Millennium Bug problem. They have worked hard to raise awareness in each of these fora and to encourage practical action. In the EU, we ensured the issue was addressed in a wide range of relevant fora: we raised it for instance at the Telecoms Councils on 26 February and 19 May, the Internal Market Council on 30 March, the Industry

  137
  Council on 7 May, and at the European Conference on 12 March. We organised a major conference in London on 8 May to draw attention to the Bug's cross-border implications and to encourage the sharing of best practice among member states. We also raised the issue at the Cardiff European Council. The Conclusions of the Council include a call for effective national compliance programmes and for a further progress report to the Vienna Summit in December.

  At the 3–4 April Asia Europe Meeting, leaders highlighted the importance of international co-operation to ensure millennium compliance, particularly where failures would cause social and economic dislocation.

  At their 15–17 May Birmingham Summit, G8 leaders recognised the seriousness of the threat posed by the Millennium Bug. The G8 communique agreed to take urgent action and to share information, among ourselves and with others, that would assist in preventing disruption in the near and longer term. The G8 would work closely with business and organisations working in those sectors, who would bear much of the responsibility to address the problem. The G8 would work together in international organisations, such as the World Bank to assist developing countries, and the OECD, to help solve this critical technological problem and prepare for the year 2000. Heads agreed that G8 officials should meet to pursue the issue. I announced that the UK was giving £10 million to the World Bank Trust Fund to help poorer developing countries develop strategies to combat the problem.

TRADE AND INDUSTRY

  Power Stations
  Mr. Pound
  To ask the President of the Board of Trade what assessment she has made of the Independent Assessor's finding that the closure of generating capacity at three power stations by National Power and Powergen could reflect a reluctance to relinquish claims to existing power station sites in order to retain their market position; and if she will make a statement. [47324]

  Mr. Battle
  [holding answer 25 June 1998]: I refer my hon. Friend to the statement made by my right hon. Friend on 25 June 1998, Official Report, columns 1169–72, concerning the Government's proposals following the Energy Review.

  Oil and Gas
  Mr. Fearn
  To ask the President of the Board of Trade (1) in which sectors of the United Kingdom's offshore waters exploration for oil and gas is currently taking place; [47694]

  (2) how many (a) United Kingdom and (b) non-United Kingdom operators are currently exploring for oil and gas in United Kingdom offshore waters; [47698]

  (3) how many (a) United Kingdom and (b) non-United Kingdom operators produce oil or gas from United Kingdom offshore waters. [47697]

  Mr. Battle
  Details of areas currently under Petroleum production licence are published in Volume II of the annual Energy Report (the 'Brown Book'), which is 138
  available in the Library of both Houses. There are, in addition, 35 current exploration licences, which allow the holders to carry out survey work (but not drilling) in any area not subject to a production licence.

  On-site exploration—mainly seismic data acquisition or exploratory drilling—is a relatively short-term process and actual locations therefore change rapidly, but exploration is taking place, or in preparation, in all sectors of the North Sea, to the north and west of Scotland, and in the Irish Sea. There is no current on-site exploration activity on licensed areas south of England or in the south-west approaches.

  In accordance with the Hydrocarbons Licensing Directive, no distinction is drawn between United kingdom and non-United Kingdom companies as operators of partners in the award of administration of licences. The statistics for licence operators in both categories on Petroleum Production licences and producing fields are as follows:

  Current petroleum Producing licences

  Producing offshore oil and gas fields

  Current total

  550

  187

  Operating companies:

  UK

  10

  6

  Non-UK1

  30

  19

  1Includes UK registered companies with non-UK parents

  Multilateral Agreement on Investment
  Ms Walley
  To ask the President of the Board of Trade how the United Kingdom Government intend to fulfil their commitment in the OECD Ministerial Statement on the proposed Multilateral Agreement on Investment of 28 March concerning a period of assessment and further consultation; what steps have been taken in this respect; and if she will make a statement. [48048]

  Mrs. Roche
  Officials from the Department and from other relevant Government Departments are continuing their on-going consultations with business, unions, local government, non-governmental organisations, and others interested in the Multilateral Agreement on Investment (MAI). We will participate in planned EU-wide meetings with trade unions and non-governmental organisations in September. We are also considering options for further consultations with developing countries.

  Sellafield
  Mr. Baker
  To ask the President of the Board of Trade if she will list the representations from other countries her Department has received since 1 May 1997 in respect of the Sellafield reprocessing facility. [47747]

  Mr. Battle
  [holding answer 29 June 1998]: Since 1 May 1997 I have responded to one representation from the Government of the Republic of Ireland about safety issues at UK nuclear sites, including Sellafield. In

  139
  addition, officials of my Department have responded to two letters from individuals in Ireland, and also to one from an individual in Germany who raised a number of issues, including safety at the Sellafield site.

  Midland Bluebird Bus Company
  Mr. Canavan
  To ask the President of the Board of Trade if she will make a statement about the future ownership of the Midland Bluebird Bus Company. [47842]

  Mr. Nigel Griffiths
  My right hon. Friend, the President of the Board of Trade, will announce her decision as quickly as is practicable on FirstBus's request for a review of the decision of the then Minister for Corporate and Consumer Affairs that it should be required to divest its subsidiary, Midland Bluebird, plus part of the Glasgow operations of SB Holdings.

  EU Research Council
  Dr. Gibson
  To ask the President of the Board of Trade if she will make a statement on the outcome of the European Union Research Council on 22 June. [48479]

  Mr. Battle
  I chaired the meeting of the EU Research Council on 22 June 1998.

  The Council made useful progress on the negotiations on the Fifth Framework for Research Technological Development and Demonstration Activities 1998–2002 (FP5), achieving consensus in a number of areas and maintaining momentum against the tight timetable for introducing FP5 by the end of this year. This Council consolidated the achievements of our Presidency in pressing forward these negotiations.

  The Council reached a "common position" on the proposed decisions on the rules governing participation in the Framework Programmes and the dissemination of results, which are essential for implementing the programme. Although formal decisions could not be made at this stage, the Council reached broad consensus on the scientific and technological content of three of the ten specific programmes that give detailed effect to FP5, and on the underpinning general provisions broadly common to these programmes. It also took note of the progress made in negotiations so far on the distribution of funding within each of the specific programmes, which will be the subject of further consideration under the Austrian Presidency.

  The Council also agreed conclusions on the management of Community RTD programmes that reflect the agreement reached at the Colloquium of EU research ministers that I chaired on 28 April. An important aspect of these conclusions is the Commission's undertaking to report on the progress made in meeting performance targets, adopting new management approaches and on plans for future improvements.

  The Council agreed a resolution aimed at strengthening the links and complementarity in space research between the EU and ESA. A parallel resolution was adopted by the ESA Council on 23 June. The resolution represents a significant step towards increased co-operation in this field between the EU and the European Space Agency.

HOME DEPARTMENT

  Electoral Registration
  Mr. Barnes
  To ask the Secretary of State for the Home Department what is his most recent assessment of the accuracy of electoral registers at the end of their lifespan. [47712]

  Mr. George Howarth
  The information required for such an assessment to be made is not held centrally.

  Mr. Barnes
  To ask the Secretary of State for the Home Department how many people have been fined for failing to comply with the requirement to register for electoral purposes in each of the last 10 years. [47713]

  Mr. George Howarth
  In 1988 there were three prosecutions and in 1989 there were 13 prosecutions, although we have no information as to their outcome. Data for this summary offence have not been collected centrally since then.

  Mr. Barnes
  To ask the Secretary of State for the Home Department what assessment he has made of the amount of canvassing carried out in each local authority area to compile electoral registers; and how many areas carry forward names from the previous year's register for (i) one year and (ii) longer than one year. [47704]

  Mr. George Howarth
  "Compiling the electoral register 1996", published by the Office for National Statistics last year, looked at the main canvass procedures adopted by local authorities, the number of reminder stages and whether, and in what circumstances, names of non-responders were carried forward.

  Mr. Barnes
  To ask the Secretary of State for the Home Department how much money has been spent on advertising electoral registration by central Government in each of the last 10 years. [47714]

  Mr. George Howarth
  Expenditure for England and Wales was as follows:

  Year

  Expenditure (£)

  1998–89

  472,000

  1989–90

  481,000

  1990–91

  541,000

  1991–92

  648,000

  1992–93

  624,000

  1993–94

  653,000

  1994–95

  697,000

  1995–96

  868,000

  1996–97

  728,000

  1997–98

  691,000

  The figures available for Scotland and Northern Ireland are as follows

  Year

  Scotland

  Expenditure (£) Northern Ireland

  1994

  1128,000

  11,000

  1995

  59,000

  10,000

  1996

  1115,000

  5,000

  1997

  73,000

  5,000

  1Includes publicity for absent voting

  141
  Mr. Barnes
  To ask the Secretary of State for the Home Department what estimate he has made of the extent of non-registration on the electoral register of(a) those in privately rented and furnished accommodation, (b) New Commonwealth citizens, (c) those who had moved in the past year, (d) black people, (e) those aged under 17 years, (f) those aged 21–24 years and (g) those living in inner London. [47708]

  Mr. George Howarth
  The most recent information available is set out in "Electoral registration in 1991", published in 1993, which provides estimates for all seven categories listed.

  Mr. Barnes
  To ask the Secretary of State for the Home Department what is his estimate of the extent of dual electoral registrations by(a) students, (b) owners of second homes and (c) others. [47705]

  Mr. George Howarth
  The information needed for such an estimate is not available.

  Mr. Barnes
  To ask the Secretary of State for the Home Department if he will arrange for electoral registration statistics to be compiled by parliamentary constituencies. [47707]

  Mr. George Howarth
  Electoral registration statistics are already compiled by parliamentary constituencies, as well as by local government areas. The Office for National Statistics (ONS) published figures for the 1998 register on 23 April 1998, in an ONS Population and Health Monitor (reference EL 98/1), copies of which are in the Library.

  Mr. Barnes
  To ask the Secretary of State for the Home Department what is his estimate of the number of overseas voters and service voters who live abroad. [47706]

  Mr. George Howarth
  The total number of overseas electors and service voters (whether serving in the United Kingdom or overseas) included on the 1998 register was published by the Office for National Statistics in "Population and Health Monitor" EL 98/1, copies of which are in the Library. Figures for the number of registered services voters posted abroad are not held separately.

  Data Protection
  Mr. Cohen
  To ask the Secretary of State for the Home Department (1) if his Department holds copies of all the certificates signed by Cabinet Ministers since 1984, under section 27 of the Data Protection Act 1984; [47377]

  (2) how many certificates have been signed to date under section 27 of the Data Protection Act 1984. [47378]

  Mr. Straw
  [holding answer 29 June 1998]: In 1986, the then Home Secretary made a determination in respect of all data held by the Security Service. In accordance with that determination, the Security Service has not registered under the Act.

  Certificates under section 27 of the Data Protection Act relate to exemption from the provisions of Part II and sections 21 to 24 of Part IV of the Act, for the purpose of safeguarding national security.
  142
  I understand that no such certificate has been signed by a Home Secretary and that none are held in my Department.

  Youth Justice Board
  Ms Keeble
  To ask the Secretary of State for the Home Department what progress he has made with arrangements to establish the Youth Justice Board. [48480]

  Mr. Straw
  Following my announcement at Second Reading of the Crime and Disorder Bill [Lords] on 8 April 1998, Official Report, column 376, that I intended to establish the Youth Justice Board for England and Wales from 1 October 1998 (if the Bill receives Royal Assent early enough), advertisements for the Chair and 11 other Board Members appeared in the press from 19 April.

  Over 750 applications have been received (for the post of Chair, member or both), and the competitions are being conducted in line with guidance from the Office of the Commissioner for Public Appointments ('Nolan' procedures). The selection panel for the post of Chair was chaired by David Omand, Permanent Secretary of the Home Office, with John Halliday, Director of Criminal Policy Home Office; Tom Luce, Head of Social Care Policy, Department of Health; and two independent assessors: Sir Terence Harrison, Chairman, Alfred McAlpine plc., former Chief Executive, Rolls-Royce; and Mrs. Gill Pitt, general education inspector, Northamptonshire, Inspection and Advisory Service, former primary headteacher.

  Following advice from the selection panel, I am pleased to announce that the Chair of the Youth Justice Board will be Norman Warner, chair of the Task Force on Youth Justice and, until he takes up his appointment, senior policy adviser, Home Office.

  The panel selecting the 11 other members of the new Board is expected to provide advice in the summer, and Mr. Warner is participating in the selection process.

  The setting up of the Youth Justice Board as an executive non-departmental public body is a significant step forward in delivering the Government's commitment to tackling youth crime and reforming youth justice. The Task Force on Youth Justice is likely to complete its work in July and will then be wound up.

  Deportation
  Mr. Livingstone
  To ask the Secretary of State for the Home Department how many people aged 65 years or over are currently subject to deportation orders; and how many people aged 65 years or over have been deported or removed in each of the last three years. [46691]

  Mr. Mike O'Brien
  As at 29 May, there were 54 persons aged 65 years or over who had deportation orders signed against them but who had not been removed from the United Kingdom.

  The available information on persons who were aged 65 years or over when they were removed, or departed voluntarily, following deportation or illegal entry action is given in the table. Comprehensive information on

  143
  persons aged 65 years or over when removed under port procedures could be obtained only at disproportionate cost.

  Removals1 as a result of deportation or illegal entry action of persons aged over 65 years2, 1995–19973

  1995

  1996

  19973

  Persons removed from the United Kingdom as a result of deportation action4

  22

  25

  18

  Persons removed from the United Kingdom as a result of illegal entry action4

  4

  10

  9

  1Includes persons departing 'voluntarily' after deportation or illegal entry action had been initiated against them

  2Covers persons aged over 65 years on the date they were removed or departed 'voluntarily'

  31997 data are provisional

  4Enforcement action may have been initiated in an earlier period

  Murder Victims (Support)
  Mr. Öpik
  To ask the Secretary of State for the Home Department what support his Department offers for the relatives of murder victims; and if he will make a statement. [47435]

  Mr. Michael
  In addition to the support provided by state funded services, including the National Health Service, Social Services, the police and other criminal justice agencies, the Home Office funds two national voluntary organisations which are able to offer practical help and emotional support to the families and friends of murder victims, both in the immediate aftermath of the murder and on a longer-term basis. In 1998–99, the Home Office grant to Victim Support will amount to £12.7 million, and the grant to Support After Murder and Manslaughter (SAMM) will amount to £43,000.

  The Home Office also produces a pack called "Information for Families of Homicide Victims", which contains leaflets on a number of subjects. The pack is handed to friends and relatives by the police at the earliest suitable opportunity following the murder.

  Pilot scheme

  Area covered

  Better Government for Older People

  Scottish Borders Council

  Stirling Council

  South Lanarkshire Council

  Disqualification from Driving for all Offences

  Paisley Sheriff Court

  Perth Sheriff Court

  Initiative at the Edge (Iomairt Air An Oir)

  Comhairle nan Eilean Siar (Western Isles Council)

  Argyll and Bute Council

  Highland Council

  Northern Periphery: ERDF Article 10 Pilot Action Programme

  Eligible Areas: Highlands and Islands Objective 1 Area and adjacent

  Objective 5(b) areas of North West Grampian and Rural

  Stirling/Upland Tayside

  Pilot Scheme under Road Traffic (Vehicle Emissions) (Fixed

  Glasgow

  Penalty) Regulations 1997

  Regional Selective Assistance Priority Initiative—Pilots

  Glasgow North

  Glasgow East End

  Dundee

  West Dunbartonshire

  North Ayrshire (3 Towns—Saltcoats, Ardrossan and Stevenston)

SCOTLAND

  Gender Impact Assessments
  Jackie Ballard
  To ask the Secretary of State for Scotland if he will place in the Library copies of gender impact assessments which have been undertaken in respect of legislation introduced in this Parliament; if he will make it his policy to do so in respect of future legislation; and if he will make a statement. [47018]

  Mr. McLeish
  We are addressing the gender perspective in policy making through the cross-Departmental mainstreaming initiative which the Ministers for Women launched on 18 May. New guidelines have been formulated after wide consultation which the Scottish Office will adapt to suit Scottish circumstance and issue to all Scottish Office staff. The guidelines require Departments to:

  consider how policy proposals affect women

  consult with women's organisations and

  act upon that information to ensure that policy decisions reflect the views and interests of women.

  The Scottish Office will contribute to an Annual Report to Parliament setting out progress on mainstreaming the women's perspective into Government policy making. The first report will be published after the end of this financial year.

  Action Zones
  Mr. Llwyd
  To ask the Secretary of State for Scotland if he will list the initiatives undertaken by his Department since 1 May 1997 which have involved the establishment of(a) action zones and (b) pilot schemes limited to particular geographical areas, indicating the name of the programme and the action zone or pilot scheme areas covered in each instance. [47057]

  Mr. Dewar
  There have been no action zones established by my Department since 1 May 1997. Pilot schemes, covering particular geographical areas, which have been established in Scotland are listed in the following table.
  145

  Pilot scheme

  Area covered

  Rehabilitation Courses for Drink-Drive Offenders

  Dumbarton Sheriff Court

  Greenock Sheriff Court

  Hamilton Sheriff Court

  Paisley Sheriff Court

  Scottish Biodiversity Group Pilot Programme: Establishment of

  Orkney Islands Council

  Local Biodiversity Action Plans

  North East Scotland (a partnership of Aberdeen City, Aberdeenshire

  and Moray Councils)

  South Lanarkshire Council

  Argyll and Bute Council

  In addition, my Department has also announced a number of projects in particular geographical areas under the New Housing Partnerships initiative, Empty Homes Initiative and Rough Sleepers Initiative.

  Employment
  Ms Osborne
  To ask the Secretary of State for Scotland how he plans to encourage the retention and expansion of high-skilled jobs in Scotland. [47441]

  Mr. Wilson
  The creation and retention of high-skilled jobs is very important for the future of the Scottish economy and of its international competitiveness. This requires action by Government and their agencies on a number of fronts, including education and training, the attraction of appropriate international investment in Scotland, and the encouragement of new high-tech companies.

  Our education and training initiatives include Higher Still, Modern Apprenticeships, Skillseekers, the Scottish University for Industry and a range of other measures to encourage lifelong learning. In order to meet the skills needs of industry, Scottish Enterprise is currently reviewing its own approach to skills development and we intend to draw together its findings and other recent work to create an overarching Skills Strategy for Scotland.

  Our inward investment strategy is targeted particularly on high value-added sectors such as aerospace and biotechnology, electronics, software and design projects. Project Alba is a particularly important fruit of this approach. In encouraging the creation and development of new high-tech companies, I attach particular importance to the Foresight initiative, which is encouraging companies throughout the UK to look at the opportunities created by new technology. Scottish Enterprise's Technology Ventures scheme is also an important initiative designed to promote commercialisation of the fruits of academic research, by facilitating links between business and the research base in our higher education institutions.

WALES

  Small Businesses
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many(a) small and (b) medium sized businesses his Department has helped to start since 1 May 1997; and if he will make a statement. [47415]
  146
  Mr. Hain
  Under the enterprise programme managed by the TECs in Wales and funded by the Welsh Office, over 1,500 new business starts have been assisted since 1 May 1997. All can be categorised as small firms.

  I am keen to see more good quality businesses established throughout Wales—and to this end a new Business Starts Programme has recently been launched under Business Connect. Further planned action in this area will be set out in the "Economic Agenda for Wales" which will be published shortly.

  William Crompton and Fiona Ovis
  Mr. Öpik
  To ask the Secretary of State for Wales what factors underlie the length of time taken to review the case of the murders of William Crompton and Fiona Ovis; and if he will make a statement. [47434]

  Mr. Win Griffiths
  Dyfed Powys Health Authority initiated an Independent Review Panel under the NHS complaints procedure, to inquire into the healthcare circumstances relating to the case. I understand that the authority has received legal advice to the effect that the report of the panel should not be made available pending the outcome of a retrial in relation to alleged offences arising from the deaths.

  Government Policies
  Mr. Fabricant
  To ask the Secretary of State for Wales if he will list the projects undertaken by his Department since 1 May 1997 to research public reaction to(a) Government policies and (b) potential new policies; and if he will place the results of the research in the Library. [46687]

  Mr. Ron Davies
  In line with the practice of successive Administrations, the Department routinely consults the public, interested parties and client groups by way of consultation papers, White Papers and discussion groups on a wide range of policies and proposed legislation. I have therefore confined my reply to 3 major exercises.

  Between March and June 1998 a major consultation exercise was conducted inviting views on "Modernising Local Government in Wales". A series of 7 consultation papers, which were placed in the Library of the House has attracted over 200 responses to date. When all the responses have been received and analysed, the analysis and copies of all responses will be placed in the Library. The results of the consultation will inform the White Paper I intend to publish in the summer.
  147
  Three pieces of research have been conducted since 1 May 1997 in relation to the National Assembly for Wales. In June 1997 qualitative research was carried out to help determine the most effective cover for the Devolution White Paper. In April 1997 quantitative tracking research was used to establish shifts in awareness in the run up to the Referendum in Wales. In March—April 1998 qualitative research was conducted among the general public to explore information needs in relation to the forthcoming National Assembly elections.

  A public consultation exercise was undertaken by the Welsh Consumer Council on behalf of the Welsh Office to gauge views relating to the production of a new Patient's Charter for Wales. The results will be published in the Autumn.

EDUCATION AND EMPLOYMENT

  Moral Studies
  Mr. McWalter
  To ask the Secretary of State for Education and Employment if he will expand the National Curriculum to introduce school students to the study of modes of reasoning about morality which do not emphasise the idea that obedience is the primary virtue. [48176]

  Ms Estelle Morris
  The Qualifications and Curriculum Authority (QCA) is currently piloting draft guidance for schools on promoting pupils' spiritual, moral, social and cultural development. The guidance makes it clear that moral development involves acquiring both the capacity for moral reasoning, and a determination to obey moral rules derived from shared values. My right hon. Friend the Secretary of State has asked QCA to review the National Curriculum for the year 2000. The review will incorporate recommendations on education for moral and social responsibility from the Advisory Group on Education for Citizenship.

  Correspondence
  Mr. McLoughlin
  To ask the Secretary of State for Education and Employment when he will reply to the letter from the hon. Member for West Derbyshire of 25 April on behalf of his constituent, Mr. A. Mundin, of Belper about compulsory school uniform. [48217]

  Dr. Howells
  Unfortunately, the original letter appears to have gone astray. A copy, however, was received in the Department on 29 June 1998 and therefore a reply will be issued within five working days.

  Tuition Fees
  Mr. Dalyell
  To ask the Secretary of State for Education and Employment what discussions he has had with UK Vice Chancellors in respect of the advantages of eliminating differences in the level of fees paid by students for similar university courses from different parts of the UK. [48255]

  Dr. Howells
  The Government's policy is that, subject to a maximum of £1,000, the level of the annual contribution towards tuition fees for eligible home full-time undergraduates should depend on the student's own and his or her parents' or spouse's income. This inevitably means that there will be differences in the level 148
  of contributions made by students for similar university courses. The only exceptions we are proposing relate to students in the fifth and subsequent years of medical and dental courses and the special concession which my right hon. Friend the Secretary of State for Scotland, intends in relation to Scottish students on the fourth or additional year of honours degree courses in Scotland where those are a year longer than comparable courses elsewhere in the UK.

  My right hon. Friend, the Secretary of State for Education and Employment, made clear in the House during the Third Reading debate on the Teaching and Higher Education Bill that he would be happy to join my right hon. Friend, the Secretary of State for Scotland, in talking to the Vice-Chancellor of Edinburgh University and other vice-chancellors, but he has received no further approach to do so.

  New Deal
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment what steps will be taken to ensure that employers engaged in the New Deal adhere to the standards set under the terms of their employer agreement; and what action will be taken against those firms who are found to be exploiting New Deal recruits. [47755]

  Mr. Andrew Smith
  The employer is given a copy of the Employment Agreement once it has been signed and prior to the New Deal participant starting on the option. This sets out the full terms and conditions of the Employment Option. A copy is also issued to the New Deal employee at the time they start on the Employment Option.

  The personal adviser will remain in contact with both the employer and the employee throughout the option and will take up any concerns that arise with the employer. A confidential New Deal Information Line has also been set up for participants who have concerns about any aspect of New Deal.

  If an employer fails to meet the terms and conditions of the agreement, the Employment Service (ES) following discussion with the employer, may terminate the agreement and recover payments already made. Employers suspected of being in breach of existing legislation or statutory duties will also be reported by the ES to the appropriate authorities for action. An employer whose agreement is terminated will not be allowed to participate again in New Deal until they are able to satisfy the ES that they will be able to fulfil the terms and conditions applicable at the time.

  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment how many(a) voluntary and (b) public organisations have currently signed up to the New Deal in (i) Coventry, (ii) the West Midlands and (iii) England. [47756]

  Mr. Andrew Smith
  In the West Midlands 24 voluntary organisations and 34 public sector companies have signed Employer Agreements to date. Of these, two of the voluntary organisations and four of the public sector companies are based in Coventry. In England, over 10,500 employers have signed Employer Agreements. A breakdown of this number into private sector, voluntary and public sector organisations is available only at local level.

SOCIAL SECURITY

  Child Support Agency
  Ms Stuart
  To ask the Secretary of State for Social Security how many CSA cases are currently awaiting assessment. [46564]

  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 Mrs. Faith Boardman to Ms Gisela Stuart, dated 29 June 1998:
  I am replying to your Parliamentary Question to the Secretary of State for Social Security about Child Support Agency cases currently awaiting assessment.
  The number of cases awaiting assessment at 31 May 1998 was 283,152. This is made up of approximately 110,000 backlog cases which are over 52 weeks old (down from 225,000 at the start of 1997/8) and 173,000 work on hand cases under 52 weeks old (down from 180,000 in the same period). In total, this represents a 30 per cent. reduction in the number of cases awaiting assessment.
  In addition to the cases awaiting assessment, there are also around 128,000 cases where the parent with care was in receipt of Income Support prior to the launch of the Agency in April 1993. Any parent with care in this group who wishes to pursue maintenance as part of the Government's New Deal for Lone Parents or for any other reason will be taken on by the Agency.
  The reductions in the numbers of cases outstanding have been achieved at the same time as the workloads of the Agency have been increasing. In 1997/98 the Agency cleared 595,000 maintenance applications—an increase of two-thirds on the 357,000 cleared in 1996/97. At the end of May 1998 our live and assessed caseloads stood at 784,160, compared with 609.800 in May 1997 (an increase of 29 per cent.) and is expected to rise to around 1.2m by 2003/04.
  I hope this is helpful.

  Benefit Fraud
  Mr. Goggins
  To ask the Secretary of State for Social Security what steps she is taking to minimise fraud in the transition from family credit to the working families tax credit. [46202]

  Mr. Field
  I refer my hon. Friend to the Written Answer I gave on 25 June 1998,Official Report, columns 623–24

  Government Policies
  Mr. Fabricant
  To ask the Secretary of State for Social Security if she will list the projects undertaken by her Department since 1 May 1997 to research public reaction to(a) Government policies and (b) potential new policies; and if she will place the results of the research in the Library. [46680]

  Mr. Field
  In line with the practice of successive Administrations, the Department routinely consults the public, interested parties and client groups by way of consultation papers, White Papers and discussion groups on a wide range of policies and proposed legislation. It is our normal practice to make the findings of all projects in the Department's Research Programme available to the public, including placing copies in the Library.

  In my Written Answer to the hon. Member for Northavon (Mr. Webb) on 11 May 1998, Official Report, columns 29–30, we provided a list of the focus group
  150
  projects which the Department has undertaken since 1 May 1997 to explore qualitatively public attitudes to existing and future policies.

  Two additional focus group studies have been commissioned since then:

  Attitudes to methods of making benefit payments.

  Attitudes to survivors benefits.

  Work commissioned under our ongoing call-off contract with Social and Community Planning Research has included studies on attitudes to lone parents working; to child support arrangements following relationship breakdown; and views on proposals for partners of Jobseeker's Allowance claimants.

  Since 1 May 1997, we have also tested public attitudes quantitatively. A small-scale telephone poll was undertaken exploring attitudes to welfare reform issues, and we have on occasion commissioned questions for inclusion in the Office for National Statistics Omnibus Survey which have allowed us to test quantitatively attitudes to particular policy areas. Questions have been asked about sickness and disability benefits, lone parents working, financial top-ups, conditions attached to receipt of benefits, partners of the unemployed.

  Council Tax Benefit
  Mr. Coleman
  To ask the Secretary of State for Social Security (1) if she will make a statement on the numbers of claimants affected by the changes to council tax benefit regulations introduced on 1 April; [47424]

  (2) how many households in London have been affected by the changes to council tax benefit regulations introduced on 1 April; and what percentage of the total this figure represents. [47425]

  Mr. Keith Bradley
  An estimated 8,000 claimants will be affected by the restriction of Council Tax Benefit in properties in Band F and above in 1998/99. The long-run estimate of those affected is 66,000.

  Information for those households affected in London is not available. However, in Greater London the long-term estimate of those claimants affected is 28,000. This represents approximately 40 per cent. of the total affected by the changes.

  Jobseeker's Allowance
  Mr. Öpik
  To ask the Secretary of State for Social Security what plans she has to review the degree of flexibility available to staff implementing the jobseeker's allowance in relation to imposing conditions on a client's claim; and if she will make a statement. [47405]

  Mr. Keith Bradley
  The conditions of entitlement for receipt of Jobseeker's Allowance are set out in legislation. Adjudication Officers make decisions on entitlement to Jobseeker's Allowance within this framework. Their decisions are monitored regularly by the Chief Adjudication Officer who reports annually on the standards achieved.

  An extensive programme of research has been commissioned as part of the evaluation of Jobseeker's Allowance. The findings will be available in the Summer of 1999 and will enable us to consider what changes need

  151
  to be made to ensure that the design and operation of the benefit meets the principles set out in the Welfare Reform Green Paper.

  Social Fund Grants
  Jackie Ballard
  To ask the Secretary of State for Social Security (1) what plans she has to allow the reclaiming of expenses for hospital visits by spouses whose income is at the level of income support; [48083]

  (2) if she will review the problems faced in meeting the costs of attending specialist hospitals by families whose income is just above income support levels. [48084]

  Mr. Denham
  Social fund community care grants can be paid to people on Income Support or income-based Jobseeker's Allowance to help with travelling expenses to visit a partner in hospital. Any award is subject to the level of priority which can be sustained from the district budget, and the circumstances of the particular case. Grants for visits to a child in hospital would normally be given a high priority.

  In addition, social fund crisis loans can be paid to people, whether on benefit or not, where the applicant needs help with fares to hospital for treatment for the applicant or a member of their family. Such a payment would have to be the only means of preventing serious risk or serious damage to the applicant or a member of their family. The Hospital Travel Costs Scheme, administered by the Department of Health, provides financial help to patients in receipt of Income Support and, where deemed medically necessary, an escort for travel to hospital for treatment under the care of a consultant.

  Benefit Integrity Project
  Mr. Burstow
  To ask the Secretary of State for Social Security, pursuant to her answer of 9 June 1998,Official Report, columns 545–46, concerning the BIP, for what reasons she was unable to list the operational and legal issues that have prevented a review of BIP cases prior to 9 February 1998. [45770]

  Mr. Denham
  [holding answer 15 June 1998]: On 17 June, we announced that action will be taken to look again at Benefit Integrity Project cases decided before 9 February 1998, where a decision to reduce or remove benefit was based solely on evidence provided by the claimant and where the claimant did not seek a review of the decision.

  In order to make this announcement legal issues needed to be resolved relating to: our scope to take review action on cases that had already been reviewed as part of the Project; how and when the claimant should be involved, and what sort of decisions might be made. Operationally, we also needed to identify the scale of the exercise and how it might be conducted sensitively, without raising false expectations. Claimants need to be fully informed about the possible outcomes of a further review of their entitlement but in such a way that they are not dissuaded from exercising their right to have their case looked at again if that is what they choose. We are currently finalising the details of this new exercise.

  Benefits Agency
  Mr. Goggins
  To ask the Secretary of State for Social Security what plans she has to realign local Benefits Agency boundaries so as to make them coterminous with local authority boundaries. [47490]

  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. Paul Goggins, dated 29 June 1998:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking what plans there are to re-align local Benefits Agency (BA) boundaries so as to make them co-terminous with local authority boundaries.
  As part of our ongoing effort to improve customer service we are looking together with our colleagues from the Employment Service at the boundaries of the two agencies and local authorities, with a view to seeking further alignment where possible.
  I hope you find this reply helpful.

AGRICULTURE, FISHERIES AND FOOD

  Ritual Slaughter
  Mr. Wyatt
  To ask the Minister of Agriculture, Fisheries and Food what action he proposes to take to seek implementation of the EU Slaughter Directive which would outlaw the slaughter of animals without pre-stunning at open air festivals. [46765]

  Mr. Morley
  Directive 93/119/EC on the protection of animals at the time of slaughter or killing is not clear as to whether religious slaughter is permitted outside of slaughterhouses. The Directive was implemented in GB by the Welfare of Animals (Slaughter or Killing) Regulations 1995. The Regulations permit the slaughter of animals elsewhere than in slaughterhouses without stunning for reasons of religion. Such slaughter must be carried out in accordance with specific legal requirements, by a licensed slaughterman and in the presence of an authorised person. More recently, the European Commission has stated that in its opinion open-air religious slaughter is in fact prohibited by the Directive. We therefore intend to reconsider the position, in consultation with all those with an interest, later this year.

  Mr. Wyatt
  To ask the Minister of Agriculture, Fisheries and Food if he will introduce measures for the labelling of meat to identify at the point of sale meat which has been ritually slaughtered. [46766]

  Mr. Morley
  Meat from animals slaughtered to provide food for the religious communities is already identified at the point of sale. It is the Government's intention to discuss with representatives of the religious communities all aspects of religious slaughter, including the entry onto the general market of meat from animals slaughtered without prior stunning.

  Farmers (Late Payments)
  Mr. Charles Kennedy
  To ask the Minister of Agriculture, Fisheries and Food what percentage of payments due in December 1997 to farmers(a) have not been paid to date and (b) were paid late; and if he will make a statement. [46947]
  153
  Dr. John Cunningham
  Under the Arable Area Payments Scheme in England, 99.51 per cent. of applicants received payments due by 31 December 1997 (representing 99.12 per cent. by value). As at 1 June, 0.025 per cent. of applicants are yet to receive payments (representing 0.011 per cent. by value).

  EU Subsidies
  Mr. Charles Kennedy
  To ask the Minister of Agriculture, Fisheries and Food if he will bring forward, from September 1998, the payment of those European Union hill farming subsidies available to United Kingdom agriculture; and if he will make a statement. [46942]

  Dr. John Cunningham
  There are two subsidies specific to hill farmers: Hill Livestock Compensatory Allowances (HLCAs) and the Less Favoured Area (LFA) supplement under the Sheep Annual Premium (SAP) scheme. HLCAs are paid in the spring. The SAP LFA supplement is paid in two stages in tandem with payments of the basic premium, after rates for the latter have been fixed in Brussels. For the 1998 scheme year, we expect to pay a 90 per cent. advance of the LFA supplement over July and August and the balance next April. The agriculture departments try to make all subsidy payments as early as possible.

  Mr. Alick Barnes
  Mr. Charles Kennedy
  To ask the Minister of Agriculture, Fisheries and Food if in respect of the case involving Mr. Alick Barnes, Loyton Farm, Bampton, Devon, and his application for European Objective 5b funding, he will(a) approve disclosure of the documents requested by Mr. Barnes and (b) agree to discussions between his officials and Mr. Barnes; and if he will make a statement. [47138]

  Dr. John Cunningham
  A request for disclosure of papers has already received from Mr. Barnes' solicitors. This is being considered, with the other Departments with an interest in the case, and a reply will be sent as soon as possible. As regards a meeting with officials, it is not clear that any issues arising from Mr. Barnes' application for Objective 5b funding remain to be resolved. But if Mr. Barnes wishes to write to explain why he thinks that a meeting would be helpful, such a request will of course be considered.

  Gender Impact Assessments
  Jackie Ballard
  To ask the Minister of Agriculture, Fisheries and Food if he will place in the Library copies of gender impact assessments which have been undertaken in respect of legislation introduced in this Parliament; if he will make it his policy to do so in respect of future legislation; and if he will make a statement. [47013]

  Mr. Morley
  The Department had guidelines in place designed to ensure that those involved in the development of policy consider the possible differential effects which their proposals may have on men and women and to take action where these effects cannot be justified.

  No differential effects have been identified during the course of preparation of any of the legislation introduced in this session of Parliament for which the Minister of Agriculture, Fisheries and Food is responsible.
  154
  The Department's guidelines will be reviewed once we receive new guidelines, which are being worked up as part of a cross-departmental initiative which the Ministers for Women announced on 18 May.

  Primates
  Mr. Hancock
  To ask the Minister of Agriculture, Fisheries and Food (1) what assessment he has made of Article 9(5) of Regulation 338/97/EC in relation to primates' journey times; [47337]

  (2) for what reasons his Department does not impose maximum journey times for non-human primates. [47323]

  Mr. Morley
  In relation to animals, Article 9(5) of Regulation 338/97/EC requires that Community rules on protection of animals in transport are complied with. These rules, implemented in Great Britain by the Welfare of Animals (Transport) Order 1997, do not set maximum journey times for animals other than farm animals and horses. However, no animal may be transported in a way that causes or could cause injury or unnecessary suffering. Strict rules cover the construction, maintenance and use of the receptacles and means of transport used. For example, receptacles in which primates are transported must provide adequate space for the animals to stand in their natural position; be constructed and maintained in such a way as to prevent the animals from suffering undue exposure to noise and vibration and must provide adequate ventilation and air space.

  Fish Stocks
  Mr. Gordon Prentice
  To ask the Minister of Agriculture, Fisheries and Food if he will list by species of fish, the dates when the stocks in fishing grounds around the United Kingdom will be fished out at current rates of depletion. [47454]

  Mr. Morley
  Approximately half of the fish stocks in the North East Atlantic assessed by the International Council for the Exploration of the Sea (ICES) are considered to be above safe biological limits. This means that they are above the level necessary to avoid an increasing risk that they will fail to reproduce themselves. The remaining stocks are at or below this level so cautious fisheries management is necessary to ensure that these stocks are not overfished and remain at or return to a safe level. With such management, no stocks around the UK are predicted to be fished out in the foreseeable future.

  Cumberland Rum Butter
  Mr. Martlew
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the impact of EU Commission Regulation 623/98 on the manufacture of Cumberland Rum Butter; and if he will make a statement. [47772]

  Mr. Rooker
  Commission Regulation (EC) 623/98 amends Commission Regulation (EC) 577/97 relating to standards for spreadable fats and the protection of dairy designations. From April 1999, "Cumberland Rum Butter" and all other alcoholic butters (including brandy and whisky butters) may only be so described if they contain sufficient butter to meet a minimum milkfat level of 34 per cent. The UK was opposed to the adoption of arbitrary compositional rules of this kind.
  155
  The Regulation will, however, have no effect on those rum and other "butters" sold with 34 per cent. or more milkfat. Products which do not contain enough butter to meet the minimum milkfat level may also continue to be sold, but may need to be relabelled to ensure that their different composition is clear to consumers. It is not possible to estimate the likely impact of such relabelling on sales or production of these products but the Department is working closely with the relevant companies to find ways to minimise problems for UK manufacturers.

  Feeding Stuffs
  Mr. Hancock
  To ask the Minister of Agriculture, Fisheries and Food (1) how many checks have been made since 1995 to monitor compliance with the prohibition in Article 15(11)(a) of the Feeding Stuffs Regulations 1995 on the use of poultry manure in compound feeding stuffs; [47581]

  (2) how many contraventions of Article 15(11)(a) of the Feeding Stuffs Regulations 1995, on the prohibition of the use of poultry manure in compound feeding stuffs, have been notified to his Department since it came into force; and if he will make a statement. [47582]

  Mr. Rooker
  The Feeding Stuffs Regulations 1995 are enforced by Local Authority Trading Standards Departments. The Department is not informed of the number of checks carried out or contraventions detected.

  Mr. Hancock
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the adequacy of the prohibition in Article 15(11)(a) of the Feeding Stuffs Regulations 1995, in ensuring that no poultry manure is used in foodstuffs; and if he will make a statement. [47584]

  Mr. Rooker
  While we have no evidence on the current use of poultry manure in animal feed, officials have recently alerted both Local Authorities and the State Veterinary Service to be on the lookout for this practice.

  Mr. Hancock
  To ask the Minister of Agriculture, Fisheries and Food what mechanisms are used to ensure that no poultry manure is included in compound feeding stuffs and to monitor compliance with Article 11(a) of the Feeding Stuffs Regulations 1995; and if he will make a statement. [47585]

  Mr. Rooker
  Compliance monitoring, to ensure that poultry manure is not used in animal feed, is a matter for individual Local Authority Trading Standards Departments.

  Over-30-months Scheme
  Miss McIntosh
  To ask the Minister of Agriculture, Fisheries and Food how many carcases are currently waiting to be disposed of under the over-30-months scheme. [47770]

  Mr. Rooker
  There are no carcases awaiting disposal under the over-30-months scheme (OTMS). The majority of the 15,000 cattle which enter the OTMS each week are rendered to produce meat and bonemeal (MBM) and tallow, which is being safely and securely stored pending destruction. Around 2,000 animals a week, mostly on-farm casualties, are directly incinerated in appropriately authorised incinerators. Capacity for direct 156
  incineration is expected to further increase as new facilities covered by the Intervention Board's 1996 tender for carcase incineration facilities come on stream, subject to the successful companies obtaining the necessary planning and environmental consents, thus reducing the rate of increase of MBM and tallow stocks.

  Fallen Stock
  Miss McIntosh
  To ask the Minister of Agriculture, Fisheries and Food what methods of disposal of fallen stock his Department has evaluated. [47686]

  Mr. Rooker
  The Animal By-Products Order 1992, which specifies the methods of disposal for fallen stock, is being reviewed and I hope to consult on the outcome during the summer.

  Miss McIntosh
  To ask the Minister of Agriculture, Fisheries and Food if he will give a regional breakdown of fallen stock in England for the last 12 months for which figures are available. [47685]

  Mr. Rooker
  This information is not collected.

  Miss McIntosh
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the extent of problems with fallen stock in the North of England. [47684]

  Mr. Rooker
  Some farmers in the North of England, as in other parts of England, may be experiencing problems if knackers' yards or hunt kennels have stopped taking certain types of fallen stock. We are concerned that fallen stock should be disposed of properly and my officials have therefore been liaising with the disposal and farming industries over the disposal of fallen stock and possible future arrangements.

  Culled Ewes
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food for what reasons the cull ewe trade from the United Kingdom to France is restricted to four southern-based abattoirs. [47271]

  Dr. John Cunningham
  [holding answer 29 June 1998]: Our recent proposals to amend the Specified Risk Material Regulations to allow export of ewe carcases with spinal cord intact were based on the French authorities' list of four premises in France which they were prepared to designate for the removal of spinal cord under their own controls on specified risk materials.

  Revised proposals have now been issued for statutory consultation on the basis of a further list of seven premises which the French authorities have notified to us. These are:
  Abattoir Municipal de Gap (SE France); Abattoir Municipal de Thiviers (SW France); Stemontoise D'Abbattage, Mont-de Marsan (SW France); Abattoir de Mantes-la-Jolie (near Paris); Socopa a Coutances (Normandy); Abattoir Public d'Oloron (SW France); Abattoir SVA a Vitre (NW France).

  Genetically Modified Pigs
  Mr. Cohen
  To ask the Minister of Agriculture, Fisheries and Food what means of transport have been used to export genetically modified pigs; and what measures have been taken to ensure they do not escape. [47379]
  157
  Mr. Morley
  [holding answer 29 June 1998]: Genetically modified pigs have been exported by road and air. During this transport they were subject at all times to the provisions of the Welfare of Animals (Transport) Order 1997, paragraph 8 of Schedule 1 of which requires that all means of transport and receptacles must be escape-proof.

  Public Registers

  Comments

  County, Parish Holding (CPH) Register

  This is not a public access database although some information is

  made available in certain circumstances

  Register of classification (by level of microbiological contamination)

  Held in accordance with the Shellfish Hygiene Directive

  of designated bivalve mollusc production areas in England and

  91/492/EEC as implemented by the Food Safety (Fishery Products

  Wales

  and Live Shellfish) (Hygiene) Regulations 1998

  Register of establishments approved to export meat, meat products

  In compliance with Article 9(i) of Council Decision 98/256/EC and

  etc. derived from foreign origin bovine products

  known in the UK as the XAP system

  The Conservation Walks Register

  Provides details of access agreements under the agri-environment

  regulations

  Register of laboratories approved to test samples of milk for the

  presence of brucellosis or enzootic bovine leukosis

  Register of authorised quarantine premises in Great Britain which

  are open to the public for the purpose of detaining imported rabies

  susceptible animals

  Register of authorised carrying agents in Great Britain which are

  available to the public for the purpose of carrying imported rabies

  susceptible animals

  Register of meat plants licensed or approved in England under meat

  This information is made available to the public on request and

  hygiene legislation

  notified to the European Commission and other Member States but

  there is no specific legislative requirement to provide public access.

  Register of establishments or undertakings carrying on activities

  In accordance with the Waste Management Licensing Regulations

  licensed, approved or registered under the Diseases of Animals

  1994

  (Waste Food) Order 1973 and the Animal By-Products Order 1992

  Register of Applications for Licences to Deposit Substances and

  Articles in the Sea issued under the Food and Environment

  Protection Act 1985 (Part II)(as amended)

  Register of Oil Spill Treatment Products Approved for use in the

  United Kingdom for treating oil on the surface of the sea

  Register of abattoirs and cutting plants authorised to remove spinal

  cord from sheep over 12 months of age

  List of Hygiene Assessment System scores for all individual

  licensed abattoirs and cutting plants in the UK

  Registers of commercial and non-commercial interests of members

  of the:

  Food Advisory Committee

  Advisory Committee on Novel Foods and Processes

  Spongiform Encephalopathy Advisory Committee

  MAFF Consumer Panel

  Badgers
  Mr. McLoughlin
  To ask the Minister of Agriculture, Fisheries and Food when he will reply to the letter from the hon. Member for West Derbyshire of 11 May about the culling of badgers. [48215]

  Mr. Rooker
  I wrote to the hon. Member for West Derbyshire on 26 June 1998.

  Public Registers
  Mr. Cohen
  To ask the Minister of Agriculture, Fisheries and Food if he will list the public registers which his Department has responsibility for. [47359]

  Mr. Rooker
  [holding answer 29 June 1998]: The Department has responsibility for the following public registers:

  French Beef
  Mr. Laurence Robertson
  To ask the Minister of Agriculture, Fisheries and Food what discussions he has had with the French Agriculture Minister about the quality and safety standards of French beef, with particular reference to possible gene contamination in French beef of cancer cells; and if he will make a statement. [47753]
  159
  Mr. Rooker
  The Minister has not discussed the particular subject with the French Agriculture Minister, nor are we aware of the problem referred to.

  Agriculture Council
  Mr. Peter Bradley
  To ask the Minister of Agriculture, Fisheries and Food what was the outcome of the Agriculture Council held in Luxembourg on 22 to 26 June; and if he will make a statement. [48483]

  Dr. John Cunningham
  I chaired a meeting of the European Union Agriculture Council in Luxembourg on 22–26 June. My noble Friend, The Lord Donoughue, Parliamentary Secretary responsible for the farming and food industry, represented the United Kingdom.

  This 4-day Council took decisions on a large package of important legislative measures concerning the Common Agricultural Policy and animal welfare. The package included agreement on changes to the bananas regime to bring it into conformity with World Trade Organisation rules whilst ensuring continued access to the EU market for Caribbean ACP bananas; significant reform of the olive oil regime, abolishing public intervention and the consumer and small producer aids which have been particularly susceptible to fraud; and measures setting common welfare standards for the rearing of farm animals throughout Europe. This measure is an important further step to improve animal welfare following the agreement to phase out fishing for tuna and swordfish with drift nets, which I secured at the Fisheries Council earlier this month.

  The package also included adoption of the 1998–99 CAP price proposals and the 1999–2000 compulsory set-aside rate, giving farmers certainty for the coming marketing year, as well as limited reforms to the tobacco regime to encourage producers to become more market-oriented and less dependent on subsidy.

  The package was agreed by a qualified majority of Member States, as were each of the individual elements. The Netherlands voted against all elements, Denmark against the bananas and set-aside proposals and France against the set-aside proposal. The Council also adopted by qualified majority, with Greece voting against, a proposal changing the rules for payments of aids to cotton producers.

  I am very pleased that the United Kingdom Presidency was able to secure a satisfactory deal on this complex package of measures. Coming on top of the conclusions on CAP reform which were unanimously agreed by the Agriculture Council at its May meeting, and subsequently endorsed by the European Council meeting in Cardiff, it concludes the substantial programme of work which I set out at the outset of our Presidency.

  Government Policies
  Mr. Fabricant
  To ask the Minister of Agriculture, Fisheries and Food if he will list the projects undertaken by his Department since 1 May 1997 to research public reaction to(a) Government policies and (b) potential new policies; and if he will place the results of the research in the Library. [46679]
  160
  Mr. Rooker
  In line with the practice of successive Administrations, the Department routinely consults the public, interested parties and client groups by way of consultation papers, White Papers, on a wide range of policies and proposed legislation. I have therefore confined my reply to major exercises. It is our normal practice to make the results of such research available to the public, including placing copies in the Library.

  Project

  Date commenced

  Review of the Sugar Beet and Education Committee

  20 June 1997

  Review of the Milk Development Council

  June 1997

  Weed Control on the Farm: Management of Genetically Modified Herbicide Tolerant (GMHT) Crops

  10 July 1997

  Review of the Home Grown Cereals Authority

  29 August 1997

  Proposals for new Code of Practice on Effective Use of Animal Medicines on Farms

  27 October 1997

  Evaluation of Access Provisions in Agri-Environment Schemes

  Autumn 1997

  Farmers' Attitudes to Arable Options in the Countryside Stewardship Scheme

  Autumn 1997

  Food Standards Agency: A Force for Change. White Paper Cm3830

  14 January 1998

  Proposed Sugar Beet Development Council

  30 January 1998

  Agricultural Restructuring

  18 March 1998

FOREIGN AND COMMONWEALTH AFFAIRS

  Foreign Policy Centre
  Mr. Waterson
  To ask the Secretary of State for Foreign and Commonwealth Affairs to what extent and in what ways the Foreign Policy Centre has influenced his Department's policy initiatives; and if he will make a statement. [46706]

  Mr. Tony Lloyd
  The Foreign Policy Centre is an independent policy institute launched in March of this year. It is established practice for Foreign Office Officials and Ministers to have contact with policy institutes and NGOs and to consider their views when developing policy. These contacts occur at all levels of the Foreign Office and are an important and valued part of the policy-making process. Policy institutes and NGOs contribute to a wider public debate which can also influence policy. The nature of these contacts means it is not possible to assess the influence of one particular policy institute in isolation from other institutes and NGOs.

  Diplomats
  Mr. Burden
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many serious offences were committed in 1997 by persons entitled to immunity. [48597]

  Mr. Tony Lloyd
  From a diplomatic community of over 17,000 persons, seventeen alleged serious offences by persons entitled to immunity were drawn to the attention of the Foreign and Commonwealth Office in 1997. "Serious offences" are defined in accordance with the Report to the Foreign Affairs Committee "The Abuse of Diplomatic Immunities and Privileges (1985)" as offences which fall into the category which in certain
  161
  circumstances attract a maximum penalty of 6 months imprisonment or more: the majority involved drinking and driving and shoplifting.

  In relation to this question, I refer my hon. Friend to the answer my noble Friend the Parliamentary Under-Secretary of State gave to the noble Lord, Lord Marlesford on 1 June 1998, Official Report, House of Lords, column 16, that one diplomat was withdrawn at the Department's request from his post in the United Kingdom as a result of alleged offences, compared with six the previous year.

  EU Economic and Social Committee
  Mr. Burden
  To ask the Secretary of State for Foreign and Commonwealth Affairs who are the United Kingdom's candidates for the next term of membership of the Economic and Social Committee of the European Union. [48595]

  Mr. Doug Henderson
  We have today submitted to the Council Secretariat details of the United Kingdom's 24 nominees for membership of the Economic and Social Committee, along with 24 reserve nominees.

  The nominees are:
  Group I

  Malcolm Levitt—European Adviser, Barclays Bank

  John Little CBE—Former Chairman, CBI Scotland

  Peter Morgan—Director, South West Wales Electricity

  Kenneth Walker—Management Consultant

  Clive Wilkinson—Director of the Gin and Vodka Association

  Bill Tosh—Chief Director of Unidare Plastics

  Dr. Sandra Thomas—Nuffield Council for Bioethics

  Yvonne Thomson—European Federation of Black Women Business Owners

  Group II

  Tom Jenkins—Europe Unit, TUC

  Helen McGrath OBE—NUKFAT. TUC Women's Committee

  George Wright—Welsh TGWU

  Campbell Christie CBE—Scottish TUC

  Eddy Warillow—Regional Secretary, GMB

  Ken Jackson—AEEU

  Josie Irwin—Royal College of Nursing

  Alison Shepherd—UNISON

  Group III

  Ann Davison—Consumers in Europe

  Sukhdev Sharma—Commission for Racial Equality

  Professor Rose D'Sa—University of Glamorgan

  Tim Papé—Shaw Trust

  David Evans CBE—ex-Director General, NFU

  Professor James Petrie—Aberdeen Royal Infirmary

  John Simpson—Economics Consultant

  Alma Williams—Consumer Issues.

  The reserve nominees are:
  Group I

  Keith Welton—Mid Yorkshire Chamber of Commerce

  Brian Prime—Federation of Small Business

  Jim Foulds—ex-Chemical Industries Association

  Leonard Collinson—Forum of Private Business

  Pamela Shimell—Managing Director, Industry and Environment Associates

  162

  Doug Franks—Biscuits, Cakes, Chocolate & Confectionery Alliance

  Balram Gidoomal—Chairman of Winning Communications

  Alan Blackburn—Ex Nat West

  Group II

  David Triesman—Association of University Teachers

  John Lyons CBE—Engineers and Managers Association

  Sir Alex Macara—BMA

  Ian Partridge—Lloyds TSB Group Union

  Rory Murphy—NatWest Staff Association

  John Andrews—Management and Professional Staff Association

  Tom Leney—Association of Teachers and Lecturers

  Christopher Minta—NATFHE

  Group III

  Robert Moreland—Business Graduate Association

  Catherine O'Donnell—Low Pay Unit

  Sean Mayo—Union of Independent Companies

  Iain Robertson—Highlands and Islands Enterprise

  John Fergusson, OBE—Royal Pharmaceutical Society

  Chris King—Avon Rubber

  Felicity Huston—Northern Ireland Consumer Council

  Fitzroy Andrew—Windsor Fellowship.

  In selecting these nominees the Government have sought to provide a delegation with a wide range of experience who will be able to represent the views of differing social and economic groups throughout the United Kingdom.

  Nazi Gold Conference
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he has taken to follow up the Nazi Gold Conference of 1997. [48208]

  Mr. Doug Henderson
  The Government have contributed £1 million to the International Fund for Needy Victims of Nazi Persecution. We have discussed how the money should be spent with concerned NGOs and envisage that the first payments will be made shortly. FCO officials contributed to the Stockholm seminar on Holocaust Education on 7 May 1998, and on 30 June 1998 officials are attending the Organising Seminar for the Washington Conference on Holocaust-Era Assets, scheduled for later this year. FCO officials are also taking forward proposals for an international guide to archival sources on Holocaust-era assets.

  British Council
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the number of British Council staff at overseas locations on(a) 1 May 1997 and (b) 24 June 1998. [48205]

  Mr. Fatchett
  Precise figures for the numbers of British Council staff on the dates requested are not available, but the estimated average numbers of staff working overseas in 1997–98 and 1998–99 are as follows:

  1997–98

  1998–99

  Overseas general managers

  229

  237

  Locally engaged staff

  3,700

  3,874

  Teachers

  1,670

  1,737

  Total

  5,599

  5,848

  163
  UK-appointed management staff have remained roughly constant over the past three years, whereas the numbers of local staff have grown markedly. This reflects a policy of increasing localisation of work to reduce costs and the expansion in activity and turnover from non-HMG sources. The number of teachers continues to grow annually at around 5 per cent., with the expansion of the Council's self-funded teaching centre network.

  Libya
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the role played by the Government of Libya in(a) Guinea Bissau, (b) Sierra Leone and (c) Liberia. [48212]

  Mr. Fatchett
  We are aware of contacts between Libya and President Vieira of Guinea-Bissau, and that Libya has just sent a high-level delegation to Bissau to mediate in the current internal political crisis there.

  We are aware of reports that the Liberian Government are training soldiers in Libya to fight West African peacekeeping forces (ECOMOG) on the Sierra Leone/Liberia border. We are also aware of longstanding links between Libya and the President of Liberia, Charles Taylor, and between Libya and the Sierra Leone rebel movement, the Revolutionary United Front (RUF).

  We have been told that the Government of Sierra Leone are now considering their position with regard to Libya. A Libyan delegation made a recent visit to Sierra Leone, and was received by President Kabbah.

  Burundi
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implementation of the Arusha Agreement in Burundi. [48211]

  Mr. Tony Lloyd
  The British Government welcome the progress achieved at the first session of the Burundi Peace talks conducted from 15 to 21 June 1998 in Arusha, and the commitment made by all parties represented at the talks to engage in serious negotiations with the aim of resolving the conflict in Burundi.

  We welcome the unanimous adoption by the parties of a declaration which includes a commitment to resolve the crisis by peaceful means and put an end to all forms of violence. We call on all armed parties to honour the commitment to suspend hostilities by 20 July 1998 at the latest.

  We strongly encourage all parties to return to the negotiating table on 20 July, ready to start a second round of negotiations in the spirit of goodwill and commitment to dialogue indicated by their declaration. The UK and our European partners will continue to support the peace process and the efforts of former Tanzanian President Julius Nyerere to bring about a durable solution to the Burundi crisis.

  Kashmir
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent killings in Champnagri, Kashmir. [48210]
  164
  Mr. Fatchett
  We are shocked by this latest incident in Kashmir. We condemn all acts of terrorism. It is essential that those who have committed these crimes are brought to justice.

  Holocaust Victims
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implications for Her Majesty's Government of the offer made by Credit Suisse, Swiss Bank Corporation and the Union Bank of Switzerland to settle the lawsuits by Holocaust victims in the United States. [48207]

  Mr. Doug Henderson
  We will continue to monitor with interest progress in negotiations between the Swiss banks and their US interlocutors. Possible wider implications are unclear at this stage. These will depend on the terms and scope of any settlement.

  Ottawa Convention
  Mr. Howard
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he was notified by his officials that the official opposition would not obstruct the passage of the Bill enabling the UK Government to ratify the Ottawa Convention. [48201]

  Mr. Tony Lloyd
  I was informed by the Opposition Foreign Affairs Spokesman in February that the Opposition would not obstruct legislation to ratify the Ottawa Convention, and the Leader of the Opposition confirmed in a letter of 25 June that the Opposition would co-operate in expediting its progress.

  Afghanistan
  Helen Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list, for each of the past five years(a) the total amount spent by the UN on crop substitution programmes in Afghanistan and (b) the amount contributed each year by the United Kingdom. [47848]

  Mr. Tony Lloyd
  We have been unable to obtain the information on UN expenditure. Projects run by UNDCP in Afghanistan have included preparatory work for crop substitution, but the UN has not recorded this expenditure separately.

  The UK contributed £900,000 to the overall UNDCP programme in Afghanistan in 1997. This did include preparatory work on a poppy crop substitution module.

  Helen Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what monitoring is being undertaken to ensure that money given to Afghanistan for crop substitution programmes is actually spent on those programmes; and if he will make a statement. [47847]

  Mr. Tony Lloyd
  The UK contributes directly to the pilot projects operated by the UN Drug Control Programme in Afghanistan, and initiated a donor monitoring mission in Afghanistan in November 1997. FCO and DFID officials took part. We continuously monitor the development and implementation of UNDCP's programme through our Posts in Vienna and Islamabad. In May the UK hosted the Afghanistan Donor
  165
  Support Group meeting which endorsed the full integration of drug control assistance into the UN's aid programme.

HEALTH

  Drug Misuse Services
  Mr. Jim Cunningham
  To ask the Secretary of State for Health what extra funding he has made available for the development of drug misuse services. [46613]

  Ms Dari Taylor
  To ask the Secretary of State for Health if he will make a statement about the additional resources he has made available to deal with the consequences of drug misuse. [46638]

  Ms Jowell
  The Department provides a cash contribution to health authorities to purchase drug services under a special allocation. In 1997/98 this stood at £37.2 million. In the current financial year the special allocation is £41.3 million, an increase of 11 per cent.

  The Department also administers the Specific Grant for making Payments to Voluntary Organisations Providing Services for Drug and Alcohol Misusers, which will distribute £2.5 million in 1998/99.

  Mr. Hesford
  To ask the Secretary of State for Health what assessment he has made of the impact of money invested in drug misuse treatment on the cost to public funds of crime. [46625]

  Ms Jowell
  I refer my hon. Friend to the reply I gave my hon. Friend, the Member for Warrington, North (Helen Jones) on 30 June 1998,Official Report, columns 145–46.

  PFI Hospital (Isle of Sheppey)
  Mr. Wyatt
  To ask the Secretary of State for Health if he will make a statement on progress with the private finance initiative hospital on the Isle of Sheppey. [46614]

  Mr. Milburn
  Thames Gateway National Health Service Trust and their preferred private sector partner are working together on drawing up a revised Full Business Case for the Private Finance Initiative scheme for a new community hospital for the Isle of Sheppey. The local health authority will shortly be reviewing progress with the scheme and will be meeting my hon. Friend to discuss the project.

  National Performance Frameworks
  Mr. Pike
  To ask the Secretary of State for Health what progress he has made in drawing up national performance frameworks for the NHS. [46616]

  Mr. Milburn
  We have received over 550 responses to our consultation on the National Performance Framework. These indicate wide support for a move to a broader based approach to assessing National Health Service performance and away from the narrow focus of the past. The Framework is to be 'road-tested' by health authorities over the summer in advance of its implementation across the NHS from April 1999.

  Breast Cancer
  Mr. Ian Stewart
  To ask the Secretary of State for Health what action he is taking to reduce waiting times for breast cancer treatment. [46617]

  Ms Jowell
  We are committed to equal access to high quality health services. We have already made £10 million available for breast cancer services which is being used to support over 300 initiatives around the country. Particular emphasis has been given to supporting projects that give rapid access to diagnostic services through the provision of "one stop" clinics, speeding access to high quality treatment and care delivered by specialist teams.

  The White Paper, "The New NHS" sets out a specific target for cancer that everyone with suspected cancer will be able to see a specialist within two weeks of their general practitioner deciding that they need to be seen urgently and requesting an appointment. This has been guaranteed for breast cancer by April 1999.

  NHS Personnel (Management Skills)
  Mr. Sheerman
  To ask the Secretary of State for Health what steps he is taking to improve the management skills of senior national health service personnel. [46618]

  Mr. Milburn
  It is vital that the National Health Service continues to invest systematically in developing senior managers and leaders.

  Major development programmes making a significant contribution to developing the skills of senior managers in the NHS include a new Chief Executive Development programme, a Senior Manager Career Development Service, the well established NHS Management Training Scheme and the Management Education Scheme by Open Learning.

  Dental Students
  Mr. Kidney
  To ask the Secretary of State for Health if he will increase the number of training places for dental students. [46621]

  Mr. Milburn
  The number of undergraduates in dental schools in England increased from 3,174 in 1995/96 to 3,325 in 1997/98—an increase of 5 per cent. We are to review future workforce requirements, in consultation with the dental profession.

  Primary Care Groups
  Mr. Truswell
  To ask the Secretary of State for Health how he will ensure GPs and other members of the primary health care team are fully involved in the development of primary care groups. [46622]

  Mr. Milburn
  Once Primary Care Groups have been developed, general practitioners and nurses will be in the driving seat as signalled in the White Paper.

  We also expect GPs and others to have a say in the configuration of Primary Care Groups. Health authorities must provide evidence of support for the proposed configuration, and we are instructing the National Health Service Executive Regional Offices to ensure that health authorities explicitly provide evidence of the Local Medical Committee view on proposals.
  167
  Miss McIntosh
  To ask the Secretary of State for Health what steps he has taken to protect general practitioners within the new primary care groups from losing their resources in the event of a hospital budget overspend. [47098]

  Mr. Milburn
  We will ensure that the level of investment in primary care infrastructure within health authorities' unified budgets will be maintained and uplifted for inflation.

  At Primary Care Group level, through the mechanism of the new primary care investment plans, the level of resources available for staff and computer maintenance will be maintained at current spending levels, uplifted for inflation. Alongside this guarantee and the current statement of fees and allowances protection, a one-year period of notice for change on these items at practice level is to be established.

  Miss McIntosh
  To ask the Secretary of State for Health if he has taken into account the special needs of rural areas when setting the funding levels for the new primary care groups. [47099]

  Mr. Milburn
  There will be a national weighted capitation formula to set target fair shares for the new Primary Care Groups (PCGs). It will be for health authorities to determine how quickly individual PCGs are moved from their starting point to their fair share.

  The health care needs of populations, both rural and urban, will be the driving force in determining where cash goes.

  Miss McIntosh
  To ask the Secretary of State for Health if he will make a statement on the ability of primary care groups to decide on treatment for a particular condition. [47097]

  Mr. Milburn
  The ability to offer patients the individual care they require has been and remains the cornerstone of general practice. Patients will continue to be guaranteed the drugs, investigations and treatments they need. The freedom to refer and prescribe remains unchanged.

  Miss McIntosh
  To ask the Secretary of State for Health if he will make a statement on the proposed new primary care groups of general practitioners. [47100]

  Mr. Milburn
  Primary Care Groups offer an historic opportunity for primary care professionals to be in the driving seat in shaping and improving health services locally.

  Community Health Councils
  Sir Sydney Chapman
  To ask the Secretary of State for Health if he will make a statement on the role and degree of independence of community health councils. [46623]

  Mr. Milburn
  Community health councils are independent statutory bodies whose role is to represent the interests of the public in their districts in health service matters.

  Mr. Etherington
  To ask the Secretary of State for Health how many representations since June 1997 he has received from(a) hon. Members, (b) community health
  168
  councils, (c) health authorities and (d) hospital and ambulance trusts regarding the future role of community health councils; and if he will make a statement. [46521]

  Mr. Milburn
  We have received a number of letters from hon. Members and community health councils about the future role of community health councils.

  Mr. Etherington
  To ask the Secretary of State for Health (1) what plans he has to review and expand the role of community health councils; and if he will make a statement; [46526]

  (2) what action he is taking to raise the profile of community health councils. [46524]

  Mr. Milburn
  No immediate changes to the role of community health councils are planned. It is for CHCs to decide how best to undertake and raise awareness of their activities.

  Acute Beds
  Mr. Love
  To ask the Secretary of State for Health what proposals he has to increase the number of acute beds in the NHS. [46624]

  Ms McCafferty
  To ask the Secretary of State for Health how many NHS beds are expected to be provided through the extra money made available to the NHS from the 1998 Budget. [46628]

  Mr. Boateng
  As a result of the extra £417 million we have made available for the National Health Service in England this year, an extra 2,000 acute beds and day case places are being opened to tackle waiting lists and the closure of a further 1,100 beds has been deferred.

  Mr. Dennis Turner
  To ask the Secretary of State for Health what was the change in the number of acute beds in the NHS between 1979 and 1997. [46633]

  Mr. Milburn
  There was an average of 148,725 beds available on acute wards in England in 1979, compared with 108,895 in 1996–97, a fall of 39,830.

  Hospital Waiting Lists (Essex)
  Mr. Amess
  To ask the Secretary of State for Health what recent representations he has received about hospital waiting lists in Southend and Essex. [46627]

  Mr. Milburn
  We have received a small number of representations about hospital waiting lists in Essex.

  NHS Beds (West Kent)
  Mr. Pond
  To ask the Secretary of State for Health how many extra NHS beds he estimates West Kent health authority will be able to purchase as a result of the 1998 Budget. [46629]

  Mr. Boateng
  West Kent Health Authority will open an extra 96 beds as part of a package of measures to tackle waiting lists funded from the additional £5.1 million it received as a result of the 1998 Budget.

  Strategic Health Review (Worcestershire)
  Mr. Michael J. Foster
  To ask the Secretary of State for Health when he is likely to announce his decision
  169
  regarding the strategic health review submitted by Worcestershire health authority; and if he will make a statement. [46630]

  Mr. Milburn
  We are aware of the decision taken by Worcestershire Health Authority to approve its preferred option for service reconfiguration, and that support for this option has been received from 2 of the 3 local Community Health Councils within Worcestershire.

  As my hon. Friend will be aware, the Kidderminster and District Community Health Council has formally objected to the proposals. The submission to Ministers will be given careful consideration and a decision will be made in due course.

  Cancer Treatment
  Mr. Colman
  To ask the Secretary of State for Health what action he is taking to improve patient access to specialists in cancer treatment. [46631]

  Mr. Boateng
  We are committed to improving cancer services so that all patients have access to high quality, specialist and patient-centred services, wherever they may live. As a first step we made available an additional £10 million for breast cancer services to speed access to diagnosis and high quality services. We have also announced a further £10 million for improvements to colorectal cancer services. The White Paper, "The New NHS" guarantees that everyone with suspected cancer will be able to see a specialist within two weeks of their general practitioner deciding that they need to be seen urgently and requesting an appointment. This will be achieved by April 1999 for breast cancer, and for all cancers by 2000.

  Professional Conduct Standards
  Ann Clwyd
  To ask the Secretary of State for Health what steps he is taking to introduce professional conduct standards for all medical staff in the NHS. [46632]

  Mr. Milburn
  All medical staff in the National Health Service must comply with the existing professional standards set out in the General Medical Council's guidance "Good Medical Practice". The GMC has made it clear that if serious problems arise which call a doctor's registration into question, these are the standards against which such doctors will be judged.

  Our White Paper "The New NHS" announced proposals to introduce a duty of clinical governance in the NHS. This will provide a framework of local accountability to ensure staff comply with their professional duties.

  Hospital and Maternity Provision (Cornwall)
  Mr. Matthew Taylor
  To ask the Secretary of State for Health if he will make a statement on hospital and maternity provision in Cornwall. [46634]

  Mr. Milburn
  The proposals for changes to health services in Cornwall put forward by Cornwall and Isles of Scilly Health Authority remain under consideration by my right hon. Friend, the Secretary of State. The decision will reflect the best interests of the people of Cornwall and will be announced when all the relevant factors and information have been properly scrutinised.

  Health Trusts (Ethnic Minority Appointees)
  Mr. Vaz
  To ask the Secretary of State for Health what plans he has to increase the number of ethnic minority appointees to health trusts. [46635]

  Mr. Milburn
  We are committed to improving the participation of people from ethnic minorities in public life. Since taking office, 9 per cent. of all the non-executive appointments made to National Health Service trust boards in England have been of people from an ethnic minority background, compared with only 5 per cent. before the General Election. Approximately 7 per cent. of trust board non-executive directors now come from ethnic minorities. The new goal for all National Health Service boards is to achieve at least 7 per cent. ethnic minority participation by September 2001.

  NHS Procurement
  Mr. Miller
  To ask the Secretary of State for Health what steps he is taking to improve efficiency in NHS procurement. [46636]

  Mr. Boateng
  We have set up a review of current procurement practice by National Health Service trusts in England. This will cover both procurement through the NHS Supplies Authority and that carried out directly by NHS trusts. The review has been asked to report by September 1998.

  NHS Medical Staff Vacancies
  Mr. Stunell
  To ask the Secretary of State for Health how many NHS medical staff vacancies there are at present. [46637]

  Mr. Milburn
  The number of National Health Service medical staff vacancies is not available centrally.

  Health Services (Birmingham)
  Dr. Lynne Jones
  To ask the Secretary of State for Health what discussions he has had with Birmingham health authority about health services in Birmingham. [46639]

  Mr. Milburn
  The conclusion to Birmingham Health Authority's recent public consultation on 2 March 1998 was an important stage in developing a long-term strategy on the future of health services in the Birmingham area. After careful analysis of the results, and consideration of the recommendations of Lord Hunt's Panel, Birmingham Health Authority will publish, in July, a strategic framework for health investment in the City.

  Until the outcome is finalised, it would be premature to comment on Birmingham Health Authority's proposals.

  Hospitals (Clinical Performance)
  Dr. Iddon
  To ask the Secretary of State for Health what action he is taking to improve patients' access to information about local hospitals' clinical performance. [46640]

  Mr. Milburn
  I refer my hon. Friend to the reply given today to my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) on 30 June 1998,Official Report, column 133.

  Tobacco Advertising
  Mr. White
  To ask the Secretary of State for Health what plans the Government have to ban tobacco advertisements aimed at young people. [46619]

  Ms Jowell
  Our forthcoming White Paper on Tobacco Control will set out our plans for implementing the European Community Directive to ban tobacco advertising and sponsorship, which was formally adopted by the Council on 22 June.

  The Directive bans all forms of tobacco advertising aimed at young people.

  Drugs Budget
  Mrs. Ellman
  To ask the Secretary of State for Health what steps his Department takes to ensure the NHS receives value for money in relation to the purchase of drugs. [43029]

  Mr. Milburn
  The Department encourages clinicians to seek value for money in their use of medicines through various means, including publications, feedback on prescribing patterns, and visits from prescribing advisers. In addition, the Department seeks to secure fair prices for National Health Service medicines through the operation of the Pharmaceuticals Price Regulation Scheme and (for out of patent medicines) through encouraging price competition.

  Efficiency Gains
  Mr. Maude
  To ask the Secretary of State for Health what estimate his Department has made of efficiency gains achieved since 1 May 1997. [46436]

  Mr. Milburn
  Latest estimates for the National Health Service show that efficiency savings equal to £655 million were made in 1997/98. Targets have been set for further NHS efficiency savings equivalent to £750 million across the NHS in 1998/99.

  In addition to this we are committed to a broader based approach to improving efficiency in the NHS. To that end we have:

  set targets to reduce NHS bureaucracy in England by £84 million in 1997/98 and by a further £73 million in 1998/99

  established an Efficiency Task Force to identify opportunities for process and systems changes in the NHS

  developed a revised performance assessment framework focused on improving both quality and efficiency.

  Trauma Patients
  Mr. Nigel Jones
  To ask the Secretary of State for Health how many specialists in trauma treatment there are in each health authority area. [46513]

  Mr. Milburn
  Competence to offer treatment for the psychological and psychiatric after-effects of trauma, like other psychological and psychotherapeutic interventions, is not restricted to one professional group. The Department does not keep data centrally about the number of staff qualified for such work.

  Bristol Royal Infirmary
  Mr. Harvey
  To ask the Secretary of State for Health if he will assess the advantages of extending his proposed 172
  inquiry into paediatric cardiac services at the Bristol Royal Infirmary to include adult cardiac surgery involving the same medical professionals. [46805]

  Mr. Milburn
  The public inquiry which my right hon. Friend the Secretary of State announced on 18 June 1998,Official Report, columns 529–39, will address primarily the questions arising from the delivery of paediatric cardiac surgery at the Bristol Royal Infirmary. However, the exact terms of reference will be announced later, and if necessary the inquiry will take account of any related issues involving adult cardiothoracic surgery.

  Dan Norris
  To ask the Secretary of State for Health when he will make an announcement about what form the Government inquiry into paediatric cardiac services at Bristol will take. [46972]

  Mr. Milburn
  I refer my hon. Friend to the statement my right hon. Friend, the Secretary of State made on 18 June 1998,Official Report, columns 529–39, in which he announced a public inquiry under the chairmanship of Professor Ian Kennedy.

  Dental Amalgam
  Mr. Gordon Prentice
  To ask the Secretary of State for Health what assessment he has made of research on the alleged link between leakage of mercury in amalgam fillings and multiple sclerosis. [46979]

  Mr. Milburn
  None. The Committee on Toxicity of Chemicals in Food, Consumer Products and the Environment, in their recent review of the potential toxicity of dental amalgam, were aware of suggestions that neurological diseases such as multiple sclerosis may be associated with dental amalgam and also of the evidence against this hypothesis. They therefore did not consider it necessary to comment specifically on this matter.

  Waiting Lists
  Mr. Hammond
  To ask the Secretary of State for Health how many patients were awaiting an outpatient consultation in an NHS hospital at 1 May(a) 1997 and (b) 1998. [47134]

  Mr. Milburn
  Information is not collected centrally in the form requested.

  Mr. Flight
  To ask the Secretary of State for Health what data he has collated and what estimates he has made as to the numbers of people on NHS waiting lists who are aged over 65 years. [46626]

  Mr. Milburn
  Information on the age of people on National Health Service waiting lists is not collected centrally.

  ENT Services (Gloucestershire)
  Mr. Nigel Jones
  To ask the Secretary of State for Health if he will make a statement on the future of ear, nose and throat departments in Gloucestershire. [47294]

  Mr. Milburn
  Gloucestershire Health Authority will be considering proposals for the future of ear, nose and throat services in Gloucestershire at its meeting on 7 July 1998. Any proposals for service change will be subject to public consultation.

  Pharmacists
  Mrs. Lait
  To ask the Secretary of State for Health when he expects to agree remuneration with pharmacists for the current financial year. [47136]

  Mr. Milburn
  Discussions with the Pharmaceutical Services Negotiating Committee are continuing, and I hope that an agreement will be reached shortly.

  Diabetes Day
  Mr. Maclean
  To ask the Secretary of State for Health what initiatives his Department will take to promote U.N. International World Diabetes Day on 27 June. [47208]

  Ms Jowell
  The Department was not aware that such an event was planned for 27 June, in addition to the annual World Diabetes Day, which is co-sponsored by the World Health Organisation and the International Diabetes Federation and which takes place on 14 November each year. World Diabetes Day is a reminder of the importance and seriousness of this condition worldwide, and of the need to continue to strive to improve the care of people with diabetes and their quality of life. We recognise that need, and are pledged to work in partnership with the National Health Service, health professionals, the British Diabetic Association and all those with an interest to secure these improvements.

  Registered Homes Act 1984
  Mrs. Lait
  To ask the Secretary of State for Health what plans he has to review Part 2 of the Registered Homes Act 1984. [48011]

  Project

  Purpose of research

  Placed in Library?

  NHS White Paper research

  Potential new policy-advice on public attitudes towards the NHS to allow the identification of the areas of greatest importance

  This will be placed in the Library in due course

  Nursing careers—CREM Report

  Government policy—publicity campaign development

  This will be placed in the Library

  Nursing campaign

  Government policy—creative development

  No. commercially confidential

  Prescription charges, exemption and fraud

  Potential new policy—publicity campaign development

  Not yet available but it will be placed in the Library in due course

  Correspondence
  Mr. McLoughlin
  To ask the Secretary of State for Health when he will reply to the hon. Member for West Derbyshire's letter of 18 March 1998 on behalf of his constituent, Mr. Paterson, of the Matlock Dental Practice. [48216]

  Mr. Milburn
  The matter is being investigated by officials and I will respond to the hon. Member once it has been resolved.

  Pharmacies
  Mr. McWalter
  To ask the Secretary of State for Health how many pharmacies are currently supported by the essential small pharmacy scheme. [48221]
  174
  Mr. Boateng
  We are committed to creating effective independent regulatory arrangements for residential and nursing homes which are tough, transparent and accountable. We are reviewing the options for change, including the provisions of the Registered Homes Act 1984, and will set out our proposals in the White Paper on Social Services to be published later this year.

  NHS Funding
  Mr. Malcolm Bruce
  To ask the Secretary of State for Health what is his latest estimate of the real increase in National Health Service funding between 1997–98 and 1998–99; and if he will make a statement. [48220]

  Mr. Milburn
  Planned Government expenditure on the National Health Service in 1998–99 is 2.3 per cent. higher in real terms than the forecast outturn expenditure in 1997–98.

  Government Policies
  Mr. Fabricant
  To ask the Secretary of State for Health if he will list the projects undertaken by his Department since 1 May 1997 to research public reaction to(a) Government policies and (b) potential new policies; and if he will place the results of the research in the Library. [46677]

  Ms Jowell
  The Department's press and publicity division has undertaken the following research projects since 1 May 1997. Only those reports containing commercially sensitive materials and agencies' creative concepts are not made available under the terms of the Code of Practice on Access to Government Information. Copies of the research will be placed in the Library as indicated.

  Mr. Milburn
  At 30 September 1997, 251 pharmacies in England were receiving payments from the essential small pharmacies scheme.

  Mr. McWalter
  To ask the Secretary of State for Health how many community pharmacies he estimates will close if resale price maintenance on over the counter medicines is discontinued; and what assessment he has made of the effect of such closures on the progress of(a) primary care groups and (b) health action zones. [48218]

  Mr. Milburn
  I have made no such estimate.

  Junior Doctors
  Mr. Laurence Robertson
  To ask the Secretary of State for Health what are the recommended working hours per week of junior doctors. [47749]
  175
  Mr. Milburn
  The working hours of junior doctors are limited by the New Deal on junior doctors' hours, introduced in June 1991. Overall contracted hours of duty should not exceed 72 hours a week on-call, and for partial shifts and full shift working the maxima are 64 hours and 56 hours a week respectively. Regardless of working pattern, no doctor should actually be working more than 56 hours a week on average within those contracted duty hours.

  Nursing Homes
  Mr. Laurence Robertson
  To ask the Secretary of State for Health what plans he has to make the National Health Service responsible for running and financing nursing homes. [47752]

  Mr. Boateng
  None. Where a patient meets eligibility criteria for continuing National Health Service in-patient care, the NHS is responsible for arranging and funding such care, either by providing it in a NHS hospital or purchasing it from a nursing home. We have no plans to take privately-owned nursing homes into public ownership.

TREASURY

  Registration (Births, Deaths and Marriages)
  Mr. Laurence Robertson
  To ask the Chancellor of the Exchequer what plans he has to reform the system for recording births, deaths and marriages; if he will examine the system of, and cost of, access to these records; and if he will make a statement. [47754]

  Mrs. Liddell
  The Government have no plans to reform the system for the collection of information for the registration of births, deaths and marriages.

  The Registration Acts are quite specific on the recording of information and access to records of births, deaths and marriages. The Registrar General has no powers to make available or disclose registration information in any other way.

  It has long been recognised that this is unnecessarily restrictive. The 1990 White Paper "Registration: proposals for change" (Cm 939) made recommendations for fundamental reform of the system for the registration of births, deaths and marriage including access to records. No Bill has been introduced to give effect to these reforms. The Registrar General has been asked to reconsider the proposals relating to access to registration records, and an options paper will be presented to Ministers.

  Parliamentary Questions
  Mr. Vaz
  To ask the Chancellor of the Exchequer when he expects to reply to the question from the hon. Member for Leicester East of 20 May relating to the Bingham report (43079). [48254]

  Mr. Darling
  I hope to do so shortly.

  Tax Liability
  Mr. Winnick
  To ask the Chancellor of the Exchequer when the arrangement for reducing tax liability by forming a company only for this purpose was first permitted. [46664]

  Dawn Primarolo
  [holding answer 19 June 1998]: There has never been a bar on an individual forming a company to reduce their liability to tax. However, incorporation does impose various obligations.

  Mr. Winnick
  To ask the Chancellor of the Exchequer (1) if he will estimate the sum which the Treasury would receive if those who minimise their tax liability by forming a company only for this purpose were no longer able to do so; [46666]

  (2) if he will estimate the number of those who minimise their tax liability by forming a company only for this purpose. [46667]

  Dawn Primarolo
  [holding answer 19 June 1998]: Companies are formed for many different reasons and it is not possible to identify from tax records those where the only reason is the intention to minimise tax liability.

  Economic and Fiscal Strategy Report
  Mr. Heathcoat-Amory
  To ask the Chancellor of the Exchequer if he will reproduce table 3A.1 in the Economic and Fiscal Strategy report for each of the years 1991–92 to 1997–98. [46854]

  Mr. Darling
  [holding answer 22 June 1998]: Annexe 3A of the Economic and Fiscal Strategy Report contained an illustrative presentation of the spending plans for 1998–99, restated in terms of the main elements of the new system. Outturn data in this format for the past few years will be included alongside plans for the three years to 2001–02 when the conclusions of the Comprehensive Spending review are published next month.

  Working Families Tax Credit
  Mr. Webb
  To ask the Chancellor of the Exchequer what would be the cost to the Exchequer of introducing a flat rate mortgage interest credit of(a) £20 per week, (b) £30 per week and (c) £40 per week into the working families tax credit for people with mortgages. [46955]

  Dawn Primarolo
  [holding answer 22 June 1998]: The information requested is given in the table:

  £ million

  Mortgage interest credit

  Net cost

  £20

  680

  £30

  1,100

  £40

  1,580

  Notes:

  1. Figures include Council Tax Benefit savings of £10 million/£15 million/£15 million arising from the £20/£30/£40 mortgage interest credits respectively

  2. Costs rounded to nearest £10 million

  3. Figures for Great Britain, based on 1998–99 levels of earnings and benefit rates

  4. Costings assume all measures from March 1998 Budget are in place (including those taking effect in 1999–2000)
  177
  Mr. Webb
  To ask the Chancellor of the Exchequer what would be the gross cost to the Exchequer of introducing a flat rate housing credit of(a) –20 per week, (b) –30 per week and (c) –40 per week into the working families tax credit for people in rented accommodation; and what would be the cost net of savings in housing benefit if the corresponding amount was removed from the eligible rent of all housing benefit claimants. [46954]

  £ million

  Costs

  £20 rented housing credit

  £30 rented housing credit

  £40 rented housing credit

  Gross WFTC costs

  600

  930

  1,280

  Costs net of HB/CTB

  450

  720

  1,030

  Costs net of HB/CTB: eligible rent reduced by amount of rented housing credit

  330

  610

  93

  Notes:

  1. Costs rounded to nearest £10 million

  2. Eligible rent has only been reduced for Housing benefit recipients on WFTC

  3. Figures for Great Britain, based on 1998–99 levels of earnings and benefit rates

  4. Costings assume all measures from March 1998 Budget are in place (including those taking effect in 1999–2000)

  Casino Industry
  Mr. Brooke
  To ask the Chancellor of the Exchequer, pursuant to the oral statement of the Financial Secretary to the Treasury of 28 April 1998,Official Report, column 234, what factors led her to conclude that the casino industry is undertaxed compared with most other betting and gaming sectors. [47820]

  Dawn Primarolo
  [holding answer 29 June 1998]: In reaching these conclusions, I took into account a number of factors. These included the effective rate of taxation on net consumer spend (effectively the house winnings) compared to other sectors of the betting and gaming industry, levels of profitability, turnover and the capacity of the industry to bear a higher burden of taxation.

  Public Registers
  Mr. Cohen
  To ask the Chancellor of the Exchequer if he will list the public registers which his Department has responsibility for. [47366]

  Mrs. Liddell
  [holding answer 29 June 1998]: The Treasury has no responsibility for maintaining public registers.

  Individual Savings Account
  Mr. Cousins
  To ask the Chancellor of the Exchequer if he will list the participants, and the organisations they represented, at Treasury seminars on individual savings accounts. [47729]

  Mrs. Liddell
  [holding answer 29 June 1998]: The Treasury has held two seminars in London and one in Edinburgh as part of the process of consultation on the proposals for setting voluntary standards for individual savings accounts set out in the Treasury consultation document "Making Saving Easy".

  The seminars included speakers from Britannic Assurance, Direct Line, the Financial Services Authority, M&G, Midland Bank, Nationwide Building Society, Pearl Assurance, Tillinghast Towers Perrin and Virgin Direct.
  178
  Dawn Primarolo
  [holding answer 22 June 1998]: The information requested is given in the table. The first row gives the increase in WFTC cost from introducing a rented housing credit; the second row shows the net effect including reduced Housing Benefit and Council Tax Benefit owing to the increased WFTC. The third row shows the net effect if the eligible rent in Housing Benefit is reduced by the amount of the rented housing credit.

  The seminars were attended by some 240 representatives of a range of organisation including consumer organisations, financial institutions and their trade associations, law firms, the press and regulators. Officials from HM Treasury and the Inland Revenue were also present.

  VAT (Empty Properties)
  Mr. Shaw
  To ask the Chancellor of the Exchequer how much revenue he estimates would be lost if VAT were reduced to 5 per cent. on properties empty for one year or more. [47808]

  Dawn Primarolo
  The information is not available.

  Gender Impact Assessments
  Jackie Ballard
  To ask the Chancellor of the Exchequer if he will place in the Library copies of gender impact assessments which have been undertaken in respect of legislation introduced in this Parliament; if he will make it his policy to do so in respect of future legislation; and if he will make a statement. [47027]

  Mrs. Liddell
  I refer the hon. Member to the answer the Parliamentary Under-Secretary of State for Women gave her on 24 June 1998,Official Report, column 557.

  Retirement Benefit Schemes
  Ms Stuart
  To ask the Chancellor of the Exchequer what assessment he has made of the extent to which funded unapproved retirement benefit schemes are used(a) to avoid the payment of national insurance contributions and (b) to obtain a reduction in a company's council tax charges. [46952]

  Dawn Primarolo
  Since April this year the Contributions Agency has been enforcing liability for National Insurance contributions on all employers' payments into funded unapproved retirement benefit schemes in a way that matches the Inland Revenue's income tax regime. This alignment of the tax and National Insurance rules is a further example of the Government's determination to make the two systems fairer and easier to administer. Changes to the National Insurance regulations
  179
  giving additional clarification are expected to be made shortly. Funded unapproved retirement benefit schemes cannot be used as a means of avoiding council tax charges.

  Trusts (Compliance Strategy)
  Ms Stuart
  To ask the Chancellor of the Exchequer what plans the Inland Revenue has to prepare a compliance strategy for trusts. [46951]

  Dawn Primarolo
  The Inland Revenue already undertakes compliance work on trusts as part of the existing Departmental compliance strategy.

  Bank Notes
  Mr. Gordon Prentice
  To ask the Chancellor of the Exchequer if he will conduct research into(a) the cost of manufacturing a plastic banknote and (b) its lifespan in comparison with a paper note; and what plans he has to introduce plastic currency. [47199]

  Mrs. Liddell
  The Bank of England, which is responsible for issuing banknotes, has an active research and development programme which considers all aspects of a variety of substrates ranging from the current high quality cotton based paper to the polymer substrate (plastic). There is no clear information available on the cost of manufacturing polymer banknotes although this will depend on a number of factors including the number of banknotes printed and their actual lifespan.

  There are no plans to introduce a polymer banknote in the short term.

  Financial Services Authority
  Mr. Caplin
  To ask the Chancellor of the Exchequer when he expects the annual report of the Financial Services Authority to be published. [48316]

  Mrs. Liddell
  A copy of the Board's report, made in accordance with Section 117 of the Financial Services Act 1986, was laid before Parliament today. The report covers the period 1 April 1997 to 31 March 1998. Copies are available in the Library of the House.

  Engineers
  Dr. Starkey
  To ask the Chancellor of the Exchequer how many(a) male and (b) female engineers there are in the United Kingdom; and how many in each case are qualified as (i) chartered engineer, (ii) incorporated engineer and (iii) engineering technician. [47511]

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

  Letter from Tim Holt to Dr. Phyllis Starkey, dated 30 June 1998:
  As Director of the Office for National Statistics (ONS), I have been asked to reply to your parliamentary question about engineers by professional status and gender.
  The Labour Force Survey (LFS) is the ONS's major up to date source of data on numbers of people in various occupations. The Standard Occupational Classification is used in the LFS and respondents are assigned to categories largely on the basis of the job title and a description of the job provided by the respondent. There is no specific separate question asking for membership (or grade of membership) of professional bodies. Consequently, the LFS cannot be used to provide estimates which are consistent with the qualification categories which you have specified.
  The attached table shows estimates of the numbers of men and women in the Engineers and Technologists minor group of the Professional Occupations major group and in the Engineering technician and Building and Civil Engineering technician unit groups which are classified under the Associate Professional & Technical Occupations major group.

  Employment in engineering professional and technical occupations United Kingdom, winter 1997–98, not seasonally adjusted

  000s

  All

  Men

  Women

  Engineers and technologists1

  580

  554

  26

  Engineering/Civil engineering etc. technicians2

  58

  56

  3—

  Total

  638

  609

  29

  1 Standard Occupational Classification (SOC) minor group 21

  2 SOC Unit Groups 301 and 304

  3Sample size too small for reliable estimate

  Source:

  ONS, Labour Force Survey

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

European Union: UK Presidency
Lord Barnett Lord Barnett asked Her Majesty's Government:
What they consider to be the most important achievement in the European Union during the term of their presidency.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, there were a number of very important achievements in the European Union during the term of the UK presidency. We achieved a real commitment to economic reform, made sure that jobs are at the top of the EU agenda, got enlargement off to a flying start, and oversaw the launch of EMU. We also made progress on the single market and reform of EC policies and on improving the environment, strengthened co-operation to fight organised crime, and ensured a more coherent and powerful European voice on foreign policy. We launched a debate about the future shape of the European Union and how to increase its democratic legitimacy, and a process to take it forward. Outstanding among these, as the Prime Minister told the European Parliament on 18th June, was the launch of two historic events, EMU and enlargement.
Lord Barnett: My Lords, I thank my noble friend for that comprehensive list. Does she not agree that it contains one item of quite historic importance; namely, the fact that 11 independent member states, made up not wholly or indeed at all of idiots or dangerous men, agreed unanimously that they would give up their own currency and start a single currency? That was a free decision taken by them all. Does the Minister not accept that it is rather sad that once again we, the United Kingdom, will not be in at the start? I am not asking her to say when we shall join because I know that she will give me the answer which the Prime Minister reiterated this morning. But will she not accept the plain fact that once again we shall be on the fringes of Europe instead of leading it?
Baroness Symons of Vernham Dean: My Lords, let us be clear. Her Majesty's Government want the single currency to succeed. In principle the Government believe that British membership of a successful single currency would be beneficial to Britain and to Europe. But it is not in Britain's interests to join a single currency in 1999. There is neither the flexibility nor the convergence with other European economies which would make joining the EMU during the course of the parliament in Britain's economic interests. To join now would be to accept a monetary policy which suited other
518
European economies but not our own. We need a period of stability and settled convergence before we can join. In order to create a real option of joining early in the next parliament, it is essential that government and business prepare intensively during this Parliament. In that way, we could join if the single currency is successful and if the Government, Parliament and the people agree.
Baroness Ludford: My Lords, will the Minister accept that while from these Benches we believe that the Government have done a lot in the six months to put the United Kingdom back in the mainstream, we are not forming the leadership of Europe because we have not joined the single currency? The Minister referred to the Government making preparations. We have all received a business pack about preparations. However, is it not time to make political preparations so that our citizens have a lead and can make preparations? I believe that our citizens are looking for a lead from this Government and they are not getting it.
Baroness Symons of Vernham Dean: My Lords, those preparations are under way. In the answer that I gave to my noble friend's supplementary question, I made clear that we must now use the next period to prepare for the possibility of joining the EMU should Parliament, government and the people agree so to do.
I agree with the noble Baroness. It is important that there is a leadership role for the United Kingdom in Europe. We believe that during the course of the presidency we re-established strong and positive relations with our European Union partners, and not before time.
Lord Shore of Stepney: My Lords, the House will recognise the very difficult question which my noble friend has posed the Minister. But in that long list of amazing achievements by the European Union in the past six months, where does she locate the robust and united stance of the European Union when faced with a crisis—Saddam Hussein in the Gulf?
Baroness Symons of Vernham Dean: My Lords, let us be clear. I did not say that they were amazing achievements. They were professional, sound and solid achievements. I am not over-egging any puddings. But the noble Lord raises the question of how the European Union has reacted. It reacted by showing co-operation over the Gulf crisis. Moreover, in another international difficulty, the European Union has shown a unanimity of interest as regards its reactions to Kosovo.
Baroness Carnegy of Lour: My Lords, does the Minister accept that the effect of EMU on the European citizen will depend very much on where he lives? Can the Minister confirm that because of our particular system of loans for house ownership and such matters, personal borrowing in the United Kingdom amounts to 64 per cent. of GDP whereas in France it amounts to only 16 per cent., in Germany 3 per cent., and in Italy 2 per cent.? Clearly, interest rate levels and who sets them matter far more in this country than in those other

519
countries. Did the Prime Minister take that into proper account when he so enthusiastically facilitated the setting up of EMU?
Baroness Symons of Vernham Dean: My Lords, of course the Prime Minister will take all those matters into account. Naturally he would do so, doing a professional job and receiving advice from the Treasury and other government departments during his presidency. I cannot confirm the figures which the noble Baroness has given simply because I do not have that information. If she wishes, I shall write to her confirming those figures. But I remind your Lordships that in going forward, the United Kingdom will see the papers for Euro-X, has had the opportunity to be present at the first of the meetings of Euro-X, and will be keeping a very firm eye on developments on that front.
Lord Jenkins of Putney: My Lords, does my noble friend the Minister agree that, as well as preparing for the possibility that it may be desirable for us to join a common currency, it would also be desirable and wise to prepare for the possibility that it may not be desirable for us to do so?
Baroness Symons of Vernham Dean: My Lords, I believe that both my right honourable friends the Prime Minister and the Chancellor of the Exchequer have made it abundantly clear that we will join the EMU if it is in the interests of this country and if Parliament, this Government and the people agree. I believe that that covers all eventualities.
Lord Moynihan: My Lords—
Lord Tordoff: My Lords, I wonder—
Noble Lords: Order!
The Lord Privy Seal (Lord Richard): My Lords, we have now spent eight minutes on this Question. I think that it is perhaps for the Opposition Front Bench to wind up the debate.
Lord Moynihan: My Lords, what assessment of the Government's performance as president of the European Union does the Minister think MEPs made when, the day after the Foreign Secretary addressed the European Parliament, they voted down the resolution to congratulate the UK Presidency on its stewardship of the EU Council of Ministers and its preparations for the Cardiff Summit, despite the fact that Labour MEPs constitute the biggest single group in the Parliament? To what does the Minister attribute that defeat in the European Parliament?
Baroness Symons of Vernham Dean: My Lords, the noble Lord tells only half the story. The result of the vote to which he refers was due to procedural wrangling between political groups. As I am sure the noble Lord will know, a vote is not normally taken before the European Council; indeed, that is a matter for the European Parliament.
520
However, the noble Lord did not tell the House that the European Parliament voted on a draft resolution tabled by the socialists on the Cardiff European Council. As a result of the postmortem vote, the European Parliament overwhelmingly adopted a resolution of congratulation on the Cardiff European Council by 428 to 45 votes. It is the full story that matters, not half of it.

Gibraltar Waters: Unlawful Fishing
2.45 p.m.
Lord Hardy of Wath Lord Hardy of Wath asked Her Majesty's Government:
What action is being taken to prevent unlawful fishing in Gibraltar waters.
Baroness Symons of Vernham Dean: My Lords, Her Majesty's Government recognise the seriousness of the problem. The Governor has made clear that the Royal Gibraltar Police has his full support, and that of Her Majesty's Government, in any measures needed to enforce the law in Gibraltar waters.
Our Ambassador in Madrid protested to the Spanish authorities following an incident which occurred on 13th March. Since then, the number of Spanish fishing vessels entering Gibraltar waters has decreased. They are now moving on when the Royal Gibraltar Police instruct them to do so.
Lord Hardy of Wath: My Lords, I thank my noble friend the Minister for that Answer. It is a relief to know that a serious view is being taken, especially as there have been over 200 incidents of Spanish illegal fishing over the past 12 months. Will my noble friend ensure that this serious view is maintained as the response by Spanish fishermen to Gibraltar police boats is often extremely threatening? I should like also to ask my noble friend to maintain an interest in the matter as there are two species of dolphin which thrive in Gibraltar waters that are not likely to live very securely if such incidents continue.
Baroness Symons of Vernham Dean: My Lords, I acknowledge the environmental points that my noble friend raises. Of course, Gibraltar has no commercial fishing. On environmental grounds, it enacted in 1991 a local law banning fishing by net or rake. The Government of Gibraltar continue to seek a solution through dialogue at local level between the Gibraltar environmental organisations and the representatives of Spanish fishermen.
However, perhaps I may seek to put my noble friend's mind at rest a little further. I asked this morning for monthly breakdown figures as regards how many incursions there have been since the 13th March incident to which I referred earlier. I can tell the House that there were 73 in March, 26 in April, 12 in May, but only three in June. Therefore, I believe that the action so far taken has been effective.
Lord Merrivale: My Lords, can the Minister affirm that all necessary naval support is available to support the Gibraltar police in enforcing the law in British waters?
Baroness Symons of Vernham Dean: My Lords, support is, of course, given. Our ambassador in Madrid has made the situation very clear. I believe that the very pressing need identified by my noble friend in his original Question has to a very large extent been met by the fall in the number of incursions, as I was able to tell him in my answer to his supplementary question. Therefore, we have so far been successful in tackling the problem in the way that the Government of Gibraltar and Her Majesty's Government have been able to do.
Lord Wallace of Saltaire: My Lords, can the Minister assure the House that there is sufficiently close co-operation between the Gibraltarian and Spanish authorities in combatting the very extensive trade in smuggling drugs and people across the Strait of Gibraltar?
Baroness Symons of Vernham Dean: My Lords, the drugs trade and the illicit trade in people are always a problem. We try to obtain co-operation through a number of different fora to combat these problems. We shall continue to press for co-operation in this area.
Lord Henley: My Lords, will the Government consider that a better way to get the message over to the Spanish authorities might be if the Government here were to reconsider their hostility to giving votes in European elections to the people of Gibraltar, as we demanded during the passage of the European Parliamentary Elections Bill last week?
Baroness Symons of Vernham Dean: My Lords, I remember that debate rather well because I sat through it. I remember that the noble Lord said this was an overwhelming case; so overwhelming in fact that when his party was in government it did nothing about it. Last week my noble friend Lord Williams explained that to do what the noble Lord suggests would put us in breach of EC law. The only legally secure way to extend the European Parliament franchise to Gibraltar is to amend the 1976 EC Act on direct elections. This would require the unanimous agreement of all member states. We do not believe that would be forthcoming.
Lord Berkeley: My Lords, is this not the latest in a long series of incidents caused by the previous government allowing our waters and those of Gibraltar to be opened up to all the Community's fishermen at the time of the accession of Spain and Portugal to the European Union?
Baroness Symons of Vernham Dean: My Lords, it is remarkable how the enthusiasm of the party opposite to put things right is much more evident now than it was when it had the opportunity to do so. Spain does not recognise British territorial waters around Gibraltar because they were not explicitly mentioned in the Treaty
522
of Utrecht. Whatever I wish to lay at the door of the party opposite, I do not think I can manage to go that far back!
The Earl of Carlisle: My Lords, we are all grateful for the fact that Her Britannic Majesty's Ambassador has protested to the authorities in Madrid—I hope in the strongest terms—about the illegal fishing. Will the noble Baroness ensure that the British ambassador in Madrid goes back to the authorities and protests in the strongest possible terms about the harassment that occurs regularly to Spaniards, Gibraltarians, and indeed many tourists, entering and leaving the Rock of Gibraltar?
Baroness Symons of Vernham Dean: My Lords, Spain has the right to carry out customs checks because Gibraltar is outside the Community customs territory. It also has the right to carry out a light passport check, but we continue to urge Spain to ensure that such checks are proportionate to the need. We are pleased that the situation has recently improved, but we take any delays seriously. I can assure the noble Earl that we raise them frequently with the Spanish authorities.

War Widows: Reimbursement of Tax
2.52 p.m.
Lord Clifford of Chudleigh Lord Clifford of Chudleigh asked Her Majesty's Government:
Whether they will reimburse British ex-prisoners of war, their war widows or dependants, with the present day value of tax deducted from pay due to them while in captivity.
Lord McIntosh of Haringey: My Lords, the assessment of prisoners of war for income tax was conducted in accordance with the normal rules, which provided that when service personnel were serving abroad their service pay was assessed to United Kingdom income tax. Service personnel continued, of course, to serve and to be paid while in captivity. The Government have no plans to refund the tax deducted.
Lord Clifford of Chudleigh: My Lords, I thank the Minister for that reply. I am sure he is aware that without taxpayers the Chancellor of the Exchequer would not have been able to give £300 million to those who have suffered strife for the past 30 years in Northern Ireland. Is the Minister aware that the amount that was deducted from the pay of the officers imprisoned in Germany and in Italy during the past world war—there were about 8,000 of them—amounted to about £1.8 million, or £37.5 million in today's terms, and that in Stalagluft III, which was an RAF camp, the officers provided financial help to the other ranks to

523
the tune of up to about £2 million in today's terms? Can the Minister explain why, unlike our wartime allies—that is to say, America, Australia, New Zealand, Canada, the former Rhodesia and South Africa—who promoted their officers, paid pensions and increased those pensions and did not deduct any tax from their pay, we did the exact opposite? Why is it—
Noble Lords: Oh!
Lord Clifford of Chudleigh: My Lords, this is my third question. I believe that I am allowed three supplementary questions. Do Ministers believe that the electorate, especially former prisoners of war, their widows and dependants, feel that Ministers are telling the truth when they stand by the Cenotaph and say, "Lest we forget"?
Lord McIntosh of Haringey: My Lords, the noble Lord is, of course, right that a considerable sum was deducted from prisoner of war officer pay. When it was deducted wrongly—in the sense that camp pay turned out not to have been paid either during or after the war—refunds were made at repatriation. It was also the case—although this probably occurred too late and too slowly—that camp pay could be repatriated during the course of the war to dependants under arrangements organised by the protecting power.
As regards the noble Lord's question about comparisons with other countries, I acknowledge that there were differences. But the government policy on the deduction of income tax from service pay was publicly announced by the then Chancellor of the Exchequer in 1943. It was well known throughout the period of the war and the period after the war when repatriation took place.
Lord Campbell of Alloway: My Lords, is the noble Lord aware that speaking only for myself, I find his Answer wholly satisfactory?
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord, and particularly grateful knowing of his experience in the war.
Baroness Strange: My Lords, speaking on behalf of the War Widows Association, if there should be any chance at all of money coming back to some of these ladies—they are few in number after 53 years—does the Minister agree it would be a happy day for them to have a present from their husbands 53 years on?
Lord McIntosh of Haringey: My Lords, of course it would, but the noble Baroness is as well aware as I am from her distinguished service as the president of the War Widows Association that the pay records of service personnel were destroyed some years after the war. Even those who have objected to the Government's policy and were dissatisfied with the review which was announced last year have never thought it possible that there should be individual restitution.

Film Review Group Report: A Bigger Picture
2.57 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What progress has been made in implementing the recommendations made in the Film Review Group's report entitled A Bigger Picture.
Lord McIntosh of Haringey: My Lords, work is well under way towards the implementation of the action plan set out in the report A Bigger Picture. The proposed training strategy, which will include a major new skills investment fund, is being developed for launch later this year. Considerable progress has been made towards designing the new all-industry fund which is due to begin operating in mid-1999. A detailed work plan for the Film Education Group is being worked up for its first full meeting in September. Progress is also being made on the other recommendations in the report and we are on target to have a new strategy for the film industry in place by April 2000.
Lord Dormand of Easington: My Lords, is my noble friend aware that while this report is to be warmly welcomed there is a long way for the British film industry to go before it catches up with the major Hollywood companies? Therefore, implementation of the report is a necessary first step. Is my noble friend entirely persuaded that a voluntary all-industry fund—he mentioned the fund but he did not say whether it was voluntary—is the best way forward? Of the many valuable recommendations which are made, will he say whether the Government can indicate their priorities in taking action?
Lord McIntosh of Haringey: My Lords, my noble friend is, of course, right. Despite the recent successes of the British film industry we are still structurally very much at a disadvantage compared with the United States film industry. To that extent the boom and bust—if I may use the Chancellor's term—which the British film industry has suffered in recent years is still likely to recur. As regards the all-industry fund, my noble friend queries whether it should be voluntary. The British film industry is not mendicant; £3 billion is spent by the British public on attendance at British films and on television performances of British films. It would not be right for the Government to throw money at the British film industry. What we can do is attempt to deal with the market failures that the industry has recognised.
If my noble friend is asking whether the all-industry fund is going to work, I draw his attention to the membership of the action group. It is very powerful indeed. Broadcasters, including Channel 5, Granada, BSkyB and the BBC, are included; the major American players such as Goldwyn, Warner Brothers and 20th Century Fox are included; the major studios;

525
British Screen Finance; the British Film Commission; the Arts Council; and the BFI are all included. That is good evidence that the voluntary fund will work.
Baroness Rawlings: My Lords, will the noble Lord explain how the removal of tax relief on the travelling and subsistence expenses of film crews on short-term contracts on British locations helps to achieve the objectives of A Bigger Picture?
Lord McIntosh of Haringey: My Lords, it will hardly make a significant difference in either direction. However, it is in accordance with normal tax procedures. We ought not to be making special interest exceptions of that kind.
The Viscount of Falkland: My Lords, following the supplementary question by the noble Lord, Lord Dormand of Easington, and the important point about the establishment of an all-industry film fund, is the noble Lord aware that many of those who will be asked to subscribe are not at all happy to subscribe to a fund, rather than doing as they presently do and will continue to do—namely, individually supporting the industry in ways that are fitting for commercial reasons? In the cost-benefit analysis now being undertaken as to whether this is the way to proceed, will the Government be reasonably impartial? Will they examine that concern, rather than trying to support the proposals contained in the document, A Bigger Picture?
Lord McIntosh of Haringey: My Lords, I can certainly confirm that the cost-benefit analysis will be impartial. Regarding the noble Viscount's major question, he should see the all-industry fund as sitting alongside other public sector activities. After all, we are seeking only 0.5 per cent. of film-based turnover. Although there is presently no evidence, my conviction is that the powerful membership of the action group to which I have referred will secure that. It will bring £15 million to £25 million to add to the funds already available from the Arts Council, lottery financing and the production fund.
Lord Dormand of Easington: My Lords, is my noble friend aware that one of the biggest difficulties facing the British film industry lies in the distribution of its films? Do the Government have any specific proposals in relation to that problem?
Lord McIntosh of Haringey: Yes, my Lords. My noble friend is right. We have a number of major players in film production. However, our exhibitors are very much in the hands of the major American players. The result is that, instead of the vertical integration that exists in the United States' film industry, our distribution facilities are very fragmented and under-financed. A substantial part of the effort described in A Bigger Picture is the provision of research, marketing and other support for that weak link in the film production, distribution and exhibition chain.

Pesticides Bill
3.3 p.m.
Read a third time.
Lord Stone of Blackheath: My Lords, I beg to move that the Bill do now pass. In moving the Motion, I wish to thank those from all sides of the House who have contributed to the discussion. It has been an interesting initiation into the workings of the House, and certainly not as straightforward as I had imagined.
The noble Lord, Lord Kimball, taught me much about the interplay between business in this House and in another place. I shall know another time to look both ways, even when crossing what appears to be the quietest of country roads!
The noble Baroness, Lady Anelay, has not only given us the benefits of her magisterial experience but also called on the juridical experience of close friends and helped me understand more about the processes of this House. I believe the Bill will now significantly improve the legal framework for the regulation of pesticides in the UK. I commend it to the House.
Moved, That the Bill do now pass.—(Lord Stone of Blackheath)
On Question, Bill passed, and returned to the Commons with an amendment.

School Standards and Framework Bill
3.5 p.m.
Report received.
Lord Pilkington of Oxenford Lord Pilkington of Oxenford moved Amendment No. 1:
Before Clause 1, insert the following new clause—

CHAPTER AI
  KEY STAGE 1: ANNUAL PERFORMANCE TABLES

    KEY STAGE 1: PUBLICATION OF ANNUAL PERFORMANCE TABLES
    .—(1) The Secretary of State shall publish annual performance tables for the results of National Curriculum assessments at the end of key stage 1 for all relevant schools.
    (2) The performance tables defined in subsection (1) shall include the average class size.").
    The noble Lord said: My Lords, this is the first of various amendments that we shall propose from this side of the House which in essence put forward the policy of using existing facts—I repeat, existing facts: facts that are ascertainable and about which we can find out—as a means of judging whether the proposals in the Bill actually improve standards. One of the problems regarding educational reform over the past 20 years has been that rhetoric has often replaced facts. Whereas we all agree that we are in the business of improving standards, we can often hide reality behind a cloud of words.
    I and my noble friends accept the view put forward decisively by the Government that smaller classes are in essence better than larger ones. As a former independent

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    school headmaster, I accept that independent schools have always valued smaller classes. However, I think we can enter into agreement in saying that reduction in class sizes is not of itself a universal panacea. On its own it may not be the total answer to the improvement of educational standards.
    Perhaps I may mention a few other factors that we ought to consider: first, styles of teaching. There is sometimes a view that whole class teaching is better than dividing a class and in that case, some educationists argue, classes can be somewhat larger.
    Another factor is care over correction of work. In this case, smaller classes are better than larger ones in that schoolteachers can devote more time to the class with which they are dealing. They can also give individual attention to pupils who have problems. Here again, smaller class size is of good value.
    We can all agree on that. However, it is worth saying that problems exist. That brings me to the point of my amendment. It is concerned with those awful things, facts. It is concerned not merely with the improvement of standards, but with how they are improved and how they are judged. Our amendment proposes that a detailed analysis is made of the effect that reduced class sizes would have on school performance. We are offering the Government a means of knowledge. As Plato, Aristotle and many others said, knowledge is a means to truth—therefore, as I am sure the noble Baroness will agree, the more knowledge, the better. Knowledge is one of the most potent weapons in improving standards in education.
    The amendment is very simple and direct. I suggest that it is well within the spirit of what the Government are trying to achieve in the Bill. The amendment would do two things. It would make available to all of us the overall performance of schools in relation to class size. That information would be of value to educationists. It would also enable us to judge the future. In my opinion and that of my noble friends, that could do nothing but good. It is on that note that I commend the amendment to the House.
    I shall be interested to see how the noble Baroness can oppose the amendment because what I suggest is a study of facts. Her ingenuity in opposing my excellent amendments always amazes me, but in this case I am sure that she will say, "Well, I think I'd like these facts as well". I cannot see why she should not want them, but if she does say that, then I shall mistrust her motives, albeit somewhat slightly. I beg to move Amendment No. 1.
    3.15 p.m.
    Lord Dormand of Easington: My Lords, the noble Lord properly spent time speaking about the other factors which contribute towards a proper and full education. As he said, he has had great experience himself as a former headmaster of an independent school in the independent sector. What concerns me is that the party opposite should say these things and simply diminish the importance of small classes. One thing that private schools have in common is their small
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    classes. That applies to all the independent schools. I suggest that demonstrates it to be the most important factor in all of them.
    We could go further. Brilliant teachers make a very big difference, as we know. I am glad that the noble Lord approves of that. However, he weakens his case considerably by saying that the number in a class is not all that important. It seems to me, and to those on this side of the House, that it is vitally important. That is why the Labour Party, and now the Labour Government, properly place such importance on it.
    Baroness Carnegy of Lour: My Lords, I support the amendment strongly. It gets close to the nub of the matter in this part of the Bill and I took an interest in it at Committee stage, as I do now. The noble Lord, Lord Dormand, said that my noble friend's amendment diminishes the importance of the size of classes. Perhaps we shall come to that when the Minister moves her amendment, if she is particularly concerned about it.
    To publish annual performance tables of this key stage is an essential feature of the state school system. People cannot choose without information and the teaching profession in the area cannot tell how they are getting on without the information. It seems to me that parents, teaching staff and everyone else are perfectly capable of making distinctions between the possibilities there are for schools and what their problems are. The noble Lord, Lord Dormand, shakes his head, but where it has been done it has proved to be the case. I know the party he represents does not like it—it is a historical matter—but the facts are that it is enormously helpful to everyone concerned. I support the amendment.
    Lord Swinfen: My Lords, I support the proposal to reduce class sizes where possible, but I also maintain that it is the quality of teaching that is important. The Government have said that they have put aside a certain amount of money to assist in the reduction of class sizes. But I understand that it takes two or three years to train a teacher. When the Minister answers the question, can she say from where the additional teachers will come? If it takes so long to train teachers, it will take some time to find them.
    Lord Tope: My Lords, I see the Minister rising and I am tempted to let her answer first because I would certainly not claim her ingenuity in explaining to the noble Lord, Lord Pilkington, why I cannot support what he believes to be such obviously sensible amendments.
    I say that for a number of reasons. First, I welcome his clear statement, accepting that smaller classes are desirable and make a difference. Having sat on the Bench I still sit on during the lifetime of the previous government, that was far from clear to me when the other Benches were reversed and the noble Lord's colleagues sat where the Minister now sits. It is far from clear to me that they believed that smaller class sizes made any difference at all, whether at infant or later ages. So I welcome one part of his statement: the clear recognition that class sizes make a difference.

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    The noble Lord went on to say that they were not a universal panacea. I do not think that any of us who are advocates of smaller class sizes would say that that is the be-all and end-all to better education for children. Of course it is not. A bad teacher will not necessarily be a good teacher in a smaller class and a good teacher will probably he better than a bad teacher in a large class. But there is no doubt that a good teacher will be an even better teacher in a smaller class where such teachers can give greater attention to the children.
    We are therefore now talking about the publication of performance tables, more usually known as league tables because once they are published at national level that is what they inevitably become. They become league tables like performance tables at any other stage which are published.
    There seems to be confusion about whether the information is available and, if it is, whether it is secret. The information is available, it is made available to parents and teachers. So judgments can be made. Where it is not available in published form anyway is at national level. I continue to have misgivings about league tables that are published. I will have even greater misgivings should we ever reach the stage of publishing crude league tables at key stage one. I do not think that we will do that. I read the Minister's reply when we had a debate on this at Committee stage. I thought that she answered the noble Lord, Lord Pilkington, very well. I recognise that he was at a disadvantage at the time because the noble Baroness, Lady Blatch, had just run out of the Chamber with his notes. We all felt for him on that occasion.
    Added value or value added are the buzz words. That is important. If this kind of information is to be able to make a valid statement about the effect of reducing class sizes we need properly to be able to compare the situation as it is now with the situation as it develops as class sizes become smaller. We are not in a position to do that. I argue that a better comparison which is fairer to schools would be between the improvement at the base line when they start and when they have reached key stage one. So I do not doubt that in the fullness of time the Government will move towards publishing such information at a national level, but I hope that, as and when it comes, it will not come in the crude form we have known in the past and will take account of the important differences.
    However, it is also linked to the publication of information about class sizes. Again, I read the Minister's reply and I do not want to steal what I suspect she will say. Publishing class size numbers is all right at a national level overall. It is probably all right at the LEA level, although with some small LEAs of which I have experience even that can be distorted. However, publishing it at individual school level can be misleading. Facts and information are useful. Misinformation and misinterpretation of facts are very dangerous. That would be my concern if the two are linked in this way.
    We all want to know how well the reduction of class sizes works. We are all committed to driving up standards. I have no doubt about that. We may have
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    different ideas as to how it can best be done, but we all want to see it done. I would worry very much if this method were chosen. While I do not doubt for a moment the sincerity of the noble Lord, Lord Pilkington, I suspect that there may be some of his colleagues who a year or two ago were not committed to smaller class sizes. They want to go down this route to prove that the Government's investment in smaller class sizes is wasteful. I do not believe that to be the case and primarily for that reason I cannot accept the amendment.
    Baroness Blatch: My Lords, I was interested in the final comment of the noble Lord, Lord Tope. This is not about scoring points or proving people wrong. The Government have linked class sizes with performance. That is the whole rationale for what the Government are doing because they believe that reducing class sizes to 30 will improve education.
    There is a great debate going on about class sizes and I repeat something that the noble Lord, Lord Tope, said, as regards a poor teacher with a small class and a good teacher with a large class. Very often the better deal for the child educationally will be with the good teacher, whatever the size of the class. I accept what the noble Lord, Lord Tope, said, a good teacher with a small class can achieve that much more. Nevertheless, there is poor scientific evidence on the point and a great deal of debate on what is important.
    One of the factors to which I give great weight is the ability of head teachers to make a judgment about where, if they had more money, they would spend it in their schools. The chances are that in many primary schools the head teachers would spend it on keeping class sizes down. But there would be some occasions when they would spend the money in another way where it would be more beneficial educationally. One of the factors I support is giving that choice to head teachers. The rigidity of the Government's policy means that priorities of both the LEA and the schools will be pre-empted by the Government without any flexibility whatever.
    I find it difficult to understand what the arguments can be against obtaining the very information that will inform people about the effect of class sizes in our schools. If one has such information, bringing together the size of the class and the achievement of the school, it will be possible to make real, scientific judgments as to the effect of the policy. I cannot believe that the Government are not interested in seeing and evaluating the effectiveness of their policy.
    I want to leave one fact on the table as a contribution to this extremely confused debate as to whether it is a beneficial policy; that is, the statistics that went with the Inner London Education Authority. It spent the most on children in schools. It was the highest spender in the whole country. It had the most generous pupil:teacher ratios in primary and in secondary schools and yet produced the worst education in the country. That is irrefutable; it is part of the record.

    531
    There is a good deal of confusion around the issue and, over time, this amendment would provide this Government and other governments with information that is important in order to make a real evaluation as to the effect of the application of the policy on class sizes.
    The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, I shall have to try to be ingenious again. When we last had the opportunity to debate the issues raised by this amendment in Committee, it was clear that there was a fair amount of common ground between us in several key areas. I believe that there still is.
    We all share agreement on the need to make information publicly available, which enables comparisons to be made of the performance of our schools so as to enable us to inform the debate on standards in schools and to raise those standards right across the board. That is something about which there is common agreement.
    We can also agree that the way forward in improving the data provided in school performance tables, as the noble Lord, Lord Tope, said, is the introduction of measures of value-added by schools from one stage to another or possibly at the beginning of the stage through to the end of it. That is the only fair and just way of assessing the quality of what schools are providing in terms of the performance of pupils.
    I believe also that we agree that the development of those value-added measures is complex and depends on suitable data on a pupil's prior attainment coming on stream. Research shows that prior attainment is the single most influential factor on performance in later years. I entirely accept what the noble Lord, Lord Pilkington, said: that is, that we cannot use class size as a universal panacea. The Government are not doing that. There are many other factors which affect the quality of what is being provided. I agree strongly with what the noble Lord, Lord Swinfen, said about the quality of teachers. That is of enormous importance and is perhaps the most important factor of all. However, he raised the question of where the teachers would come from. The one area where we can be confident is as regards infant school teachers. Applications for teaching at that level are buoyant and courses for infant school teaching are over-subscribed. I do not believe therefore that there will be a problem in the recruitment of additional teachers at that stage.
    I know that we also agree on the importance of early years schooling on the future development, both educational and personal, of the individual pupil and on the importance of reducing class sizes in those early years. I should like to associate myself with what the noble Lord, Lord Tope, said in that regard. He is absolutely right. There is a great deal of evidence to support his position. However, the arguments against the amendment still stand.
    At the risk of repeating points that I made in Committee, we already have statutory provisions in place in the 1996 Education Act governing the publication of performance tables. We are currently in
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    the middle of a programme of significant changes to the way in which information is presented in performance tables. They include, for example, helping parents to see at a glance how each school's performance improved over time; better reflecting the achievements of pupils across the full ability range rather than just looking at the achievements of the most able, and providing information for the first time on progress made in schools between Key Stage 3 in 1996 and GCSEs in 1998—an important step towards the development of full value-added measures. I do not believe therefore that anybody can claim that the Government are being idle in this area.
    We have also delegated the responsibility for publishing Key Stage 2 results in primary performance tables to individual LEAs, enabling them to provide additional data on primary school performance and to set the results in a local context, which is also important. We have encouraged LEAs to publish Key Stage 1 results alongside the Key Stage 2 results where they can obtain the data without adding to the bureaucratic burdens on schools, of which we must also be aware and take seriously. It is a significant point. There is always the risk, in introducing changes on this scale, that we shall place unreasonable demands on schools in checking or providing the necessary data for publication. We want to reduce the existing burdens overall. It is essential that we plan these developments carefully, taking all these issues into account and, wherever possible, balance any increases in burdens in one area with reductions elsewhere. I am sure that all noble Lords will share that objective.
    For those reasons I remain unpersuaded that the time is right to introduce a full set of national performance tables at Key Stage 1. The noble Baroness, Lady Blatch, and her noble friend Lord Pilkington both said that we need more scientific evidence. As a social scientist, I do not dispute that. But it is important that the kind of evidence we collect is genuinely helpful rather than misleading. The noble Lord, Lord Pilkington, was offering more knowledge as a way to truth. I agree that that is a desirable objective. But to go back to my elementary statistics, statistical data must be both valid and reliable for it to be useful; otherwise it will lead to misinterpretation and a failure to understand exactly what the data is showing.
    I do not in any way want to suggest that the Government do not agree with the publication of such performance tables. However, we must wait until we can base the related data requirements on the lessons learnt from the work that we are already doing on the later key stages. I explained to your Lordships during Committee that the collection of statistics on class sizes is not straightforward. It is based currently on a snapshot of the position in schools on a single day at the time of the annual schools' census. Nor do I believe that linking average class sizes with Key Stage 1 results in the way proposed will necessarily be helpful when assessing performance of schools at this stage or conversely, in assessing the effect on performance of reducing class sizes.

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    As the noble Lord knows, there is not one, but a number of factors at work. To link achievement to just one of those would be giving an incomplete picture. Therefore I accept that there is a need to do further work in this area. I accept that at some point we should be able to publish performance tables. I accept also that it is important to evaluate new policies of this kind; and that we shall do. But I do not believe that the amendment as drafted would be helpful to parents. Therefore, I hope the noble Lord will agree to withdraw it.
    3.30 p.m.
    Lord Swinfen: My Lords, before the noble Baroness sits down, she very kindly gave me an answer to my question on infant schools, but what about the other schools in the education system? Where will the teachers be found to bring their class sizes down to at least 30?
    Baroness Blackstone: My Lords, the Government are committed to bringing infant school class sizes down to 30. That is what these clauses are about and that is what these amendments are about. If I may say so, the noble Lord's question is not really relevant to the amendments here, but of course the Government are concerned to improve the recruitment of teachers at all stages.
    Lord Pilkington of Oxenford: My Lords, perhaps I may begin with my fellow teaching colleague, the noble Lord, Lord Dormand. I was not belittling the argument. Anyone who is a practising teacher knows that it is better to teach small classes than large classes, particularly if one is correcting work, even among junior or primary children.
    I felt that the noble Baroness met me more than half way, but her ingenuity clouded the route. There seems to be agreement between us but I think that the debate revealed that there is controversy on this matter. The issue is about how one uses resources and whether in some cases to choose between a class of 32 and a better teacher or whether arbitrarily to say that 30 is the limit.
    I understand why the Government have committed themselves to this, but it is because their commitment has been so precise—30 and no further and the headmaster or headmistress allowed no choice—that my question mark is raised. That is why I want to put facts on the face of the Bill. I appreciate what the noble Baroness said about value added and I share her views on that. However, as the noble Lord, Lord Dearing, said in Committee, this is an enormously complicated matter. There was enormous trouble in finding a system for value added. Therefore, I cannot see that any harm is done by producing facts. They will not be the elixir of truth but they will give some guidance. In the country of the blind, the one-eyed man is king; and the Government could open one eye to this.
    I dispute whether it would lay such a burden on schools. All we are asking is that the class sizes should be put alongside Key Stage 1, which is very easy to do. The noble Baroness and the noble Lord, Lord Tope, pointed out that as things exist at the moment it is
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    difficult. We on this side of the House are not making a violent ideological attack on this point. We are sharing some of the problems and we are saying that there are difficulties and there is agreed ground. But what we are asking is for facts on the face of the Bill, facts which will not lay such a burden on schools. As various surveys have shown, what really lays burdens on schools is the rocks they hit in the pass. Therefore, despite the noble Baroness's ingenuity, charm and her standing on her head, I am not happy. I should like to ask the opinion of the House on this matter.
    3.33 p.m.
    On Question, Whether the said amendment (No. 1) shall be agreed to?
    Their Lordships divided: Contents, 96; Not-Contents, 146.

    Division No. 1

    CONTENTS

    Aberdare, L.

    Hayhoe, L.

    Addison, V.

    Henley, L.

    Ailsa, M.

    Hooper, B.

    Aldington, L.

    Hylton-Foster, B.

    Ashbourne, L.

    Ilchester, E.

    Belhaven and Stenton, L.

    Knight of Collingtree, B.

    Bellwin, L.

    Knollys, V.

    Beloff, L.

    Lauderdale, E.

    Belstead, L.

    Lindsay, E.

    Biffen, L.

    Long, V.

    Blatch, B.

    McConnell, L.

    Boardman, L.

    Masham of Ilton, B.

    Braine of Wheatley, L.

    Merrivale, L.

    Broadbridge, L.

    Milverton, L.

    Brougham and Vaux, L.

    Molyneaux of Killead, L.

    Burnham, L. [Teller.]

    Monro of Langholm, L.

    Butterworth, L.

    Moore of Wolvercote, L.

    Campbell of Alloway, L.

    Mottistone, L.

    Carnegy of Lour, B.

    Mountevans, L.

    Charteris of Amisfield, L.

    Mowbray and Stourton, L.

    Chelmsford, V.

    Munster, E.

    Chesham, L.

    Murton of Lindisfarne, L.

    Clanwilliam, E.

    Noel-Buxton, L.

    Courtown, E.

    Norrie, L.

    Cranbrook, E.

    Onslow, E.

    Crickhowell, L.

    Orr-Ewing, L.

    Cross, V.

    Oxfuird, V.

    Cuckney, L.

    Pearson of Rannoch, L.

    Davidson, V.

    Pender, L.

    De Freyne, L.

    Pilkington of Oxenford, L.

    Dean of Harptree, L.

    Rawlings, B.

    Denbigh, E.

    Rawlinson of Ewell, L.

    Denham, L.

    Renfrew of Kaimsthorn, L.

    Dixon-Smith, L.

    Renton, L.

    Eden of Winton, L.

    Rotherwick, L.

    Elliott of Morpeth, L.

    Rowallan, L.

    Elton, L

    Sandford, L.

    Erne, E.

    Seccombe, B. [Teller.]

    Feldman, L.

    Sharples, B.

    Fookes, B.

    Sudeley, L.

    Gage, V.

    Swansea, L.

    Gainford, L.

    Swinfen, L.

    Garel-Jones, L.

    Teviot, L.

    Gilmour of Craigmillar, L.

    Teynham, L.

    Glentoran, L.

    Thomas of Gwydir, L.

    Gray of Contin, L.

    Trumpington, B.

    Grimston of Westbury, L.

    Waddington, L.

    Halsbury, E.

    Westbury, L.

    535

    NOT-CONTENTS

    Acton, L.

    Kirkhill, L.

    Addington, L.

    Linklater of Butterstone, B.

    Allen of Abbeydale, L.

    Lockwood, B.

    Allenby of Megiddo, V.

    Lofthouse of Pontefract, L.

    Alport, L.

    Longford, E.

    Ampthill, L.

    Ludford, B.

    Annan, L.

    McIntosh of Haringey, L. [Teller.]

    Ashley of Stoke, L.

    Avebury, L.

    Mackie of Benshie, L.

    Barnett, L.

    McNair, L.

    Bassam of Brighton, L.

    McNally, L.

    Beaumont of Whitley, L.

    Maddock, B.

    Berkeley, L.

    Mallalieu, B.

    Blackburn, Bp.

    Mar and Kellie, E.

    Blackstone, B.

    Mason of Barnsley, L.

    Blease, L.

    Merlyn-Rees, L.

    Bruce of Donington, L.

    Methuen, L.

    Burlison, L.

    Milner of Leeds, L.

    Callaghan of Cardiff, L.

    Mishcon, L.

    Calverley, L.

    Monkswell, L.

    Carmichael of Kelvingrove, L.

    Montague of Oxford, L.

    Carrick, E.

    Morris of Manchester, L.

    Carter, L. [Teller.]

    Murray of Epping Forest, L.

    Castle of Blackburn, B.

    Nicholson of Winterbourne, B.

    Chorley, L.

    Northbourne, L.

    Cledwyn of Penrhos, L.

    Ogmore, L.

    Clinton-Davis, L.

    Paul, L.

    Cocks of Hartcliffe, L.

    Peston, L.

    Davies of Oldham, L.

    Pitkeathley, B.

    Dean of Beswick, L.

    Ponsonby of Shulbrede, L.

    Dean of Thornton-le-Fylde, B.

    Prys-Davies, L.

    Dixon, L.

    Ramsay of Cartvale, B.

    Donoughue, L.

    Randall of St. Budeaux, L.

    Dormand of Easington, L.

    Rea, L.

    Dubs, L.

    Redesdale, L.

    Eatwell, L.

    Rendell of Babergh, B.

    Evans of Parkside, L.

    Richard, L. [Lord Privy Seal.]

    Exmouth, V.

    Ripon, Bp.

    Ezra, L.

    Rodgers of Quarry Bank, L.

    Falconer of Thoroton, L.

    Sainsbury, L.

    Farrington of Ribbleton, B.

    Sainsbury of Turville, L.

    Fitt, L.

    Sandberg, L.

    Gallacher, L.

    Sandwich, E.

    Geraint, L.

    Sefton of Garston, L.

    Gibson, L.

    Serota, B.

    Glenamara, L.

    Sewel, L.

    Gordon of Strathblane, L.

    Shannon, E.

    Gould of Potternewton, B.

    Shepherd, L.

    Graham of Edmonton, L.

    Shore of Stepney, L.

    Gregson, L.

    Simon, V.

    Grenfell, L.

    Simon of Highbury, L.

    Hampton, L.

    Smith of Gilmorehill, B.

    Hardie, L.

    Stallard, L.

    Hardy of Wath, L.

    Stoddart of Swindon, L.

    Harris of Greenwich, L.

    Stone of Blackheath, L.

    Haskel, L.

    Strabolgi, L.

    Hayman, B.

    Symons of Vernham Dean, B.

    Hilton of Eggardon, B.

    Taverne, L.

    Hollis of Heigham, B.

    Taylor of Blackburn, L.

    Holme of Cheltenham, L.

    Thomas of Macclesfield, L.

    Howie of Troon, L.

    Thomas of Walliswood, B.

    Hoyle, L.

    Thomson of Monifieth, L.

    Hughes, L.

    Tope, L.

    Hughes of Woodside, L.

    Tordoff, L.

    Hunt of Kings Heath, L.

    Turner of Camden, B.

    Irvine of Lairg, L. [Lord Chancellor.]

    Wallace of Saltaire, L.

    Watson of Invergowrie, L.

    Jay of Paddington, B.

    Weatherill, L.

    Jenkins of Hillhead, L.

    Whitty, L.

    Jenkins of Putney, L.

    Wigoder, L.

    Kennedy of The Shaws, B.

    Williams of Crosby, B.

    Kennet, L.

    Williams of Elvel, L.

    Kinloss, Ly.

    Williams of Mostyn, L.

    Kintore, E.

    Winchilsea and Nottingham, E.

    Resolved in the negative, and amendment disagreed to accordingly.
    3.44 p.m.
    Clause 1 [Power to set limits on infant class sizes]:
    Baroness Blackstone Baroness Blackstone moved Amendment No. 2:
    Page 1, line 9, leave out subsections (1) to (3) and insert(".—
    (".—(1) The Secretary of State shall by regulations—

    (a) impose a limit on class sizes for infant classes at maintained schools; and

    (b) specify the school years in relation to which any such limit is to have effect.

    (2) Any limit imposed under this section shall specify the maximum number of pupils that a class to which the limit applies may contain while an ordinary teaching session is conducted by a single qualified teacher.
    (2A) Subject to subsections (3) and (3A), regulations under this section shall be so framed that—

    (a) the maximum number specified in pursuance of subsection (2) is 30, and

    (b) that limit has effect in relation to the 2001/2002 school year and any subsequent year.

    (3) Regulations under this section may—

    (a) provide for any limit imposed under this section to take effect—

    (i) at the same time in the case of each of the age groups into which the pupils in infant classes fall, or

    (ii) at different times (which may be earlier than the beginning of the school year mentioned in subsection (2A)) in the case of different such age groups;

    (b) provide that, in any circumstances specified in the regulations, any such limit either is not to apply or is to operate in such manner as is so specified.

    (3A) The Secretary of State may by order amend subsection (2A)—

    (a) by substituting for "30" such other number as is specified in the order; or

    (b) by substituting for the reference to the 2001/2002 school year a reference to such other school year as is so specified.").

    The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 10, 17, 172 to 175, 201 and 234. As Members of your Lordships' House will recall during Committee, following our discussions on the recommendations of the Delegated Powers and Deregulation Committee, I undertook to return to the House with proposals on this matter. These government amendments will meet the committee's concerns and therefore I am very pleased to move them.
    I said before and I say again, that we are keen to respond as positively as possible to the committee's recommendation, as we have done elsewhere in the Bill. Not only have we placed the maximum number of 30 on the face of the Bill, we have placed the deadline of 2001 on the face of the Bill, too. However, it would not be wise for the maximum number of 30 and the deadline of 2001 to be completely inflexible. The reason is simply that we may, at some future date, want to consider reducing infant class size limits even further to 28, 27 or, who knows, even to 25. In asking for these important powers to be placed on the face of the Bill, we do not believe that the committee intended to limit flexibility. Indeed, its report makes clear that it has

    537
    accepted the need for flexibility in implementing this policy. Its intention—which we fully accept—was to permit informed debate on the government's central objectives in imposing infant class size limits, but I do not believe that the committee intended that the limit of 30 should be set in stone. That is why subsection (3A) gives the Secretary of State power by order to amend the maximum number and the deadline.
    There is no question of this Government using these flexibilities to renege on their pledge to the British people. We could not have been clearer. We shall ensure that by the beginning of the 2001 school year—earlier where circumstances will allow—no child of five, six or seven years of age will be in a class of over 30. The fact that we are introducing this legislation and the £62 million that we have already made available, shows that we are determined that this pledge will be met.
    If at some future date we find ourselves in a position to build on this well-supported policy, by reducing the maximum number even more, these amendments enable us to do so without the need for primary legislation. We would have to change both the maximum number and the target date because any new number would apply from a date other than that shown on the face of the Bill.
    I turn now to Amendments Nos. 172 to 175. These are of an entirely technical nature. The standard number is the minimum number of pupils that a school must admit if it is asked to do so in the normal admissions age group. But admission authorities are free to set admission limits above this if they choose to do so. They must then admit pupils to this level. They must not set an admission limit below the standard number.
    It is essential that arrangements relating to admission numbers do not in any way restrict the effective implementation of class size policy. We are taking measures in Clause 92 and Schedule 23 to ensure that admission authorities do not set an admission limit above the standard number if that limit would conflict with infant class size limits. These measures require admission authorities to review the existing standard number and to apply for a reduction where it is set at a level which would be incompatible with meeting the class size limit.
    Clause 92 also gives the Secretary of State the power to disapply the standard number for a transitional period while the review is being carried out and a reduction is applied for. These amendments simply allow for transitional arrangements so that the measures we have set out in Clause 92 and Schedule 23 can take effect when the class size regulations come into force. They make no change to the provisions that we are putting in place to help admission authorities plan admission numbers in the light of the class size limit, as soon as possible.
    Similarly, Amendments Nos. 173 and 174 are of a technical nature and reflect the introduction to the Bill of the new Clause 1(2A) which allows for only one class size limit. There is no change to the nature of the provisions contained in Schedule 23.
    Amendment No. 234 provides for transitional provisions which are necessary following Royal Assent. The provisions on class sizes will come into force
    538
    immediately. However, we intend the new admission framework to come into force on 1st April 1999. This amendment gives specific power to adapt the existing admission legislation in the Education Act 1996 so it is consistent with the class size provisions before the new admissions framework is brought into force. This is necessary to ensure that admission authorities can plan admissions so that they will be able to comply with the class size provisions. If admission authorities are to comply with the class size provisions by 2001, they need to have suitable admission arrangements, including planning numbers, in place for the beginning of the admissions round for entry in September 1999.
    The amendment will allow them to plan for new infant class size limits to be an integral part of the admission arrangements over the three years of entry beginning in September 1999. Those children admitted in September 1999 would be subject to infant class limits in 2001.
    Subparagraph (1)(b) will enable the existing legislation relating to appeals to be modified before the new admission framework is in force so that it contains provisions to constrain appeals panels from making decisions to admit children which would breach the class size legislation.
    Subparagraph (1)(c) would allow transitional provisions specifically to cover the occasions where the published admission arrangements were not compatible or consistent with any modified arrangements that were necessary. Admission authorities would have to redetermine and republish their arrangements.
    The Government have responded positively to the recommendations of the Select Committee on Delegated Powers and Deregulation. The Government are committed to limiting the size of infant classes and to doing so as quickly as practicable. I urge the House to support the amendments. I beg to move.
    The Chairman of Committees (Lord Boston of Faversham): My Lords, I must point out to your Lordships that if Amendment No. 2 is agreed to, I cannot call Amendments Nos. 3 to 5 inclusive.
    Baroness Carnegy of Lour: My Lords, I am sure that the House is grateful to the Minister for tabling these amendments. It is good to see the Government's broad intentions on the face of the Bill. However, I should like to ask one question about what I think may be an omission from Amendment No. 2. In Committee, the Minister told us that despite the expenditure that would be involved the Government were determined to keep class sizes to the number prescribed and that if necessary extra teachers would be recruited and new building work carried out. The Minister said that quite clearly. We hear that a good deal of money is to be moved into schools from other areas of expenditure on our national life, presumably partly to meet this extra expenditure.
    I have read in the education press that one of the ways in which the Government's aim is to be met is by creating classes containing children at different stages, with two or even three-stage classes. Can the Minister

    539
    confirm that that is a possibility? If it is, can the noble Baroness tell me whether the Government think that 30 children is the right maximum for a mixed stage class? In Scotland, the contractual limit on the maximum size of a class containing children who are all at one stage is 33, but when the class contains children at two different stages, the maximum size allowed is 25. Those limits apply at every level of schooling, right through a child's school life.
    It seems to me that it must be very difficult for a teacher to teach children at two or three different stages. It is probably not impossible with a smaller number of children, but if a class contained 30 children at three different stages, the teacher would have to be pretty good to be able to cope. I wonder whether the Minister has allowed for that. My reading of the text of Amendment No. 2 does not reveal that that is allowed for in future regulations. I hope that the Minister will be able to reply to this important point.
    Lord Northbourne: My Lords, I too welcome Amendment No. 2 and the fact that the Government have been able to go into rather more detail about their proposals. However, at the next stage will the Minister consider going just a mile further because class sizes seem an awfully blunt instrument in terms of very young children. Normally in classes containing four and five year-olds there will be at least one assistant and perhaps two. The quality of that assistant is important, as is the experience of the teacher who should have special training for dealing with very young children. Some people take the view that there should be at least one trained nursery nurse as an assistant in a class containing four year-olds. A class of 30 which is taught by a 35 year-old—by one young, inexperienced teacher alone—is very different from a class of 30 which is taught by an experienced nursery teacher or infant teacher helped by one or two assistants, perhaps one of whom is a nursery nurse.
    I wonder whether there could be rather more precision in these provisions. I should like to take this opportunity to support what was said by the noble Baroness, Lady Carnegy of Lour, because there is, indeed, a very great difference if one is teaching children of different ages and at different stages of their development.
    Baroness Blatch: My Lords, I wonder whether the Minister can give us some figures. I know that the department has now carried out a great deal of work into ascertaining how many children are in this age group, where they are, and the size of their classes. I know that there has been a recent publication on this although I have not had all the details. At the last date for which information was available, how many classes at Key Stage I contain children of mixed age groups? My noble friend Lady Carnegy made an important point. The school in my village contains only three classes. The first contains five, six and seven year-olds; the second class contains seven, eight and nine year-olds; and the third class contains nine, 10 and 11 year-olds. That situation is very common in the rural areas of this country.
    540
    As the noble Lord, Lord Northbourne, said, there is a world of difference between a teacher having to teach a class of 30 children of three different age groups and a teacher who teaches a class containing only five year-olds, or only six year-olds or only seven year-olds. The burden on the former teacher is so much greater. If the policy were applied inflexibly, the teacher with the mixed age group would be subject to the same limit on class size as the teacher with a class of only one age group. There is a great width of ability in the four, five and six year-old age group; in the five, six and seven year-old age group and in the seven, eight and nine year-old age group. The range of ability in such mixed classes is vast. However, it does not appear that any provision has been made to recognise that difference when applying the policy.
    Baroness Maddock: My Lords, we are aware that in these amendments the Government have dealt with many of the issues that were raised in Committee. Effectively, they have rewritten the provisions dealing with class sizes in infant schools. I know that in Committee the Government were sympathetic to many of our amendments. At a recent conference of local education authorities concern was expressed about implementing the Government's policy. Many practical problems have emerged for both LEAs and individual schools around the country as they have tried to cope with what they thought was the Government's policy.
    We recognise that the amendments give the Government much more flexibility in applying their infant class size policy. The amendments will give schools time to introduce the policy and may create less competition in terms of other policies, such as admissions policies, and with regard to the effect on classes for older children in schools that comprise both infants and juniors.
    However, we feel that the Government have got themselves into a bit of an unnecessary mess by pushing their policy a little too soon and even before it has passed through the legislative process. We accept—we have accepted for some time—that the costs will be higher. Indeed, over a period of time we have been giving detailed costings of how we suggest that our proposals should be enacted. Our proposals would go even further than the Government's and would ensure that all primary school classes are limited in size to 30 children.
    However, the difficulty remains that resources will be needed. We are not absolutely convinced that the Government have squared the circle. The nature of the Government's amendments makes life slightly difficult as regards our later amendments in relation to class sizes. The original provisions were intended to ensure that the size of classes in all primary schools was 30, in part because of the knock-on effects flowing from the Government's proposals. If we are to achieve that we believe that it should be done properly. The Government have a partial policy; and the amendments that they have tabled today demonstrate that that policy has a knock-on effect. The Government have responded to that today.

    541
    It is likely that the policy on infant class sizes will not work its way through the schools in precisely the way intended by the Government. There have been discussions in another place and announcements have been made by the Government about how many new teachers will be needed, how much money the Government will give for that, and how much money will be made available in the immediate future. Originally a statement was made by a Minister in another place that 5,000 extra teachers would be required by the year 2001. My honourable friend in another place, Mr. Don Foster, has done some arithmetic. Being generous to the Government, it is difficult to understand how another 8,000 additional teachers will not be required. The noble Baroness the Minister has informed the House today that recruitment of infant school teachers is buoyant. We are pleased to hear that. However, we still believe that it will be difficult to find the extra teachers who will be needed.
    In a press release on 22nd May, the Government said that the sum of £22 million was being allocated from the standards fund to recruit 1,500 new teachers to ensure that just over 100,000 infant pupils are kept out of large classes from September. However, if one works out the cost per teacher the figure is about £18,000. That means a shortfall of approximately 250 teachers, unless the figures are wrong. When one looks more closely at the figures in the Government's statement one is concerned that there will be problems despite the fact that they have given themselves flexibility on the issue.
    We support small class sizes. As a teacher I have supported that concept on the Floor of the House many times. The question is always raised whether there is scientific evidence that small classes are beneficial to children. As a teacher I know that with small classes I was able to get more out of those children than with larger classes. I refer in particular to the average child who is able to achieve a great deal more. If I had been an even better teacher perhaps I could have gained the very best out of every child. I suggest that few people can do that. There is no doubt that for the average teacher to be able to carry out his or her job, and to feel satisfied about the achievement of the child at the end of that teaching, it is better for all concerned if there are smaller classes. I do not believe that scientific evidence is required to demonstrate that.
    It is possible that we shall not be able to move the next sets of amendments. I hope that I have indicated why we wish to move those amendments. In part we are concerned about the levels of funding and the recruitment of teachers. The Government recognise some of the points that we make. They believe that they are answering some of the questions that we raise. However, in the end more resources are required. During the general election we were clear as to where those greater resources would come from. I shall not bore noble Lords this afternoon with the figures. We worked out a five-year plan based on a penny on income tax and how much we would put towards it. In year five there would be a figure of £475 million which would ensure classes of 30 in all primary classes. Some of our later amendments seek to define primary school classes. That is also important.
    542
    We welcome the Government's recognition of the issues that have been raised by ourselves and others outside this House. However, we do not believe that what they have done goes far enough. We regret that we shall not be able to talk about that at greater length.
    4 p.m.
    Baroness Blackstone: My Lords, I begin by dealing with the question of mixed age teaching raised by the noble Baroness, Lady Carnegy, which was also touched upon by the noble Baroness, Lady Blatch. That matter was also commented upon by the noble Lord, Lord Northbourne. Twenty seven per cent. of pupils in primary classes in January 1998 were taught by one teacher in mixed age classes. At Key Stage 1 21 per cent. of pupils were in mixed year group classes; and at Key Stage 2 28 per cent. were in mixed year group classes. There are already substantial numbers of pupils in these classes. I understand that the average size of mixed age primary classes taught by one teacher in primary schools is 27.4. Therefore, that is lower than the equivalent figure for all single year group classes except reception class. But I accept as a matter of common sense that if a teacher is asked to teach across age groups it may be more demanding. I also accept the point about the value of teaching assistants in classes of this kind.
    We want to ensure that local education authorities come to sensible decisions. It is a matter for local decision-making. It is obvious from the figures that LEAs already take this into account, and I see no reason why they should not continue to do so. We do not expect an enormous increase in the number of Key Stage I infant school classes that are taught in mixed age groups as a result of the change that we make to the class size limit. I turn to the point raised by the noble Baroness, Lady Maddock. The reason for that is that we shall provide the resources. We have not had to put a penny on income tax to find the resources for this initiative. Those resources are being found without increasing income tax.
    I am grateful to the noble Baroness, Lady Maddock, for her comments about the importance of small classes for young children. If there are smaller infant classes they will work their way through primary schools. As a result we expect to see rather smaller classes at Key Stage 2 as those smaller infant school classes work their way through. I believe that I have answered the questions that have been put. On that basis I hope that the House will accept this amendment.
    Baroness Carnegy of Lour: My Lords, before the Minister sits down and with the leave of the House, is the Minister saying that, whereas it is a good idea to express in law the maximum class size for Key Stage 1 children, she does not think it necessary to stipulate a lower age for such classes when they contain two stages or more?
    Baroness Blackstone: My Lords, yes, the Government believe that that is a matter for LEAs. There should be some flexibility here. It is clearly

    543
    common sense that where teachers are having to teach across more than one age group that should be taken into account.
    Lord Northbourne: My Lords, before the Minister sits down, I do not want to be a bore, but she did not deal with the qualification and numbers of teachers in classes of 30.
    Baroness Blackstone: My Lords, I am not sure whether the noble Lord was here for the previous group of amendments when I talked about the importance of the quality of teachers. I have just said that it is important that with young children there should be adequate additional adult help in the classroom of the type that I know that the noble Lord has espoused for a long time. I accept that. I hope that that answers his question.
    On Question, amendment agreed to.
    The Deputy Speaker (Lord Ampthill): My Lords, Amendment No. 2 having been agreed to, I cannot call Amendments Nos. 3 to 6.
    Baroness Blatch Baroness Blatch moved Amendment No. 7:
    Page 2, line 4, at end insert—
    ("( ) No limit under this section shall be effective to prevent the admission of a child to a denominational school where—

    (a) the parent of the child has expressed a desire for the child to attend a denominational school;

    (b) the admissions authority of a denominational school have expressed a willingness to accept the child, notwithstanding the provisions of this section; and

    (c) no alternative place is available within a reasonable distance in another school of the same denomination.").

    The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 8 and 9. Many parents throughout the land who choose denominational schools are worried. It is important to clarify what we believe to be the Government's intention. Where the parent has expressed a desire for his or her child to attend a denominational school, and where the admissions authority—in other words, the school itself, because under the new arrangements the school itself will be an admissions authority—has expressed a willingness to accept the child, notwithstanding the provisions of this clause, and where there is no alternative place available within a reasonable distance in another school of the same denomination, the school should be free to accept the child.
    Amendment No. 8 goes a little further in saying that where it is considered that disapplication is in the interests of parental choice—in other words, of the child being accepted—disapplication can be supported only if it is decided in a ballot by a majority of parents for the time being at that school.
    Amendment No. 9 provides again that the provisions can be disapplied where a brother or sister is seeking a place at the school. These are all practical manifestations of the policy. We know that there is concern, especially among the local authorities. Parents are just beginning now to get in touch with us about
    544
    their concerns as to how this will work in practice. We know that some parts of the Church, for example, are concerned about how it will work in practice.
    We are trying to exercise some foresight by saying to the Government that with these provisions, where everyone concerned is agreed, and where parental preference can be satisfied, especially when one is talking about an extra one, two or three children, it is important that the parents' wishes are acceded to.
    There is real concern now that parental preference will have to be compromised. The Government's statements are unequivocal: parental preference will not be compromised. If that is the case, the amendments should go a long way towards reassuring parents that they will get the school that they wish for their child, particularly where the choice is a denominational one. I beg to move.
    4.15 p.m.
    The Lord Bishop of Ripon: My Lords, it is with some hesitation that I speak in opposition to the amendment. I am aware of the concern that the noble Baroness, Lady Blatch, and the noble Lord, Lord Pilkington of Oxenford, have for denominational schools. I have no doubt of the integrity of their motives in moving the amendment. The noble Baroness referred to some parts of the Church. I was not clear to which parts of the Church she was referring. Those parts of the Church with which I am in touch do not support the amendment.
    On previous occasions, I have said that we are anxious not to drive a wedge between denominational and county schools. It would be unfortunate were such a wedge to be driven, especially if it were to happen in relation to class sizes. It would be an odd situation if class sizes were limited to 30 in all schools except denominational schools. We do not wish church schools to be excluded from this provision.
    I recognise that Amendments Nos. 8 and 9 provide other circumstances in which classes might conceivably be larger, but in terms of the overall category of schools, church schools wish to be in the same position as all other schools.
    I did say that I was not sure with which parts of the Church the noble Baroness had been in touch. I remember exchanges on this issue we have had previously in your Lordships' House during the Bill's passage. In Committee the noble Lord, Lord Pilkington, claimed to speak on behalf of the Roman Catholic Church. There was an exchange on another issue when I was speaking on behalf of the Roman Catholic and the Anglican Churches. I need to make it clear that the Roman Catholic, Anglican and free Churches work closely together on these matters. The staff of the board of education which I chair, the Catholic Education Service, and the education secretary of the Free Church Council meet to discuss issues. We met to discuss this issue. When we visit Ministers, as we do frequently, we do so not as separate denominations, but as the Churches together. It is out of that shared experience that I speak on behalf of the Church of which I am a member and the Catholic Education Service.

    545
    Others in your Lordships' House might want to make other representations on behalf of other Churches. The Catholic Education Service and the board which I chair are not prepared to support the amendment. We do so in the understanding, and against, I believe, an undertaking, that the proportion of denominational places will be maintained: the reduction of class sizes is not to be used as an instrument for reducing the number of places in denominational schools.
    It is against that background that we welcome the additional finance that has been made available, not least for church schools. We look forward to the announcement of which church schools will benefit from the finance that has been made available. Against that background. I oppose the amendment.
    Lord Dormand of Easington: My Lords, perhaps I may repeat for the sake of emphasis an important point made by the right reverend Prelate. I am sure that the noble Baroness, Lady Blatch, is aware that where a differential is made—the right reverend Prelate described it as a wedge between the two types of schools—there can be considerable agitation. If parents are refused a place for their child at a particular school while the church school—if I may so describe it—which is often just half a mile along the road, admits a child, that causes a great deal of anguish. People see differential treatment being given to their children. I hope that the noble Baroness will agree that that causes many parents a great deal of concern.
    Secondly, if we feel that 30 is the correct limit for good educational purposes and reasons, that should apply to denominational schools as it does to any other school.
    Lord Northbourne: My Lords, I am minded to disagree with the noble Lord, Lord Dormand of Easington, and the right reverend Prelate. I accept that it must be right that church schools should not wish to crowd in children to the disadvantage of those children. The Church of England has a different point of view from the Jewish religion and the Roman Catholic Church. As I understand it, the Church of England takes the view that Church of England schools are for all children, and its objective is to provide the best possible education with a Christian background.
    The concern, particularly of the Catholic and Jewish communities, is to ensure that children of parents who adhere to those faiths have the opportunity of an education set in the context of that faith. It is important to stress that that is the objective of this amendment. I do not think it is a terribly good amendment, but I would be very much encouraged if the noble Baroness were able to say in replying that very careful consideration will be given to ensuring that, as far as is humanly possible, children from particularly the Roman Catholic and the Jewish denominations will have the opportunity of receiving an education in the context of their parents' faith.
    Baroness Carnegy of Lour: My Lords, I do not know about Church of England schools in particular because I have not lived in England. It sounds as if the
    546
    Church of England, and perhaps other Churches that are agreeing with them, are falling into a trap when they are embarrassed by what they see as a conflict between fairness for children and what works for them in education.
    There is no question but that Church schools work best of all for the children whose parents' motivation for them being there is that they want that particular ethos for their children. If those children are kept out of a school because of parents who choose on the basis of the nearness of the school, that is very sad. I am sorry to hear the Church say that, because it is probably a mistaken perception. I see their embarrassment; I think I understand it, but I believe it is a mistake and I wish that they were not opposing this concept. even if the amendment itself is not what they particularly fancy.
    The Lord Bishop of Ripon: My Lords, may I give a word of explanation in answer to the noble Baroness, Lady Carnegy? I did make it clear that I was speaking against a background in which the total proportion of denominational places was to be maintained. It seems to me that there is no question therefore of those from a particular faith finding any difficulty created for them. I would entirely agree with the noble Lord. Lord Northbourne, that children must be educated in the faith of their parents, where that is desired. Nor would I see that the Churches are embarrassed by this. The Churches are fighting for their fair proportion, which has always been the case for denominational places, and I do not think the move to reduce class sizes to 30 affects that.
    Baroness Blackstone: My Lords, these amendments cover the issue of whether there is a need to apply the class size limits in certain situations, and I will respond to all of them together. I recognise the particular concerns to ensure that school places are available in specific cases, but I believe that the arguments against these amendments, raised when we last had the opportunity to discuss them, still stand.
    If I could begin with Amendment No. 7, which is the one that has led to the most discussion, it is natural that parents of a particular denomination will want to get a place in a school of the same denomination. I certainly do not disagree with that. Indeed, though it is not possible in all cases at present, we want as many parents as possible, from all schools and not just denominational schools, to obtain the school of their first choice or one that they feel would be most appropriate for their child. However, we also want all small children to share in the benefit of being in small classes, including those in denominational schools.
    The effect of this amendment would be to allow denominational schools to exceed the class limit so as to admit a child where a place in another school of that denomination was not available within a reasonable distance. The right reverend Prelate has clearly stated his position. This is not what the Churches want and nor do we. In their responses to our consultation on the draft regulations and guidance there has been a broad welcome from Church bodies to what we are proposing to do. Our approach does not guarantee a place in a school of a given denomination for every child whose

    547
    parents may seek such a place; but there are no such guarantees under the existing arrangements, which were established by the previous government. One cannot easily envisage any arrangements that could offer a totally cast-iron guarantee. Perhaps I may say to the noble Lord, Lord Northbourne, that we shall, of course, do our best to ensure—as I am sure the Churches will also ensure, in partnership with the Government—that we meet parents' wishes in this respect.
    Consultation is at the heart of our policy to reduce infant class sizes. We intend that regulations under Clause 2(3) of the Bill will require LEAs to consult before submitting their class size implementation plan, including with representatives of denominational schools. We made it clear that we want to safeguard the proportion of denominational provision in an authority, as the right reverend Prelate has already said.
    In the guidance which will be given under Clause 2(2), to which LEAs must have regard, we will be stating that they should consider the demand for denominational provision when preparing their class size plans. There should be no question either of schools being forced to expand against their will. LEAs will have to prepare plans that have due regard to parental preference. Our consultation document also states that the Secretary of State will not approve plans which do not demonstrate that the LEA has given due regard to the exercise of parental preference; but there does have to be planning and that is how we intend to ensure that parents' wishes are taken into account.
    Amendment No. 8 would seriously weaken our policy of reducing infant class sizes in all schools. It would enable any school to opt out of the class size limit if the majority of existing parents supported it through a ballot. In practical terms the amendment is unclear on a whole range of issues. For example, it does not specify the circumstances in which ballots could be called. It also only covers parents of existing pupils at the school. One must ask about the views of parents of pupils who are about to join the school. Would there need to be a ballot to opt back into the limits? Would schools have to ballot every year, so that at any one time the views of all the parents are covered? Who would pay for these annual ballots? There are a great many unanswered questions here. These practical difficulties are not central to the Government's objection, however. As I have said many times, the class size pledge is fundamental to our proposals to raise standards. It has the overwhelming support of parents, who for many years have wanted to see smaller classes for their small children. The Government made it a manifesto commitment and we intend to honour it. I therefore cannot support any amendment which would see these limits being set aside on a school-by-school basis.
    I also continue to believe that Amendment No. 9 is unnecessary as a means of ensuring that children may attend the same school as their siblings. This is best done through the admissions arrangements that individual schools make. While not every child with an elder sibling in the school can be given a cast-iron guarantee of a place in that school, nearly all schools already include a factor in their over-subscription
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    criteria which gives priority to pupils who have siblings at the school. By giving priority to children with brothers and sisters in the school, as this amendment proposes, it would also allow any admissions authority to breach the class size limit by excluding siblings from the normal admissions criteria and admitting them after the admissions round. Giving priority to siblings has long been part of LEA and school arrangements, and I am sure that that will continue. We therefore see no need for this amendment and I hope that, in the light of what I have said, the noble Baroness will feel able to withdraw it.
    4.30 p.m.
    Baroness Blatch: My Lords, I am equally disappointed in the Minister's response. From the beginning of the school year in 2001 there will be no flexibility whatever. If parents who have been accustomed to sending their children to the local denominational school request another place making the class size 31 just one extra child over 30—the answer will be no, because one cannot overnight produce the classroom or the teacher in order to take that child at the beginning of the September term. LEAs do a great deal of planning, but they do not plan down to the exact number of children. Most LEAs act retrospectively and the Government will find that they, too, must do so. They make as intelligent a guess as possible about the intake of each school. So, too, do the head teachers of each school. However, at the end of the day the accuracy of that figure is judged retrospectively; it could be more or it could be less. Those of us who live in villages know that when a family moves in four children can be added to the school and that when a family moves out the school can lose four children. The position is as sensitive as that. My amendments are tabled against a background of no flexibility whatever.
    I have no problem with the Minister's arguments about what parents want generally. They would like to see smaller classes, particularly in infant schools. The issue between us is one of flexibility. The issue between the Local Government Association and the Government is the flexibility they will need in order to deliver the policy.
    The right reverend Prelate asked me to which parts of the Church I was referring. Individual clergy within the Church of England have approached me. On every occasion I have invited them to get in touch with the right reverend Prelate because I believe that that is correct. They are most concerned about particular schools in their localities. I hope that some of them have been in touch with the right reverend Prelate and have had their fears allayed. Nevertheless, those fears exist.
    The noble Lord, Lord Dormand, reinforced the point made by the right reverend Prelate that we should not make a special case for the Church. In fact, we do make a special case for the Church; there is special provision for the Church of England. Throughout the progress of the Bill the right reverend Prelate and his colleagues have visited the DfEE and have asked for and received favours. We are delighted that that has been the case. Many fears have been allayed as a result of denominational schools asking the DfEE for recognition

    549
    of particular difficulties. I have absolutely no difficulty with that. Indeed, when I was a Minister, I, too, received special delegations from the Church asking for its particular denominational concerns and those of parents to be recognised. That is not an issue between us.
    As regards the particular point made by the noble Lord, Lord Dormand, the truth is that there are many choices for secular schoolchildren. In my local town of Huntingdon, a child looking for a place in another secular school can walk to half a dozen or more schools. However, the choice of denominational schools is a very different matter. Children cannot go to the next school or the one beyond that.
    The right reverend Prelate referred to the story that was leaked to the press on Monday about the funding for 100 Church schools. We all look forward to learning which schools those are. But the perspective needs to be understood. There are 3,557 Church schools with infant classes. I understand that 46 per cent. of those schools have classes over 30. Forty per cent. of 3,557 is about 1,600 schools and we are talking about funding for possibly 100 of them. There are only two years to go before the policy must be put into operation when we must cope with all such classes. We must provide all the extra classrooms and all the extra teachers with all the planning that that will entail. Church schools are popular schools. One of the reasons why they have more than 30 children in classes for five, six and seven year-olds is precisely that they are so popular with local parents.
    The Minister rightly said that the Government could not guarantee a place for every child at a denominational school. I do not believe that any previous government have done so and I do not believe that any future government can do so. However, the inflexibility of the policy will mean that fewer children will be guaranteed a place.
    Perhaps I may give as an example a school with an intake of 62 children a year. The extra two children will not receive a place at the school unless the Government are prepared to change it from two classes of 31 to three classes of 20. Are the Government saying that they will do that overnight at a stroke? Will they find a brick-built classroom—we know from the noble Lord, Lord McIntosh, that there will be no temporary classrooms—in order to create three classes of 20 to accommodate 62 children? In the following year the intake might be only 58. That is what happens in rural schools. The inflexibility of the policy is incredible.
    I am depressed almost beyond words to know that the right reverend Prelate does not support the amendments. Parents will find that under the new system their child cannot have the 31st or 32nd place whereas under the present system that child can be accommodated. I am going to stand up and be counted and I hope that my colleagues will, too. We will fight for the right of flexibility that is agreed by the parents, the school and the community. I seek the opinion of the House.
    4.35 p.m.
    On Question, Whether the said amendment (No. 7) shall be agreed to?
    Their Lordships divided: Contents, 74; Not-Contents, 131.

    Division No. 2

    CONTENTS

    Abercorn, D.

    Knollys, V.

    Ailsa, M.

    Mackay of Ardbrecknish, L.

    Alton of Liverpool, L.

    Mackay of Drumadoon, L.

    Arran, E.

    Mayhew of Twysden, L.

    Belhaven and Stenton, L.

    Milverton, L.

    Beloff, L.

    Molyneaux of Killead, L.

    Belstead, L.

    Monro of Langholm, L.

    Berners, B.

    Montagu of Beaulieu, L.

    Biddulph, L.

    Mottistone, L.

    Biffen, L.

    Mountevans, L.

    Blatch, B.

    Mowbray and Stourton, L.

    Brabazon of Tara, L.

    Moyne, L.

    Braine of Wheatley, L.

    Munster, E.

    Brentford, V.

    Naseby, L.

    Burnham, L. [Teller.]

    Northesk, E.

    Butterworth, L.

    Norton, L.

    Carnegy of Lour, B.

    O'Cathain, B.

    Carnock, L.

    Onslow of Woking, L.

    Charteris of Amisfield, L.

    Orr-Ewing, L.

    Colwyn, L.

    Pender, L.

    Constantine of Stanmore, L.

    Pilkington of Oxenford, L.

    Cope of Berkeley, L.

    Rankeillour, L.

    Crathorne, L.

    Rathcavan, L.

    Cuckney, L.

    Rawlings, B.

    Davidson, V.

    Rawlinson of Ewell, L.

    Denham, L.

    Rees, L.

    Dunleath, L.

    Renfrew of Kaimsthorn, L.

    Ellenborough, L.

    Rotherwick, L.

    Elliott of Morpeth, L.

    Seccombe, B. [Teller.]

    Erne, E.

    Stodart of Leaston, L.

    Gardner of Parkes, B.

    Sudeley, L.

    Grimston of Westbury, L.

    Swansea, L.

    Hayhoe, L.

    Teviot, L.

    HolmPatrick, L.

    Thomas of Gwydir, L.

    Hooper, B.

    Trefgarne, L.

    Jopling, L.

    Waddington, L.

    Kinnoull, E.

    Wade of Chorlton, L.

    NOT-CONTENTS

    Acton, L.

    Dubs, L.

    Addington, L.

    Eatwell, L.

    Alport, L.

    Erroll, E.

    Ampthill, L.

    Evans of Parkside, L.

    Ashley of Stoke, L.

    Falconer of Thoroton, L.

    Barnett, L.

    Farrington of Ribbleton, B.

    Beaumont of Whitley, L.

    Fitt, L.

    Berkeley, L.

    Gallacher, L.

    Blackstone, B.

    Glenamara, L.

    Blease, L.

    Goodhart, L.

    Bledisloe, V.

    Gould of Potternewton, B.

    Brooks of Tremorfa, L.

    Graham of Edmonton, L.

    Bruce of Donington, L.

    Gregson, L.

    Burlison, L.

    Grenfell, L.

    Calverley, L.

    Grey, E.

    Carlisle, E.

    Halsbury, E.

    Carmichael of Kelvingrove, L.

    Hampton, L.

    Carter, L. [Teller.]

    Hardie, L.

    Castle of Blackburn, B.

    Hardy of Wath, L.

    Cledwyn of Penrhos, L.

    Harris of Greenwich, L.

    Clinton-Davis, L.

    Haskel, L.

    Cocks of Hartcliffe, L.

    Hayman, B.

    Davies of Oldham, L.

    Hilton of Eggardon, B.

    Dean of Beswick, L.

    Hollis of Heigham, B.

    Dean of Thornton-le-Fylde, B.

    Holme of Cheltenham, L.

    Dixon, L.

    Hoyle, L.

    Donoughue, L.

    Hughes, L.

    Dormand of Easington, L.

    Hughes of Woodside, L.

    551

    Hunt of Kings Heath, L.

    Porter of Luddenham, L.

    Irvine of Lairg, L. [Lord Chancellor.]

    Prys-Davies, L.

    Ramsay of Cartvale, B.

    Islwyn, L.

    Randall of St. Budeaux, L.

    Jay of Paddington, B.

    Razzall, L.

    Jeger, B.

    Rea, L.

    Jenkins of Hillhead, L.

    Redesdale, L.

    Jenkins of Putney, L.

    Rendell of Babergh, B.

    Kennedy of The Shaws, B.

    Richard, L. [Lord Privy Seal.]

    Kennet, L.

    Ripon, Bp.

    Kintore, E.

    Rodgers of Quarry Bank, L.

    Kirkhill, L.

    Sainsbury of Turville, L.

    Linklater of Butterstone, B.

    Sandberg, L.

    Lockwood, B.

    Sefton of Garston, L.

    Lofthouse of Pontefract, L.

    Serota, B.

    Ludford, B.

    Sewel, L.

    McIntosh of Haringey, L. [Teller.]

    Shepherd, L.

    Shore of Stepney, L.

    Mackie of Benshie, L.

    Simon, V.

    Maddock, B.

    Simon of Highbury, L.

    Mallalieu, B.

    Slim, V.

    Mason of Barnsley, L.

    Smith of Gilmorehill, B.

    Merlyn-Rees, L.

    Stallard, L.

    Meston, L.

    Stone of Blackheath, L.

    Methuen, L.

    Strabolgi, L.

    Milner of Leeds, L.

    Symons of Vernham Dean, B.

    Mishcon, L.

    Taverne, L.

    Monkswell, L.

    Taylor of Blackburn, L.

    Montague of Oxford, L.

    Thomas of Macclesfield, L.

    Morris of Manchester, L.

    Thomas of Walliswood, B.

    Murray of Epping Forest, L.

    Tope, L.

    Nicholson of Winterbourne, B.

    Tordoff, L.

    Ogmore, L.

    Turner of Camden, B.

    Paul, L.

    Walker of Doncaster, L.

    Peston, L.

    Watson of Invergowrie, L.

    Pitkeathley, B.

    Whitty, L.

    Plant of Highfield, L.

    Williams of Elvel, L.

    Ponsonby of Shulbrede, L.

    Williams of Mostyn, L.

    Winchilsea and Nottingham, E.

    Resolved in the negative, and amendment disagreed to accordingly.
    4.45 p.m.
    [Amendments Nos. 8 and 9 not moved.]
    Clause 2 [Plans by LEAs for reducing infant class sizes]:
    Baroness Blackstone Baroness Blackstone moved Amendment No. 10:
    Page 2, line 7, leave out ("the limits imposed under section 1 are") and insert ("any limit imposed under section 1 is").
    On Question, amendment agreed to.
    [Amendment No. 11 not moved.]
    Baroness Blatch Baroness Blatch moved Amendment No. 12:
    Page 2, line 46, at end insert—
    ("( ) The Secretary of State shall not approve any statement prepared by a local education authority under this section which envisages an increase in the average size of classes in junior schools or secondary schools in that authority's area over the level prevailing in the same area in 1997.").
    The noble Baroness said: My Lords, in speaking to this amendment I shall speak also to Amendments Nos. 13, 14 and 15. These amendments cover the issues of growth in junior schools; the costs incurred by the application of the pledge; distances travelled by children to school; and accommodation.
    As regards junior schools, the Minister in another place, Estelle Morris, went to Derbyshire last week and met a large number of teachers. She was challenged a number of times about the subject of overcrowding in junior schools, which is a logical correlation with the proposals we have before us. The Minister replied:
    "Our current priority is to fund Key Stage 1 and we do not have any plans to deal with Key Stage 2 at the moment".
    I suggest to the Minister that the application of that class-size pledge leaves the Government with two choices: they either fly in the face of the proposition in the guidance—that it shall not result in increased class sizes at junior school stage—or the pledge must be continued throughout the school.
    I give an extremely simple example. The intake of a school has 75 children. That is too many for two classes, so there would have to be three classes. The three classes would be in year one and sustained in years two and three. But at year four, either there are two classes of 34 or 35—and one can take any number of children over the magical number of 60 which is appropriate for two classes under the new proposals—or there continues to be three classes in years five to seven. Those are the two choices. They are stark but they are real. If those classes are to be sustained throughout the school, there is not a need only for one teacher in year one but there is a need for seven teachers in seven year groups. It is not merely one classroom that is needed for the extra class at year one, but an extra classroom is needed when that class becomes class two and so on. It is all very well for the Minister to say that she has no plans to address Key Stage 2, but I suggest there is no choice if the pledge is to be delivered.
    In response to the previous set of amendments, the Minister said that as the classes work through, classes in the junior school will also become smaller. That is an absolutely logical progression from smaller classes in infant schools. As the classes become smaller in junior schools, there will be a need for more teachers, classrooms and so on. Therefore, it is not possible simply to say that there will be no knock-on effect.
    Because we believe that that is a very real danger caused by the rigid application of that policy, we believe that it should help the Government, and certainly help them in their arguments with the Treasury to have this provision on the face of the Bill. After all, the Government have promised that under this clause, which envisages an increase in the average size of classes in junior and secondary schools, the Secretary of State said that he will not approve any statement from a local education authority that involves increasing class sizes at other key stages. It is such an important issue because, as was shown at the meeting with the Minister last week, teachers fear that it can only be achieved at the expense of junior school classes, unless a great deal more money is provided beyond Key Stage 1.
    In Derbyshire last week, when speaking with the people from local government, the Minister of State, Mr. Byers, said that he could absolutely assert that there will be no reduction in parental preference. The conference went on to pass a motion to the effect that reduction in class sizes would constrain parental preference. The chairman of the Labour controlled

    553
    borough of Lewisham, Mr. Gavin Moore, said that people should not make pledges that they are not in a position to carry out. The Government have made two pledges on class sizes and parental choice, but they are in danger of failing to deliver on both of them.
    The concern is not just with teachers in schools; the concern is with the very people who will be charged with implementing the policy. The problems that they foresee are those which will arise because of the extra costs involved in coping in three years' time with the extra provision in junior school classes. The charge that they will have put upon them to enhance parental preference—indeed, not even to sustain it—is very important. The leader of Lewisham Council went on to say that the election pledge made by Labour last year to reduce primary class sizes to under 30 pupils will be impossible to achieve if parents have the right to decide which school their child attends. There are huge tensions, which must be addressed.
    When responding to a similar amendment during the last stage of the Bill, the noble Lord, Lord McIntosh of Haringey, gave us an assurance—indeed, a reassurance because some of us rather gulped at what he said about the permanent classrooms pledge. However, he made it absolutely clear at that stage, and said:
    "I have just said that our letter to local education authorities wishing to apply for the class size capital funds makes it clear that their plans will have to be for permanent classrooms, not mobile classrooms. As I have already quoted, the guidance we sent out states that.
    'Applications relating simply to the provision of mobile classrooms will not be accepted'".
    That was queried by my noble friend Lady Byford and, in response, the noble Lord, Lord McIntosh, said:
    "I must be precise about this. We are saying that applications for funding for the purpose of reducing infant class sizes which rely on the use of mobile classrooms will not he accepted".—[Official Report. 5/5/98: col. 582.]
    When speaking to previous amendments I said—and I repeat it now—that very often there is a bulge in the number of children coming through a school which then moves away in the course of time. Very often, where there are new developments of housing, large numbers of primary school places are required in the early stages, but the situation always settles down again later. The use of mobile classrooms, which have improved immeasurably over the years, has been the local education authorities' way of being flexible; in other words, they can take a mobile classroom, satisfy the school's needs for two or three years and then move the classroom to where it is needed.
    The situation where every child in a class where the number has exceeded 30 whose placement might involve him travelling a longer distance to school, and mean putting him into a school where the performance is poorer than the school which he would have attended, could in fact inhibit all the promises that the Government have made. In that case, as Ministers said, a classroom and a teacher would be provided for any single child in a class where the number of pupils has reached over 30. If the Government are really saying that they can deliver that in every instance beyond the school year of 2001, then LEAs will need a good deal
    554
    more assurance. The amendments are designed to take the Minister's own words in the guidance and put them on the face of the Bill, so that there could be no doubt in that respect: LEAs are bound by law to ensure that classes do not have over 30 pupils in those age groups, just as schools will not be allowed to have classes with over 30 pupils come the year 2001. Indeed, the Government require that parental preference must be enhanced; buildings must be permanent; distances travelled must be reasonable; and denominational choice must be adhered to as far as is possible.
    In order to deliver that, it is right that the Government should have an obligation placed upon them to ensure that the money is made available in all those circumstances so that LEAs can be assured that, in order to avoid some of the side effects of implementing this policy, they will not be found wanting but will have the wherewithal to put it into effect. I beg to move.
    Lord Whitty: My Lords, Amendments Nos. 12, 14 and 15 deal with the question of the Secretary of State's approval of LEA statements. As the noble Baroness implied, many of these points were made in Committee. Given the strength of the commitments that we made at that time, I am slightly surprised that they have been tabled again.
    Amendment No. 12 deals with the effect on the size of classes at a later stage. Perhaps I may reiterate a point that we have already made strongly. There is no intention to fund reductions in infant class sizes by allowing class sizes to rise in later key stages. The noble Baroness also asked about resources. This year, we have already made available a total of £62 million of additional funding specifically designed to reduce the size of infant classes. More money will be made available in the future. In addition, the £835 million extra that we are providing for schools in England will keep down class sizes in all key stages.
    Therefore, there is no reason to disbelieve the Government's commitment here or to believe that the size of classes in junior and secondary schools will increase as a result of this policy. We will ensure that it will not, through the regulations, guidance and the system of approval of LEA plans. As the noble Baroness said, we have made our position abundantly clear. Our consultation states that,
    "plans will not be approved that show reductions in infant class sizes being achieved at the cost of increases in Key Stage 2 class sizes arising from a transfer of funding from junior to infant classes".
    It is clear from our commitments, and from the way in which our consultative document indicates that regulations will be drawn, that we will not allow that to happen. Therefore, the proposed provision is redundant.
    The noble Baroness turned the argument slightly on its head by stressing the point about class sizes which have been reduced working through the system. It may work through in certain cases, but our priority is on infant classes. Indeed, our priority is for the early years. We believe that we have good educational grounds for ensuring that that is the priority. Therefore, although it may work through to upper years, there is no requirement for it to do so. None of that means that

    555
    junior school classes or higher level classes will increase as a result of these provisions, because of the commitments that we have made.
    I move on to Amendment No. 14 which deals with travel. We have made it very clear that no child will have to travel an unreasonable distance to school as a result of our pledge to reduce infant class sizes. Furthermore, it would be impractical as well as unnecessary to require that LEA statements should set out the travel arrangements for what would effectively mean every single infant school pupil. We have said that funds will be provided for an extra teacher—and, where necessary, an extra classroom—if there is a child who has only one school within reasonable travelling distance and he could not otherwise be admitted without pushing an infant class beyond the limit of 30 pupils. Our consultation paper makes it clear that LEAs will have to provide information on what they will do in those circumstances.
    LEAs have confirmed that what we are talking about here will be very much the exception rather than the norm. Where pupil numbers are growing, we would expect LEAs to apply for extra capital to provide the necessary number of classes. But, exceptionally, where a child requires a place and there is no other school within reasonable distance, we are talking about a second teacher in a class of 31, 32 or 35, as may be the case. The travelling arrangements of individual children is a matter of detailed implementation of the policy which is best left to the LEA to resolve in the context of the local situation, particularly in rural areas. We will provide the broad guidelines.
    Amendment No. 15 deals with the question of temporary accommodation. I had thought that my noble friend Lord McIntosh had made clear the Government's intention here, and I think the noble Baroness, Lady Blatch, recognised that. Not only have we made that clear in this place, but we have made it clear in terms of our commitment of capital—the extra money through the New Deal for Schools invested in schools' capital. A significant part of the first tranche will be used to replace old mobile classrooms with permanent structures. We have made it clear that applications for capital resources which relate simply to the provision of mobile classrooms will not be accepted.
    In addition an extra £90 million of capital is being made available, of which £40 million is to provide extra classrooms to accommodate smaller infant classes. We shall shortly announce the details of the allocation of that £40 million for this year. I can also confirm that Church schools are to receive 100 per cent. funding for school building work in order to meet the class size commitment. The most effective means to control the use of mobile classrooms is through controlling funding rather than by an amendment such as this.
    Amendment No. 13 deals with funding. I am not clear why the noble Baroness believes it is necessary to require implementation costs to be reimbursed in this way. She did not go into any detail on that. We have made it clear that we shall provide the funding that LEAs and schools need to enable them to reduce infant class sizes. We have pledged to use the resources
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    available from the phasing out of the assisted places scheme which will amount to some £100 million in the financial year commencing April 2001. Some £22 million of this has already been made available to LEAs. There is, of course, also the £40 million to which I referred earlier. This will enable LEAs to make good progress towards meeting the class size pledge.
    This amendment would not require the Secretary of State to do anything more than he already has the power to do. We regard Amendment No. 13 as unnecessary. I hope that the noble Baroness will be prepared to withdraw her amendments.
    5 p.m.
    Baroness Maddock: My Lords, before the Minister sits down, I welcome the comments about adequate buildings. I wonder whether he shares my concern that when we listen to the noble Baroness, Lady Blatch, we are all expected to have amnesia about what happened before 1997 with regard to school space standards and extra resources that were not available for school buildings. I have mentioned my next question before. It concerns minimum space standards. Do the Government intend in the future to reverse the reductions in space standards that were permitted under the previous government?
    Lord Whitty: My Lords, I am grateful to the noble Baroness for reminding us of what happened over the past 18 years. I have tried to steer clear of partisan points in these debates. However, I am glad that she has made them for me. As regards space requirements, the priority at the moment is to reduce class sizes. We shall examine space requirements but at this point we do not intend to alter the space requirements that we have inherited.
    The Lord Bishop of Ripon: My Lords, may I just comment briefly on the statement by the Minister?
    Lord McIntosh of Haringey: My Lords, if the right reverend Prelate will forgive me, we are at Report stage and interventions are not possible after the Minister has spoken.
    Baroness Blatch: My Lords, the reply was disappointing. It is interesting that local education authorities and schools will be bound in law to provide this policy. The Government are prepared to put on the face of the Bill that they are obliging everyone in the system to deliver this policy. There is only one body that is not bound by law to fund this policy, unless it wins the money from the Treasury, and that is the DfEE. The noble Lord must accept that local education authorities and schools are genuinely nervous about this provision. They are alarmed at the calls on them to deliver this pledge, for if they are not funded properly they will have to use moneys to meet this pledge rather than meet other priorities.
    The Government have given their word on junior school class sizes but are not prepared to put that on the face of the Bill. That makes me deeply suspicious. They have given their word that junior school class sizes will

    557
    not increase. It is nave to suggest that the same number of pupils will pass from an infant school to a junior school. If a two form entry school at present becomes a three form entry school, as night follows day those three form entries will pass into the following year and the year after that unless the children start in year one and then leave the school. As regards a large proportion of our schools, children stay in the same schools. There are areas of high mobility where children move in and out of schools—that causes another problem for teachers—but in most schools children who start in an infant school finish at the top end of that infant school. Those who start at the bottom end of a primary school finish at the top end of that primary school. As the three classes—that were two—progress through the school, those three classes will require three teachers and three classrooms. One cannot simply say that the numbers may work out, but that is not really an issue.
    The Minister in another place has said that the Government have no plans to deal with Key Stage 2. If these pupil numbers work through into Key Stage 2, will schools be guaranteed funding for them? If they are not, the other part of the promise cannot be kept; namely, that class sizes in Key Stage 2 will not be increased. Class sizes will either increase or there will be smaller classes but more of them. The noble Lord looks puzzled, but this is a simple equation. If you have 63 children as an intake into an infant school and they are divided into three classes because they cannot be divided into two classes any more, and it is too far to send the children to another school, and there is no other denominational choice—all the factors that have been built into the guidance—and that school has to have another classroom and another teacher, there will be three classes of 21 children. Those three classes become second year classes, and then third year classes. If you put them into two classes in the junior school—in other words, have bigger classes in the junior school—the teachers' worst fears will be realised in that they will have bigger classes in the junior school.
    Lord Whitty: My Lords, our pledge is that junior school classes will not increase above the size they would have been prior to the introduction of this policy. The noble Baroness is saying that the reductions in class size at the lowest level ought to be automatically reflected throughout the system. I agree that might be desirable, but that is not our priority. Our priority is to reduce class sizes at the lowest level. If, at junior school, there are two classes—where formerly there were three—we are not increasing the size of junior school classes above what they would otherwise have been. Therefore the noble Baroness's contention is incorrect. She wants us to commit ourselves to reducing the maximum size of junior school classes. At this stage we are not in a position to do that. I think that is understood.
    Baroness Blatch: My Lords, it is not understood, but it is now clear that children will revert to being taught in larger classes in junior schools. My next point is a logical progression from this policy. If two classes are made into three classes with 20-odd children in each, the capacity for that school to take more children is
    558
    increased. It must be a popular school if it has that problem in the first place. Therefore it takes in more children and instead of having three classes of 21, the classes increase to 25 or 26. When those children enter the junior school, do the classes then become two classes or do they remain three classes? I hope that the Minister will answer that point.
    Baroness Lockwood: My Lords, on a point of order, we are on Report. Is it in order for the two Front Benches to become involved in an exchange of this kind at Report stage?
    Baroness Blatch: My Lords, I remind the House that I was winding up on this amendment when I was interrupted by the Minister. I asked a question. My understanding has always been that with the leave of the House we can ask questions of the Minister. However, I shall leave the question on the table. We have received an interesting clarification that when two classes are split into three in an infants school, they return to being two classes in the junior school. That clarification is helpful and important.
    Coopers & Lybrand produced a report for the Local Government Association on which the Government said they would not be commenting when I asked a Written Question. Following consultation with heads, teachers and governors, the report stated:
    "Whilst there was widespread support for the policy of reducing class sizes in principle, we found that many heads were not convinced that a slight reduction in class sizes in their own schools would recompense for the upheaval and loss of flexibility that could result".
    The report went on to state:
    "At Key Stage 2"
    which is the point of one of my amendments—
    "if the development causes resources to shift towards Key Stage I at the expense of other Key Stages … at Key Stage 1 and 2 if the policy causes a change to mixed age teaching … at Key Stage 1 if non teaching classroom assistants are withdrawn"—
    that is, if local authorities have to compensate in other ways in order to fund the change—
    "at schools in areas of social deprivation if the policy causes a shift of resources towards schools in more prosperous areas".
    Those are real reservations that the Coopers & Lybrand report expressed to the local authorities. When the local authorities brought those matters before the Minister, they received short shrift. This is an important policy, and I wish to take the opinion of the House.
    5.11 p.m.
    On Question, Whether the said amendment (No. 12) shall be agreed to?
    Their Lordships divided: Contents, 86; Not-Contents, 140.

    Division No. 3

    CONTENTS

    Ailsa, M.

    Arran, E.

    Aldington, L.

    Astor of Hever, L.

    Alexander of Tunis, E.

    Attlee, E.

    Alton of Liverpool, L.

    Baker of Dorking, L.

    559

    Beloff, L.

    Lucas of Chilworth, L.

    Belstead, L.

    Luke, L.

    Berners, B.

    Lyell, L.

    Biddulph, L.

    McConnell, L.

    Biffen, L.

    Mackay of Ardbrecknish, L.

    Blake, L.

    Mackay of Drumadoon, L.

    Blatch, B.

    Mancroft, L.

    Brabazon of Tara, L.

    Midleton, V.

    Braine of Wheatley, L.

    Milverton, L.

    Broadbridge, L.

    Mottistone, L.

    Brougham and Vaux, L.

    Mountevans, L.

    Burnham, L. [Teller.]

    Munster, E.

    Butterworth, L.

    Naseby, L.

    Cadman, L.

    Northesk, E.

    Caithness, E.

    O'Cathain, B.

    Carnegy of Lour, B.

    Onslow of Woking, L.

    Carnock, L.

    Orr-Ewing, L.

    Chelmsford, V.

    Oxfuird, V.

    Colwyn, L.

    Park of Monmouth, B.

    Constantine of Stanmore, L.

    Pearson of Rannoch, L.

    Courtown, E.

    Pilkington of Oxenford, L.

    Cuckney, L.

    Porter of Luddenham, L.

    Cullen of Ashbourne, L.

    Rawlings, B.

    Dean of Harptree, L.

    Rawlinson of Ewell, L.

    Dixon-Smith, L.

    Renfrew of Kaimsthorn, L.

    Elton, L.

    Roberts of Conwy, L.

    Gardner of Parkes, B.

    Rotherwick, L.

    Grimston of Westbury, L.

    Seccombe, B. [Teller.]

    Harmar-Nicholls, L.

    Sharples, B.

    Hayhoe, L.

    Stodart of Leaston, L.

    HolmPatrick, L.

    Sudeley, L.

    Hooper, B.

    Swansea, L.

    Howell of Guildford, L.

    Swinfen, L.

    Ironside, L.

    Taylor of Warwick, L.

    Jopling, L.

    Tebbit, L.

    Knight of Collingtree, B.

    Teviot, L.

    Leigh, L.

    Thomas of Gwydir, L.

    Liverpool, E.

    Vivian, L.

    Long, V.

    Waddington, L.

    NOT-CONTENTS

    Acton, L.

    Eatwell, L.

    Addington, L.

    Evans of Parkside, L.

    Alport, L.

    Falconer of Thoroton, L.

    Ampthill, L.

    Farrington of Ribbleton, B.

    Ashley of Stoke, L.

    Fitt, L.

    Avebury, L.

    Gallacher, L.

    Barnett, L.

    Gladwin of Clee, L.

    Beaumont of Whitley, L.

    Glenamara, L.

    Berkeley, L.

    Goodhart, L.

    Blackstone, B.

    Gould of Potternewton, B.

    Blease, L.

    Graham of Edmonton, L.

    Borrie, L.

    Gregson, L.

    Bridges, L.

    Grenfell, L.

    Brooks of Tremorfa, L.

    Grey, E.

    Bruce of Donington, L.

    Halsbury, E.

    Burlison, L.

    Hambro, L.

    Calverley, L.

    Hampton, L.

    Carlisle, E.

    Hardie, L.

    Carmichael of Kelvingrove, L.

    Hardy of Wath, L.

    Carrick, E.

    Harris of Greenwich, L.

    Carter, L. [Teller.]

    Haskel, L.

    Castle of Blackburn, B.

    Hayman, B.

    Chandos, V.

    Hilton of Eggardon, B.

    Cledwyn of Penrhos, L.

    Hollis of Heigham, B.

    Clinton-Davis, L.

    Howie of Troon, L.

    Cocks of Hartcliffe, L.

    Hoyle, L.

    Davies of Oldham, L.

    Hughes, L.

    Dean of Beswick, L.

    Hughes of Woodside, L.

    Dean of Thornton-le-Fylde, B.

    Hunt of Kings Heath, L.

    Desai, L.

    Irvine of Lairg, L. [Lord Chancellor.]

    Dixon, L.

    Donoughue, L.

    Islwyn, L.

    Dormand of Easington, L.

    Jay of Paddington, B.

    Dubs, L.

    Jeger, B.

    560

    Jenkins of Putney, L.

    Rea, L.

    Kennedy of The Shaws, B.

    Redesdale, L.

    Kennet, L.

    Rendell of Babergh, B.

    Kintore, E.

    Richard, L. [Lord Privy Seal.]

    Kirkhill, L.

    Ripon, Bp.

    Linklater of Butterstone, B.

    Rix, L.

    Lockwood, B.

    Rodgers of Quarry Bank, L.

    Lofthouse of Pontefract, L.

    Sainsbury of Turville, L.

    Longford, E.

    St John of Bletso, L.

    McIntosh of Haringey, L. [Teller.]

    Sandberg, L.

    Sefton of Garston, L.

    Mackie of Benshie, L.

    Sewel, L.

    McNair, L.

    Shepherd, L.

    Maddock, B.

    Shore of Stepney, L.

    Mallalieu, B.

    Simon, V.

    Mar and Kellie, E.

    Simon of Highbury, L.

    Mason of Barnsley, L.

    Smith of Gilmorehill, B.

    Merlyn-Rees, L.

    Stoddart of Swindon, L.

    Meston, L.

    Stone of Blackheath, L.

    Methuen, L.

    Strabolgi, L.

    Milner of Leeds, L.

    Symons of Vernham Dean, B.

    Mishcon, L.

    Taylor of Blackburn, L.

    Monkswell, L.

    Thomas of Gresford, L.

    Montague of Oxford, L.

    Thomas of Macclesfield, L.

    Morris of Manchester, L.

    Thomas of Walliswood, B.

    Murray of Epping Forest, L.

    Thomson of Monifieth, L.

    Nicholson of Winterbourne, B.

    Thurso, V.

    Ogmore, L.

    Tope, L.

    Paul, L.

    Tordoff, L.

    Peston, L.

    Turner of Camden, B.

    Pitkeathley, B.

    Walker of Doncaster, L.

    Plant of Highfield, L.

    Watson of Invergowrie, L.

    Ponsonby of Shulbrede, L.

    Whitty, L.

    Prys-Davies, L.

    Williams of Crosby, B.

    Ramsay of Cartvale, B.

    Williams of Elvel, L.

    Randall of St. Budeaux, L.

    Williams of Mostyn, L.

    Razzall, L.

    Winchilsea and Nottingham, E.

    Resolved in the negative, and amendment disagreed to accordingly.
    5.20 p.m.
    [Amendments Nos. 13, 14 and 15 not moved.]
    Lord Tope Lord Tope moved Amendment No. 16:
    After Clause 2, insert the following new clause—

MAKING AND APPROVAL OF GENERAL GUIDANCE ON CLASS SIZE REDUCTION PLANS
(".—(1) Guidance given under section 2(2) may include guidelines setting out aims, objectives and other matters, including the interpretation of the law, in relation to the discharge by local education authorities of any function under sections 1 to 4.
(2) The Secretary of State shall publish any such guidance for the time being in force which is applicable to all local education authorities, or a class or description of local education authorities.
(3) Where the Secretary of State proposes to issue or revise guidance provided for under subsection (1) he shall prepare a draft of the guidance, consult such persons about the draft as he deems fit and consider any representations made by them.
(4) If he determines to proceed with the draft (either in its original form or with such modifications as he thinks fit) he shall lay a copy of the draft guidance before Parliament.
(5) If, within the 40-day period, either House resolves not to approve the draft, the Secretary of State shall take no further steps in relation to the proposed guidance.
(6) If no such resolution is made within the 40-day period, the Secretary of State shall issue the guidance (or revised guidance) in the form of the draft, and it shall come into force on such date as the Secretary of State may by order appoint.
(7) Subsection (4) does not prevent a new draft of the proposed guidance from being laid before Parliament.
(8) In this section "40-day period", in relation to the draft guidance. Means—

(a) if the draft is laid before one House on a day later than the day on which it is laid before the other House, the period of 40 days beginning with the later of two days, and

(b) in any other case, the period of 40 days beginning with the day on which the draft is laid before each House,

no account being taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.").
The noble Lord said: My Lords, this is the first of a number of amendments put down by myself and my noble friends to express our concern on the issue of guidance. Since this is the first occasion on which it arises, it might be helpful to your Lordships if I spent a little time speaking generally about our concern rather than specifically to Amendment No. 16. Then I shall not need to do so every time one of our amendments is raised.
I can summarise our concerns on the issue of guidance and our reasons for the amendments as being threefold. First, we wish to draw attention to the increase in the statutory guidance provisions in the Bill. Secondly, we wish to find out why some guidance is subject to parliamentary scrutiny and other guidance is not. Thirdly, we wish to find out what the Government hope to achieve by making guidance statutory.
I say at the outset that I accept that the drafting of some of our amendments may not be perfect and in some cases they may be in the wrong place. I believe that that does not matter too much, as I do not intend to press them to a Division. Our purpose and intention are clear, or will become so.
On the general issue of statutory guidance, the Bill introduces at least 10 new powers, and perhaps more, for the Secretary of State to give guidance to which LEAs, schools and other bodies must have regard. They are: class size reduction plans, education development plans, sale of other premises, consultation on establishment alteration or discontinuation of schools, approval, imposition and revision of LEA financial schemes, exclusion of pupils, admissions, home school agreements, early years development plans and LEA/school relationships.
The status of the guidance seems to vary. The guidance on admissions and LEA/school relationships is accorded the title of "code of practice" and a form of negative resolution procedure is provided for parliamentary scrutiny. No such scrutiny is provided for any other statutory guidance in the Bill. Interestingly, our Delegated Powers and Deregulation Committee commented only on the admissions and the LEA/schools relationship codes of practice, but not on the others. The DfEE memorandum mentioned only the admissions code of practice. Could it be that the term "code of practice" makes the guidance more important? The Minister's view on that would be welcome.
I recognise, of course, that the importance and role of the 10 areas of guidance which I have just mentioned vary. For example, the guidance on the sale of other non-school premises is minor and we have not raised
562
any amendments on it. But the importance of guidance in other areas is enormous, in particular in education development plans and exclusion of pupils. Can the Minister therefore explain to us why some statutory guidance documents are subject to parliamentary scrutiny and others are not?
The mushrooming of statutory guidance has not been subject to any parliamentary debate and that is in part our purpose today. Our Amendment No. 16, and others to be moved, will ask for parliamentary scrutiny similar to that for codes of practice on admission and LEA relationships. There has been some confusion in the press and elsewhere about the effects of the Bill. Some argue that it gives enormous powers back to the LEAs. Others, for whom I have slightly more sympathy, take an almost directly contrary view.
Time will test the overall effects of the legislation. but the increasing ability of the Government to require LEAs and school governing bodies to take account of the Government's views is a noticeable feature of the legislation and must result in increased centralism over the next few years. Every new piece of statutory guidance takes away from local government and schools the ability to think through and act independently in their joint task of raising standards. It makes the LEA the authority of the GAPs. We shall have to look at a number of separate documents provided by central government to find out the LEA's role. Once the new arrangements are in force, there may not be much local discretion left which is not directly controlled by secondary legislation or by guidance.
The implications for free-standing LEAs and schools of having to work around an increasingly large number of codes of practice and guidance, all having statutory force to which they must have regard, reduces such bodies to mere cyphers of central government and, arguably, that is an impediment to creativity and innovation, the lifeblood of raising standards. By giving parliamentary scrutiny over the guidance, there will at least be some brake on the power of the Government.
I turn now specifically to Amendment No. 16, having made the general point which I shall not repeat with future amendments. The consultation on the draft guidance on reducing infant class sizes closed on 12th June. Perhaps the Minister can tell us something about its outcome. That draft guidance contains a rather obscure paragraph, paragraph 13, which attempts to provide guidance on meeting parental preference, while still achieving the class size pledge. The Secretary of State will use the published guidance to determine whether or not to approve a plan, with significant consequences, if the plan is not approved, in loss of grant.
The problem with paragraph 13, as currently drafted, is that it is obscure. It uses terms which are not defined such as "poor schools" or "popular schools" or "schools with high standards". It does not address such issues as whether popular schools can be extended. Parliamentary scrutiny of the guidance would enable us to have a full debate on it, and to tease out and understand better the meaning of such guidance.
I hope that this first amendment offers the Minister an opportunity to clarify the three areas which I described. That would be of great service to those of us who will be subject to the guidance as it emerges. I beg to move.
Lord Whitty: My Lords, it is clear that the noble Lord, Lord Tope, recognises the importance of the guidance and of some flexibility in guidance. We have obviously accepted the merits of wide consultation on guidance. As he said, in this area we have just completed the draft guidance consultation. To answer the noble Lord's last question, at present we are still analysing and carefully considering the responses. We shall put a copy of our summary of responses in the House Library in due course.
However, we do not accept that it is good use of parliamentary time to subject guidance to the procedure suggested in the amendment. There is already parliamentary scrutiny of the associated regulations relating to class size. The guidance will not, and indeed could not, contain any new obligations over and above that, but will give guidance to LEAs on preparing their plans for the reduction of class sizes.
Moreover, there is no clear precedent for guidance at this level being subject to the negative resolution procedure. It is true that in the Bill both the code of practice on admissions and the LEA codes of practice are subject to the negative resolution procedure. The former was introduced only in response to a recommendation from the Select Committee on Delegated Powers and Deregulation. It is important to note that no such recommendation was made in the case of any other guidance which the department will be producing to support the implementation of the new measures introduced by the Bill.
The Government accept that the negative resolution procedure is right for codes of practice which will have statutory force, in that LEAs will have to have regard to them in carrying out their relative duties and responsibilities. The same is not true of the other guidance, which will be non-statutory in that sense. The guidance will assist LEAs in implementing the class size regulations and, at later stages in the Bill, other aspects of the policy embodied in the Bill. Ultimately, however, it remains for the LEAs to decide how best to achieve their targets.
The guidance is also of a different scale from, for example, the proposed code of practice on admissions. That code of practice will cover a whole range of admission points whereas the guidance that we are proposing under this clause will be much more limited in scope. I am sure that everybody involved in education recognises that the department issues a whole range of circulars and guidance documents. If each was subject to parliamentary procedures, I fear that there would be little time for anything else on the educational front.
I have tried to explain the difference between where we accept that the negative procedures should apply with codes of practice of statutory force and the issue of guidance. Guidance is extremely important in guiding
564
local authorities to take their own decisions. The codes of practice have more direct effect. The difference is understood in the education world and is reflected in the way in which we deal with it in the Bill. I therefore ask the noble Lord to withdraw his amendment, as he indicated he would.
5.30 p.m.
Lord Tope: My Lords, I am grateful to the Minister for his reply. I shall read it and try to understand it more fully.
I recognise that the noble Lord, understandably, was replying to the specific amendment I moved. However, I am not sure that he satisfactorily answered the more general points I made and there may be opportunities later, as we progress through the Bill, to return to them.
As I said in my speech, I recognise that guidance is of different levels of importance and there are certainly some areas where guidance is to be issued where nobody—least of all me—would suggest that it should come before Parliament. But the Minister seemed to be saying that it was coming here for negative resolution because the Delegated Powers and Deregulation Committee said that it should—that is a good reason in itself and I do not question it—rather than that it was of great importance.
There are areas where guidance will have statutory effect: it will certainly have serious effect which is extremely important. Development plans are a case in point. But I am still not clear on the three questions that I asked at the beginning. One stressed the considerable increase in reliance on statutory and even non-statutory guidance. I particularly wanted to find out why some is and some is not subject to parliamentary scrutiny. If it is only because the Delegated Powers and Deregulation Committee said so, that is not a satisfactory answer.
I was trying also to find out what the Government hoped to achieve by making guidance statutory. I am less clear now than I was as to what is and what is not statutory guidance. I suspect that we shall return to this later. As I said at the beginning, these are probing amendments and I have no intention of pressing them. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Payment of grant in connection with reductions in infant class sizes]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 17:
Page 3, line 3, leave out ("the limits imposed under section 1 are") and insert ("any limit imposed under section 1 is").
On Question, amendment agreed to.
[Amendment No. 18 not moved.]
Clause 4 [Interpretation of Chapter I]:
[Amendment No. 19 not moved.]
Clause 5 [Duty of LEAs to promote high standards in primary and secondary education]:
Lord Pilkington of Oxenford Lord Pilkington of Oxenford moved Amendment No. 20:
Page 3, line 44, at end insert ("of attainment").
The noble Lord said: My Lords, this is not simply a petty-fogging linguistic amendment. We are all concerned to improve educational standards. But, as we all know, education is a complex process containing many aspects. However, I am sure that we all agree that our fellow citizens want their children to improve their attainment levels; that is, within the limits of their potential to do as well as they can in the subjects that they are sitting at school. In general, that is what "attainment" is understood to mean.
The concerns of our fellow citizens are that their children should learn to read and write in the first stages and that that performance should be improved in the sense that it has not been as good as that in many of our fellow countries in the European Union. We would like to reach the same standards as them or better. We then move to the more advanced studies of science, the arts and much more. Again, there are certain areas where we face a somewhat alarming deficit in contrast to our neighbours.
The problem is that, unless we add the word "attainment", high standards can be lost in a fog of generalities. I am not against value added or anything like that, but I can assure noble Lords—I repeat for the second time this afternoon what the noble Lord, Lord Dearing, said at greater length—that it is hard to define "value added". One thing for which every education authority should strive is improvement in basic skills; that is, that people read better, write better, and have a better performance in maths, particularly in arithmetic.
It may be that the Minister will assure me that "high standards" mean exactly what I say they mean. However, I hope he will understand—I say this not in any critical sense—that it is often good to dot the "i's" and cross the "t's", particularly in the world of education. Therefore, I ask that we think of the words "of attainment" being added to "high standards" and in that way we shall get the best of all worlds. What could be better than that? I beg to move.
Baroness Maddock: My Lords, I understand the intention behind the noble Lord's amendment. Over the weeks that we have been here—it has been a long time—we have all agreed that we want to see high standards of attainment. However, when I look at the amendment it seems to me that it narrows the meaning of "high standards" of education.
We have had many debates about what is included in education. I want high standards of attainment and assume—perhaps wrongly—that that must be part of "high standards". However, I want to see high standards in a lot of other areas—personal, social and health education; people's confidence and communication skills; cultural, moral and spiritual development. We have discussed those matters at some length over recent weeks and they are all important. If we change the wording of the Bill to insist on "high standards of attainment", what happens to the rest?
I suggest that "high standards" of education include high standards of attainment and therefore I am not happy to support the noble Lord, though I support his intention absolutely.
Lord Whitty: My Lords, this is a slightly déjà vu debate. We have had this debate before and the points made by the noble Baroness, Lady Maddock, have been made before.
This amendment would change the LEAs general duty to promote high standards to one which I assume is attempting to focus on raising standards of measured or measurable attainment. Indeed, the noble Lord. Lord Pilkington, seemed to narrow it even further to something approaching the three R's.
All of those things are vitally important in raising standards, but the connotation of attainment is often that which relates to performance, tests and exams, and excludes issues such as the attitude to school, attendance, exclusion, personal development and moral, social and cultural development. If attainment were written in that way it would, as the noble Baroness, Lady Maddock, said, limit rather than focus the role of LEAs.
That is not to say that the Government are in any way diluting the need to achieve high levels of attainment in that sense. Raising the levels of attainment is one of our major focuses and is something to which the Government attach great importance. If the amendment seeks an assurance that raising levels of attainment must be a priority, I can certainly give that assurance. However, noble Lords will know that this duty to achieve high standards of attainment is part of a package of new measures which will be designed to improve the effectiveness of local education authorities in a wider sense and to ensure that their activities are focused on raising all standards.
One of the main ways in which we shall be monitoring LEAs' performance is through the education development plan, covered by Clauses 6 and 7, which will require specifications from LEAs on how they aim to achieve higher standards. LEAs will be required to include in their EDP targets for raising pupils' attainment in literacy and in numeracy, as the noble Lord wants, and in GCSE qualifications. These standards will indeed clarify goals and provide specific measures against which we can judge LEAs' and schools' successes. We shall be monitoring that performance.
However, as I said, local authorities also carry out many other functions—in relation to school education, management services, the management of school places, behaviour support and special services in support of particular groups of pupils. All those functions must be carried out to the highest standards if they are to contribute most effectively to providing the best quality of education service in our schools.
We believe that LEAs should be striving for excellence in all that they do and, consequently. that the duty to promote high standards should apply much more widely to all their functions relating to the provision of education. We would not wish to go along the road of this amendment in reducing the effect of this clause by implying that it was limited to levels of measured attainment in the narrower sense, albeit, as I have said, that this is a vital part of their role and will be a vital part of our monitoring through education development plans and elsewhere.

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I hope that the noble Lord will recognise that his amendment in one sense achieves the opposite of what he intends and that the limiting effect of the amendment would not be helpful. We need to recognise all aspects of local education authorities' responsibilities and we believe that the current wording does that.
Lord Pilkington of Oxenford: My Lords, I welcome what the Minister said about the desire of the Government to raise standards of attainment in the work children do at school in literacy, numeracy and much more.
I respect what the noble Baroness, Lady Maddock, said; and of course I do not have a narrow view of education. What worries me is that those from the more deprived areas of our community—those from a different ethnic background or from deprived families—will not be expected to attain as well as others have attained. That has not been the case in the past when people from those areas have attained high standards of literacy and numeracy—often immigrants who came to this country at the turn of the century from Russia and many other countries. While I respect what the noble Baroness, Lady Maddock, said, we must never hide behind saying, "Little Johnny may not be able to read or write, and in fact he cannot add up either, but, my goodness, he is a confident little fellow when you see him walking down the street". That may be very desirable, but it does not get little Johnny a job.
We must be practical and not take the rather high and mighty attitude of saying that if you make a person confident everything else will follow. He also needs to read and write and achieve examination success. That is the point I and my noble friends sought to make. I am delighted that the Minister understands it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Preparation of education development plans]:
5.45 p.m.
Lord Pilkington of Oxenford Lord Pilkington of Oxenford moved Amendment No. 21:
Page 4, line 11, after ("area,") insert ("specifying the targets for attainment for individual schools at key stage 2 and key stage 4,").
The noble Lord said: My Lords, we are back again to those nasty things called facts. I always think it best to set targets in order to know what one has achieved and what one will aim at. Fortunately, in Key Stage 2, which is at year seven, and Key Stage 4, at year 11, we have two crucial points in a child's career: when he leaves his junior school and when he takes his GCSE examinations. At those points we have records of achievement. In this amendment I suggest that the education development plan for any school, in discussion with the school and the governors of the school, should take into account the achievements at those key stages and then say what the target should be and what improvements are necessary. It should not leave the issue vague but say, "We achieved this".
One could take into account the background of the pupils in the school. But if one is to improve standards, one has to look at the reality of the situation and then decide in a co-operative way how far those standards can be improved. I suggest that these facts are the skeleton and that the flesh which is to clothe the skeleton should be the education development plan based on those facts.
For example, if a school has consistently under-performed at GCSE in six subjects, one should analyse those subjects, first, as would any headmaster or headmistress, and decide how the performance could be improved. Otherwise, it can become mere rhetoric. I hope that the Government can assure us that they will at least put into directions on education development plans some reference to what is being achieved and what is expected to be achieved. It is not Gradgrind; it is just facts. Anyone looking at a business, a factory, or even at one's own individual performance, would do the same. When I hear confessions, I do not say to the person, "It's got to be the same as last week"; I expect an improvement in performance over the years. It is the same with regard to a school; otherwise, salvation would be denied us all. I hope that some thought can be given to these key stages in deciding the education development plan. I beg to move.
Lord McIntosh of Haringey: My Lords, Amendments Nos. 21 and 22 may be taken together. Their effect is to require local education authorities to include in their education development plans specific targets for individual schools at each of Key Stages 2 and 4 and that the targets so specified should be based on prior attainment of pupils at individual schools. The noble Lord tabled similar amendments in Committee but they went further than these amendments. I am pleased that he has taken on board one of the reasons that we resisted the first amendment; that is, that the previous version, which covered all key stages from one through to four, would have seriously over-burdened schools and local education authorities. But I am afraid that the amendments now before us still represent a backward step in the arrangements for target setting that we currently propose under the Bill.
Our intention is to have a small number of challenging but not burdensome targets in education development plans. These—and they are set out in the draft guidance on education development plans—are precise and clear, both to local education authorities and to schools. They are also able to change over time because the Secretary of State can issue regulations on target setting to focus on subject areas that changing circumstances may make it appropriate to include as targets, or to phase out an existing target if circumstances justify that. But by placing targets at Key Stages 2 and 4 on the face of the Bill, Amendment No. 21 would require new legislation in order to vary the targets; for example, by removing a target at Key Stage 2 or adding targets at Key Stage 4. That would introduce inflexibility and delay which cannot be to the benefit of the local education authority and still less the schools. So I do not see any advantage in the amendment to which the noble Lord has principally spoken.

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There is at least one potential difficulty. Once the Secretary of State has approved LEAs' education development plans, they will be required, as the guidance states, to update them annually to review progress against the achievement of targets agreed between LEAs and schools. That is an education development plan. The second year of education development plans will provide a bench-mark for tracking the progress of schools and LEAs regarding performance and the achievement of targets on the basis of actual performance in the first year.
Of course, prior attainment is very important. Indeed, the value added measures which the department will be publishing relate specifically to prior attainment. But research suggests that other factors such as free school meals or English as an additional language, are of less significance once prior attainment is taken into account. The noble Lord understands the interaction between those things. We discussed that in Committee.
Value added measures are one of a range of tools alongside, for example, bench-mark information which schools have available to them to help them set realistic but challenging targets. We believe that this information will greatly enhance schools' understanding of their performance and it will help with their efforts to improve.
But there will be no compulsion on the schools to use it or to use it in any particular way. It will be for the schools themselves, perhaps in discussion with the LEAs, to decide on how best to use this and the other performance information which will be available to them. A requirement to base targets on one of these sources of information would not help to set realistic targets. It might make the process less effective. We are really continuing to argue for flexibility. I do not believe that we are doing so in conflict with "the facts" as the noble Lord expressed them, in his introduction to these amendments. I hope that he will feel able to withdraw them.
Lord Pilkington of Oxenford: My Lords, I welcome what the noble Lord has said. I hope that the House will bear with me if I am anecdotal for a few moments. When I was a headmaster and took over a new school, I used to do an analysis of its performance in every subject. As often happened, the school was weaker in certain subjects than in others. I regarded myself as successful when I had improved the school standard in those weaker subjects. I discovered the weakness in those subjects by looking at the results achieved in internal or external exams.
I take the point made by the noble Baroness, Lady Maddock. One would look at the discipline of the school and things like that. But in every case one would look at an existing situation and decide what one wanted to do about it. I am not saying it was the total way of dealing with the situation, but one takes two important points such as when the child leaves the junior school and when the child is 16 years of age and takes the GCSE.
I say this because it is educationally important. It is also what the citizens of this country value very greatly. I shall not dwell on some of the instructions for the
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education development plans, but they were needlessly complex. They were more within education jargon than in terms which the parents and others would understand. I shall not press the amendment. I merely state that in many ways it is a good way of judging whether standards will improve. The Government may find that, in a year or two, the guidance they have put forward for the education development plans is not so direct as they would wish it to be. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 22 not moved.]
Baroness Thomas of Walliswood Baroness Thomas of Walliswood moved Amendment No. 23:
Page 4, line 30, after ("regulations,") insert—
("( ) show how the special educational needs policy of the local education authority will raise the achievement of children with special educational needs;").
The noble Baroness said: My Lords, we now come to the interests of pupils with special educational needs. Before speaking to the amendment, I would like to say how much everyone concerned with moving amendments at an earlier stage appreciates the tabling of Amendments Nos. 26 and 27 in the name of the noble Baroness, Lady Blackstone, and the noble Lord, Lord Rix. That shows a great step forward. It satisfies a great deal of the general anxiety felt by people concerned with pupils with special educational needs when they read the Bill and followed its progress through another place.
Amendment No. 23 is not meant to contradict in any sense the amendment put forward by the Minister; namely, Amendment No. 27. On the contrary, it puts on the face of the Bill an example as regards the statement of purpose which is part of the education development plan. It adds the requirement that the proposals should,
"show how the special educational needs policy of the local education authority will raise the achievement of children with special educational needs".
I believe that many people feel that local education authorities need to face up to the fact that their policies should be directed towards improving the attainment of pupils with special educational needs. They should demonstrate in their proposals how their education development plan will have that effect. It is clearly a practical example of having regard to children with special educational needs. It is something like the terminology of the amendment tabled by the Minister. It is a way of showing how "have regard to" shall be implemented in practice in the presentation of the education development plans. Therefore, it is a practical mechanism for ensuring that the education of children with special educational needs is placed firmly within the framework. I shall leave my noble friend to speak to Amendment No. 26. I beg to move.
6 p.m.
Lord Rix: My Lords, in the world of the theatre, the importance of top billing is quite straightforward. It relates to the amount of money that one will receive. If you have second, third, or fourth billing, it generally

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means that your attainments are less and that your remuneration at the end of the week is consequently reduced. I am very happy to take second, third and even fourth billing on Amendments Nos. 23, 26, 27, 79 and 142. I should like to speak to them together and, as a Cross-Bencher, to support everybody in sight.
As we have just heard, Amendment No. 23 stands first in the name of the noble Baroness, Lady Thomas of Walliswood. It provides a link between the education development plan and a local education authority's SEN policy. Amendment No. 26, which stands first in the name of the noble Lord, Lord Addington, would make it a requirement that an LEA's SEN policy was annexed to the education development plan.
Amendment No. 27 stands on its own in the name of the Minister, the noble Baroness, Lady Blackstone. As the noble Baroness, Lady Thomas, said, we are all grateful for the amendment. We are delighted to see it and we hope that it will soon be on the face of the Bill.
Naturally, I am supporting Amendments Nos. 79 and 142, which are government amendments, because my name appears to them in second billing. I am delighted that the Minister, her department and the Government have taken notice of the great stress that many Members of your Lordships' House laid on the question of bullying. It is a major step forward to see that on the face of the Bill, particularly with regard to children with learning disabilities who attend SEN or ordinary mainstream schools.
Perhaps I may again express my gratitude for these amendments to all concerned. I am sure that we shall not be seeking the opinion of the House because everybody concerned recognises the worth and the scope of the government amendments as well as those which stand in the names of the noble Baroness, Lady Thomas, and the noble Lord, Lord Addington.
Lord Addington: My Lords, my name appears to Amendment No. 26, in top billing, to borrow the phrase of the noble Lord, Lord Rix. If I may first be a little sour, perhaps I may say that we could really have had this debate in Committee. I hope that in the future when we deal with the issue of special educational needs and bring that matter into our overall educational policy, we shall not need such debates. I hope that those of us with an interest in this will be brought together; that a discussion will take place and that the Government will not have to move such amendments because these provisions will, we hope, already be part of any future education Bills. Perhaps I should add that I was hopeful of that happening under the previous government because a similar process took place then. However, that did not occur.
I hope that this Government will learn from this experience and recognise the fact that, generally speaking, some attention has to be paid to this even if that means that our prepared set speeches cannot be rolled out quite so often. I hope that we shall then be able to deal with the other more controversial parts of such Bills where there is real disagreement between us. I think that this has been a victory for the House, but it
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is a victory in a battle that we did not need to fight because we have all discovered that we have been shooting in the same direction.
Baroness Blackstone: My Lords, I am grateful for what the noble Lords in first, second and third billing have said. Coming on as fourth billing, I should like to do a little more than merely respond to the amendments or speak to the government amendments. I should like to say a few words about special educational needs in the wider context of the Bill, given the concerns expressed at both Second Reading and in Committee that there has been only limited reference to SEN pupils on the face of the Bill. We know that the importance of ensuring high standards of special needs provision is an issue that is dear to Members of this House, as it is to the Government.
Following the Committee stage, officials from my department had a constructive meeting with the noble Lords, Lord Rix and Lord Swinfen, and with the noble Baroness, Lady Darcy de Knayth, at which they discussed a number of issues. In response to that helpful discussion and the earlier debates, we are proposing three amendments which we hope will address key concerns. I shall deal with those in a moment, but I should like first to mention one or two other important areas.
I begin with education action zones and education action forums. The issue becomes particularly important in education action zones, where poor health, low levels of family literacy and a large number of disaffected pupils are likely to lead to higher numbers of pupils with special educational needs. It is reassuring to see that these issues are being addressed by the EAZ proposals themselves. I will give three examples. In Herefordshire, teams of support staff will work across the zones addressing problematic behaviour and learning difficulties. In Thetford, the EAZ will include specialist, localised speech and language therapy provision; and in Leicester there will be multi-agency support teams to endeavour to help address special needs from early years.
Concerns have been expressed that the establishment of foundation special schools will create difficulties in planning specialist provision. There are fears that foundation special schools will be able to change their schools in ways that will not reflect local and regional plans for the development of SEN provision; or, indeed that they will not change to reflect such developments.
Those fears are unfounded. Foundation special school governors will be able to bring forward proposals to alter their school, but LEAs will also be able to propose changes to foundation special schools. Our guidance to proposers will make clear the plans they should consider when bringing forward proposals to reorganise special needs provision. These will include school organisation plans, proposals for the regional development of SEN provision and education development plans.
We are also very conscious of concerns about how children with special educational needs but without statements will be treated under the new admission arrangements. We have stated clearly and unequivocally

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in the draft interim guidance on school admissions that children with special educational needs but without statements must be treated no less favourably than other applicants.
The interim guidance also covers pupils with disabilities and reminds schools that they are under a duty to admit a child where the school has been named in the child's statement of special educational needs. It stresses the importance of schools and LEAs working together to agree strategies that will allow all schools to admit a more even share of children with challenging behaviour.
This guidance is the first consultative step on admissions leading to the statutory code of practice to which all admission authorities will be required to have regard. We shall continue to work with representatives of children with special needs as we proceed to finalise the interim guidance and to develop the code. I will speak further about how SEN issues have been addressed in developing other policies when the relevant clauses are reached.
I now turn to the specific amendments we are proposing. These relate to Clauses 6, 25 and 61. Amendment No. 27 to Clause 6 would place a requirement on LEAs when preparing their education development plans to have regard to the education of children with special educational needs. We have sought in this amendment to address some very important concerns. EDPs will be the key mechanism through which LEAs will play their part in raising standards in schools. Children with special educational needs are an important part of this agenda. We want to raise standards for all children. That is why the draft guidance which we issued drew special attention to their needs and required LEAs to include significant action to support them. But in response to the concerns that have been raised, we have looked again at this question to see what more needs to be done.
The definition of "children" in Clause 6 includes children with special educational needs. Clause 6 therefore requires LEAs in their EDPs to address education for pupils with special educational needs. I wrote to the noble Baroness, Lady Thomas of Walliswood, confirming the position following concerns raised by her and others on Second Reading that, as drafted, the Bill may not fully reflect the Government's commitments to SEN. We are minded of those concerns and attach the greatest importance to ensuring that LEAs are continually reviewing and improving provision for these pupils. We have concluded that to put the matter beyond doubt there should be a specific requirement on the face of the Bill.
Special educational needs should be part of the mainstream programmes of LEAs with clear targets for improvement. Therefore, LEAs' targets for raising standards for pupils with SEN should be contained within the main body of the EDP. That is in line with the spirit of inclusion and will ensure that LEAs are held to account for raising standards for pupils with special needs in the same way as for pupils who do not have special needs. We also want to ensure that LEAs' EDPs reflect the broader range of the Government's key
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objectives for SEN. We therefore propose that LEAs should set out in a separate mandatory annex what they will do to make progress towards those objectives. This measure and our amendment to put on the face of the Bill a requirement for LEAs to have regard to SEN when drawing up their EDPs will send a clear message to LEAs about the importance that we attach to SEN.
The precise balance between what should appear in the main body of the EDP and what should appear in the annex needs careful thought. I know that there are differing views among those with an interest in SEN about exactly how EDPs should reflect SEN. We shall therefore be consulting organisations who have a particular interest in this matter on the details. We need to keep EDPs as streamlined as possible. Attaching these policies may make EDPs more lengthy than we believe is desirable; but we would expect LEAs to reflect key aspects of their policies and priorities for SEN in their EDPs. What exactly should be attached as an annex is a matter we can consider after further consultation.
I turn to school organisation committees and school organisation plans. It is important that school organisation committees should have access to appropriate SEN expertise covering provision in both special and mainstream schools. We are committed to achieving that. But there are a number of ways of doing so. We shall consult specifically on this point before making clear in guidance and in regulations how special educational needs will be represented on school organisation committees. We are determined to get this right. Amendment No. 79 responds to concerns expressed by your Lordships during Committee stage about the proposed school organisation plan. The plan will set the crucial context for decisions on school organisation proposals and will be a very important part of the process. Clause 25(2)(a) already provides that the plan shall describe how the authority intends to meet the needs of the population of its area. Pupils with SEN would clearly be covered by that provision. However, your Lordships expressed concerns during Committee stage. I am happy to respond with this amendment which puts beyond doubt that the plan will always have to take explicit account of the needs of pupils with SEN.
Finally, at Committee stage we undertook to consider further the arguments of my noble friend Lady David and others that there should be a specific reference to bullying on the face of the Bill. We have accepted the force of those arguments. Amendment No. 142 would require the headteacher to determine measures, as part of the school's discipline policy, to prevent all forms of bullying among pupils. We attach a high priority to helping schools prevent and combat bullying. This is by no means an issue only for children with SEN. My right honourable friend the Secretary of State has made clear on a number of occasions that bullying in whatever form, be it racial or because of a child's special educational needs, or for some other reason, is a pernicious problem which puts the emotional well-being and educational achievement of pupils at risk. Bullying is disruptive and intolerable and it must have no place in our schools. It can lead to disaffection and truancy that totally blights a young person's life. We want all

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schools to treat bullying very seriously and we are determined to help schools take steps to combat it promptly and firmly whenever and wherever it occurs.
I hope that the House will feel that, taking together what I have said today and the amendment that I move, the Government have shown in a very practical way that they are ready to listen to genuine and clearly articulated concerns. It was in order to listen to the widest possible range of views on SEN that last year we published our consultative Green Paper on the subject. Taking account of the thousands of responses we received, we shall in the early autumn publish our action programme designed to take forward the principles set out in the Green Paper. In the light of what I have just said, I hope that the noble Baroness, Lady Thomas, will be persuaded to withdraw Amendment No. 23 and the noble Lord, Lord Addington, will be persuaded to withdraw Amendment No. 26.
6.15 p.m.
Baroness Thomas of Walliswood: My Lords, it is my pleasant duty to respond to the Minister. The noble Baroness has given an excellent exposé of the Government's approach to special educational needs and described how the amendments tabled by the Government and the noble Lord, Lord Rix, help to reflect on the face of the Bill the concerns that we have expressed in relation to educational development plans, school organisation committees and bullying. We are grateful for what the noble Baroness said. I shall read the words of the Minister with great care. I listened as carefully as I could to a long and (if I may say so) rapidly read statement. I believe that it satisfies a great number, and possibly all, of the concerns that have been expressed. I therefore beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Pilkington of Oxenford Lord Pilkington of Oxenford moved Amendment No. 24:
Page 4, line 30, leave out from ("regulations") to end of line 31.
The noble Lord said: My Lords, in moving Amendment No. 24 I should like to speak to Amendment No. 25 and also to Amendment No. 32, which is consequential on these amendments. I shall not detain the House long because we dwelt on this matter at Committee stage. Our worries on this side of the House have always been that to refer all of the education development plans to the Secretary of State is needlessly bureaucratic. We understand that it is not sufficient just to leave the matter to the schools or the local authority. For that reason we suggest the involvement of Ofsted, the chief inspector and the governors of all the schools who are concerned about the particular educational development plan and are aware of the details of their local area.
It is very much against the traditions of English government to refer so many detailed plans to the department. I have grave doubts whether the department has the speed or skill to cope with this. I believe that there will be delays and bureaucracy. I do not want to
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embarrass the noble Baroness or any of her colleagues, but they have not shown enormous skill in producing regulations while this Bill has been passing through both Houses. In many cases we have had to wait. Further, my noble friend Lady Blatch often receives letters without their enclosures. If the education development plans experience that, I fear that there may be problems.
I make no criticism of the department. I refer merely to the pressure of work. If the Secretary of State and his officials have to approve every education development plan for the schools of this country it will be a great burden. I am not a member of the Government; no doubt I never shall be, but I believe that the department has many more important tasks to perform than this. It would be a kindness to the department and to the country and a mercy to the many trees that will die in vain if the Secretary of State was taken out and Ofsted was brought in. Ofsted has inspected almost all of the schools. I believe that that would be a happier arrangement. I beg to move.
Lord McIntosh of Haringey: My Lords, I am more grateful to the noble Lord for tabling these amendments than he knows. They cover a range of important aspects of our proposals for education development plans. The fact that he has tabled them gives me the opportunity to describe what we undertook to do on Second Reading, which was to give the House the result of our consultation on EDPs. I hope that they may allay some of his fears.
I shall say something about the changes to the EDP policy which we plan as a result of the views expressed in the consultation. A summary of the responses to the consultation has been placed in the Libraries of both Houses today.
I am pleased to tell the House that there was generally a very positive response to our policies on education development plans. This came through clearly in the responses to the consultation and at the six regional conferences the department held in February and March to explain the guidance and obtain feedback. Almost all the respondents agreed that EDPs would be a key mechanism for raising standards in schools and welcomed the guidance. There were some who were concerned about what they perceived as additional bureaucracy, but in general there were very few critical comments.
The main points to come out of the consultation related to three specific aspects of the guidance: setting targets; LEAs' school improvement programmes to achieve their targets; and the supporting information that LEAs will provide to underpin their EDPs. Target-setting attracted the largest number of comments. There was broad support for the five targets proposed, but some requests for additional targets, for example, at Key Stages 1 and 3, and for attendance and exclusions. There was some concern expressed about the timescale for LEAs to agree targets with their schools. We are confident that the timescale we have set for LEAs is a viable one, and that is certainly the view of those authorities that have already begun the process of consulting their schools as the first step to drawing up

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their EDPs. There were also requests for greater clarification, which officials will take on board, in revising the guidance.
There was general support for the school improvement programme which respondents saw as a sound approach to raising standards, but some calls for greater clarity in the guidance. Officials are in the process of revising the guidance and respondents' comments will be helpful in that regard.
I turn last to supporting information. Some respondents thought that too much information was being asked for under this heading, but more thought that the information required was what LEAs are already collecting. There were continuing concerns about resources which we will take into account alongside the consultation on fair funding which ends on 31st July.
It is clear that the general content and broad thrust of the draft guidance is accepted and welcomed and we intend to retain it. We have given careful consideration to the suggestions made. We have concluded that the following changes should be made: the guidance should be streamlined and unnecessary bureaucracy reduced; GCSE equivalents (such as GNVQs), should be included in the targets currently proposed for pupil attainment in line with the targets we recently announced for 16 year-olds; special schools—my noble friend the Minister has referred to this—should be listed separately in the school-by-school targets in annex 1 of the guidance, rather than grouped with other schools; and a new, mandatory, annex on SEN should be included in the guidance.
We cannot of course finalise the guidance until after other related consultations such as fair funding and the LEA school relations code of practice are completed and until Royal Assent of the Bill. We plan to make that available as soon as possible in the autumn, but we will be writing to all LEAs to inform them of the immediate changes.
I turn now to the amendments. Amendment No. 24 would remove the Secretary of State's power to approve education development plans and together with Amendment No. 32 would remove his powers to modify and review LEAs' statements of proposals and the requirement for LEAs to publish their plans.
Clearly that would considerably reduce the effectiveness of EDPs as a mechanism to ensure that LEAs play their part in raising standards in schools. That is not the message we received through the consultation responses: LEAs welcomed the opportunity to contribute to raising standards and generally found the draft guidance a helpful aid to strategic planning. The Secretary of State's powers to approve, reject or modify EDPs are an important part of the process to lever up standards across all LEAs. Without them we cannot effectively ensure that all LEAs reach the level of the best.
The noble Lord, Lord Pilkington, thought that the department had more important things to do than that. I cannot think of anything more important than the thrust to improve school standards. That is what EDPs are about. Unless we ensure, giving proper respect to local initiative, an oversight by the Secretary of State,
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we cannot stand up before the electorate again and say that we have done whatever was necessary to improve school standards.
Amendment No. 25 requires LEAs to publish and send their draft EDPs to the Chief Inspector of Schools for England and governors of schools affected by the plans. That is not a realistic or practical alternative to sending them to the Secretary of State who has the responsibility for schools as a whole whereas the Chief Inspector of Schools has the responsibility for the inspection of individual schools and groups of schools.
Despite what the noble Lord, Lord Pilkington, said, we are determined to root out bureaucracy wherever we can. That applies just as much to EDPs as it does to other areas of educational policy. We shall be seeking to streamline the EDPs as we finalise the guidance. These amendments are not just unnecessary: they are positively undesirable.
Lord Pilkington of Oxenford: My Lords, as the noble Lord will be aware, there is an ideological divide between us as to how schools should be improved. The noble Lord and his colleagues prefer the heavier hand of bureaucracy; we would leave more initiative to the schools. I shall go no further on that point.
I was a little surprised that only 54 LEAs replied to the consultation document. I think that there are over 100 LEAs. On an important matter like this, 54 is a low number. Even more surprising was the fact that only five responses came from 25,000 schools. A consultation document that has replies from only five schools raises certain doubts in my mind. The noble Lord painted an optimistic picture of the consultation. I point out again that it was a limited consultation. He did not mention certain less than complimentary comments which noble Lords should hear.
The resources section of the EDP attracted considerable comment. There were four main concerns: too much detailed information was required; many of the resources spent on school improvement by LEAs would not be captured through EDPs; the purpose of collecting the information was unclear; and the lack of resources for LEAs for EDP-purposes would take money away from schools. That is a point which noble Lords will note that we on this side of the House have often stressed. There was some difference of view between LEAs and school-focused organisations on those points. As there were only five schools, their representation was slight.
Many respondents were worried about the tight timetable proposed by the draft guidance, particularly the timetable for target setting. There was a perceived lack of time for consultation and approval. My worries about bureaucracy are, to a degree, compounded by those criticisms. The thing has been rushed, as instanced by the paucity of reply. I am still worried about this matter. The amendments were tabled mainly to obtain the noble Lord's response, for which I am grateful. We will see how the proposals work in practice. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.30 p.m.
[Amendment No. 25 not moved.]
Baroness Darcy De Knayth Baroness Darcy De Knayth had given notice of her intention to move Amendment No. 26:
Page 4, line 33, after ("prescribed:") insert—
("( ) must in particular include the special educational needs policy of the local education authority;").
The noble Baroness said: My Lords, as I missed the general debate on Amendment No. 23, I wish to thank the Minister for these three government amendments and for the most useful meeting that we had with her officials.
[Amendment No. 26 not moved.]
Baroness Blackstone Baroness Blackstone Amendment No. 27:
Page 4, line 35, at end insert—
("( ) In preparing an education development plan the authority shall have regard, in particular, to the education of children (within the meaning of subsection (2)) who have special educational needs.").
On Question, amendment agreed to.
Baroness Maddock Baroness Maddock moved Amendment No. 28:
Page 5, line 6, after ("guidance") insert ("subject to section (Making and approval of general guidance on education development plans)").
The noble Baroness said: My Lords, this is another amendment in a group of amendments concerning guidance. It relates in particular to draft guidance on education development plans, which is another area where we have concerns. We believe that some parliamentary accountability would improve the quality of guidance. Consultation on this guidance—and here I share some of the concerns of the noble Lord, Lord Pilkington—closed in early May. Unlike him, however, I cannot tell the House exactly how many people responded. The draft guidance is very complex; it contains seven annexes and six appendices.
Expenditure on education development plans is related to the fair funding proposals in a manner which is not described in the draft guidance. Local education authorities have to choose from three key areas and take into account seven aspects when considering the guidance and in drawing up their plans. Once the plans are approved, the local education authorities will no doubt have to follow their plans and the guidance. The consequences of not doing so are significant. The Secretary of State can withdraw approval of the plan under Clause 7(5). This presumably would have a number of consequences for those who are part of the plan going forward.
The amendment makes Parliament a little more accountable in relation to the very real new powers which the Secretary of State is acquiring. As my noble friend Lord Tope explained earlier, in many ways the group of amendments, of which this is one, seeks assurance and perhaps more detail about how the Government view the development and approval of education development plans. These matters are obviously of concern to both Opposition Benches in the House.
That is the spirit in which we put forward these amendments and we look forward to hearing the Minister's comments. These matters are complex and the Minister can be in no doubt regarding our concern. I hope that the noble Lord can throw some light on how that complexity will be dealt with, and perhaps convince us that the drawing-up of these plans will go smoothly. I beg to move.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Baroness for moving the amendment. First, they are clearly thoughtful and serious amendments and a good deal of work has been put into them. Secondly, by raising the issue of consultation again she enables me to respond to the noble Lord, Lord Pilkington, which I was not able to do under the rules of debate at Report stage.
The noble Lord complained that there had been a low response to the consultation, in particular from schools. I think he overlooked the fact—and I am sure he will forgive my saying this in his absence—that the formal written responses were only part of the process. All local education authorities came to the consultation conferences—I described them when I responded to his amendment—and their views were taken into account in the Government's responses. The consultation was designed in the first instance for local education authorities, since it is they who have the responsibility for drawing up the plans. Schools could respond if they wished, but there was no particular reason for them to do so, and it is not all that surprising that a small number of schools responded directly. In addition to the local education authorities responding individually, the two local authority associations and the four major teaching unions responded to the consultation process. We do not feel therefore that the response to the consultation, given the time available—it was not particularly short—was unsatisfactory.
The noble Baroness, Lady Maddock, asked me to say more clearly how the drawing-up of the education development plans fits in. What we have sought to do with guidance—it is in turn guided by the consultation we have carried out, but in a form where the local education authority has to have regard to the guidance rather than the more specifically dirigiste provisions in Amendments No. 30 and 31, the new clauses—is to give local education authorities the opportunity to reflect their area's needs in their education development plans.
As I said in defending the role of the Secretary of State's duty to review and, if necessary, reject or modify education development plans, the Government as a whole have the responsibility for the raising of school standards. If we do not believe that the result of the local education authority's consideration will do the job, we have the right to do something about it. We do not want education development plans to be formulaic—to be expected responses to specific questions at every stage. We want them to be creative, imaginative, thoughtful and to reflect the needs of their particular areas.

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I am afraid that by putting these new clauses on the face of the Bill, the noble Baroness's proposal would add more unnecessary bureaucracy and cost to the preparation of education development plans. I am afraid that the same argument applies to Amendments Nos. 28 and 30 and to Amendments Nos. 29 and 31. It is desirable to consult on guidance on who should be consulted before the publication of statutory proposals. However, I suggest that it is not a good idea to use parliamentary time to submit that guidance to Parliament for consideration. It has never been the practice in the past and I do not see why it should be so in the future. Guidance is a lower level of the regulatory process than regulations. The very phrase "have regard to" is the appropriate description of the status of guidance.
Existing guidance is included in circulars; for example, on consultation on proposed changes. Circular 23 of 1994 provides all that is necessary to inform local authorities about what they have to do for consultation purposes. Existing guidance includes any LEA which is likely to be affected, the relevant diocese, the FEFC where 16 to 19 year-old provision is affected, any school which is subject to the proposals, other schools in the area, parents and teachers and any other interested party. I give that as an example of the way in which guidance and circulars provide a natural way for communication between government and local education authorities. I hope that on reflection the noble Baroness will agree that it is not appropriate to change them as her amendments propose.
Baroness Maddock: My Lords, I am grateful to the Minister for that long explanation. It points out why we were right to be a little concerned about the issue and to explore it. So much of the Bill involves guidance being drawn up after consultation and while we are still examining it during its various stages.
I recognise the Minister's explanation of how guidance works and I understand that. A great deal of legislation and the interaction between central and local government is dealt with in guidance. However, we on these Benches are concerned about the fact that so much of the Bill provides for guidance and codes of practice. We consult more than we used to do. We on these Benches approve of that and we do so as regards local government. In drawing up guidance, we are involving ourselves more in consultation with a wide range of people and therefore perhaps this House and another place should examine that. The purpose of our amendments is to explore the changing way in which we consult people, draw up guidance and keep legislation flexible, thus enabling us to change.
I thank the Minister for his reply. We made it clear that we would not press amendments to the vote and therefore I beg leave to withdraw Amendment No. 28.
Amendment, by leave, withdrawn.
[Amendment No. 29 not moved.]
[Amendments Nos. 30 and 31 not moved.]
Clause 7 [Approval, modification and review of statement of proposals]:
[Amendment No. 32 not moved.]
Clause 9 [Education committees to include representatives of parent governors]:
Lord Tope Lord Tope moved Amendment No. 33:
Page 9, line 3, after ("elected") insert ("without voting rights").
The noble Lord said: My Lords, we had a full debate on the subject in Committee and therefore I do not intend to dwell on the matter for long. However, for us it is a matter of principle that people who serve and have a vote on local authority committees, including the education committees, should be democratically elected to the local authority and thus accountable to the democratic process. That is the first reason for tabling the amendment. It would accept parent governor representatives on education committees, but they would have no voting rights. Indeed, a number of other people, teachers included, serve on education committees without voting rights.
The first and most important reason for tabling the amendment is one of principle and democratic accountability. As one who has served on and has been associated with education committees for more than 20 years, I wonder about the practice of the proposal. In rejecting a similar amendment in Committee, the Minister said:
"We want to ensure not only that parents have a strong influence in discussions about education matters but that they can also play a full part in decisions taken by the relevant committees or sub-committees. Only by having a vote can they do so".—[Official Report, 19/5/98; col. 1541.]
None of us would question parents' opportunity and right to play a full and effective part in the decision-making process. However, I would certainly question whether the best way to achieve that is by having two parent governor representatives on an education committee and I would question most strongly the assertion that that can be done only by having a vote on the committee. The Minister is saying that non-voting members on education committees, social services committees and other local authority committees do not play an effective part. The opposite is true; they play a most useful and effective part and sometimes more so for not having a vote.
There is a supposition that most things which are decided by an education committee are decided by vote. In reality, the opposite is the case. Generally, there are few votes. Often a vote takes place because of a party political difference. In my experience, non-voting members—for instance, those representing the Churches—will not normally take part in the vote because they do not wish to be seen to be associated with party politics. It is right that they are not seen to be associated with one or other political party in a vote. Therefore, I doubt whether in practice the proposal will have the effect that the Minister suggests. To use words that are so often quoted to us, I do not believe that the proposal is necessary. I certainly do not believe that it is desirable and as a matter of important democratic principle if we are to have parent governor representatives on education committees they should not have voting rights. I beg to move.
6.45 p.m.
Baroness Blatch: My Lords, this is a matter of principle. In addition, as the noble Lord, Lord Tope, pointed out, numerous practical problems arise. I received a letter from the Minister giving an explanation of how the measure would work. I do not know about the noble Lord, Lord Tope, but I believe that it would not take a prize for plain English. It was the most convoluted letter I had ever read. The measure is incredibly impractical and ours is an issue of principle. I support the noble Lord, Lord Tope, most strongly.
Baroness Blackstone: My Lords, after all the discussion we have had on the subject, I am surprised that it is still an issue. Our intention to include parent governor representatives on education committees has been clear for a long time. It was a manifesto commitment and was highlighted in our earlier consultation papers, Diversity and Excellence and Excellence in Schools. Last summer's White Paper, Excellence in Schools, stated our intention that these elected parent governor representatives would have voting rights. Furthermore, there was a very wide welcome to this proposal in responses to the White Paper.
I recognise that giving parent governor representatives voting rights will have implications for the way in which the relevant committee works. However, I believe that the noble Baroness, Lady Blatch, may be exaggerating a little the complications that she sees arising. It seems to me that none of the issues which has been raised tonight or in earlier debates is insurmountable. The noble Lord, Lord Tope, pointed out that representatives of the Churches often decide not to vote when a political issue arises and is being argued between the parties. Parents can abstain in such circumstances, too, if they do not wish to become involved in political argy-bargy on education committees.
The noble Lord also said that he was aware that votes occur relatively rarely and he asked whether the Government were aware of that too. The Government certainly are aware and it is my own experience of education committees. In that case, it is all the more surprising that the noble Lord is so worried about the issue. We certainly accept that parent governor representatives should not vote on matters which relate to the determination of the overall budget for education or where there is a conflict of interest. It may be right to say, as was suggested in Committee, that this will apply to a good number of issues. I personally believe that this argument has been overstated. But if it is true, it will mean that parent governor representatives will be able to exercise their vote only in limited circumstances, to reiterate what I have said. That must surely mean that there are fewer concerns about how that vote is used.
Our intention is to provide guidelines, both through the regulations and through non-statutory guidance, on the circumstances in which it is appropriate and is not appropriate for parent governor representatives to exercise their vote.
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I do not accept that giving parent governor representatives the right to vote will disrupt local democracy. That is a rather over-stated argument. Following the local government elections on 7th May, around two-thirds of councils still have sizeable majorities. Only 13 councils have a majority of less than five. There are 39 councils which have no overall control. It is for councils to decide what committees to set up and to determine the size of each committee, but they need to ensure that they reflect the requirements of local government legislation in respect of proportionality and maintaining the political majority. I wrote to the noble Baroness, Lady Young, about this point on 22nd May following our discussion in Committee. In short, where the relevant committee has a majority fewer than the number of diocesan representatives and parent governor representatives combined, the council will need to appoint additional members from the majority party to that committee in order to preserve the majority. If this proves difficult in practice, then it is always open to members of the committee to make pairing arrangements.
Where the committee has no overall control, then yes, the appointment of parent governor representatives will make a difference; but since they will be voting on issues rather than along political lines, this will ensure that the views of parents are properly represented and will count. This is precisely what we intend.
Noble Lords will know that the Government are encouraging authorities to look at ways of improving local accountability and of streamlining the decision-making process. Their committee structures are an important part of that, and I know that many are already contemplating changes. Ultimately, it is up to councils themselves to decide on their committee structure (subject to the legislative requirements) and the size of those committees, so the impact of the voting rights of parent governor representatives will rest in their hands.
We accept that there need to be safeguards built into the system; in exactly the same way as any amendments recommended by this House will be considered in the other place. In the case of decisions taken by a local authority committee, it will always be open to the full council to override any decision which they feel is not in the best interests of the local population as a whole. This is a more than ample safeguard against improper use of those voting rights.
We do think that parent governor representatives, along with diocesan representatives, are in a different position from other interests. We believe it is right that diocesan representatives should have a vote on decisions about education provision because of the significant part which they play in providing church schools. We believe also that parent governor representatives should have the right to vote on decisions about education because it is the children of the parents whom they represent who stand to succeed or fail because of those decisions. We believe that the voice of parent governor representatives will be much stronger if it is supported by voting rights. In the light of what I have said, I hope that the noble Lord will withdraw his amendment.
Lord Tope: My Lords, the Minister has replied to a number of points that I did not make. I certainly did not make such an exaggerated claim that there would be a disruption of local democracy. It would not have enhanced my case to overstate the position to that extent. Nor did I even make reference to the effect that an additional two parent votes on a committee might have. However, the Minister was perhaps overstating her case when she suggested that they would have no effect on the relatively large numbers of councils where there is no majority.
I return to the point made by the noble Baroness, Lady Blatch, and myself in support of this amendment. This is a matter of principle. People serving on local authority committees should be those who have been elected to the local authority. I do not believe that there is anything that the Minister can say which will convince me otherwise. I hope she will therefore concede that principle.
I am fully aware of the proposed changes and the moves which many local authorities, without prompting from the Government, are taking to modernise and streamline their committee systems and decision-making structures. In general, I welcome that. This measure seems to me to date back more to the 1960s and 1970s than to look forward to the new millennium.
One of the more serious concerns that I have—and the Minister referred to the support that has been received in some quarters—is that it gives parents and parent governors a false impression of the amount of influence which they will actually have by serving and voting on education committees. I stress that my colleagues and I are wholly and strongly in favour of the best possible involvement of parents, their representative governors and all governors in the decision-making process. I do not believe that the best way to achieve that is by having a place on an education committee.
The Minister has not only failed to convince but the more she spoke, the more I could hear her convincing my colleagues—although they do not need convincing—that we are right with this amendment. Therefore, I wish to test the opinion of the House.
6.56 p.m.
On Question, Whether the said amendment (No. 33) shall be agreed to?
Their Lordships divided: Contents, 69; Not-Contents, 86.

Division No. 4

CONTENTS

Addington, L. [Teller.]

Calverley, L.

Astor of Hever, L.

Carlisle, E.

Beaumont of Whitley, L.

Carnegy of Lour, B.

Belstead, L.

Chesham, L.

Biddulph, L.

Colwyn, L.

Blake, L.

Crathorne, L.

Blatch, B.

Dean of Harptree, L.

Brabazon of Tara, L.

Deedes, L.

Burnham, L.

Denham, L.

Cadman, L.

Dixon-Smith, L.

586

Elton, L.

Maddock, B.

Fookes, B.

Mountevans, L.

Fraser of Carmyllie, L.

Pender, L.

Goodhart, L.

Pilkington of Oxenford, L.

Greenway, L.

Rawlinson of Ewell, L.

Grey, E.

Redesdale, L.

Hampton, L.

Renfrew of Kaimsthorn, L.

Hamwee, B.

Renton, L.

Harmar-Nicholls, L.

Rodgers of Quarry Bank, L.

Harris of Greenwich, L.

Rowallan, L.

Seccombe, B.

Holderness, L.

Steel of Aikwood, L.

Hooson, L.

Stodart of Leaston, L.

Inglewood, L.

Strathclyde, L.

Kingsland, L.

Strathcona and Mount Royal, L.

Knight of Collingtree, B.

Thomas of Gresford, L.

Leigh, L.

Thomas of Gwydir, L.

Linklater of Butterstone, B.

Thomas of Walliswood, B.

Lucas of Chilworth, L.

Thurso, V.

Luke, L.

Tope, L. [Teller.]

McColl of Dulwich, L.

Tordoff, L.

Mackay of Ardbrecknish, L.

Ullswater, V.

Mackay of Drumadoon, L.

Winchilsea and Nottingham, E.

Mackie of Benshie, L.

Wise, L.

McNair, L.

Wrenbury, L.

NOT-CONTENTS

Acton, L.

Jenkins of Putney, L.

Blackstone, B.

Judd, L.

Blease, L.

Kennedy of The Shaws, B.

Brooks of Tremorfa, L.

Kilbracken, L.

Burlison, L.

Kirkhill, L.

Carmichael of Kelvingrove, L.

Lockwood, B.

Carter, L. [Teller.]

Lofthouse of Pontefract, L.

Castle of Blackburn, B.

McIntosh of Haringey, L. [Teller.]

Chandos, V.

Cledwyn of Penrhos, L.

Mallalieu, B.

Clinton-Davis, L.

Manchester, Bp.

Cocks of Hartcliffe, L.

Mason of Barnsley, L.

Davies of Oldham, L.

Milner of Leeds, L.

Dean of Beswick, L.

Monkswell, L.

Desai, L.

Montague of Oxford, L.

Dixon, L.

Murray of Epping Forest, L.

Donoughue, L.

Norton, L.

Dormand of Easington, L.

Paul, L.

Dubs, L.

Pitkeathley, B.

Elis-Thomas, L.

Plant of Highfield, L.

Evans of Parkside, L.

Ponsonby of Shulbrede, L.

Falconer of Thoroton, L.

Prys-Davies, L.

Farrington of Ribbleton, B.

Ramsay of Cartvale, B.

Gallacher, L.

Randall of St. Budeaux, L.

Gladwin of Clee, L.

Rea, L.

Glenamara, L.

Rendell of Babergh, B.

Gregson, L.

Richard, L. [Lord Privy Seal.]

Grenfell, L.

Ripon, Bp.

Hacking, L.

Sefton of Garston, L.

Hardie, L.

Sewel, L.

Haskel, L.

Simon, V.

Hayman, B.

Simon of Highbury, L.

Hilton of Eggardon, B.

Smith of Gilmorehill, B.

Hollis of Heigham, B.

Stone of Blackheath, L.

Howie of Troon, L.

Strabolgi, L.

Hoyle, L.

Symons of Vernham Dean, B.

Hughes, L.

Taylor of Blackburn, L.

Hughes of Woodside, L.

Thomas of Macclesfield, L.

Hunt of Kings Heath, L.

Turner of Camden, B.

Irvine of Lairg, L. [Lord Chancellor.]

Walker of Doncaster, L.

Watson of Invergowrie, L.

Islwyn, L.

Whitty, L.

Jay of Paddington, B.

Williams of Elvel, L.

Jeger, B.

Williams of Mostyn, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.5 p.m.
Clause 10 [Establishment of education action zones]:
Baroness Blatch Baroness Blatch moved Amendment No. 34:
Page 9, line 40, after ("maintained") insert ("school or group of).
The noble Baroness said: My Lords, in moving the above amendment I shall speak also to Amendments Nos. 35 to 37. We now find ourselves at the beginning of the four clauses on education action zones. To say that I wish to express my disquiet about this part of the Bill and about the way in which I have been treated as a Member of the Opposition Front Bench is an understatement. I have now asked three times for straightforward information which is now publicly available everywhere and to everyone but not to me as a Member of this House. I hope that the Minister will give me some answer tonight as to why I have not received the necessary information. Indeed, I have not even received a copy of the letter which has been sent out to the action zones bidders asking whether I can be given the information. I am not sure whether they were asked if it mattered whether the information went to local government associations or was given out in a press conference when the bids were announced. There is serious disquiet about the procedure which has been used and about our rights not only as ordinary Members of this House but also as Members of the Opposition Front Bench.
I have asked who the bidders were, but have been refused the information. I have asked about the percentage of bidders—for example, which were LEA and which were private or voluntary—but, again, I have not received that information. As I said, the information is readily available to people outside this Chamber. I am delighted that the noble Lord the Leader of the House is present tonight. He has not sympathised with me in the matter but, nevertheless, he is aware that I have not received this information. I believe that the usual channels have made strenuous efforts as regards the Department for Education and Employment to ensure that I receive as much information as is permitted to be available publicly. However, as I said, I have not to date received the information that I have requested. I am indeed disquieted by the situation.
This group of amendments is designed to ensure that a school or a group of schools should be allowed to have special status. They also insist that parents should be part of the consultation process. Where a school is taken into an education action zone, it seems to me to be quite extraordinary that there is no requirement on anyone to consult with parents and take note of their opinion. There is no formal requirement to ascertain whether they believe it is a good, bad or an indifferent process. Moreover, there is no requirement to ask parents whether they would approve of having the national curriculum disapplied. Indeed, there is no formal requirement in the process to ask parents whether they approve of whatever is to be substituted for the national curriculum.
There is the mildest possible hint—indeed, it is not even a requirement—that teachers should be consulted if the forum and/or a governing body of any school in the action zone wishes to disapply pay and conditions.
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Again, the whole process is very unsatisfactory. Almost every other part of the Bill has regulations flowing from it. However, this part does not deal with the details as regards the setting up of education action zones. For that reason, it is probably the most depressing part of the legislation.
Having only had access to what is written in newspaper reports and the information which came out on the day of the publication of the 25 winning bidders (and what we know of them), it seems to me that the education action zones are committees which will orchestrate a collective effort where schools have failed. Indeed, that is what they are because there does not appear to be any direction or any lead body in that respect. It is not mentioned in any of the information that we have seen thus far. The committees will be numerous and it is quite clear that they will consume time, money and effort. I suspect that the impact on the classroom will be in inverse proportions to the bureaucracy and what is now very confused management.
The EAZs are free to innovate, but they are subject to education development plans; they are free to innovate, but the teachers and staff are employed by the local education authority; they are free to innovate, but they are subject to almost all the other measures in the Bill. So, policies on the part of the LEA, the gathering of information and the intervention in terms of standards and whether or not they are being achieved are all in place for education action zones.
If the Government really want fruitful and effective partnership enterprise to improve education, they could do no better—certainly when one thinks of the kind of money they are putting into this—than to follow the model set by the city technology colleges which are truly independent and are part of the state family of free education. They provide education in areas which are challenging from an education point of view. There is also the model set by some of the technology colleges that have raised specific sums of money, which can be identified, and which have positive links with companies providing that money. They work well in partnership and they are free to run their colleges without the incredible bureaucratic network that surrounds the education action zones.
It is important that where it is possible for a school or a group of schools to be included in an education action zone, that should be allowed. Mr. Byers talks enthusiastically in the "back room"about single schools being leased out. We know that he is keen to give the education action zones more independence than they are given in the Bill. We believe it has been said that the education action zones as they have materialised are not quite what was intended in the first place, but that will be put right later. It would be nice to know exactly what is meant by all of that. Perhaps the Minister will be able to enlighten us.
I end as I began. I would be happy to be advised where I can find out what my rights are as a Member of a Front Bench. Why cannot I obtain straightforward information that has been provided to public bodies outside this place? Do we have any rights as Members

589
of Parliament to see information that is publicly available? If that is not the case, this is perhaps a matter that should be addressed by the Procedure Committee, to advise me how I can proceed as a Member of this House trying to do a job as a member of the Official Opposition. My hands are tied behind my back because the information that I require to do my job effectively is denied me. I beg to move.
Lord Taylor of Blackburn: My Lords, I hope that I can help the noble Baroness. I am fortunate in that I live in an area which has action zone status. Last weekend I spent some time discussing the implications of that status with governors, teachers, parents and business people. I heard nothing but favourable reports from all of them. They thought it was an excellent idea and they welcomed the partnership. They welcomed the opportunities the scheme offered. I went out of my way to try to find some criticism of the scheme but I found none. We in Blackburn are fortunate to be part of such a scheme. I am sorry that more authorities have not achieved action zone status. I am all in favour of the CTCs. I have encouraged a number of companies to put money into them. However, the concept we are discussing is completely different from that of the CTCs. I hope that as the action zones develop the noble Baroness will consider that we should have introduced them a long time ago.
7.15 p.m.
Baroness Maddock: My Lords, the education action zone is an interesting concept which many people find exciting. The noble Lord, Lord Taylor of Blackburn, has just explained how excited people are in Blackburn about the concept. I am a little worried about the concept but I understand that it is about partnership and about involving many people in what is going on. Although deep in my heart I am a little worried about democracy, at least many people are being involved in these zones. However, I am concerned that under the amendment of the noble Baroness, Lady Blatch, there could be an education action zone comprising one school, which could be a grant-maintained school by another name. Under her amendment parents would be able to opt into an education action zone which comprised just one school. That seems a rather cunning wheeze. Each school whose application is approved by the Secretary of State will be able to suspend the national curriculum, get its own money, manage itself and create a different salary structure. However, there would be no strategic view of what is going on in an area. Education action zones run for a certain period of time. We have discussed in this Chamber what might happen at the end of that period.
Under an amendment of the noble Baroness, Lady Blatch, parents and governors would apply for action zone status. That is a similar process to opting out, but there is no mention of a ballot this time. Who would make the decision? As I said, I believe that education action zones will gain strength from partnership. I believe they need to comprise at least a dozen schools. It would be nice to involve the primary and secondary sectors so that everyone benefits from the new ideas, the
590
money and the innovation that is made available. I view the amendment as a rather sinister move to return to grant-maintained status which we on these Benches have been, and remain, firmly against.
Baroness Blackstone: My Lords, I am grateful for what the noble Baroness, Lady Maddock, has just said. I think she has seen through what these amendments seek to achieve. Before I turn to the detail of the amendments, I wish to make some positive comments about education action zones and comment on what my noble friend Lord Taylor of Blackburn said. I am grateful for his comments. I believe that we have something to celebrate here rather than denigrate. As the noble Baroness, Lady Maddock, said, zones are about partnerships—not the public or private sector alone, but partnerships. A number of businesses are taking part in the scheme, in spite of the scepticism that we heard from noble Lords on the Conservative Benches at an earlier stage.
A number of household names have decided to become involved in the scheme. Shell will provide the chair of the forum for the education action zone in Lambeth. Yorkshire Water and Midland Bank between them will provide extensive support in Sheffield. British Aerospace will provide video links for all schools in the Hull zone. Scottish Power will provide an open learning centre for schools and the community in Brighton and Hove. Comcast in Middlesbrough will provide 100,000 in cash. I shall not continue but there are many other companies involved such as American Express, KPMG, BT, Tesco, Tate & Lyle, Cadburys and so on. There is a long list of companies that are involved in the scheme.
These partnerships seek to improve standards in areas which we have been concerned about for some time—I am sure the noble Baroness will agree with that—both as regards the schools and the areas that they serve. I am a little disappointed that the noble Baroness, Lady Blatch, was not able to be more welcoming towards what we intend to do. The noble Baroness asked about the rights of Members of Parliament. I remind her that she told this Chamber in Committee that she had seen all the applications for education action zones. She said that she had seen them through her political contacts in the LGA. In the light of that, to say that she does not know anything about them seems a slightly hollow claim.
On the day of the launch, Tuesday 23rd June, the noble Baroness was sent a letter. The list of proposals and partners was published and placed in the Libraries of both Houses. That was specified clearly in the letter. It was not possible to do that earlier. As was made clear to the noble Baroness—and I believe the noble Lord, Lord Tope, to whom I also wrote, will confirm this—the Government did not feel that, until decisions had been made as to which of the applications were successful, it was right to publish the names of the private sector partners unless they had given explicit permission. Unfortunately, we did not obtain that permission from all who had taken part in the bidding process before announcing the successful bidders.

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That is the reason why the noble Baroness was not given further information before 23rd June. As I said, she stated that she had already seen the applications.
I now turn to the amendments, beginning with Amendments Nos. 34 and 36. When the noble Baroness put forward the first amendment in Committee, I made it clear that this was not what education action zones were about. As the applications I mentioned all made clear, a key element of the zones is partnership. The partnership concept applies not merely to outside agencies and businesses, but to the schools themselves. A major achievement of the applications, which we welcomed when we were able to publish the outcome of the bids a week ago, was the way in which they bring together primary and secondary schools, grant-maintained and county schools to work together.
I believe that education action zones are healing some of the wounds left by the previous government. If the amendment completely removes the partnerships from zones, I wonder whether it has any merit in terms of broadening the scope for innovation.
Of course we want schools everywhere to innovate, and I am sympathetic to the notion that an individual school may wish to do that, as is my honourable friend Mr. Byers. I repeat: a large part of the innovative nature of zones is based on their working in partnership—teachers working across a number of zones; communities being drawn into their children's education; and using information and communications technology to link schools within an area. Removing that partnership and allowing a single school to go it alone would mean that much, if not all, of that would be lost.
What about the specific legislative freedoms that apply to zones? Taking each in turn, the noble Baroness separately proposed an amendment relating to teachers' pay and conditions, which we shall debate later. The national curriculum flexibilities apply to every school. Because of the benefits of partnership I am sure that we shall see them being used more frequently in education action zones, and certainly more than they were under the previous government. The remaining freedoms apply to the way in which the governing body can give its powers to the forum. That is intended to allow the forum to act as the governing body for a group of schools. I am therefore at a loss to see what this proposal can mean for a single school. In the light of my remarks I hope the noble Baroness will withdraw these amendments.
I turn now to Amendment No. 37 on parental agreement to zones being created. Of course parents must be included in helping to shape the education action zones. We hope to see parental representation alongside teachers, governors and business people on the action fora.
However, we should remember that the key form of accountability—the governing body—will remain in place. In Committee, the noble Baroness, Lady Blatch, said that this radical proposal will take schools out of local authority control and place them in the hands of third parties. I am afraid that that seems to me to be
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living in the past. Local authorities do not "control" schools; schools control themselves, unless they are failing and have their budgets withdrawn. The schools in action zones are not being placed in the hands of third parties. They are entering, voluntarily, a new kind of partnership. In all the zone applications that we have approved, the governing bodies very much intend to continue working. Parents have nothing to fear in terms of losing a voice. If, once in a zone, a governing body wishes to vary the national curriculum, parents will have a voice through that governing body, as they do outside zones. In the light of those remarks, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Blatch: My Lords, on the point of information that I am allowed or not allowed, the noble Baroness rather dismissively referred to political colleagues at the LGA. It was an official of the LGA who wrote to me personally, and to LEA leaders, sending copies to me as vice-president of the association. The letter stated that a full set of applications had been received. It was very unfortunate that that official was deemed to have breached a confidence.
There are two points in relation to that. First, I do not believe that he breached a confidence. The box of applications was simply sent to the LGA, and there was no requirement for confidence to be kept. Nor would he have sent out letters so publicly had that been the case. He would have been much more covert. I do not believe that this particular officer was guilty of the kind of action to which he would have had to resort in order to be covert. Therefore, I heard about the matter officially and was free to go into the LGA offices to see them.
My question to the noble Baroness is this. As a Member of the Official Opposition and a Front-Bencher involved materially in the making of this legislation—as a Member of Parliament, party to the whole of Parliament—why am I not allowed the right to that information? Why were an official of the LGA and council leaders written to by that official? I should be grateful if the noble Baroness would give an answer to that question.
Baroness Blackstone: My Lords, we have had this debate before. It was made absolutely clear that the information was given to the LGA by an official of my department on a confidential basis. The noble Baroness denies that that was the case, but I assure her that it was. The information was then passed on.
Baroness Blatch: My Lords, that brings me to my second point. I believe that that response calls into question the character of the official. I defend the right of the official, who was not asked to keep the information confidential and was not under the belief that that was what he had to do. If the noble Baroness can give me proof that that was the case, it will call the character of the gentleman into question. I do not believe that that is the case.
Secondly, is the noble Baroness saying that, as a Privy Counsellor, I cannot see a matter in confidence, and that the LGA, not members of the Privy Council,

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can see papers in confidence? The Local Government Association is the servant of the local authorities. It has no status whatsoever other than to be of service to those authorities. In other words, if it has information it is wrong that it should keep it to itself. Its officials are there only to serve councillors; therefore that information should be made available to them—as indeed it was, in good faith, by a particular official. His reputation has been called into question by the noble Baroness's officials at the department and by the noble Baroness across the Dispatch Box. Is the noble Baroness saying that there is information which is denied to Members of this House and to Members of the Privy Council but which can be given bona fide to those outside this building, and that therefore my rights in this matter are definitely given secondary credence to those of outside bodies? I should genuinely like an answer to that point. When the Bill has been passed, I intend to take the matter up in another way. I have been trying to find out where Members of this House can go when they have been at the receiving end of such shabby treatment.
I wish to rejoice with the noble Lord, Lord Taylor of Blackburn, because I hope that the Bill works. But he is privy to much information which I was not. as a Member of these Benches. There is nothing in the Bill as to how it will work. There are four clauses which say very little. The Bill received its Second Reading in the House of Commons on 22nd December. On 5th January, before it had even started its Committee stage in the House of Commons, the bidding documents had gone out to all the potential bidders. The closing date was 10th March. It was still proceeding through another place and it is now proceeding through this House.
The bidding is over, the considerations have been made, action zones have been named and still the information is denied me as a Member of the Opposition. I do not wish to confuse this with the point made by the noble Lord, Lord Taylor; we wish the action zones well. This is a way of tackling failing education. However, I believe that the way in which it has been set up will not tackle failing education. There are huge problems. as will be manifest as time goes on. It would be helpful if the Minister could write to me to give us an idea of the breakdown of the money. It is not surprising that there is a great deal of excitement out there; the action zones will receive £1 million each year for three years. There is no promise about what happens after that, but it is serious money and there is great excitement.
Some of the areas in the country with the worst education and the most failing LEAs have not received action zone status. Some authorities, not reputed for having failing schools, have received action zone money. We do not know why, we do not know the criteria for considering the bid. The Minister has not imparted any of that information, we are completely and utterly in the dark about it.
The noble Baroness made comments about me being something of a wet blanket about the policy. I am not. I said right at the beginning that innovation is good when trying to tackle some of the challenges in education which have eluded good teachers and good
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headteachers and even well-intentioned LEAs over a long period. I am all for that. But I believe that there is no sense of direction, no real idea. It is just a series of committees, a network of contacts. There is nothing in the information we were sent the other day that tells us precisely what the financial input is from the companies. There is nothing in the Bill that tells us where the particular company giving the money to the action zone will be materially involved in its management. That is also not included.
There is nothing in the Bill or the bidding documents that tells us what is the process for discussing with parents their involvement in ceding powers to a forum, or even when the national curriculum is to be disapplied. At least when it is disapplied under the present system in a school that has good reason for it to be disapplied, there is a process to go through. There is no process here. no process laid down, there is nothing in the Bill and nothing in regulations. Those are my complaints about this.
I shall leave the matter for the moment, but I must say to the noble Baroness that I hope I receive the information and see copies of the letters that have gone out and that the information can be made available to me. It will be interesting to see how long after my first request I receive the information. It would be helpful to have it before the Bill has gone through this House. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hoyle: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, may I suggest that the Report stage begins again not before 8.35 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Council of Europe
7.34 p.m.
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede rose to ask Her Majesty's Government what plans they have to promote the work of the Council of Europe.
The noble Lord said: My Lords, it gives me great pleasure to open this debate about the future of the Council of Europe. In my short time as a delegate to the parliamentary assembly, my understanding and respect for the work of the institution have increased exponentially. I took the trouble to look up the last time this House debated the work of the Council of Europe; it was in December 1994. The debate concentrated on the proposed admission of Russia to the Council of Europe. My noble friend Lord Kirkhill will remember the debate as he took part in it. On reading the debate, I was struck by how much the institution has grown and developed since 1994. I was also struck by how the issues surrounding human rights have remained much the same.
When I first went on the delegation, I was taken aside by an old and somewhat grizzled journalist and told what he saw to be three home truths about the Council

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of Europe. They were, first, that the parliamentary assembly was a talk shop where many people talked and few listened; secondly, that it was a waiting room for countries that wished to join the European Union; and thirdly, that the British Parliament was not interested in the work of the Council of Europe. I now believe those views are unduly negative, but I wish to address the issues they raise because next year we will have the 50th anniversary of the Council of Europe. That will give us a tremendous opportunity both to promote a greater understanding of its work and also for the Government to consider how they wish the institution to develop in the future.
The first home truth I was told was that the Council of Europe is a talk shop. Of course that is true, but it is a talk shop with real moral authority. One has to look no further than last week's business in Strasbourg to see the respect which the Council of Europe commands. Last week we were addressed by the King of the Belgians, the managing director of the IMF, the president of the EBRD, the chairman-in-office of the Committee of Ministers, the chairman-in-office of the OSCE, Mr. Paul Murphy, Minister of State for Northern Ireland, and Liz O'Donnell, foreign minister of the Irish Republic.
On top of that, a number of reports were debated by the assembly, perhaps the most controversial of which addressed the situation of the Kurdish refugees in south-east Turkey and north Iraq. The debate stirred real passion and I believe it was a testament to the parliamentary assembly itself that it is the only forum where parliamentarians can directly tell their Turkish colleagues the strength of international feeling about the human rights abuses in Turkey.
The Council of Europe is an outreach organisation. It has knowingly and deliberately taken in members who do not meet all the criteria for membership. Last week some 50 national delegations were present, made up of 40 member states plus other visiting delegations. Yet this was not some international jamboree, it was an ongoing working session of parliamentarians addressing real issues in a way that countries' ministers sometimes feel inhibited in doing. I believe that the assembly, together with the European Court on Human Rights, works to ratchet up standards in practical ways which will affect people's day-to-day lives.
The second home truth my old and grizzled journalistic friend told me was that the Council of Europe is a waiting room for those who wish to join the European Union. I believe that point is untrue, but it raises profound questions about the future of the institution. If countries do come to see the Council of Europe as only a waiting room rather than as an institution which confirms a country's democratic vocation and commitment to human rights, then frustration and disillusionment will set in.
I believe that it is likely that the negotiations for European Union expansion will become ever more intractable and difficult and that the majority of members of the Council of Europe will not become members of the European Union in my political lifetime. It follows that both the European Union and the member
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states of the Union have to give a greater status and authority to the work of the Council of Europe if such frustrations are to be avoided.
I am sure that my noble friend will point me to the second heads of state summit in October last year which set out an action plan for a united Europe. It is a laudable document. But I say to my noble friend that the fact that there has been no increase in the budget as a result of the summit reflects on the reality of achieving those aims. If governments are to will the end, they have to will the means. I also remind my noble friend that, with little exaggeration, our own Parliament has not got a clue what the 36 delegates it sends to the Council of Europe actually get up to.
And that brings me to the third home truth of my old, grizzled and somewhat tired friend; namely, that Parliament is not interested in the work of the Council of Europe. I would like to think that the only reason that this debate is not better attended is that it is now only 21 minutes until England kick-off in St. Etienne, but, sadly, I do not think that is the case. The truth of the matter is that Members are not interested in the Council of Europe because they are not told about its work.
And that brings me to the question of parliamentary scrutiny. There are many examples of conventions which this House could have scrutinized during the drafting stage. Parliament simply does not know the content of those conventions or, indeed, whether the Government signed them. I shall give two examples: first, the convention on human rights and biomedicine and, secondly, the convention on the prohibition of cloning human beings. I know that this House has a lot to say about bioethics and it is a loss to all parties concerned that it did not have a role in scrutinising that type of work. While I am on the subject it would be interesting to hear why the Government have not ratified either of those conventions. I suggest that scrutiny could take place within the existing committee structure which is currently used for scrutinizing European Union legislation. I hope that the Chairman of the Select Committee on European Communities, the noble Lord, Lord Tordoff, will treat that suggestion sympathetically as I believe that it will not only better inform Parliament, but will raise the status of the Council of Europe itself.
As I said in my opening comments, we have an opportunity to promote a greater understanding of the work of the Council of Europe through next year's 50th anniversary celebrations and I would hope that we take full advantage of that opportunity.
Lord Tordoff: My Lords, I do not want to intervene for more than a few moments in this timed debate. However, as the noble Lord is aware, I am extremely sympathetic to finding ways in which these subjects may be brought on to the Floor of the House. The possibility of organising an extra sub-committee to deal with the affairs of the Council of Europe is, frankly, remote. To include it in the work of Sub-Committee A is also difficult.
As a starting point, one suggestion is that Members of your Lordships' House who are members of the Council of Europe might submit a report—perhaps to

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the Library—and then table a Motion to debate that report in the House. We may then he able to proceed to a position where we can debate these matters in this Chamber. I agree with the noble Lord that it is scandalous that we do not take more notice of the Council of Europe.
Lord Ponsonby of Shulbrede: My Lords, I thank the noble Lord, Lord Tordoff, for that response. I shall discuss his suggestion with other delegates and see whether we can react to his proposals.
I referred to my old and grizzled friend who is tired, but still hopeful. He came up with one final home truth; that is, that the Government do not listen to the views of the parliamentary assembly. I leave it to my noble friend the Minister to answer that point.
7.43 p.m.
Lord Beaumont of Whitley: My Lords, I thank the noble Lord, Lord Ponsonby of Shulbrede, for raising this matter tonight. I had the honour of being in the British delegation to the Council of Europe in the 1970s, first, as an alternate to Alan Beith and then to David Steel—now my noble friend Lord Steel of Aikwood. Finally, I was leader of the Liberal delegation and vice-president of the Liberal Group.
I made many friends when I was there, not least because I had the dispensation of the delegation car. But I also made some good, genuine friends like the noble Lord, Lord Hardy of Wath. I am delighted to see that he too is speaking in the debate this evening.
Belonging as I did to the pro-Europe party, I thought it a second best to the EEC which, as the saying went, "Had teeth". I should have known better. My mother's Quaker background should have taught me that it is better to move slowly by consensus than fast by applying force, even if the force is merely the force majeure of adversarial politics.
I have grown to dislike and distrust the European Union, its dominance of culture by economics and the growth of bureaucratic laws produced in aid of an even playing field which inevitably favour the strong and handicap the weak. We are now dominated by economics. It is much better that we should encourage this House as far as we can—I agree with the suggestions made by the noble Lord and the encouragement of the noble Lord, Lord Tordoff—to take on discussion and examination of a Europe which is proceeding culturally and humanely; which deals with civil rights; and which at times can act strongly.
The Council of Europe may not have teeth as such, but noble Lords may remember when it expelled Greece because of the Greek colonels and the wonderful moment—I was there—when we were able to welcome Greece back after the colonels had been expelled from government.
The Council of Europe has a great deal going for it. It fills a vision of Europe which some of us had at the beginning of the adventure with the EEC, but have been in the way of losing it. Anything that we can do to strengthen bodies like the Council of Europe—I do not know whether there are any—which are not dominated
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by TNCs and economics, would be for the better. I congratulate the noble Lord on bringing forward this debate today and look forward to hearing what everybody has to say. I hope it will end up in action in your Lordships' House in making certain that we debate it much more often.
7.47 p.m.
Lord Kirkhill: My Lords, I start by commending my noble friend Lord Ponsonby for his initiative in tabling this time-limited debate for your Lordships this evening.
All of us may know that it was in 1949 that the Council of Europe was formed. It was formed by like-minded nations which rejoiced in the name of "democratic nations". There is nothing in the articles of the statute of the Council of Europe which mentions "democracy".
In 1989 the Council of Europe, from 23 nations, suddenly became a body of 40 nations and most of those nations which joined post-1989 had, at best, a limited democratic past, if they had one at all. That meant that the Council of Europe—both at Council of Ministers' level and at parliamentary assembly level—had to institute a monitoring procedure of considerable care and position.
The consequence of that movement within the Council of Europe was that before those new nations joined they were much condemned; after they joined they were considerably supported. That is probably right. But it was the support of the consensus of a cosy political club. The first question that I pose to the Minister, therefore, if we are now talking in terms of the debate of my noble friend Lord Ponsonby, is this. Are the Government proposing at any stage from now on to burst that cosy consensus and attempt to implement the decisions of the monitoring committee and the Council of Ministers? The instruments for implementation seem to be somewhat limited.
I have a second question for the Minister. We are now to have a full-time court, something which I thoroughly support. That court will reach, in a way that the part-time court and commission never did in the past, legal judgments with huge political implications. In the past, judgments have been written and very little as between the states has occurred. Will the Government in the future attempt to make certain that the judgments of the court, many of which will have significant legal implications, are overseen?
My third question to the Minister is this. There is at the moment a committee of wise persons deciding whither the Council of Europe. Admittedly, it is an interim report which has been submitted, but it has three pillars: in essence, the parliamentary pillar, the judicial pillar and the executive pillar. Will the Government stand by that type of recommendation? It would be interesting to know. It would be even more interesting to know whether the Government are interested in a budget that could he constructed on the basis of results.
However, it would be more interesting to know whether the Government will join the social development fund. Standing outside the social development fund, they are seriously criticised in

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Europe. The 50th anniversary will take place next year. The theme is that the Council of Europe is the democratic conscience of Europe. Can the Government stand by that when they stand outwith the social development fund?
7.51 p.m.
Lord Grenfell: My Lords, we are all grateful to my noble friend Lord Ponsonby for introducing this debate. He has made a powerful case for strong support of the council by all member governments, including, of course, our own. Like my noble friend, I declare an interest as a fellow member of the British delegation to the council's parliamentary assembly.
The timeliness of my noble friend's Question lies not just in the Council of Europe's imminent 50th anniversary. It lies as much in the fact that the council is in any case at a crossroads, with which the advent of its anniversary has little to do. The end of the Cold War, and the council's subsequent enlargement, has confronted the council with formidable new challenges and opportunities, and so, as my noble friends Lord Ponsonby and Lord Kirkhill have pointed out, it is currently engaged in a major reassessment of its structures and working methods to determine how best it can be equipped to handle its new tasks.
In this time-limited debate, I shall do no more than offer a few personal thoughts on what kind of a Council of Europe we should be promoting. First, we should recognise its unique nature and place within the post-Cold War architecture of Europe. It is a political body working in a pan-European context. It is the job of its parliamentary assembly, drawing on its own insights and expertise and on those of the council's intergovernmental staff, to consider, develop and defend the interests of the millions of citizens in its member countries in the areas of human rights, social cohesion and, what is sometimes forgotten, cultural diversity. These are the three pillars which should define the range of its roles.
It is not just an instrument for providing technical assistance in these three areas. If that was all it did, it would be a specialised agency, not a political forum. Nor is it just the ante-chamber to which my noble friend Lord Ponsonby referred, through which countries seeking European Union membership are expected to pass to have their democratic credentials verified. The council is much more than that. It is the single pan-European body with the democratic legitimacy and the perspective to set the standards to which European governments must be held if the construction and development of post-Cold War Europe is to proceed on democratic, humanitarian and stable lines under the rule of law.
The Spanish socialist deputy and former president of the parliamentary assembly has described the council as "by definition troublesome". He said:
"It is there to tell governments when they are behaving badly, not to sing their praises".
That is not so comforting for governments, but those with the legitimacy to set standards must monitor their meeting.
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As the committee of wise persons' assessments are studied, I hope we all pay particular attention to the following. First, there are already indications that the tasks laid upon the council by the second summit cannot be financed at the present level of budgetary resources. If governments accept and appreciate the value of the council in its unique role, they must finance it adequately and give it a proper measure of budgetary and administrative autonomy.
Secondly, the council's relationship with the European Union must be properly defined. For example, the council cannot prevent the European Parliament from discussing human rights issues—nor should it. But the council's supremacy in this field should be recognised, and the European Union should draw more on its expertise in this and other fields of council competence. Similarly, the relationship with the OSCE needs clarifying so that this body does not encroach on the council's field of competence.
Thirdly, the council itself should stick to the three pillars properly defining its role, the three fields in which it clearly has superior competence: human rights, social cohesion and cultural diversity.
Fourthly, the political impetus generated in the assembly in Strasbourg must be better channelled into national capitals, which means that the assembly must strengthen its relations with national parliaments. It cannot be left solely to a dialogue with the Committee of Ministers, and through that body, to the parliaments. Parliamentarians must speak to parliamentarians if there is to be any impact.
Finally, the council must never lose sight of the fact that it represents 800 million European citizens living in 40 countries, not 40 governments ruling 800 million citizens. The assembly's parliamentarians, in their political forum, speak for the people to the governments; and governments, my Lords, would do well to listen and then to act.
7.56 p.m.
The Earl of Carlisle: My Lords, I thank the noble Lord, Lord Ponsonby of Shulbrede, for introducing this important Unstarred Question on the Council of Europe. Fifty years ago the role of the Council of Europe was to strengthen democracy, human rights and the rule of law. I am three months older than the Council of Europe. I believe that my generation owes the Council of Europe a great debt for its espousal and promotion of those three aims and for making them a reality. That has ensured a peaceful and democratic way of life for my generation.
I know what it is like to be a minority in this debate. All the speakers so far have been members and delegates to the Council of Europe. I have not had that good fortune. I hope that when the House is reformed—I welcome that reform—Members of the House who have no constituents but have time to see the Council of Europe and take part in its work can come back and explain to the House what it has done. I hope the Government will take that suggestion on board and bear it in mind in any reform of the House of Lords.
I first heard in detail of the work of the Council of Europe from the noble Lord, Lord Hardy of Wath, who is to speak after me. I have been on three parliamentary

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delegations. Every time, be it on an autobahn in Germany or on a winding road in Gibraltar, I have heard the noble Lord, Lord Hardy of Wath, explaining to younger Members of Parliament what the work of the Council of Europe is about. It is incumbent on those who go over to the Council of Europe to explain to us and to those in another place what they have done. We can then take it on board and promote the work of the Council of Europe.
I live in one of the Baltic states when the House is not sitting. I know exactly who in this House is respected there. The person who is most respected in Estonia is the Minister who is to reply. They may not bother too much about the questions I ask but the answers the Minister, the noble Baroness, Lady Symons of Vernham Dean, gives are scrutinised. I believe that the central and eastern countries of Europe are gaining immeasurably through membership of the Council of Europe. That is one of the great values. It should be recalled that these nations have had no experience of democratic organisation; how to manipulate and get the best out of parliament. That is what the delegations from central and eastern Europe are getting from the Council of Europe.
Another thing that the Council of Europe has done is to assist minorities in central and eastern Europe, particularly those Russian-speaking Estonians and Latvians who cannot even speak the language of the majority. I very much hope that it will put more effort into that work.
Time is short, but perhaps I may end on this point. When one reaches the age of 50 one has a party. I believe that all the richer western members of the Council of Europe should give a party for delegations from the poorer countries so that we in our parliaments can meet those members, explain our work and have a cross-fertilisation of ideas. I hope that that will be one way of promoting and increasing the awareness of the Council of Europe.
8 p.m.
Lord Hardy of Wath: My Lords, I congratulate my noble friend Lord Ponsonby both on his initiative in securing this debate and on his analysis of the main matters to which we should be giving attention. I have long argued that there has been, and still is, gross inadequacy in the provision of resources for public relations and education. I believe that between £3,000 and £4,000 is the maximum allowed for the whole budget for education and information in the United Kingdom on the work of that important body. That is ridiculous. It was absurd at the time of the 30th anniversary, and I was there then. It was also absurd at the 40th anniversary when we saw the expansion in the number of new member states who joined at the same time. I hope that the 50th anniversary will see a little more common sense.
My noble friend Lord Kirkhill was on the delegation at the time. I do not know whether he can recall that some badly disposed person spread a story that a Member of Parliament had gone missing. The press were tipped off that he was hiding in Strasbourg.
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A planeload of tabloid journalists and photographers scoured Strasbourg calling at hotels, knocking on hotel room doors and going into restaurants. The man who was supposed to be missing was making speeches and presenting a report in the Council of Europe, and not one of the tabloid journalists went there. It is a ridiculous situation.
The Council of Europe has fulfilled an extremely important function. If it had not existed before 1987 it would have had to be created. I was present at one of the most important moments of modern European history when Gorbachev made his speech calling for the establishment of the common house of Europe. From that speech on things moved. In the little more than a decade since then Europe has been politically transformed. The Council of Europe has virtually doubled in size. Democracy has been extended to areas where it would not have been dreamed of a little more than 10 years ago.
I pay tribute to my noble friend Lord Kirkhill. Not many Members of this House know that were it not for his Legal Affairs Committee, which had to be immersed in the minutiae of consideration and examination of the new constitutions and the rules for the establishment of the new parliaments in all the central European states which are now democratic, heaven knows what would have happened. There would certainly have been a degree of political chaos and a lack of cohesion, which would have been sad. Europe has become democratic.
There are problems in the Balkans. But if governments had taken notice of the initiatives by the Council of Europe before the shooting started, perhaps it would not have begun. We took some initiatives and, for example, for the first time we brought representatives of the Israeli Parliament and the PNC together in conference at Strasbourg. I believe that the Likud representatives were dragged there kicking and screaming because we advised them that if they did not come we would question their observer status. Unfortunately, Europe then decided that it was an American preserve and that we should not trespass.
The Council of Europe operates without directives or an enormous army of bureaucrats. It operates by agreement and the exercise of moral authority and conventions such as that which followed a report that I presented a long time ago. That was the Berne convention on wildlife and habitat. That proved an extremely useful exercise, even if from time to time we have angered the governments of the back-sliding states.
The Council of Europe has an important future because, as the noble Lord, Lord Ponsonby, said, it will be many years before the EU embraces the whole of Europe. There has to be another voice sometimes to challenge the EU. I can give a significant illustration. Brussels instructed Austria and Switzerland, before Austria became a member state of the EU, that they had to build new roads through the valleys of their respective countries. The people were suffering a great deal because of the enormous pressure of road traffic. Brussels decided to give them instructions, although it had no right to do so. I was chairman of the relevant committee at the time. If it had not been for the Council

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of Europe pointing out that the edict of Brussels did not run in those mountain valleys, there would have been even greater problems.
The Council of Europe has an essential function and it has had one since it started. It is certainly time that governments recognised that it would be useful for a few more pounds, marks and francs to be made available to ensure that Europe is properly aware of and educated about the essential function of the organisation.
8.5 p.m.
Lord Judd: My Lords, I too, would like to congratulate and thank my good and noble friend Lord Ponsonby for introducing the debate this evening. He has done so with characteristic modesty. He has not told us about the dedicated and committed contribution he is already making to the activities of the Council, not least as a key member of the Budget Committee, and also as the person who has taken on the responsibility for seeing through the preparations for the celebration of the 50th anniversary in so far as they will be represented here in the United Kingdom.
He was right to emphasise the relevance and importance of the Council by taking the agenda last week. That is the real substance of what goes on. I could not agree with him more in what he said about the debate on Turkey and the Kurds. If one had seen the feverish activity of the Turkish delegation, not only at the assembly itself but in the preceding months in the relevant committees, trying to influence the outcome of the debate, it would have been apparent immediately how significant the debate was to the internal political life of Turkey.
In that context we have an unrivalled opportunity to build meaningful links with those politicians within Turkey who want to make their country a reasonable, decent, multicultural society in which human rights are taken seriously. It is no good just lecturing them on it or talking about it theoretically. It is a question of working with them to see how it can be done. The Council of Europe provides a forum in which politicians can get together on an agenda of that sort.
It was not just the case of Turkey. We also had debates on Kosovo. In that regard what was refreshing was to hear representatives from the region. They were people who were deeply affected and who felt themselves at risk in terms of what was happening in Kosovo. They had been through experiences which were highly relevant to the current situation there. It was not just ourselves here in Westminster regurgitating our anxieties and experience at a safe distance, but people in the immediate situation talking about what is at stake. Here again I believe that there is a very special opportunity in the Council for serious political debate.
I have referred to the work of the committees as regards the debate on Turkey. There is a whole range of committees working in a dedicated fashion, building up expertise among parliamentarians. That expertise could be put to very good use in our deliberations in both Houses here at Westminster. In that context I must pay
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special tribute to my noble friend Lord Kirkhill for the very distinguished contribution that he has made in the Legal Committee over many years.
I have the special joy of being in the Council of Europe for a second innings. I was there at the end of the 1960s and the beginning of the 1970s. It is an infinitely more interesting place now than it was in those days of the Cold War at the end of the 1960s and the beginning of the 1970s. It is a place in which the new democracies are brought together with the nations which have longer experience of democracy. There they can learn the art of constructive, open debate. They can make friendships which are very important and feel reassured in all that they are trying to do in their own countries.
At a time when in this House and in the other place we are debating the challenges which the expansion of NATO brings in terms of keeping alive the importance, the priority and the imperative of taking seriously our relationships with the wider Europe, the Council of Europe is a place in which that can be done. If we are serious about that, we should take the Council seriously.
Perhaps I may reinforce what my noble friend Lord Kirkhill said about the social development fund. We are becoming rather conspicuous by our preciousness in standing aside. That fund may not be operated as well as it should be, but we could help to operate it more effectively by paying the membership fee and becoming members. We could thus ensure that its work with refugees and displaced people is improved.
Finally—I hope that my noble friend the Minister will take this point seriously—we are fortunate in the services provided by the UK mission in Strasbourg. I hope that my noble friend will take this opportunity to convey to the mission that those words are not merely something that we say politely when we are there; it is something that we remember when we return to Westminster. We should like the people there to know that their work is deeply appreciated.
As I go round the buildings of the Council of Europe, I see the photographs of the years in which the Council was formed—photographs from 1949 onwards. I see those great statesmen and I remember their vision, imagination and commitment to democracy and human rights. I wish that throughout our political system here in the United Kingdom and more widely we had the same degree of commitment as was shown by those courageous founders. I believe that we now have an opportunity to follow that through.
8.11 p.m.
Lord Mackie of Benshie: My Lords, all speakers appear to have kept to the time limit well, so I think that we shall manage to complete the debate in time. I begin by congratulating the noble Lord, Lord Ponsonby of Shulbrede, on initiating this debate. The Labour Party has not done too badly tonight in terms of the representation on its Benches; the Liberal Democrats have done even better, considering our size, but members of the Tory Party seem to have no interest in this whatsoever. Their chap is on the Front Bench, and I dare say that he will do well.

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I served at the Council of Europe for 11 years. I greatly enjoyed it and it did me a great deal of good. I met many people there. I met foreigners. I had, for example, quite a close friendship with Mr. Karl Ahrens, a distinguished lawyer, who was the president of the Socialist Group. We compared notes on our wartime service and found that he had been in Benghazi when I had been bombing it. I apologised for missing him—and he accepted my apology! That is a good example of the sort of communion that one finds at the Council of Europe.
I was enormously impressed by the great desire of the countries of eastern Europe, newly released from bondage, to join the Council of Europe. That may have been in part a stepping stone, but those nations were very aware of the importance of the forum. There is also no doubt of the importance to the people of those countries of the question of the qualifications for joining. No one would say that Russia fulfilled all the qualifications for joining, but the Council as a whole took the view—I certainly did—that membership was a great help to the people who sought to promote democracy inside Russia. The committee is still monitoring what they are doing.
I turn now to the practical work of the Council. I served on the committee for migration and refugees. When we looked at how refugees were treated at different airports, we found something extraordinary: the Charles de Gaulle area of landing was not treated as part of France by the French in their endeavour not to have to meet their obligations. Other things were uncovered before the situation greatly improved.
I also served on the agriculture committee. I believe that we were of great help when the countries of eastern Europe, such as Poland and Hungary, were struggling to move from one system to another. Albania was striving to restore a crating system. There was some political stability because people had land and although large areas were destroyed, something was nevertheless achieved for the people.
At one point, I was the rapporteur of the wine committee of the agriculture committee. Seldom can a man have had a better job. We did much to promote the value of red wine, even discovering that half a bottle a day was very good for you, and that a bottle a day was not bad for you! That was a major achievement of the Council of Europe.
Perhaps I may finish on a serious note. There is not a shadow of doubt that the Council of Europe is the only real forum at which people can meet and discuss matters without having to take decisions. Although some may say that that is awful, it is not. It is extremely valuable. Her Majesty's Government, this new enlightened Government, will no doubt support the Council of Europe properly. I am sure that they will not throw money at the Council, but I hope that they will at least make it available in reasonable quantities.
8.16 p.m.
Lord Moynihan: My Lords, I thank the noble Lord, Lord Mackie of Benshie, for anticipating my remarks this evening. I have to admit that as a former Minister
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for Sport, I have had certain divided loyalties but, as always, I have been kept well informed. I was delighted that when we equalised I received a note to the effect that it was a very fine penalty, taken by Shearer, after a most heinous foul against the blessed Michael Owen.
I begin by saying how much I appreciate the opportunity which the noble Lord, Lord Ponsonby of Shulbrede, has given us by securing what has already been a most interesting and informative debate. From these Benches we have always fully supported the work of the Council of Europe, a view which is clearly shared among your Lordships here. As we have heard, there is much praise from all sides of this House for the aims of the Council; namely, to protect and strengthen pluralist democracy and human rights; to seek solutions to problems facing society, with particular emphasis on minorities, xenophobia, exploitation, racism and intolerance, terrorism, environmental protection, bio-ethics, AIDS and drugs; to develop a political partnership with Europe's new democracies and, as the noble Lord, Lord Grenfell, rightly stated, to assist central and eastern European countries with their political, legislative and constitutional reforms.
The Council's enhanced and increased role was marked by its first summit, the Vienna Summit, in October 1993, which recognised how important it was for security and stability in Europe that all its countries should accept the principles of democracy, human rights and the rule of law. Under that general concern for democratic stability, the summit laid down a series of common principles, including the protection of national minorities, as well as actively supporting the democratic transition process in central and eastern Europe and strengthening the Council's machinery for monitoring its new members' respect for their undertakings.
Similarly, the Strasbourg Summit last October was intended to give new impetus to the activities of the Council in an effort to respond to changes in society on the threshold of a new century. It fixed new priorities for co-operative efforts which will now benefit some 800 million Europeans in what is a truly pan-European organisation. The summit adopted a final declaration and, most importantly, an action plan, which focuses on democracy and human rights; social cohesion; security of citizens; democratic values and cultural diversity; and structures and working methods. I should like to ask the Minister about the progress on the implementation of that action plan. What timescale is envisaged for its implementation? What progress has been made to date? What is the role of the proposed commissioner for human rights in promoting respect for human rights in member states? The Strasbourg Summit instructed the Committee of Ministers to study arrangements for the implementation of an office of commissioner for human rights. Can the Minister give the House further details about the proposed new office? What arrangements for the implementation of such an office have been considered to date?
Finally, I should like to touch upon the contribution of the noble Lord, Lord Kirkhill. Can the Minister outline the Government's policy on the Council of Europe's social development fund? Can she confirm that although the fund has become more open and

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accountable, thanks to the Council of Europe Parliamentary Assembly, should the UK join it the high initial investment and subsequent annual contributions will entail a considerable diversion of resources from bilateral and other multilateral programmes in our aid budget which will require detailed analysis? Will there be a commensurate and real increase in our aid budget?
As the noble Lord, Lord Ponsonby, stated, the Council will celebrate its 50th birthday on 5th May 1999. By then almost every European country will share in its democratic vision. It is a vision that has an impact on the lives of all its citizens—a vision of a free, more tolerant and just society based on the common values of freedom of expression and information, cultural diversity and the equal dignity of all human beings. At the dawn of the third millennium there will be an opportunity to do three things: to celebrate the Council's contribution to cohesion, stability and security in Europe; to confirm that its mandate still holds good; and to give further impetus to its activities in the next century.
8.21 p.m.
Baroness Symons of Vernham Dean: My Lords, I too am grateful to the noble Lord, Lord Ponsonby, for this opportunity to discuss the Council of Europe and the part that the United Kingdom plays in promoting its work. I commend the noble Lord for his efforts as a member of the Council of Europe Parliamentary Assembly in this regard. I thank all noble Lords who have participated in the debate this evening against what for some is a more enticing, if not more weighty, encounter in France. I thank the noble Lord, Lord Moynihan, in his lonely vigil with the noble Lord, Lord Burnham, for keeping us up to date but not quite as up to date as the noble Lord, Lord Tordoff, who has just been able to inform the House that England has gone into the lead by two goals to one.
I return to the real issue. We have been discussing a weighty and important matter. I have listened very carefully to the points made today. We strongly agree that the United Kingdom should continue to play a central role in promoting the Council's key aims: to promote human rights, democracy and the rule of law. The United Kingdom has always supported the Council of Europe's work. Almost 50 years ago its statute was signed at St. James's Palace in London with the United Kingdom as one of the organisation's founder member states. But with the end of the Cold War we have also played a leading role in spreading the Council's values to the newly democratic states of central and eastern Europe. The Council had 23 members in 1989; now it has 40 and represents some 765 million people across the Continent. Through its enlargement the Council has set standards for the former communist countries to develop as modern, pluralistic, free and open societies. As the noble Lord, Lord Mackie of Benshie, said, this has been achieved through dialogue and discussion.
I turn to the question of human rights upon which the noble Earl, Lord Carlisle, concentrated. Successive British governments have regarded the work of the Council on human rights as its most important activity.
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The European Convention on Human Rights, its protocols and above all its machinery of enforcement have set the pattern and standard for international protection and promotion of human rights worldwide. The Government support the Court and Commission and take a full and active part in the organs dealing with human rights on which governments are represented: the Committee of Ministers, the Steering Committee and the daughter committees. In a very real sense the Government have shown their support for the convention most notably through the introduction of the Human Rights Bill which we hope is nearing the end of its parliamentary procedures. I point out to the noble Lords, Lord Tordoff and Lord Beaumont of Whitley, that the Government have listened to noble Lords on these issues. The parliamentary progress of the Bill demonstrates that Her Majesty's Government believe in the Council's human rights standards and that they wish those rights to progress through the Commission and the Court in Strasbourg and to be available in domestic courts up and down the United Kingdom.
At the same time the Government have conducted a thorough review of the protocols to which we are not yet a party. Following the recent vote in another place, we shall take steps to become a party to Protocol VI on the death penalty and in due course to Protocol VII. These moves have been widely welcomed by the institutions and other member states of the Council of Europe.
In addition to supporting the Council's legal mechanisms, the Government have played a leading role in developing new political procedures to ensure compliance by member states with the commitments that they accept on joining the Council. This involves member states meeting together in Strasbourg and reviewing the progress that they have made in particular areas—for example, freedom of the media or independence of the judiciary. In this way shortcomings can be highlighted and, as importantly, constructive solutions put forward, as suggested by my noble friend Lord Hardy of Wath. The Government strongly support the work of the Council in providing expertise within member states to assist them in achieving these necessary standards which, as my noble friend Lord Judd reminded us, are so important.
The Council of Europe parliamentary assembly also has an important role to play through its own monitoring procedures. The Government support increasing complementarity between their work and the work of the Committee of Ministers in Strasbourg. I thank my noble friend Lord Judd for his kind words about the work of officials in Strasbourg.
Several noble Lords, notably the noble Lord, Lord Ponsonby, and my noble friends Lord Grenfell and Lord Hardy of Wath, referred to UK financial support. The Government support the work of the Council of Europe through their financial contribution to the organisation. The United Kingdom remains one of the five grands payeurs to the Council's budget together with France, Germany, Italy and Russia. Between them the grands payeurs contribute over 60 per cent. of the Council's budget with the United Kingdom individually paying

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some 12.84 per cent. per annum. This is likely to amount to more than £14.3 million in the 1998–99 financial year.
I have listened carefully to suggestions for further financial support for the organisation. Frankly, the Government believe that like other organisations the Council must prioritise its activities within existing resources. It must make those resources work as effectively and efficiently as possible.
Lord Mackie of Benshie: My Lords, can the Minister tell the House whether the United Kingdom has been able to reduce its contribution because of the other nations that have joined the Council?
Baroness Symons of Vernham Dean: My Lords, as far as I am aware the contribution of the United Kingdom is holding steady. I am not aware of any reductions, but if what I have said is incorrect I shall write to the noble Lord to put the matter right. I believe that our contributions as a grand payeur hold steady at 12.84 per cent. per annum.
Lord Hardy of Wath: My Lords, I would not disagree with my noble friend on pursuing priorities. It would be highly desirable if the Council of Ministers were to take a firmer line in providing a higher priority for the public awareness, public relationship and education role which is now urgently needed and which would be especially appropriate as the 50th anniversary approaches.
Baroness Symons of Vernham Dean: My Lords, it is important that the Council of Europe is advertised properly within member countries. With the 50th anniversary, we shall have an opportunity to do that. That is a point to which I am now coming. My noble friends Lord Ponsonby, Lord Kirkhill and Lord Hardy of Wath reminded us that next year is the 50th anniversary of the signing of the Council's statute. It is fitting that this event should be celebrated in the United Kingdom to mark the Council's work and the United Kingdom's contribution to it. Plans are already under way. There will be a reception on 5th May at St. James's Palace, where the statute was signed. The noble and learned Lord the Lord Chancellor has agreed to give a speech that afternoon in London on the role and contribution of the Council of Europe. My noble friend Lord Ponsonby of Shulbrede, said that there must be suitable arrangements for marking the anniversary. He was right. The Government hope that a UK national committee will soon be formed to help co-ordinate the 50th anniversary and take forward various ideas that have been suggested. I thank the noble Earl, Lord Carlisle, for his interesting suggestions. I undertake that we shall look at them.
Lord Tordoff: My Lords, perhaps the Minister will forgive me for intervening once more. I had a discussion with the Government Chief Whip today and pointed out to him that the 5th May next year is a Wednesday, and
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that it might be appropriate for your Lordships' House to have a debate on the Council of Europe on that day. He pencilled that into his diary.
Baroness Symons of Vernham Dean: My Lords, as always, the noble Lord's suggestions will be given careful consideration. I cannot give any undertakings now. I am sure that the matter will be looked at through the usual channels, as we would expect.
I have very little time left. Specific matters were raised by noble Lords with which I shall try to deal. If I cannot refer to them all, I shall write to those concerned. My noble friend Lord Ponsonby of Shulbrede and the noble Lord, Lord Moynihan, mentioned the second Council of Europe Summit. The Government subscribe fully to the final declaration and the action plan adopted at the second summit of the Council of Europe in October last year.
The noble Lord, Lord Moynihan, mentioned member states' action plans. They define four main areas: democracy and human rights; social cohesion; security of citizens; and democratic values and diversity. Member states stress also the need for structural reforms to adapt the organisation to its new tasks. The Government fully support such reforms. We shall continue to assist the Council in prioritising its activities in line with the summit action plan.
My noble friends Lord Kirkhill and Lord Grenfell mentioned also the Committee of Wise Persons. The Government strongly support that committee in drawing up proposals for the structural reform of the Council of Europe. The European Union presidency representative on the council is Mrs. Audrey Glover, formerly director of the Organisation for Security and Co-operation in Europe's Office for Democratic Institutions and Human Rights. The committee is drawing up proposals for adapting the Council of Europe to its new tasks and helping to streamline its activities. I assure my noble friend Lord Kirkhill that the Government look forward to receiving the committee's proposals. They are expected to be finalised in November.
I regret that I am coming to the end of my time. My noble friend Lord Ponsonby referred to the ratification of the protocols on human rights, biomedicine and cloning. For specific reasons it has not been possible to ratify those protocols. I shall write to my noble friend to explain why. The clock is against me. I cannot explain in sufficient detail now. I shall put a copy of that letter in the Library of the House so that other noble Lords are kept up to speed on that.
We can all thank my noble friend Lord Ponsonby for his timely introduction of the debate. We must also thank my noble friend's grizzled, old, and somewhat tired journalistic friend. In my experience grizzled, old and somewhat tired journalistic friends can sometimes be good friends, and on this occasion I rather think that he was.
The Council of Europe remains as vital today as it was when established in 1949. I believe that the Government are at one with my noble friend Lord Ponsonby of Shulbrede in his concern to promote the Council's work further. We can achieve this by

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continuing to play a leading role in developing its legal and political machinery for the protection of human rights and fundamental freedoms and by helping the new democracies of Europe to meet the commitments they have accepted on joining the organisation. In its first 50 years the Council has met the challenges of a changing Europe. Together we should take every opportunity to ensure the effectiveness of the Council in meeting the further challenges it will face in the years to come.

School Standards and Framework Bill
8.35 p.m.
Consideration of amendments on Report resumed on Clause 10.
[Amendments Nos. 35 to 37 not moved.]
Clause 11 [Establishment of Education Action Forum for zone]:
Baroness Blatch Baroness Blatch moved Amendment No. 38:
Page 10, line 27, at end insert—
("( ) An Education Action Forum shall be the employer of all teaching and non-teaching staff at all schools within the education action zone.").
The noble Baroness said: My Lords, I shall speak also to Amendment No. 39. Amendment No. 38 relates to a management issue. It has always been my view, as borne out by successful management, that responsibility should be as close to the unit of operation as possible. Therefore, if there is such a thing as an action forum, it should have some of the levers of the control. One of the levers of control of course is control over staffing.
I am aware from the previous debate that some of the control over staffing will be those members of staff who are appointed on contract for the period of the action zone, presumably for three or five years. If they do not have control over staffing then they do not have control over one of the key factors in improving education. A factor in improving education is often sorting out the quality of the staff and ensuring that only staff of the highest quality are available to teach in an area that is especially challenging. That is the whole idea of action zones. They are to tackle failing education, failing LEAs and often failing schools. It is important that that should be the case.
Amendment No. 39 is tabled because the noble Lord, Lord Whitty, made a generous response to my noble friend Lord Skidelsky when he brought up this point in Committee. The noble Lord, Lord Whitty, appeared to be worried about the terminology. He explained that he was sympathetic and said:
"It may be that that is something which will be covered by the regulations and I shall think about that proposition. However, I am not sure that we want to start hares running by suggesting a new approach which would mean that an individual school could be treated separately from the whole action zone".
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The noble Lord, Lord Whitty said that in relation to a school:
"Although it will remain accountable in that it must fulfil its contract, it will be separate from the overall structure of the education action zone. Perhaps there is some terminology that is half-way between us, but the concept of leasing out gives the impression of not simply an arm's length relationship of the kind to which the noble Baroness referred but one in which the school is treated completely outside the education action zone where we want to see a mutually supportive system between all the schools in the zone".
My noble friend asked:
"If there is some terminology that is half-way between us, why do the Government believe that it is not appropriate to put it on the face of the Bill?".—[Official Report, 19/5/98; col. 1599.]
The impression given by the noble Lord, Lord Whitty, was that he would reflect on that matter. My noble friend ended by welcoming the Minister's assurance that he would reflect on the matter and possibly go half-way somewhere in the Bill to meet the arguments which my noble friends and I have been putting forward. With that assurance he begged leave to withdraw the amendment. This amendment is therefore in the vein of what appeared to be a very accommodating answer and a genuine willingness on the part of the Government to address the problem.
Referring to a point I made earlier, it is now common knowledge outside the Department for Education and Employment that Mr. Byers wants to see a tackling of individual schools where the challenges have eluded many well-intentioned educationalists in the past. There are some innovative, exciting and interesting ideas around and he has expressed a wish to be free to pursue some of them.
Amendment No. 39—it was Amendment No. 64 at Committee stage—suggests that a way should be found to facilitate such an eventuality. It might be through leasing from the action zone, where the forum believes there is a school with specifically defined problems which could be contracted out to a body which could address those problems effectively, fully accountable to the action forum. It seems to me that we are all talking about means to ends. If that improves education in a school which has hitherto failed, then it is worth trying.
We understand that the Minister in another place is receptive to these ideas; and we want to make it possible for him to pursue them over the coming years. I beg to move.
The Lord Bishop of Ripon: My Lords, I believe education action zones to be an innovative and exciting feature of this Bill, and I was most interested in the remarks of the noble Lord, Lord Taylor of Blackburn.
I have had some experience as chairman of a Leeds project working with an inner city group of schools, a pyramid of schools—high schools and feeder primaries. We have been working together with local businesses to raise standards. The local businesses have included such bodies as Marks & Spencer, British Gas, GE Capital and many others. Our experience has been that partnership with the local community is of enormous importance. I very much hope that that will be part of the feature of the education action zones. It is also entirely right that

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groups of schools should work together. Our great difficulty in Leeds was that there was no statutory exemption. That is why this initiative is of such importance. We also found a little difficulty in working closely with the local education authority. While I appreciate what the noble Baroness, Lady Maddock, said about local democracy, at times local democracy and local initiative need to learn to work together. In my experience that has not always been the case, both in relation to education and in relation to other issues.
I wish to raise this point with regard to Church schools. I very much hope Church schools will be involved in education action zones. I do not presently have information about whether any of them have been included in the zones already designated, but I take it that there will almost certainly be such schools. If they are aided schools then there is a problem in relation to the employment of staff. Church schools are in some cases committed to the inner city; this is because of the Church's belief that we need to be in such areas and working on behalf of those who live in them. The ambience and ethos of a Church school, however, is to some extent maintained by the power of the governing body as employers to employ staff. Were this amendment to be passed, as I understand it the right of employment would fall to the Education Action Forum. That would create a very considerable difficulty for Church-aided schools.
At Committee stage we passed an amendment to Clause 60 which strengthened the power of governing bodies to appoint to voluntary-aided schools those people whose religious opinions were in accordance with the tenets of the religion or religious denomination, together with a number of other specifications. If the employment power were to be removed from the governing body and placed with the Education Action Forum it would raise considerable difficulties for Church schools and Church governing bodies. It would undermine their power to contribute creatively to education action zones. I would therefore wish to resist this particular amendment at this stage.
8.45 p.m.
Lord McIntosh of Haringey: My Lords, I apologise that I am responding to this amendment, and not my noble friend Lord Whitty; we have two pinch-hitters instead of the original protagonists on Amendment No. 39. I shall do my best, however, and I shall respond to Amendment No. 39 in a rather different tone than to Amendment No. 38.
Amendment No. 38 is an amendment which we firmly resist, as we did at Committee stage. We are surprised that the noble Baroness has brought it back again. It means that the governing body of any school entering an education action zone automatically loses powers over employment. In introducing the amendment, the noble Baroness said that the intention is to remove employment powers from the local authority and to pass them on to the forum; but that is not what the school framework is, and we discussed that at Committee stage. The governing bodies and not the local authorities have the power over staffing functions. As the right reverend Prelate rightly pointed out, this
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means that the governors of voluntary-aided schools, and the Church voluntary-aided schools to which he referred, would automatically lose all of their say over staffing matters. I should be surprised if the representatives of governing bodies in all types of schools would welcome this amendment. The governors might believe that the task is so difficult, that governors are in such short supply, that it is in the interests of the children in the school for the forum to take over the governing body's role; in other words, to take over the staffing functions. If that is the case, then there is provision for it to happen. Provision in Clause 12(2)(b) allows the governors to cede their employment powers to the forum. But that is an option, not a requirement; and we believe it is right that it should be an option.
Perhaps I may come back to the helpful point made by the right reverend Prelate. We were asked whether there are any Church schools in the education action zones. We have not finished doing the counting yet but, when we have done that, on Friday of this week we shall put a full list in the Library of the House. It will be available and I shall make sure that the right reverend Prelate, in his capacity as a chairman, receives a copy.
Our response to Amendment No. 38 is therefore very definite. It is important that it should be an option and not a requirement to cede staffing powers; otherwise it would not be the LEAs who would lose their powers but the governing bodies, and that cannot he desirable.
On Amendment No. 39 the noble Baroness, Lady Blatch, is right. My noble friend was sympathetic to the objectives of the noble Lord, Lord Skidelsky, when he introduced this amendment in Committee. Incidentally, we understand that the noble Lord, Lord Skidelsky, has to get back to writing volume three of his magnificent biography of Keynes. He has, as far as we are concerned, full leave of absence from the House for that most important purpose. When the provision was introduced, my noble friend said that he would consider it carefully and see what commonality existed between the intent of the amendment and the Bill as it now stands. We have done that and we hope that the result will be helpful, although it has not resulted in a government amendment.
The Government support the idea that, for a failing school, a range of strategies should be available to turn that school round. They should be available in the first instance to governing bodies, but if the governing body does not take action of its own accord they should also be available to others, including, in some circumstances, education action forums.
I wish to clarify the position, first, outside education action zones and then to deal with what can happen within them. We have asked a number of consultants to draw up specifications for ways of turning around failing schools. We expect to see models which range from simple packages to improve the curriculum, management systems or staff training right through to models which allow a third party to be involved more directly in the running of the school; perhaps "an approved educational body", in the words of the amendment. The key in the models we are exploring is that accountability to parents, pupils and the

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Government remains with the governing body or the local authority if delegation is withdrawn. As to how that would work in an education action zone, the options that I have described would still be available. In addition, as I said in response to Amendment No. 38, the governing body could cede its powers to the forum which could then pursue its own strategy to turn around the school. This could include buying in third party help. Where powers have been ceded to the forum it would be accountable to its community and to the Government.
In terms of the amendment, while I realise its intention I am not sure that its effects would be clear. Most schools in most education action zones will not in any case be managed by the forum but by the governing bodies, so the forum would have no power to lease them out to third party managers. Where governing bodies' powers as regards the management of schools are ceded to the forum, schools would naturally expect the forum to take on the responsibility of management along with the powers. After all, it is on the forum and not the approved third party that they are represented.
Finally, where a third party can offer services which would be helpful to zoned schools, failing or otherwise, the forum can already purchase those services from education action zones' funds but without cutting any school off from the partnership structure which the zone was set up to encourage. We have made it clear that we will not tolerate failure without improvement. I hope that it is also clear that we take the issue of failing schools very seriously, whether they are within or outside an education action zone. The amendment before us relates only to schools within an education action zone. In view of the wide-ranging list of strategies that I have outlined, I hope that the noble Baroness will not move her amendment in due course.
Baroness Blatch: My Lords, that was an interesting answer. I gather that almost everything in my amendment can be achieved. I understand that a school can be leased to a third party which could be a private organisation made accountable to the action forum. That would apply if schools within the education action zone have ceded their powers to the forum. Alternatively, if the schools have decided to keep their powers, acting collectively, they could lease out to a private third party.
This is an important issue and I was cheered by that answer. However, I should be grateful if the Minister would point me to the powers in the Bill which allow that to happen. I have not seen them. Where is the power in the Bill which will achieve my amendment? Where are the powers to lease out a school which is failing with a properly defined contract accountable to the education action forum and funded under contract to the forum?
Lord McIntosh of Haringey: My Lords, the provisions are not on the face of the Bill. They will be provided for in the regulations, in particular under Clause 12(3) which contains the various provisions for regulatory powers. They are not and cannot be spelt out in detail on the face of the Bill.
Baroness Blatch: My Lords, I will look at subsection (3) again. The noble Lord is saying that the regulations
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contain a power to contract out to a third party which could be wholly private, even commercial. A defined set of criteria will be set out by the education action forum, or collectively by the governing bodies, to turn the school around. Perhaps the Minister will confirm that because I have looked at the provisions carefully and I do not interpret that power.
Lord McIntosh of Haringey: My Lords, at the risk of offending against the rules on Report, the amendment uses the word "leased". We do not and would not use that word because we do not believe it to be appropriate. However, it is possible for the management of a school under the regulations provided for in Clause 12 to be delegated in the way which the amendment intends. New legislation is not required.
Baroness Blatch: My Lords, I am re-reading subsection (3), which is linked to subsection (2). I should be grateful if the Minister could write to me telling me specifically how the provision will work. If that is the case it is good news, but it is not the understanding of some of the individuals and companies who have seen the Minister and requested involvement in single schools in order to turn them around. It would be helpful to have that spelt out.
Subsection (3)(a) states:
"as to the circumstances in which the governing body of a participating school may make arrangements under subsection (2)".
Subsection (2) is about discharging the function on behalf of the governing body. It does not use the word "leased", but it does not go as far as contracting out. There is nothing about the conditions under which it contracts out. There is nothing to say whether profits can be made. My understanding is that unequivocally the statement has been made by Ministers in this House and in another place that profits cannot be made in this way. Subsection (3)(b) states:
"for the procedure to be followed by such a governing body in connection with the making of any such arrangements".
Subsection (3)(c) states:
"for the procedure to be followed by an Education Action Forum when discharging any function by virtue of that subsection".
I find it difficult to find the powers in the Bill and it would be helpful to have that properly spelt out.
Lord McIntosh of Haringey: My Lords, I can do slightly better than writing to the noble Baroness. Again, I apologise for any breach of Report procedures. As the noble Baroness has recognised, Clause 12(2)(b) means that the forum may assume responsibility for the discharge of functions. Schedule 1, paragraph 1, means that the forum can do anything incidental to the carrying out of its functions. I was speaking of those powers. I will gladly write to the noble Baroness, too.
Baroness Blatch: My Lords, not only would I like the noble Lord to write to me, but I would like to know what he means by "anything". Can schools be hived off into the private sector never to return again? Is the noble Lord saying that there is a power for them to do anything without any procedures whatever for parents

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and governors to be formally consulted and formally to take a view about whether that is what they want for their school and their children?
I turn to Amendment No. 38. Again, I have received another incredibly technical letter from the department explaining who employs teachers. I understand that the local authority employs the teachers. I realise that that does not apply to voluntary-aided schools. The noble Lord said that any school could cede its powers. It would be its decision to do so if the governors ceded them to the education action forum. However, they cannot cede the employment of the teachers. They may be able to see the day-to-day management of teachers or through procedures set out in the Bill disapply pay and conditions, but not the employment of the teachers. I understand from the letter that at the end of the day the local authority remain the employers. I was trying to break that link so that as regards an important issue relating to the management of the quality of teachers they should have full authority and not have to negotiate through a local education authority.
The noble Lord has promised to write to me with further clarification and to couple that with an explanation of what "any" action means. Perhaps he will tell me what are the limits of the power. I remember when I sat where the noble Lord now sits. If I had advocated that a Secretary of State under secondary legislation, not even primary legislation, would be given the power to do anything whatever, the noble Lord would have been first to say that the limits of those powers should be defined.
9 p.m.
Lord McIntosh of Haringey: My Lords, the noble Baroness must look at Schedule 1 because it states:
"An Education Action Forum may, subject to sub-paragraph (2)",
which is concerned with the power to borrow money,
"do anything which is calculated to facilitate, or is incidental or conducive to, the carrying out of any of its functions".
If that is not adequate for the noble Baroness, I shall write to her about it.
Baroness Blatch: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 39 not moved.]
Clause 13 [Disapplication of pay and conditions order in relation to teachers at participating schools]:
Baroness Blatch Baroness Blatch moved Amendment No. 40:
Page 11, line 35, leave out ("For") and insert ("After").
The noble Baroness said: My Lords, we have dealt with this issue before. However, it caused disconsolation because the Government are not even prepared to consider the possibility of allowing the 1991 Act to stay in play to allow existing schools to disapply those conditions, irrespective of how many use that provision now. That is one rather barren argument that was used by the Government. Nevertheless, the schools which use that disapplication procedure do so to effect and believe
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it is very important. I should mention in that context the Oratory School. Its wings will be clipped by the measures contained in this Bill.
I make no secret of the fact—and the Minister will not be surprised—that I believe that grant-maintained schools should remain part of the diverse provision available to parents and the community. However, my amendments are not dependent on that. I believe that the disapplication facility which is to be made available to education action zones should be made available more widely, with perhaps a system in place for approving the application of a school which wishes to disapply the provisions in relation to pay and conditions of service. I beg to move.
Lord McIntosh of Haringey: My Lords, I well recall that this is an issue which caused some difficult debate in Committee. I hope that by my reply I can help us through that debate.
We argue that the pay and conditions opt-out was not used widely when it was available to individual schools. In fact, as the noble Baroness was almost good enough to remind us, it applied to only two schools under the grant-maintained system. We argue that education action zones are areas for experimentation, but the noble Baroness argues implicitly that because GM schools are already doing that it is not an experiment.
A key part of our philosophy on education action zones is that they are areas which allow experimentation beyond the norm allowed in the rest of the sector. That means that although the system we have created for the school sector works in general, there will always be some areas which need additional support and flexibility to meet the same demanding standards. Therefore, we are determined to make sure that the teachers pay and conditions document is appropriate for schools elsewhere.
We have added considerable flexibility. We have added the possibility of advanced skill teachers, which are an extremely exciting prospect. After this year all schools will be able to take advantage of advanced skill teachers. They do not need to opt-out. There are two exceptions; namely, those two schools which opted out of the document under the previous administration. We do not wish to cause undue disturbance to the way those schools run by putting them back inside the document.
However, in zones, however good the current system, we want schools to have the opportunity to look ahead and experiment further because of the particular challenges they face. That is why the opt-out is appropriate in zones and almost always, with those two exceptions, inappropriate outside them. Therefore, I hope that the noble Baroness will not press this amendment.
Baroness Blatch: My Lords, I am deeply disappointed by that answer, as I was in Committee. There seems to me to be the most incredible irony. Education action zones are being established to deal with failing LEAs and failing schools. They are designed to put right some of the failures of the past. They will enjoy the freedom of being able to disapply

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the national curriculum and pay and conditions. I accept that my amendment would apply to only two schools so far, but those schools have more than proven their ability to manage their own affairs. However, they will be denied that freedom. That seems to me to be absurd. It costs the Government absolutely nothing to allow them that freedom. They have merely to agree to place a few words on the face of the Bill.
The Government have repeated an argument which they used before and I dismissed that when I introduced the amendment. They said that the power is not widely used. Why should those two schools lose that facility? What is the argument against my proposition? The Government's argument is absurd and has no intellectual depth whatever.
Lord McIntosh of Haringey: My Lords, they will not lose that facility. I made that clear in my response.
Baroness Blatch: My Lords, as I understand it, that part of the 1991 Act is to be repealed. Is the noble Lord saying that there is to be a bridging provision?
Lord McIntosh of Haringey: My Lords, I am not permitted to go on responding. I am sorry.
Baroness Blatch: My Lords, perhaps the Minister will write to me to tell me what will be the effect of repealing this provision. I should like to know whether it will be possible for any school to avail itself of the disapplication provisions. Under the new provision, which schools will be able to avail themselves of those provisions? I should be grateful if the noble Lord will write to me on that issue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 41 not moved.]
Clause 15 [Cases where LEA may exercise powers of intervention]:
Lord Whitty Lord Whitty moved Amendment No. 42:
Page 13, line 33, at end insert ("(whether or not the notice is combined with a notice under section 62(3)(c)).").
The noble Lord said: My Lords, this is simply a consequential amendment to take account of the amendments made in Committee to Clause 62. We brought forward these amendments to Clause 62 to allow an LEA wishing to invoke Clause 62(1) (which gives such authorities reserve powers to prevent a breakdown in discipline) as well as one or both of Clauses 16 and 17 to do so without having to invoke two distinct warning notice procedures: a Clause 15 warning notice in respect of Clauses 16 and 17 and a Clause 62(2) warning notice in respect of Clause 62(1).
Those amendments which were made in Committee will now allow LEAs to make use of these different powers in a flexible way, without having to serve
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different types of notice, which could be confusing as well as bureaucratic. The amendment now needs to be reflected in Clause 15 and that is what the amendment seeks to achieve. I urge the House to accept it. I beg to move.
Baroness Blatch: My Lords, I am grateful to the Minister for that explanation. However, can he tell the House what warning notices will now be given under the new arrangements?
Lord Whitty: My Lords, there will be a single warning notice if one wished to invoke either of those clauses for the action provided under Clause 62 and under Clauses 16 and 17. It is a single warning and one would not have to issue two distinct warnings if there was going to be an intervention.
On Question, amendment agreed to.
Clause 18 [Power of Secretary of State to appoint additional governors]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 43:
Page 17, line 21, at end insert—
("( ) Before making any such appointment in relation to a voluntary aided school, the Secretary of State shall consult—

(a) in the case of a Church of England school, a Church in Wales school or a Roman Catholic Church school, the appropriate diocesan authority; or

(b) in any other case, the person who appoints the foundation governors.").

The noble Baroness said: My Lords, this amendment responds to the concerns raised in Committee by the right reverend Prelate. We have given further consideration to the points that he made and I am pleased that we have been able to meet his concerns.
The amendment is concerned with the case of a voluntary-aided school which requires special measures and to which the Secretary of State wishes to appoint additional governors. Before doing so, he must consult the relevant diocesan authority for a Church of England, Church in Wales or Roman Catholic school. For any other voluntary-aided school he must consult those entitled to appoint the foundation governors. I beg to move.
The Lord Bishop of Ripon: My Lords, I am most grateful to the Minister. When I moved a similar amendment in Committee I received—dare I say it?—a somewhat dusty answer. I am delighted that this fresh look at the issue has produced such a positive amendment. However. I have to point out to the House that the government amendment is almost word for word the amendment that I tabled at an earlier stage. I was delighted then to withdraw my amendment in favour of a government amendment. I should also point out that I have no amendments left to move at this stage as our concerns have been so thoroughly met. As I said, I am grateful to the noble Baroness.
On Question, amendment agreed to.
Clause 20 [New categories of maintained schools]:
Baroness Blatch Baroness Blatch moved Amendment No. 44:
Page 18, line 34, at end insert—
("( ) grant-maintained schools;
The noble Baroness said: My Lords, we are now dealing with an aspect of the Bill upon which the Minister and I must agree to differ. Nevertheless, it is important for us to put the case for grant-maintained schools.
I said a moment ago that I believe it is important that, among all the other variety of schools, GM schools should remain part of the educational scene. They have proven their worth and have been very successful. No one has advanced an argument against their record. They have enjoyed delegation both operationally and financially and, to my knowledge, they have risen to the challenge very well. Indeed, so much so that the Government have tried to re-invent something akin to GM schools in their stead. However, they have to achieve the same degree of autonomy. Having read the fair funding paper, I believe that there is a great deal left to be done.
Amendment No. 90 is consequential, but Amendment No. 45 relates to democracy. The parents of the children who attend these schools voted for them to become GM schools. It was a choice made by them. They had to overcome a number of hurdles in order to become GM schools. As I have said before, many schools suffered great trauma on the route to becoming grant maintained. In fact, only this week I met with a head teacher who I think may perhaps like to talk to the noble Lord, Lord McIntosh. He could describe exactly what he and his governors went through in the process of becoming grant maintained. I seem to remember the noble Lord challenging me to say whether the police were involved in a certain incident. It was indeed a very unpleasant situation.
Nevertheless, those people fought and won through the system in order to become grant maintained. But now, at the stroke of a pen, they will lose that status and have to choose whether to become foundation schools, community schools or voluntary-aided schools. It seems to me that nothing will be lost by leaving them as GM schools and, should they so wish, allowing the parents to do what they did to become grant maintained; namely, to take a ballot of parents and make a choice as to whether or not they wish the school to become a foundation school, a community school or a VA school.
I do not think that there is much more to be said other than to point out that this is a fundamental issue of democracy. I hope that the Minister will at least accept that a number of schools have very strong views on the matter. It is interesting that it has often been said that grant-maintained schools are happy with the position. That is not the case. However, they are realists. They are resigned to the massive majority in the other place. They know that the Government will go ahead with this measure. The grant-maintained schools have worked strenuously to achieve as many favourable changes as possible under the new proposals. They have been partially successful in that. However, we should still make the case to retain them and for them to retain their
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degree of autonomy under the new arrangements. That would not in any way inhibit the Government from making progress in raising standards of education in our schools. I believe they are genuinely interested in making that progress. I beg to move.
9.15 p.m.
Baroness Blackstone: My Lords, the noble Baroness, Lady Blatch, has raised many of the same points which we covered in Committee. She will find no disagreement from this side of the House on the many positive experiences of grant-maintained schools. I readily accept that many of them have been successful. However, she completely ignores the obvious flaws of the grant-maintained system.
Three years ago we published Diversity and Excellence. This set the principles underpinning our new framework for schools; namely, diversity, school self-management, fairness and partnership. We proposed a new foundation category which would preserve the best features of grant-maintained schools. We had absolutely no desire then or now to disrupt those aspects of the grant-maintained initiative which have worked well. Our proposals in that policy document formed a key part of the White Paper and are now reflected in the Bill.
The foundation and voluntary aided categories will allow grant-maintained schools to retain many of their key characteristics. For example, governing bodies will remain the employer of the school's staff. The governing bodies and trustees of grant-maintained schools will continue to own and manage the school's premises. This is something which we know grant-maintained schools value and it will, of course, be retained. Governing bodies of grant-maintained schools will remain their school's admission authority. They will have responsibility for determining the school's admission arrangements and for allocating places to the school. On statutory proposals, governing bodies will retain their powers to publish proposals to make significant changes of character to the school.
But in recognising the positive aspects of the grant-maintained initiative, we must also address its flaws. Dividing schools from LEAs is not the way to build a modern education sector. Giving one sector preferential treatment over another led to discord. We shall raise standards through encouraging partnership and co-operation, not competition and division. It is undeniable that some schools went grant-maintained because of a poor relationship with their LEA. Others went grant-maintained in order to avoid being closed. We want to see such disagreements left in the past. This Bill establishes a new role for LEAs and places schools firmly in control of their own success. The relationship between LEAs and schools must be a constructive and productive one if the challenging targets on raising standards we have set are to be met.
However, there may be occasions where LEAs and schools disagree about the best way to secure school improvement, and that may not apply just to former grant-maintained schools. It may apply to county schools or voluntary schools. Some relationships will

623
need rebuilding. That is why we have a code of practice. The current draft reflects a consensus between all the key players—including representatives from the grant-maintained sector—about the general principles which must underpin successful working relationships, including intervention in inverse proportion to success. That is obviously sensible. It also represents general agreement on how LEAs should use their powers to ensure that schools receive the right level of support and are protected from unnecessary interference. Where disagreements occur we would expect that reference to the code would normally be sufficient to resolve the situation.
The noble Baroness will also be aware that we shall monitor LEA performance through a number of other mechanisms, such as EDPs and Ofsted inspections, to ensure that they are conducting themselves in an appropriate and effective manner. The new framework will also bring grant-maintained schools back into a local partnership with other schools. Dividing grant-maintained and LEA schools created damaging tensions. The Bill devolves power over admissions and planning of school places to a local level. These new arrangements will bring schools closer together. All schools, whatever their background, will have a role in building a consensus about how best to raise standards in their community.
I hope that on the basis of what I have said the noble Baroness will agree that once the new framework is in place we shall see an end to an obsession with structures which has so damaged the debate on education in the past decade. The stability that the new framework brings will allow schools to concentrate on achieving higher standards.
The noble Baroness wants to allow grant-maintained schools to continue in isolation from the new partnership. Her amendments seek to continue the debate about structures at the expense of standards. They leave the future of grant-maintained schools in the hands of constant parental ballots. That uncertainty is not in the best interests of grant-maintained schools, the children who are pupils in them or the education system as a whole. I therefore urge the noble Baroness to withdraw her amendment.
Baroness Blatch: My Lords, I am almost breathless with alarm at what the noble Baroness has just said; namely, that we are obsessed with structures. This Bill is almost all about structures and framework. A very small part of it is about standards. We are simply saying: leave the structures as they are. Foundation schools, community schools and voluntary aided schools will be set up, which were already part of the system anyway. I do not know whether the noble Baroness has read the Bill, but it is all about structures. Those are schools that will be structurally changed within the system. Therefore, to make that accusation of me is very strange in the circumstances.
I must ask the noble Baroness some questions. If, according to the rules, she is not allowed to answer, I should be grateful for answers by letter. When the grant-maintained schools become foundation schools or
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VA schools, they will be their own admissions authorities. But who agrees the admissions policies for those schools? Who in the future has the power to modify those admissions policies? Do foundation schools have a right of veto over any change whatsoever that may be suggested by a local education authority or which may come out of an education development plan? That is very important.
My understanding is that a proposal can be made by the local authority to close a foundation school, to enlarge it or to merge it. If that is objected to, as it almost certainly will be, the matter then goes to the organisational committee, which will decide the proposals if the votes cast are unanimous; if they are not, the adjudicator will make the decision. That was the information I received in a Written Answer from the noble Baroness.
However, there is a point that the noble Baroness has not addressed. I know that the LEA cannot change the admissions policies. I have the admissions document in front of me. There are one or two glitches in it. For example, the FAS is still spoken of as though it will remain in being. The FAS will disappear from the scene. Having telephoned an official at the department, it is my understanding that for "FAS" we should read "LEA". One then starts to become worried about some of the ramifications of the content of the amendments.
I remain concerned about the degree of autonomy of grant-maintained schools. The noble Baroness has made much of how these schools became grant-maintained and what were their motives. One matter is not arguable. It is that they have all made a very good fist of running their own schools, of rising to the challenge of full autonomy and running their budgets effectively. They have been so effective that the Government have adopted that approach as a policy.
The general perception and all the rhetoric of the Government during and since the election have been that these schools are treated more favourably; and according to the Government, that has created a two-tier system: what, then, will they lose as a result of becoming foundation schools? It would be helpful if. in a letter, the noble Baroness could spell that out. What will they lose by having their special favoured status—if that is what she believes they have had—taken away? What will be lost by amortising the favourable status across all schools? I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 45 not moved.]
Lord Whitty Lord Whitty moved Amendment No. 46:
Page 19, line 19, at beginning insert ("(subject to subsection (4A))").
The noble Lord said: My Lords, this group of amendments modifies Clause 20 which, as drafted, provides that when the new framework is established LEAs will maintain the former grant-maintained schools that are located in their area. That means that in the few cases where, before a school became grant-maintained, it was maintained by one LEA but situated

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geographically in another LEA's area, under this legislation the second LEA will inherit the school rather than the former maintaining LEA.
That will make sense where a school now has little or no connection with its former maintaining LEA, though we have recently become aware of at least one case where the school still has significant links with the former LEA but little or no connection with the LEA in whose area it is located. I trust noble Lords will recognise the fact that the school is Nonsuch High School for Girls and the former maintaining authority was the London Borough of Sutton. That does not mean that by pursuing the amendment the Government are pandering to the revanchiste ambitions of the noble Lord, Lord Tope. It is an amendment which makes sense in these unusual circumstances. We are not simply currying favour with the Lib Dems, though we hope to do so.
We consider that the general principle should still be that a GM school should be maintained in the area in which it is geographically located. However, there should be a mechanism for it to be maintained by its former LEA where that is justified. These amendments will enable the Secretary of State, in those few cases, to make an order providing that the former maintaining LEA should maintain the school rather than the area in which it is situated.
The power will be restricted to the following circumstances. First, that the school, before it became GM, was maintained by one authority and situated in another and that it is still situated outside its former maintaining LEA area; under Amendment No. 235 the former maintaining LEA or the LEA in whose area it is now situated must appeal to the Secretary of State by 30th November 1998. That deadline is needed to ensure that there is enough time to give the appropriate LEA the standard spending assessment credit for its school from April 1999.
To decide such cases the Secretary of State will consider the relative strength of the two connections. It will make sense for a school to be maintained by the LEA on whose scheme its funding is currently based, but there may be other considerations; for example, the school's age range or admissions' policy may fit one LEA's general pattern rather than another. The amendments will enable the Secretary of State, in those few cases, to take account of all considerations and reach a sensible judgment. I beg to move.
Lord Tope: My Lords, I must rise to speak to this amendment. I cannot imagine any noble Lords accusing the Government of in any way pandering to my ambitions—by that stage my colleagues were laughing so much that I was not sure what sort of ambitions the noble Lord, Lord Whitty, was describing.
I am grateful to the Minister and his department for attending to this problem. It was acknowledged that this problem, to which attention was recently drawn, was mine and uniquely mine. We have a school which was built before the war to serve what is now the London Borough of Sutton. In those days we were all in Surrey and it was not conceived as a problem.
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Since the London boroughs were formed in 1964, the school has continued to be a Sutton school, albeit it is now GM. But it is located a few yards—literally—on the Surrey side of the boundary. As currently drafted, the Bill would have had the effect of transferring that school from Sutton to Surrey. I was certain that it was neither the intention of the Government nor the Bill arbitrarily to move a school from one LEA to another almost by accident. I am therefore grateful to the Minister for recognising the problem as soon as I drew it to his attention.
The Minister knows that I would have been much happier to amend the Bill to make it clear that that was not the intention for any school. I was told that other schools were in a similar position. I gather from the response of the noble Lord, Lord Whitty, that that may be so, but that his department is not yet aware of them.
I am grateful for this amendment, which I accept. I can assure the Minister and his department that they will receive one application well before 30th November and I hope that they will look upon it favourably. In moving the amendment, the noble Lord, Lord Whitty, gave some idea of the criteria which the Minister will use in considering whether or not to make such an order. In this case, I have no reason to believe that it will be opposed in any way. My understanding is that the head of the school—I am sure she speaks for her governors—would wish for things to remain as they are. I understand that, certainly at officer level in Surrey, there is a similar view. But it would be helpful if the Minister could say a little more about what criteria he will use in deciding whether or not to make an order. I would hope that if an application is not opposed it can be readily agreed. In other circumstances elsewhere in the country where there is a disputed application, what criteria will be used to judge the basis of whether or not to make such an order?
9.30 p.m.
Baroness Blatch: My Lords, I am amused on different grounds. My understanding is that it was a Liberal plot and the Government were going along with and co-operating with it.
I make a serious point. If this can be done by agreement, that is what should happen. However, my understanding is that there is a little controversy on this issue and I think it is important that it should be resolved. What consultation has taken place between the department and the school and the department and the two LEAs? There should have been some consultation, albeit that there is a period of reflection between now and then. I, too, would be interested in the criteria that will be considered. For example, if there is an objection from any of the three parties—one LEA or another and/or the school—how will the Government come to a decision on this matter?
Lord Whitty: My Lords, the criteria would relate principally to the continuing connections between the local authority catchment area and the school. They would relate to the appropriateness of the funding and to whether the school's admission policy would fit in with the general admission policy of the two local

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authorities concerned. There is not an absolute single criterion. Those criteria would all be followed, as of course would the assessment of the opinions of the two local authorities and of the school itself. All of those considerations have already been reflected to the department in relation to the Nonsuch High School. Indeed, officials have met both LEAs and the governing body of the school. All those considerations will be taken into account. Hypothetically, other schools might be in this position, but this is the only one which is actively being pursued. With that explanation, I hope that the House will accept the amendment.
On Question, amendment agreed to.
Lord Whitty Lord Whitty moved Amendments Nos. 47 and 48:
Page 19, line 19, leave out ("is") and insert ("immediately before that day was").
Page 19, line 20, at end insert—
("(4A) Where a grant-maintained school within subsection (3)(b)—

(a) was, immediately before becoming such a school, maintained by a local education authority ("the former maintaining authority") other than the one within whose area it was then situated, and

(b) remains outside the area of the former maintaining authority immediately before the appointed day,

nevertheless, if an order made by the Secretary of State before that day so provides, as from that day the school shall be maintained (as a school falling within one of the categories set out in subsection (1)) by the former maintaining authority rather than the authority in whose area it is situated on that day.").
On Question, amendments agreed to.
Lord Whitty Lord Whitty moved Amendment No. 49:
Page 19, line 26, after first ("day"") insert ("(except in Part I of Schedule 32)").
The noble Lord said: My Lords, this amendment is the first of a batch of largely technical amendments. Most of them are not new. They fall into three groups. Amendments Nos. 211, 233 and 69 are the only new ones and are relatively straightforward. Amendment No. 211 is required because of an amendment to the Teaching and Higher Education Bill made in another place. Amendment No. 233 is a minor drafting change. Amendment No. 69 clarifies the term "maintained nursery school" and I shall come back to it in a moment. All the rest of the amendments except one relate, with a few minor drafting changes—Amendments Nos. 49 and 204—to those amendments which were tabled on the second day of the Committee stage. However, following a strenuous intervention from the noble Lord, Lord Lucas, I withdrew them, partly because I had not provided to him or to the Front Benches any prior information at that stage. Since then, as with other technical amendments, I have written to the noble Baronesses, Lady Blatch and Lady Maddock, and to the noble Lords, Lord Tope, Lord Pilkington and Lord Lucas, explaining the effect of those amendments. I shall say a little more about that in a moment.
Amendment No. 210 relates to the interface with the further education sector. That amendment was tabled on the seventh day and withdrawn in the face of fairly detailed questioning from the noble Baroness, Lady Blatch.
I shall now say a little more about each of the amendments. Amendments Nos. 49, 204 and 233 all relate to the definition of the appointed day. "The appointed day" in Clause 20 should be read separately from the same expression in Part I and Schedule 32, which deals with transitional provisions.
Amendments Nos. 62, 83, 206 and 236 deal with land and property on trust for the purposes of the school and what that means. Amendment No. 62 is needed for clarification. Where land or property is held on trust for school purposes, that should include land or property actually used for the purposes of the school and held on trust for wider purposes. That includes the purposes of the school. In a number of places the Bill refers to land or property held on trust for the purposes of the school. Where the land is held on trust for a single school, the references are fine as they are, but sometimes the school land is held by wider trusts capable of being used for a number of purposes. That is why we need this particular amendment.
Amendments Nos. 63 and 64 provide for some clarification of property transfers. Amendment No. 64 deals with property transfers when a school joins or leaves a foundation body without changing the school categories provided for under Clause 21. When categories are changed that is covered by regulations in Schedule 8. We need the amendments to clarify the former case. Amendment No. 63 provides that rights and liabilities associated with property will transfer with the property itself.
Amendments Nos. 65 and 66 deal with foundation bodies and supplement the existing provisions in Clause 21 to enable the Secretary of State to make regulations governing foundation bodies which act for a group of schools. Amendments Nos. 67, 70, 207 and 211 to 214 all deal with charitable status. These all arise from discussions we have held with the Charity Commission. The new clause provided in Amendment No. 70 (which is the main one in this group) specifies that it is the governing body of a voluntary or foundation special school which is an exempt charity rather than the school itself. It does not in any way affect the school trustees or the relationship between them and governing bodies, and neither does it impose liabilities on governors which would not have applied had the Bill specified the school as the charity. Amendment No. 67 deletes provisions about charitable status of schools and foundations in the light of that new clause.
Amendments Nos. 51, 52, 55 and 61 deal with the allocation of schools to new categories. Amendment No. 51 allows regulations to require GM schools to provide information to persons other than parents—such as dioceses and school trustees. Amendment No. 52 follows from that. Currently, Schedule 2 allows regulations to be made only on the timing of the final decision on GM schools' governing bodies but not on arrangements for the meeting to take those decisions. Amendment No. 55 deals with that.
Amendment No. 69 refers to a "maintained nursery school". That needs to be defined to make clear that it does not apply to LEA-maintained special schools which provide for pupils aged two to five. They will be treated as special schools rather than in the category of a maintained nursery school.
I now come to the batch of amendments as regards Amendment No. 210 which was withdrawn on the seventh day, dealing with the interface with the Further and Higher Education Act. That Act contains a number of references that will have to be amended. The previous government established the FE sector and included within it sixth-form colleges, which, before they entered the sector, were classified as schools. The 1992 Act includes a range of provisions that deal with, for example, how those schools should be established as FE colleges and how the asset should be transferred.
A number of those provisions are time expired, but a surprising number are still technically live and require to be updated. Although following the 1992 Act it is no longer possible to propose that a school should become a local authority maintained sixth-form college, the Act includes a provision that any school which is principally concerned with the provision of full-time education suitable for the requirements of persons over compulsory school age may be incorporated into the FE sector. Accordingly, a considerable number of sections of that Act remain live, although their principal use was related to the establishment of the FE sector in 1993. It is therefore a necessary consequence of those provisions being still active upon the statute book that the draftsmen must update them. The consequential amendments to the 1992 Act seek to do nothing more than that.
Further education matters more generally, or other issues raised by the noble Baroness, are not affected by the amendments. Nevertheless, many sections of that Act are affected by the amendments and I can explain them at length. if required, either now or in writing. I believe that I have provided most of that information already to the noble Baroness and to the noble Lord, Lord Tope. Therefore, I hope that at this stage the House will be prepared with those explanations to accept the amendments, given that most of that information has already been provided to the Front Benches opposite in detailed form.
The Deputy Speaker (Baroness Lockwood): My Lords, Amendment proposed: Page 19, line 26, after ("day"") insert ("(except in Part I of Schedule 32)"). I repeat, "Schedule 32", not "three—two"; nothing to do with the latest score!
Baroness Blatch: My Lords, I am grateful to the noble Lord, Lord Whitty, for his letter and for the explanation that he has given. I have only two questions. The noble Lord said that it would be improbable or unlikely that a school would become an FE college but that it could on rare occasions. What would be the procedure for that? It would be very unusual, so what would he the procedure for a school which is known to educate young people up to and through the age of 16
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then becoming an FE college? My other question is: what veto or what absolute protection would be enjoyed by a foundation school in such circumstances?
Lord Whitty: My Lords, I think that I am right in saying that the only circumstance in which that would happen under the 1992 Act would be where a sixth-form college transferred into the FE sector or became part of an existing FE institution. Given that most of that reorganisation occurred in the wake of the 1993 Act, it would be extremely unlikely that we would move into that situation under the terms of this legislation.
Apart from that, there is no specific additional protection. It is not easy to conceive of that situation with regard to a school which provides education from the beginning of secondary schooling through to the post-16 age group. If the noble Baroness requires further information, I shall be happy to write to her.
Baroness Blatch: My Lords, with the leave of the House, I should be grateful to have more information. The noble Lord's letter clearly stated that, in rare circumstances, a school could become an FE college and/or a sixth-form college which would be for post-16 education. All that I am asking is, in the event, however rare, of a school being considered appropriate to be closed as a school and to become a further education college, what would be the procedure, and what protection would there be for a foundation school against such a proposal. If the noble Lord could write to me about that, I should be very grateful.
On Question, amendment agreed to.
Schedule 2 [Allocation of existing schools to new categories]:
9.45 p.m.
Baroness Blatch Baroness Blatch moved Amendment No. 50.
Page 114, line 22, after ("paragraph") insert ("1 or").
The noble Baroness said: My Lords, I beg to move Amendment No. 50 and speak also to Amendments Nos. 53, 54, 56 to 60 and 89. We had an interesting debate on the subject of community schools becoming foundation schools. One knows that there was some resistance to this procedure on the part of local authorities. I am among those who believe in the freedom of schools to choose. I am sorry that it is not possible for schools, almost at Royal Assent, or at least when the framework provisions come into force, to have the opportunity to make choices. One of the concerns of the Government was that they could not allow so many schools to make that choice so quickly. If the Government believe that that many schools of the number that are potentially able to make that choice will make that choice quickly there must be some view that perhaps it is a good thing for them to do. I believe that it would happen rather slowly, just as schools which are thinking of becoming grant-maintained consider the matter very carefully. They think hard about the degree of autonomy and about leaving the cradle of the local education authority. The idea that all schools will do it immediately is perhaps a worry too far. I still press the Government not to be

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over-cautious and to allow community schools the freedom to make the choice to become foundation schools as soon as possible.
If the Minister who is to respond to this amendment repeats the same answer as last time, I should like to hear an outline estimate as to the date when the framework is likely to come into being. I understand that the period is a year. If that is the case, perhaps the Minister can provide an intelligent guesstimate as to when foundation schools will have the opportunity to exercise that choice.
Baroness Thomas of Walliswood: My Lords, in the absence of the noble Lord, Lord Rix, who has been called away on other business, it falls to me to draw attention to Amendment No. 89 which is part of this group. The amendment is an attempt to provide a period of stability for special schools because of the fears of many people that foundation status will not be desirable and we should not be positively encouraging the change from community to foundation special school status.
Baroness Blackstone: My Lords, I have some sympathy with the intention behind the amendment moved by the noble Baroness. We also believe that all schools, LEA-maintained and grant-maintained, should have a choice about which category they should be in, but there are compelling practical reasons why this choice should be phased.
The noble Baroness asked about the timetable. The new framework with the new categories will come into being on 1st September 1999. All schools will be able to publish proposals on 1st September 2000. Schedule 2 requires grant-maintained schools to take a decision on whether to accept their allocation or to opt for a different category. Their governing bodies must take that decision; it is not an option for the governing body simply to do nothing. These amendments would impose the same requirement on LEA-maintained schools. They would also be required to take an active decision on whether to accept their category or opt for another. We believe that to require all 23,000 maintained schools to go through this process at the beginning of the next academic year will create a lot of turbulence in the education system. We have therefore decided to phase the choice.
After the moratorium, however, all schools will have the option of publishing proposals to change category. It will last for one year following the introduction of the new categories on 1st September 1999. The advantage of that phasing of choice is that only those schools that wish to change category will be required to take any action. There will be no time constraints on the time by which schools have to publish proposals.
The proposals will be determined locally through the school organisation committees. We regard each new category as equally valid. We will reflect that principle in guidance to the school organisation committees. They will have to demonstrate that they have determined each proposal on its individual merits. They will be required,
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through guidance, to take particular account of the extent of support for any change of category proposals from governors and parents.
The amendments seemed to us to be the most practical way forward. They allow GM schools which will experience the most change under the new framework to choose their category at the outset. LEA-maintained schools, if they wish, will be able to choose a new category after a short period of time. I therefore hope that the noble Baroness will accept that that timetable will create less disruption. I urge her to withdraw her amendment.
Baroness Blatch: My Lords, the noble Baroness did not respond to Amendment No. 89.
Baroness Blackstone: My Lords, I apologise. Amendment No. 89 was spoken to by the noble Baroness, Lady Maddock. The Bill provides that the length of the moratorium before a school—mainstream or special—could apply to change category will be prescribed in regulations. We have indicated that we expect the moratorium to last for one year. Our White Paper and technical consultation paper suggested that all special schools should become community special schools, but responses to that suggestion were clear that it would be wrong to deny parents at GM special schools, who had voted for greater autonomy for their school, the right offered to parents at mainstream schools to participate in choosing the school's future category. That was a powerful point. The decision to give special schools a choice of category was made in that light.
We believe that special schools should be treated under the new framework in the same way as mainstream schools. They should have the same choices about change of category. We therefore see no reason why the length of the moratorium should be different for special and mainstream schools. We shall consult on the regulations governing proposals to make changes to special and mainstream schools. If, in response to that consultation, strong arguments are presented that suggest that the length of the moratorium should be different for special schools, Clause 135(7) provides the power for us to set a different moratorium. In the light of that commitment, I hope that the noble Baroness will not move her amendment.
Baroness Blatch: My Lords, I shall respond to my amendments. I am a little disappointed, but we have an absolute assurance that the procedure will happen one year after September 1999. My understanding is that September 2000 will be the date upon which they can submit a proposal; in other words, presumably they can become a foundation school the following term or the following year (2001). I do not know how long the process will take to make the choice and to become a foundation school, presumably the application could be ready to be submitted on 1st September 2000. It would be helpful to know how quickly that will be processed.
The Minister will not be surprised to know how disquieted we all are by the organisation committees. We are giving them the power to make important

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decisions. If there is any dissention at organisation committee level, the matter goes to the adjudicator who has the power to take a view different from that of the school itself. At the end of the day, the decision is taken by the organisation committee and/or the adjudicator. I have expressed my disquiet on other occasions, and we shall be talking about it in a moment. On the basis that we see a light at the end of this tunnel, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Whitty Lord Whitty moved Amendments Nos. 51 and 52:
Page 114, line 34, leave out from ("decisions") to end of line 35 and insert ("to prescribed persons;
(ca) as to the provision of prescribed information to prescribed persons;
(cb) authorising governing bodies to charge a fee (not exceeding the cost of supply) for prescribed documents supplied by them in pursuance of regulations made by virtue of paragraph (ca);").
Page 114, line 36, leave out ("such") and insert ("registered").
On Question, amendments agreed to.
[Amendments Nos. 53 and 54 not moved.]
Lord Whitty Lord Whitty moved Amendment No. 55:
Page 115, line 10, leave out from ("the") to end of line 11 and insert ("procedure to be followed in connection with the taking by governing bodies of their final decisions (including, in particular, provision as to the time by which governing bodies are to take such decisions).").
On Question, amendment agreed to.
[Amendments Nos. 56 to 60 not moved.]
Baroness Blackstone Baroness Blackstone moved Amendment No. 61:
Page 116, line 15, leave out (", as from the appointed day,").
On Question, amendment agreed to.
Clause 21 [Kinds of foundation and voluntary schools and types of foundations]:
Baroness Blackstone Baroness Blackstone moved Amendments Nos. 62 to 67:
Page 20, line 19, at end insert ("; and
(c) references to land or other property held on trust, or by trustees, for the purposes of a school include references to land or other property which—

(i) is held on trust for purposes which (whether the trust deed expressly so provides or not) include the purposes of the school, and

(ii) is used for the purposes of the school.").

Page 20, line 37, after ("property") insert (", rights and liabilities").
Page 20, line 38, at end insert ("but do not change category in accordance with Schedule 8").
Page 21, leave out lines 5 to 7 and insert—
("(f) in connection with a school leaving the group—

(i) for requiring the publication of proposals under paragraph 2 of Schedule 8 (procedure for changing category of school);

(ii) for enabling the Secretary of State to require the publication under that paragraph of proposals for the school to become a school of a category specified by him;

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(iii) for preventing a voluntary school from becoming one falling within subsection (2)(a) unless any conditions specified in pursuance of paragraph 4(2)(b) of that Schedule are satisfied in relation to the school;").

Page 21, line 13, at end insert—
("(i) for conferring functions on school organisation committees and adjudicators including any functions which might otherwise be conferred on the Secretary of State.").
Page 21, line 20, leave out subsections (9) to (11).
On Question, amendments agreed to.
Clause 22 [Maintenance and other funding of schools]:
Baroness Blackstone Baroness Blackstone moved Amendments Nos. 68 and 69:
Page 21, line 45, at end insert ("or (4A)").
Page 22, line 44, at end insert ("and is not a special school").
On Question, amendments agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 70:
After Clause 22, insert the following new clause—

CHARITABLE STATUS OF MAINTAINED SCHOOLS, ETC
(" .—(1) The following shall be charities which are exempt charities for the purposes of the Charities Act 1993—

(a) the governing body of any foundation, voluntary or foundation special school; and

(b) any foundation body established under section 21;

but no governing body of a community or community special school shall be a charity.
(2) So far as it is a charity, any institution which—

(a) is administered by or on behalf of any body to which subsection (1)(a) or (b) applies, and

(b) is established for the general purposes of, or for any special purpose of or in connection with, that body or any school or schools falling within subsection (1)(a),

shall also be an exempt charity for the purposes of the Charities Act 1993.
(3) Any foundation established otherwise than under this Act which has no property other than the premises of any school or schools falling within subsection (1)(a) shall be a charity which (subject to section 3(5B) of the Charities Act 1993) is not required to be registered for the purposes of that Act (but is not an exempt charity for the purposes of that Act).
(4) In this section—

(a) "charity" and "institution" have the same meaning as in the Charities Act 1993;

(b) "premises" includes a teacher's dwelling-house.").

On Question, amendment agreed to.
Schedule 3 [Funding of foundation, voluntary and foundation special schools]:
Lord Whitty Lord Whitty moved Amendment No. 71:
Page 120, line 32, at end insert—
("but such requirements may be imposed after the making of any such payment only if the Secretary of State is satisfied that in all the circumstances it is reasonable for them to be so imposed.").
The noble Lord said: My Lords, this amendment is one which we promised noble Lords in Committee. We brought it forward primarily to meet the concerns expressed by the Churches about the Secretary of State's power to set a retrospective condition for voluntary-aided school grant. The amendment modifies the Secretary of State's powers so that he may set a

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condition only after grant has been paid, where he is satisfied that in all the circumstances it is reasonable to do so.
As my noble friend Lord McIntosh of Haringey told this House in Committee, we expect this power to be used rarely. One example would be where, as a result of what is referred to here as "a clerical oversight"— I think that an administrative oversight is meant rather than an oversight by the clergy—the grant condition is omitted from the formal grant letter. We should want to be able to correct that omission. The governors and trustees would have been aware of the intention to set a condition.
Another example could be where a condition is not set initially—where the trusts are not examined because they seem to secure recycling within the state system—but it subsequently comes to light that the trusts have either been misconstrued or changed and do not secure that recycling satisfactorily. We wish to be able to set a retrospective condition in these circumstances in order to protect public fund investment, and we believe that it would be reasonable to do so.
In those limited circumstances, I hope that the House will accept the need for the amendment. I hope that it also meets the concerns of the Churches about the new voluntary-aided school grant condition. I beg to move.
The Lord Bishop of Ripon: My Lords, I am most grateful to the noble Lord, Lord Whitty, for moving the amendment. I expressed concerns at Committee stage and, as the noble Lord explained, the noble Lord, Lord McIntosh, made it clear that these powers to impose a retrospective condition would be used only in circumstances of administrative error. I am grateful for the clarification with regard to the word "clerical" that has been provided. The amendment satisfies the Church, as it provides us with the kind of safeguard for which we are looking. I am grateful for its introduction.
On Question, amendment agreed to.
Clause 23 [School organisation committees]:
Lord Tope Lord Tope moved Amendment No. 72:
Page 23, line 5, at end insert (". which shall specify that such a committee's powers are restricted to advising the local education authority").
The noble Lord said: My Lords, in moving Amendment No. 72 I wish to speak also to Amendments Nos. 74 and 75. I believe that Amendment No. 80 has been moved to another grouping.
We turn now to the issue of the school organisation committee and, whatever suggestion there may have been regarding other parts of this Bill that there is some sort of agreement or pact or understanding between these Benches and the Government Benches, it falls down dramatically at this point.
I am more than sad: I am disappointed that we reach this issue at this hour of the night and when the attentions of the nation, and indeed your Lordships' House, are firmly fixed elsewhere. We understand that extra time is being played. I do not feel that I can compete with that. I am not sure that I can concentrate properly with all the toing and froing. Indeed, we have
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already had a message from the Government Chief Whip that no Divisions are to be called. That rather inhibits the course of action that I might choose to take.
I am consoled a little because for more than two hours we debated school organisation committees when we were in Committee. The longer the debate went on (before a fuller House than is the case tonight) it became clear that the more Members heard about the nature, composition and function of school organisation the more concern grew in all corners of the House.
It was suggested that it was part of the devolving of decision-making; that it was part of partnership and consensus. As the noble Lord, Lord Whitty, said, all those issues are very dear to Liberal Democrats. We strongly believe in partnership and in seeking consensus. We certainly feel strongly about devolving decision-making. However, to suggest that a school organisation committee is any of those things is a travesty of those descriptions. As the debate continued, it became clearer that school organisation committees will be bureaucratic and cumbersome and that they are unnecessary and will not work. In my view, they will be far more expensive than the Government suggest.
In Committee we described the process through which a local education authority goes in drawing up its plans. Before they are agreed by an LEA they are always subject to widespread consultation and discussion. That is entirely right and proper. If consensus and agreement can be reached, that is all to the better, and that would be the aim.
If the Government believe that some LEAs do not strive sufficiently in that direction, fair enough, let them devise some measures to encourage LEAs to perform better. That is the approach I would wish to see. Once an LEA has gone through the lengthy consultation process, discussion in the education committee and almost certainly in a full council meeting and has reached agreement, I do not see why it is necessary to have another structure imposed upon it which is directly accountable to no one and cumbersome in that it comprises a number of different groups, each of which must reach a unanimous decision; in other words, any one group represented on the school organisation committee has a veto. We would all wish that circumstances never arise in which that veto could be used, but those of us with experience of such matters know that that is optimism in the extreme. It will be used and if one group on an organisation committee knows that it has a veto, it is almost an encouragement for the group to be difficult, awkward, stubborn and forced into using the veto.
The first of the amendments suggests that if we are to have school organisation committees their roles should be advisory only. Many of the bodies which will be represented on the committee—probably all the bodies—would in any event be involved in the consultation process with the LEA. Certainly they ought to be. Perhaps there is a case for formalising it into something called a school organisation committee and requiring an LEA to consult with it and for that committee then to advise the LEA as it is the elected body, democratically accountable and takes the decision. I could be persuaded of that.
I suspect that today it is my role to persuade your Lordships that that is the right way to go because it is the purpose and intention of Amendment No. 72. However, it is the nature of our procedure that that comes before what I would prefer to see, which is Amendment No. 74 and the deletion of Clause 23.
I strongly believe that a school organisation committee is not necessary. For the reasons I have outlined—that it will be burdensome, cumbersome, expensive, bureaucratic, on too many occasions unlikely to reach consensus and undemocratic—I believe that we should not have them at all.
I began by saying I regret that we are debating this issue at this time of night when attention is focused very much elsewhere. But it is an important issue. In fact, it is one of the most important issues within this Bill on which we differ from the Government. I suspect that this evening the Minister will not say anything that we did not hear in Committee. However I should say that the more we heard in Committee, not only did my colleagues and I become more convinced that we were right but so too did the rest of the House. I suspect that had we moved to a Division at that time, we should probably have won it.
That is history. It did not happen. It probably will not happen this evening in view of the circumstances and the edict which has been given to us by the Government Chief Whip. However, it is an issue to which we shall undoubtedly need to return. I beg to move.
Baroness Blatch: My Lords, I can understand the disappointment of the noble Lord, Lord Tope. This proposal by the Government is probably the most undemocratic suggestion that there has ever been. There is real disquiet about this proposition among our local government colleagues. The members of these committees will be unaccountable and will be placemen. They will be responsible for making decisions which affect the lives of children, parents and local communities. The absolute power of the adjudicator is unbelievable because there is no right of appeal. However we shall deal later with that.
I want the noble Lord, Lord Tope, to know that we support this amendment extremely strongly and if he were minded to call a Division, we should support him.
Lord McIntosh of Haringey: My Lords, my attention is not elsewhere and I shall not talk about adjudicators, as the noble Baroness did. Indeed, so much is my attention not elsewhere that, as Alan Bennett once said, wild horses on their bended knees would not drag me to watch a football match under any circumstances.
The noble Lord, Lord Tope, with the best of intentions and goodwill, misrepresents the existing situation and the Government's proposals. It is necessary to try to put that right.
First, as regards the present position, he gives the impression that the democratically elected local education authorities have full responsibility for the matters which are the subject of our proposed school organisation committees. Noble Lords and the noble Lord, Lord Tope, should know that many proposals for
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change to school organisation are currently considered not locally but by the Secretary of State. Legislation provides that all proposals published by the governors of voluntary schools, by grant-maintained schools and the promoters of new, voluntary or grant-maintained schools must come to the Secretary of State for a decision. Local authorities may decide their own proposals where they attract attention or are not called in by the Secretary of State. But where there are objections or where they are called in, a decision is made by the Secretary of State. Therefore, the present situation, which the noble Lord's amendments would retain, is profoundly centralist and quite different from that which he describes.
The Government believe that decisions on changes to school organisation should be taken at local level. When we consulted following the White Paper Excellence in Schools, there was widespread support for that principle. That is the basis for the proposals set out in Clause 23 because they aim to build also on the partnership which exists already at local level, reflecting in particular the significant contribution of the Churches over many years in the provision of schools.
What is being put forward in the Bill is still at a local level but extends the range of responsibility from the LEA to the other partners in the education process. The noble Lord speaks as though those other partners then have a veto. They do not have a veto unless an amendment which is to be considered later were to be carried. If they really need to, they have the power to say that the issue will be decided by an adjudicator and not on a local basis. That is not a veto; the matter has to be resolved. They have a veto only in the very limited sense that the matter cannot be resolved without further reference. Again, there are later amendments which would provide for an appeal from an adjudicator to the Secretary of State. That is also a centralising tendency with which we shall deal later. I cannot accept either the noble Lord's description of what happens now or his description of what we propose.
What would be the effect of Amendment No. 72; namely, for such a committee to be only advisory? The noble Lord drew attention to the consultation and discussion between partners that is already undertaken in the development of proposals for change to school organisation. The Government entirely support that and trust that it will continue. Our proposals seek to build on that partnership at local level, but the partnership is supported by the formal arrangements of Clause 23, in which proposals made by partners other than the LEA automatically come to the Secretary of State.
In giving effect to the principle of decisions at local level and building on the local partnership, we concluded that it was right to involve those other partners directly in the decision-making process. We also concluded that it was right to do so in such a way as to give their views the degree of force that they are given under this part of the Bill. So a school organisation committee, in which the key partners at local level are brought together to reach decisions at a local level, is the solution at which we have arrived.

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Our proposed new arrangements will not reduce the powers of LEAs in respect of proposals for change to school organisation. LEAs will be responsible for securing that there are sufficient school places in their area; and for that reason will draft the school organisation plan. LEAs will retain their powers to publish proposals for all types of change to community schools and to decide on any of their own proposals that do not attract objections. In that respect there is no change from the current arrangements.
Where they do introduce change is in the decision making on those proposals that local education authorities have never had the power to determine: proposals of their own that attract objections, proposals made by voluntary schools and proposals made by foundation schools. Those proposals are currently removed from the local arena to disappear for a while in the corridors of Whitehall. But in our proposed arrangements, these decisions will be made jointly by all the partners with each having a direct voice in the decisions on those proposals.
The noble Lord seemed implicitly to ask why decision-making could be devolved only to the local authority. In the provision of school places, the local education authority is only one partner. It makes decisions for only some of the schools in its area. Partnership works now because it is supported by the involvement of the Secretary of State. The school organisation committee, through its membership and its voting arrangements, maintains the balance in decision making between partners.
I simply do not accept that such a disagreement between any one of the statutory partners in the school organisation committee is an invitation for them to disagree. Psychologically, the reverse is the case. Because they know that it will be much easier if they can reach an agreement, they will be much more likely to make the necessary compromises in order to avoid going to the adjudicator. The noble Lord has misconceived both the existing situation and what is proposed in the Bill. I hope, therefore, that he will feel able to withdraw his amendment.
Lord Tope: My Lords, I must say that to be called a "centralist" by the noble Lord, Lord McIntosh, is almost a compliment. However, I wholeheartedly reject that statement. Indeed, it is actually a reverse of the use of language. Nevertheless, we are not going to agree on the issue. I talked deliberately—and I do not recant it—on the use of a veto. We require unanimity from a school organisation committee. If one member of that committee does not agree, the committee will be unable to reach a decision. In effect, that seems to me to be a veto.
In moving this amendment I studiously avoided talking about adjudicators as they are the subject of the next batch of amendments. As I said in Committee, it is difficult to talk about one without the other. However, the Minister has just done exactly that. I shall follow him in that regard. The Minister expresses great hope for this measure. I should like to join him in that, but I
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suspect that my comments are nearer to reality than to hope. When unanimity is reached—we all strive for that; as I said previously, I am a consensus politician—and there is agreement and everyone is content, that is fine. That is not what is at issue. One does not need a great structure to deal with matters on which everyone is agreed. One might need a procedure to encourage them to agree. Where we need a structure is when people do not agree.
In the case we are discussing a committee needs to be unanimous or it cannot reach a decision. But what happens then? The matter is then referred to an adjudicator. I do not see how that can be considered to be devolving decision making to a local level. The matter is handed to an adjudicator appointed by the Secretary of State. That adjudicator will not necessarily have any local connection. There is no right of appeal to anyone, anywhere. How that can be said to be devolving decision making and to be democratic defeats me. It is a perversion of language. It is easier to argue—as the Minister has just done—about school organisation committees in isolation. When agreement is not reached—and that will happen, although we all hope it will be on only a few occasions—one has to look at the other part of the package; namely, the adjudicators. Statutory school organisation committees, which are bureaucratic, expensive, cumbersome and require unanimity, and which have to refer decisions to an appointed and unaccountable adjudicator who does not necessarily have any local connections, are, to say the least, unnecessary. They are undemocratic and we strongly oppose them.
I recognise the perhaps not too serious edict from the Government Chief Whip, but more particularly the hour of the night and the fact that attention tonight is perhaps focused somewhere other than this Chamber. I shall have to withdraw this amendment. I do so with enormous regret. We shall undoubtedly return to the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.15 p.m.
Baroness Blatch Baroness Blatch moved Amendment No. 73:
Page 23, line at end insert ("; and
( ) a head teacher of a foundation or of a grant-maintained school, or of both, providing that there is at least one school of such a type or types within the local education authority area").
The noble Baroness said: My Lords, this is a somewhat defeatist amendment because we assume that the Government with their weighty vote in another place will have their way, whatever we say in this House. Therefore, we shall have school organisation committees and adjudicators. That is an undemocratic position, as the noble Lord, Lord Tope, has made clear.
If there are to be organisation committees I do not know how the Government can argue against having representatives of foundation schools on those committees, if there are foundation schools in the area. They are a separate category of school and I believe that they should be recognised, particularly as different

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arrangements apply in terms of their relationship with the local education authority and the degree of autonomy that they enjoy.
I have included grant-maintained schools in the amendment in the fervent but rather forlorn hope that they will remain as part of the diverse provision for parents and children. But if that is not to be the case, I hope that the Government will not argue against the right of foundation schools to be represented on school organisation committees. If the Government continue to argue against that—as they did in Committee—one must be extremely suspicious about what is being proposed in terms of the organisation committees, the role of the adjudicators and the status of foundation schools within their local communities. I beg to move.
Lord McIntosh of Haringey: My Lords, I find it an extraordinary proposition that the noble Baroness thinks there is something undemocratic about the large majority in another place. We have a large majority in another place because that is how the people voted. It is not undemocratic to have a majority; and having achieved that majority, it is not undemocratic to use it. So there need be no apology for the number of Labour Members of Parliament. If the noble Lord, Lord Tope, wants to discuss proportional representation, I have no doubt he will find some opportunity when it is in order for him to do so. It is certainly not in order in this debate tonight.
All schools will have the power to publish proposals of at least one sort within the new framework, including proposals to change category. There will not be any grant-maintained schools because, when the noble Baroness raised the issue of their continuance, she decided in her wisdom not to press the matter to a vote. We are clear that, where there are foundation and non-diocesan voluntary schools in a local authority area, they should be represented within the school organisation committee for the area. The paper that we have placed in the Library proposes that they be represented broadly in proportion to the number of pupils for whom they are responsible. However, that is a level of detail much better suited to regulation than to the face of Bill.
We are also clear that schools should be represented on the school organisation committee by governors. At individual school level it is the governors who take the decisions on school organisation matters. We shall not specify that it should be a particular class of school governor that sits on the school organisation committee. If the head teacher, a teacher, or parent governors are prepared to serve, we shall not prevent that. However, we do propose to restrict school representation on the committee to governors. It is right that schools should be represented. We believe it right that they should be represented by governors. That goes directly against the requirements of Amendment No. 73. I invite the noble Baroness not to press it to a vote.
Baroness Blatch: My Lords, on the noble Lord's final point, perhaps I may ask him a question. Again, I am not sure whether the rules of the House preclude him from answering, in which case I shall have to resort to
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yet another letter. If I removed the term "grant-maintained"—although I should prefer not to—and replaced the words "head teacher" with "governors" so that the category of school is quite specifically represented if there are foundation schools in an area, given that that was used as an argument against me it would be helpful to know whether that change would make a difference to the Government's response. I should like to return to this matter at the next stage of the Bill.
I was doing no more than accepting reality. I was not querying what happened at the election; I accept the reality that there is a majority. However. something rather unpleasant has been happening during the course of this year. We have seen on many occasions the wilful pre-emption of the will of Parliament. The noble Lord just said, "There will not be any GM schools". The Bill has not yet gone through Parliament. It will be for Parliament to say whether there will be any GM schools at the end of these debates. The reality is that, with such a large majority, whatever this House says Members in another place will have their view. At this stage, however, we have to bow to the will of Parliament, and it will be sovereign at the end of the day.
On the understanding that the noble Lord will give me a response as to whether he would be more accommodating to the suggestion that foundation schools should be represented if I replaced the words "head teacher" with "governors", I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 74 and 75 not moved.]
Clause 24 [Adjudicators]:
Baroness Maddock Baroness Maddock moved Amendment No. 76:
Leave out Clause 24.
The noble Baroness said: My Lords, my noble friend Lord Tope was drawn into talking about adjudicators and said much of what needs to be said. However, I found the intervention of the noble Lord, Lord McIntosh, interesting. I draw Members' attention particularly to the proposed school closure proposals "disappearing into the corridors of Whitehall", which was how he described it.
We had a discussion on this at some stage and those of us who have been involved in school closures know that it is not quite like that. People become extremely upset about school closures and usually go to their Member of Parliament, who sees the Minister, and all sorts of delegations are set up. The issue does not disappear into the corridors of Whitehall.
In relation to the adjudicator, many of us are concerned with precisely what the Minister felt happened under the old system; that is, that it would disappear into the adjudicator and there would be no way in which local people could go on putting the case about the closure of their schools. This will not be a normal quango; it will be a one-man quango, and that one man will make the final decision.
We had considerable debates on this matter at earlier stages in the passage of the Bill and it became obvious that there would be just as much controversy in a school

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organisation committee in relation to a school closure as there is anywhere else. At the moment local people are consulted and all those involved in a school closure make a lot of noise when they do not want a school to close. Indeed, I have been part of such a demonstration with parents and others.
The noble Lord, Lord McIntosh, was also misrepresenting what happens on the ground when he replied to my noble friend. At the moment, people have an opportunity to put their case and the democratic accountability goes right from the bottom to the top in Parliament. Now we have a great democratic hole in the middle; that is, the school organisation committee and the adjudicator. It is clear that that is how both Opposition Benches see the situation, though the Government fail to agree.
I hope that the Minister is right; that is, that it will not end in tears when more of these decisions are made by an adjudicator. Quite frankly, Clause 24 and Schedule 5 provide for the setting up of the appointment of adjudicators to be what I might describe as the Secretary of State's representatives on earth in various corners of the country. We do not believe that that is democratic. We do not want to see it happen and if it were not for all the things that are happening both here and outside tonight, we would be pushing this matter to a Division. However, we all know that that will not happen tonight, but we will return to it at a later stage. I beg to move.
Baroness Blatch: My Lords, I believe it is legitimate and we will not be remonstrated with by the noble Lord, Lord McIntosh, for talking about adjudicators. The noble Lord fell into the same trap into which we all fell: that is, that it is not possible to talk about organisation committees without talking about adjudicators, because we know that the operation of the organisation committee leads neatly on to the function of the adjudicator.
One does not have to go far to look at some of the powers of the adjudicator. I have been looking at the interim document on admissions policies. Paragraph 25 concludes by saying that the adjudicator will provide for disputes about the continuation of existing partial selection to be decided by the adjudicator. Paragraph 28 talks about schools with a specialism which apparently have an important part to play in the framework and will seek to ensure that children have an opportunity to develop their specific talents to the full. Nevertheless, the adjudicator will rule on disputes about existing or proposed priority by aptitude. It goes on and on as to where there are opportunities for the adjudicator to become the determining body.
This is a power too far. It is a placement appointed by the Secretary of State and the idea that it will be a local person is wrong. It will not be local. If there are 20 in the country, one must put at least two local education areas together, possibly more. I can take my own two counties—mine and a neighbouring county—Cambridgeshire and Hertfordshire, Cambridgeshire and Norfolk or Cambridgeshire and Suffolk. It is easy to see
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that many areas of those counties will be remote from this unelected person who will have the power to make a decision against which there will be no appeal.
The noble Baroness, Lady Maddock, has made a powerful case. It is one that I support very strongly. It is backed almost entirely by all Benches in this House and even by some noble Lords opposite to whom we have spoken outside the confines of this Chamber. The local government associations and indeed the local authorities themselves are decidedly concerned about this.
The noble Lord, Lord McIntosh, made much of things being lost in the corridors of Whitehall. But at the end of the day responsibility should lie with the Secretary of State and the Ministers in the department. I have been one of them and took my job very seriously in terms of receiving deputations, receiving parent bodies and listening to the cases put by the relevant Members of Parliament. I prefer that because they are elected people. They are elected and they can be unelected. An adjudicator cannot be. He is there by the patronage of the Secretary of State. The case is absolutely overwhelming and it will have my enthusiastic support.
10.30 p.m.
Lord McIntosh of Haringey: My Lords, the noble Baroness, Lady Blatch, is right to say that it is impossible to separate consideration of the school organisation committee from the adjudicator. If I rebuked her for moving on, I apologise, because, as she rightly said, I did myself. I also apologise to both noble Baronesses for the imprecision of my language when I referred to the corridors of Whitehall. Of course I meant the rooms around the atrium and sanctuary buildings of Great Smith Street, where nothing so vulgar as a corridor is allowed to appear.
There are serious points behind this provision. The school organisation committees provide the framework for local discussion and agreement. But we have always recognised the need for a mechanism to cover occasions, which we anticipate will be relatively rare, when local agreement cannot be reached. We hope it will not be necessary, but we must provide for it. We propose that the role should be fulfilled by an adjudicator appointed by the Secretary of State.
The noble Baroness, Lady Blatch, referred to this as patronage. But I have to stress that we will advertise the posts, we will recruit openly and we will follow guidance set down by the Committee on Standards in Public Life in making the appointment. We have placed in the Library a statement on the adjudicator which describes in a little more detail our view on the functions, operation and appointment of adjudicators. That statement will provide a basis for consultation. Other matters of largely administrative detail, including the procedure to be followed by adjudicators, will be set down in regulations, and we shall consult broadly on the content of those regulations.
The adjudicator will look again at proposals, comments and objections and the reasons for disagreement at local level. In other words, he will not simply be operating in some bureaucratic vacuum. The

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adjudicator will consider all cases in the light of principles set out in public guidance from the Secretary of State and, as appropriate, the school organisation plan. The adjudicator will make an independent judgment on the relative merits of each case, based on the facts, and against those principles. But in all cases decisions will be judgments between restricted options.
I can go into more detail if noble Lords wish me to about the appointment, payment and terms of reference of adjudicators but I think that the House would probably wish to be spared from that. The payment will be roughly the level currently paid to the chairs of special education needs tribunal panels.
Adjudicators must be separate from any concern that decisions have been prompted by political considerations and therefore must be demonstrably independent of the Secretary of State, of local authorities and of other bodies. Perhaps most importantly, adjudicators must also be able to keep an objective perspective in order to be able to weigh competing arguments and be accepted for their ability to do so. They will be excluded from cases in which they have had prior involvement or might otherwise be regarded as parti pris.
There is a great deal of paranoia in the reaction of noble Lords to the concept of the adjudicator. It arises from a suspicion which I recognise—although I do not agree with it—about the role of the school organisation committees. I believe that those views are unfounded. The alternative to the long stop which we have provided in the role of the adjudicator would be back to the centralising tendency of the Secretary of State. The noble Baroness was a Minister in a department herself. If she believes that decisions are taken purely independently by those elected to do so rather than by officials, then I wonder at the role she was playing in her capacity as a Minister. She acted on advice. She was obliged not just by tradition but by statute to act on advice. She would have been in terrible trouble if she had not done so. Advice is no more democratic in that sense than the role of the adjudicator which we have described and are proposing in this Bill.
Lord Mayhew of Twysden: My Lords, before the noble Lord sits down, does he not agree with me that acting on advice is different as a concept from acting in accordance with advice? I understood the first part of what the noble Lord said as stating that a Minister would have to act in accordance with advice. If he is saying that, will he, on reflection, not accept that that is a serious mistake? Does he not accept that Ministers in this particular jurisdiction and in many others listen to what is said to them by, among other people, Members of Parliament? Is the noble Lord suggesting that it would be wrong for a Minister to act in accordance with what a Member of Parliament has suggested, notwithstanding that the official advice might be otherwise? Will it be open to an adjudicator to receive representations from a Member of Parliament when a case has gone to the adjudicator in the event of a disagreement from a school organisation committee?
Lord McIntosh of Haringey: My Lords, as regards the noble Lord's first point, I would be the last person
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to cross swords with him in view of his distinguished career in government. The point I was making was a much more simple one; namely, that a Minister in making a decision whether on advice or in accordance with it is not acting as an elected politician but as someone who has the responsibility of taking into account the facts of the case. In answer to his second question, of course it will be open to an adjudicator to receive representations from a Member of Parliament or from anyone else.
Baroness Blatch: My Lords, before the noble Lord sits down and with the leave of the House, may I say that no Minister below Secretary of State actually took those decisions. There was a great deal of activity. One listened to delegations from parents and delegations from Members of Parliament. One culled all the information and one was advised by officials. After taking all that advice and coming to a view about the recommendation, it was put to the Secretary of State, who took the decision on the basis of all that information, including ministerial advice. At the end of the day the decision was taken by an elected Member. A great deal of activity is cut out in this process. If someone has an army of people around him, it will become even more expensive. As I believe the noble Baroness, Lady Maddock, said, it is a quango post and unelected. It is a placemen post and not accountable to anybody.
Lord McIntosh of Haringey: My Lords, if I am being asked a question before I sit down for a second time, my answer is that I am in no position to question the noble Baroness's description of the way in which government operated when she was part of it.
Baroness Maddock: My Lords, after all those interventions, which I am not sure were entirely apposite, perhaps I may reply to my amendment. I found some of the Minister's remarks somewhat surprising. If carried to logical conclusions, he was saying that in many cases we might as well have a dictatorship and that at any level of government elected members should not be relied on to make decisions. I found that disturbing, but it highlights why we are so concerned about what is happening here. I am concerned that those who are democratically elected should be making the decisions. Politics does come into this—quite often—and I regret that in some cases that happens when perhaps it should not. Many decisions are not particularly political, but come down to common sense and to the question of what is the best value or what is best for everybody in any area. In terms of school closures, it tends to be money that makes things political.
I have not been convinced by the Minister. In fact, his comments about the way he thinks decisions are made and the right of those who have been elected to make those decisions worry me no end. I am sure that we shall return to this again, but at this exciting stage—I am not sure whether we have the latest news of the match—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blatch Baroness Blatch moved Amendment No. 77:
After Clause 24, insert the following new clause—

RIGHT OF APPEAL AGAINST DECISION OF ADJUDICATOR
(" . The governing body of any school or the parents of pupils at any school affected by decisions of the adjudicator with respect to matters referred to him concerning or in connection with—

(a) school organisation plans under section 25 below;

(b) directions given under Schedule 7 concerning rationalisation of school places; or

(c) admission arrangements under sections 88 and 89 below,

shall, in all cases, have a right of appeal to the Secretary of State.").
The noble Baroness said: My Lords, I have the opportunity to discuss this amendment only because the noble Baroness, Lady Maddock, withdrew the previous amendment. If the House had taken a view on the previous amendment, this amendment may have fallen.
If the role of the adjudicator is to survive after the Bill has passed through both Houses and Parliament has given its assent, it is fundamental that there should be a right of appeal to the adjudicator. It is conceivable that a local authority, having done all its work, may make a recommendation about a school; that that recommendation may go to the organisation committee, on which there is one dissenting voice; then that decision moves on to the adjudicator. As I understand the paper on the adjudicator, the adjudicator is free to accept the majority view; he is free to accept the minority view or he is free to reject both those views and to propose an alternative decision which will be the final word. That is the most undemocratic proposal to have come from this Government. I beg to move.
Lord McIntosh of Haringey: My Lords, I am afraid that this is one of those cases where nothing will bring us together. We have a profound disagreement about the role of the Secretary of State and about local decision-making. I shall not go into the nature of decision-making in departments. I have already got into enough trouble by venturing amateur opinions on that subject, so I shall steer clear of it.
The issue before us is straightforward. Where we have gone to great lengths to secure that as far as possible decisions shall be taken at local level by those who are responsible—I refer not just the LEAs but to the schools, the diocesan and Church authorities and to all others who are necessarily involved in the issues considered by a school organisation committee—and where we have provided only for those, we hope, rare cases where there is no agreement (despite all attempts at mediation) for the provision of an adjudicator, the last thing that we want is for the matter to be returned to the Secretary of State for a final decision on appeal, as is provided for in the amendment.
The whole thrust of the Bill has been against central control of school organisation and other educational matters. We are profoundly opposed to this amendment.
Baroness Blatch: My Lords, the noble Lord will not be surprised that I am disappointed by his reply. The thrust of the Bill is that, where the Government do not want to take difficult decisions, they pass them on to third parties—in this case, to the adjudicator and, in the
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case of grammar schools, to the people, in a rigged ballot system. I believe that that is a wholly unsatisfactory answer. The organisation committee with responsibility for determining a decision following a proposal from the LEA is made up of the Further Education Funding Council which may have nothing whatever to do with, say, the primary school. Church authorities may have nothing to do with the proposal because there is no Church interest whatever. Governors of schools may have nothing to do with the proposal, in particular as the noble Baroness and noble Lords have rejected the idea of having all categories of schools represented on this body; and the LEA is involved only as a small part of the whole. That is the so-called local democratic body. It is unelected and is placed there by the Secretary of State.
The noble Lord makes much of harmony and co-operation at local level. Where there is no dissension at local level these decisions do not even go to the Secretary of State. But where one is talking of a merger, a closure, the removal of a sixth form, the ending of selection—whatever it may be—almost always there is dissension. What is particularly distasteful about the proposals is that if the dissension is on the part of the governors of the school affected by the proposal, or if the dissension is on the part of the LEA that is outnumbered on the organisation committee, and it goes to the adjudicator that dissension counts for absolutely nothing because it is not part of the decision-making process. I do not believe that that is democratic. If they are to proceed with this undemocratic process the least the Government can put in place is a right of appeal to the Secretary of State against the decision of an adjudicator, in particular if an adjudicator arrives at an alternative solution that is no part of the proposals of the LEA or the organisation committee but which has been dreamt up because it is one way of solving the problem. I do not believe that the Government can defend such an indefensible position. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 78 not moved.]
10.45 p.m.
Clause 25 [School organisation plans]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 79:
Page 24, line 2, at end insert—
("( ) The matters prescribed for the purposes of subsection (3) shall include the provision which the authority propose to make during the period in question for children with special educational needs.").
On Question, amendment agreed to.
Lord Pilkington of Oxenford Lord Pilkington of Oxenford moved Amendment No. 80:
Page 24, line 16, at end insert—
("( ) requiring that the draft plan shall not be approved by the school organisation committee, or referred to the adjudicator, if the representatives of the relevant diocese or dioceses of the Church of England for the area of the local education authority, or the equivalent representative of the Bishop of the Roman Catholic church concerned, are opposed to the proposal;").
The noble Lord said: My Lords, I beg to move Amendment No. 80. To some extent the noble Lord, Lord McIntosh, has made matters clear in relation to this amendment. The amendment is concerned with denominational schools and touches on the complex issue of the organisation committee and adjudicator. Noble Lords will realise from earlier discussions at Report stage, that all sides agree on the important contribution that religious denominations, particularly the Anglicans and Roman Catholics in terms of size, have made to education over the past 100 or 200 years. But we also agree on the importance that many of our citizens attach to being able to attend a denominational school. Possibly that view is held more passionately by Roman Catholics than Anglicans, but it is certainly a view held by many people.
The purpose of this amendment is to protect denominational schools from possible closure. As the noble Lord, Lord McIntosh, made clear—I congratulate him in that regard given the many myths surrounding this subject—to say that school organisation committees have the right of veto is untrue. But one element of a school organisation committee can dissent and pass the matter on to the adjudicator who makes the decision. That is the key element.
The Church is to a degree confused about this. I quote a letter from Canon Hall, General Secretary of the Anglican Board of Education. He said—the noble Lord, Lord McIntosh, said that it was false—that,
"Such decision will be taken by school organisation committees, on which the Churches will have a veto".
It does not have a veto; it has the right to pass it on.
If the committee passes it on, as is obvious, the adjudicator has the final decision. It is acknowledged on all sides of the House that he could close a Church school. I said in Committee that this has caused trouble in Scotland. An LEA has argued that a school should be closed and Cardinal Winning has questioned the decision. If the Bill became law, there would be no right of appeal.
The amendment would give the Churches a genuine veto. In other words, what Canon Hall said about the Churches having a veto would be realised. Many of the dioceses are worried. The Diocese of Leicester has said:
"It would not be satisfactory for these arrangements to be left to regulations which can be changed by the Government at any time. Such arrangements should be laid out in the Bill".
I shall not enter into a discussion of the adjudicator's powers. He will obviously have to have the wisdom of Gamaliel and the virtue of an archangel. There will be no right of appeal. I am very much on the periphery of the Church. I have heard rumours—no doubt the right reverend Prelate will be able to tell me this—that the Churches have had discussions with the department and it has given the Churches guarantees on this point: denominational schools will not be closed without a guarantee of places being made available within easy access of the school.
If that guarantee has been given, it should be stated clearly before Parliament. I do not want to hear weasel words or talk about closed doors. Have the Churches been given a guarantee that if the adjudicator closes a
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Church school there will be denominational provision? If the Government have given that assurance they should place it on the face of the Bill or make a ministerial statement to Parliament.
The right reverend Prelate should be saying this rather than me. I have never been near being a bishop in the Church of England nor ever will be. Since 1870 the churches have co-operated with the Government. They have in effect had the right of veto because of the ownership of their land and buildings. They paid a great deal before the 1944 Act. That was without detriment to the co-operation. If the Government accepted my amendment and gave the Church the right of veto, which the noble Lord, Lord McIntosh, acknowledged it would give—one of its leading officials thinks it has it, otherwise why would he write to The Times in that vein—they would not need to worry—if history is any guide—about co-operation. The right would not be used in an obstructive manner.
Unless the amendment is accepted, the adjudicator will be the judge of the closure of Church schools. My amendment would fulfil what seems to be the intention of the Government and the Churches. At least we would then know where we stood. I want to hear clearly from the Government Front Bench what assurance has been given to the Churches, so that the House might know the position. I beg to move.
The Lord Bishop of Ripon: My Lords, I was a little too sanguine when I said earlier today that we had no concerns left. There is at least one concern which has been raised by Amendment No. 80 moved so passionately by the noble Lord, Lord Pilkington of Oxenford. It has been said to me that the Churches are supporting the Government because of the concessions we have received. I need to make it clear that in every case where the Churches have a concern we have raised it. We have not been slow in making our concerns known. Where we have no concern, we have been content to leave the Bill unamended. We made public our very many concerns before the Bill was published, as a result of which the Bill was considerably reshaped. Since the publication of the Bill we have raised well over 50 issues: some through the Department for Education and Employment, some through amendments in Committee. In each case, after careful negotiation, our concerns on these issues have been met. Where there is a concern, we are therefore quite prepared to continue raising it.
I now refer to the concern raised through this amendment, and I am most grateful to the noble Lord, Lord Pilkington, for moving it. He has sketched out the scenario perfectly clearly. If a school organisation committee should disagree over the closure, shall we say, of a Church school, the Church part of that committee has the power to refuse to accept that decision; but, as the noble Lord has made quite clear, the matter then goes to the adjudicator. I cannot comment on the letter written by Canon Hall to which he referred, since I have not seen a copy of it; but we are quite clear as to what the position is.

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When I spoke at the Committee stage in support of a similar amendment I said that my purpose in doing so was to attempt to draw out the factors to which an adjudicator would need to pay regard in reaching a decision. It seems to me that that is precisely the point which has been raised by the noble Lord, Lord Pilkington, this evening. What are the factors to which an adjudicator has to pay regard? We did talk earlier about the undertaking that the total proportion of denominational places in school provision should not be reduced. Might I ask whether that would be a consideration which an adjudicator would have to take into account? Would it be the case that guidance would require an adjudicator to take into account the need not to reduce the total provision of denominational places? If that were to be placed as a requirement on an adjudicator, then I think our difficulties in relation to closure would be very considerably reduced. I look forward to the Minister's response.
Baroness Blatch: My Lords, perhaps I may ask the Minister a question. In the event of a whole LEA ballot for the demise of selective education in grammar schools taking place and being successful, and reorganisation plans are drawn up, does the LEA determine those reorganisation plans? In a county like Kent or an area like Trafford it would have to be a very substantial plan. That is the first question: who would determine? Would the LEA determine it and then go to the Secretary of State, or would it go to the organisation committee and then on through the adjudicator process?
Secondly, if one or more of the schools in the area is a school with a religious ethos and it has to go as part of the reorganisation because it is not viable as a non-selective comprehensive school, and therefore it either has to be merged or taken out altogether, what protection is there for retaining denominational choice in that area, if there is not another school of the same denomination within travelling distance, which is unlikely to be the case? What protection is there for that? What right does a denominational school have for making certain that the denominational preference is retained, if not enhanced, in the process of reorganisation following a successful ballot to end selective education in a whole LEA ballot area?
11 p.m.
Lord McIntosh of Haringey: My Lords, in introducing this amendment the noble Lord, Lord Pilkington, has acknowledged that it does in fact provide for a veto. It does not just provide for a veto; it provides for a veto at a very early stage in the process. It is still not clear to me whether the noble Lord understands the relationship between the preparation of a school organisation plan and the publication of specific proposals.
In discussing previous amendments, we have talked about the publication of specific proposals for the alteration of a school's status, the future of schools, or whatever, which require and have always required statutory procedures to be gone through. But the
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preparation of the school organisation plan for presentation to the school organisation committee is the responsibility of the local education authority.
The amendment states:
"requiring that the draft plan shall not be approved by the school organisation committee, or referred to the adjudicator, if the representatives [of the Churches] are opposed to the proposal".
Therefore, the amendment is clear in stating that the Churches would have the power to prevent the completion by the local education authority of a school organisation plan, whether or not there are any proposals for statutory changes and, if there are to be such proposals, before the statutory procedures are embarked upon. In that sense, it is not only a veto but an early veto.
The school organisation plan will help by setting a context against which decisions will be made. In Committee, the noble Baroness, Lady Blatch, talked about the medium-term plan produced in the authority of which she was a member. The school organisation plan might look very similar to that and it might be useful both in identifying where proposals might be required and in reaching decisions on the proposals when they come forward. But it does not replace individual proposals. Nor would we expect it to make reference to individual schools. If a conclusion is reached within a school organisation plan that, for example, there is a need to add places in a particular area, proposals will still be required where the addition of places is significant. Those proposals will come to the school organisation committee.
It is not at all clear to me that the noble Lord, Lord Pilkington, has understood that distinction.
Lord Pilkington of Oxenford: My Lords, perhaps with the permission of the House I shall be allowed to give an explanation. I am prepared to accept the criticisms of the noble Lord as regards the wording of my amendment. If necessary, I will come back at Third Reading with a revised version. The noble Lord is always helpful over my amendments. However, I am concerned about a school closure. If a school closure is put before a school organisation committee and the diocesan representatives disagree, I am opposing the matter being left entirely to the adjudicator. That is my position and I am prepared to reword the amendment. I thank the noble Lord for his assistance.
Lord McIntosh of Haringey: My Lords, I thought that that was the case. I am glad that we are clear about where we stand.
If we take what the noble Lord means rather that what the amendment says, we do not accept that it is right for one of the partners to be given an absolute veto over the decisions of the committee in the way that the amendment proposes. There must be a way of reaching a resolution in respect of which there is consensus. That is the whole purpose of the school organisation committee exercise.

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The Church groups will have the same opportunity as all other groups to register their views and should have no greater powers of veto than other groups if we are to maintain and continue the existing balance of powers and responsibilities.
I will now qualify that statement. The House will be aware that in the context of class sizes we have recently made a commitment that our intention to reduce infant class sizes will not lead to a reduction in the relative numbers of denominational places within an authority. In the same way, the guidance we shall issue to adjudicators to assist them in the difficult task of reaching decisions will make it clear that where the relevant Church group on the committee has voted against closure of a denominational school an adjudicator, in taking the final decision, shall not reduce the proportion of denominational places within the authority. That goes slightly further than the "take into account" phrase which the right reverent Prelate used, and I hope he will agree that it is in accordance with a letter which my noble friend sent to him yesterday. I hope he will agree that it meets the points which he raised in particular.
Therefore, that does not mean that we can accept this amendment. It would disrupt the balance of partnership between local providers, a partnership that we are trying to maintain. But with the commitment that I have given to including in guidance to adjudicators that the proportion of denominational places within the authority should not be reduced, I hope that the noble Lord, Lord Pilkington, will feel able not only to withdraw the amendment but not to put forward a better amendment next time because the points required by the Churches have been met.
The noble Baroness, Lady Blatch, asked about grammar schools. Let us discuss those when we reach our discussions on that. We must not assume that a closure would necessarily flow from a ballot on grammar schools. I really believe that it is better to discuss the issue fully in context rather than dealing with it now.
Lord Pilkington of Oxenford: My Lords, I thank the noble Lord for his assistance in drafting my amendments. The problem will arise if no consensus is reached on the school organisation committee. Secondly, denominational schools are extremely different from other schools in that situation since there are many people in the country who feel passionately about attending their denominational schools. It may be that Roman Catholics feel more passionately about that than Anglicans, but certainly many Roman Catholic families feel extremely strongly about that.
I am rather mistrustful of the promise which the noble Lord gave to the right reverend Prelate but I shall look very closely at what he said. The Minister said that denominational places would be provided in a local authority area. I think of a county like Kent, which is enormous. Perhaps the Minister will add, which would please me somewhat more, that denominational places will be provided within travelling distance. If a denominational school were closed in, for example, Maidstone or Canterbury, it may be necessary to travel
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40 or 50 miles, because sometimes those schools do not exist nearby. Therefore, I ask the Minister to meet the spirit as well as the letter of the law.
It is late at night and I shall consider this matter. I do not promise not to come back on Third Reading. I may do. However, I shall read what the Minister said and I ask him to send me a copy of the letter that was sent to the right reverend Prelate. I am a free negotiator. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 [Proposals for establishment or alteration of community, foundation or voluntary school]:
Lord Monkswell Lord Monkswell moved Amendment No. 81:
Page 25, line 31, after ("community") insert (",voluntary").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 82 and 195. The genesis for these amendments is the representations that we have received from the Steiner Waldorf community and, in particular, the debate that was initiated by the noble Lord, Lord Elis-Thomas, in Committee on the amendments which he put forward at that time.
The other point I make is that another aim of these amendments is to assist the Government by providing them with new powers. I shall briefly present the amendments and present some arguments for them.
Amendment No. 81 inserts the word "voluntary" in Clause 27(1). The effect of that would be to give the LEA power to bring forward proposals for a new voluntary school where the people who would normally promote such a new voluntary school do not necessarily have the expertise nor the resources to scramble through the bureaucracy of education legislation.
Amendment No. 82 amends Clause 27 to give authority to the promoters of a new school to ask the Secretary of State to sanction an alternative curriculum to the national curriculum. Amendment No. 195, which is an amendment to the Education Act 1996, provides that an alternative curriculum to the national curriculum may be promulgated by regulation and applied to certain designated schools.
In researching the background to these amendments, it became very clear to me that the Government have the power to promulgate a single national curriculum and that they also have the power to disapply it or to apply it with some modifications. However, the Government do not have the power to promulgate an alternative curriculum to the national curriculum.
While the key purpose of these amendments is to provide a mechanism for schools such as the Steiner Waldorf schools to become part of the state system and receive some public money while retaining their distinctive school ethos and curriculum, there is also another aspect that I should like to highlight; namely, the saving of public expenditure. I shall give the House two examples. The first is an existing Steiner school with, say, 400 pupils. If it gets into financial difficulties, it would have to close, leaving 400 extra pupils to be educated totally at taxpayers' expense. However, if it could become a voluntary school which received some

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money from the state and some from the Steiner community, the schooling of the children would be undisturbed and public money would be saved.
My other example is the development of new voluntary Steiner schools. I believe that there is a significant demand for such schools throughout the country. The provision of some public funds would actually reduce the number of children attending state schools totally funded by taxpayers. I hope that these amendments will overcome the technical flaws identified by the Government in Committee and that they will build on their acceptance of diversity in education.
In conclusion, I should also point out that we have heard about the development of EAZs and the fact that the national curriculum might be disapplied. I hope, therefore, that the Government recognise that, by accepting my amendments, they would have a mechanism to ensure that an alternative curriculum within those zones could in fact be promulgated by them rather than having a situation where no curriculum was promulgated, thus leaving things in limbo. I beg to move.
Baroness Blatch: My Lords, I should like to express my support for the noble Lord, Lord Monkswell. The Government appear to have buried all their past prejudices and to have moved into the area of pluralism; indeed, that is certainly the case with education action zones, although they have a blind spot about GM schools, which is such a pity.
I believe the point that the noble Lord is trying to make is a general one for pluralism but the specific hook upon which it is hung is the Steiner Waldorf schools. Here we have a group of schools attaining comparable results at GCSE and at A-level. It seems to me that we should worry less about the route to that if at the end of the day the attainment is at least comparable and in some cases better than many of our own schools. We ought to be open minded about them coming into the mainstream sector.
Further, they do have something offer. I believe that they have a curriculum which is conducive to some young people who are for one reason or another not suited to and are misfits within mainstream education. Again, we should be looking at innovative ways of tackling that kind of issue. Therefore, I should like to support a blow for pluralism.
Baroness Maddock: My Lords, I also rise in an effort to try to persuade the Government to look more closely at the work of the Steiner Waldorf schools. I spoke in Committee on the matter, and I have experience of schools in the constituency that I used to represent. The noble Baroness, Lady Blatch, has just mentioned the considerable success achieved by these schools, particularly as regards children who have difficulties fitting into other schools. The Minister talked earlier tonight—this has been echoed by other noble Lords—about partnership and innovation. It is clear that these schools are successful. It is not as if they are asking for a curriculum that is not approved.
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They are saying the curriculum must be approved, but that it may be a different kind of curriculum. Judging from the response we obtained from the Government on a previous occasion, I imagine they will not be willing to go that far. Will the Minister give an undertaking that if the Government are not prepared to accept the amendments, they will establish a dialogue with the Steiner Waldorf Foundation to participate in that foundation's innovative and exciting developments in education? I believe that has occurred for a number of years. I hope the Government will consider establishing a dialogue with the foundation.
11.15 p.m.
Lord Elis-Thomas: My Lords, I support the amendment moved by my noble friend Lord Monkswell and echo what has been said on the Liberal Benches. I believe these amendments take further the discussion we had at Committee stage. I hope that my noble friend the Minister will address the question of schools within the school system that deliver the equivalent of the targets of key stages of the national curriculum but within a different timescale and in a different form.
It seems to me that there is an important issue here in terms of pluralism within the system. I draw to my noble friend's attention, as I did in Committee, the study on the aims, methods and curricula of Steiner Waldorf education edited by Martyn Rawson, and in particular to the final chapter of that work which compares in detail the mathematics curriculum, the science curriculum and the language curriculum of the various key stages as delivered within the Steiner Waldorf school system and as delivered within the national curriculum. I believe that proves conclusively that the equivalent of the national curriculum is being delivered. It is time that we moved on from a prescriptive form of national curriculum. As we have already heard, the department may consider it appropriate to do that in certain areas.
Surely here is an internationally recognised school system of high standing, backed by its own specific approach in terms of educational skills, teacher training and delivery and strong parental support. Here we have a strong, pluralistic movement within the school system. Surely that should be recognised. I echo what has been said about the need to have a dialogue between the education department and this foundation to ensure that the benefits of this form of education are recognised within the state system and that they become part of best practice which is available throughout a genuinely pluralistic education system. I hope that the Minister can make some positive comments on this matter. I am grateful to my noble friend for moving the amendment.
Baroness Blackstone: My Lords, I am afraid that I shall disappoint my noble friend. The noble Baroness, Lady Maddock, was right in predicting that would be the case. That is probably because she understands what these amendments seek to achieve. I shall discuss that in a moment. In saying that, I do not in any way want to suggest that Steiner schools do not have a contribution to make, but they are independent schools outside the state system. I shall certainly take back to

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the department the suggestion that there might be some dialogue with them. Perhaps that is something we can pursue.
I am afraid these amendments represent an attempt to change radically the arrangements that this Bill seeks to put into place. They would affect both the framework of schools and the curriculum taught within them.
The voluntary sector originated from independent and, for the most part but not exclusively, religious promoters establishing schools. LEAs have never been able to establish voluntary schools. This Bill continues that tradition. Each of the categories of the new school framework will have distinctive characteristics. Characteristic to the voluntary category will be that new schools can be established only by independent promoters, not by LEAs as these amendments propose.
There are good practical reasons for that. The voluntary category will, as now, consist of schools whose premises are owned by foundations. Having a foundation will be a condition of entry to the category, and there will be two types of foundation: existing private law foundations, whose trustees own part or all of a school's premises, and new statutory group foundations, which Clause 21 of the Bill enables schools to set up. It would not be right for LEAs to use their resources to endow a private law foundation. As for group foundations, those will be voluntary associations of existing schools.
LEAs will have the power to establish community and foundation schools. They will give them enough flexibility to secure the supply of school places in their area. There is no need to enable them to establish voluntary schools. Moreover, it does not make sense for them to do so.
Turning to the amendments which refer to alternative curriculums, the national curriculum sets the framework for teaching in maintained schools. It defines children's entitlement to a rich and varied education, and is therefore central in determining their educational experience. It shapes parents', teachers' and employers' expectations of the skills and knowledge that children will acquire during their school years; and it sets the framework for the Government's drive to raise standards in schools.
The Government's position is therefore to regard the national curriculum as a central plank in our campaign to raise educational standards, to uphold its place at the statutory core of the school curriculum and to adjust it where necessary to help schools play their part in the campaign.
The Government's actions are aimed at making the national curriculum more inclusive and at tailoring it to changing needs in education. The national curriculum remains our benchmark. My noble friend's amendments, however, by seeking to give equal status to other curriculums yet to be specified—he explained that he is applying these amendments to Steiner schools, but they could be picked up by other independent schools—would undermine the place of the national curriculum,
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with the guarantees of breadth, balance and rigour that it provides. Regretfully, therefore, I cannot accept the amendments.
Lord Monkswell: My Lords, I thank all noble Lords who have contributed to the debate. It has shown that there is wide-ranging support on all sides of the House for the idea of pluralism within our education system.
I perfectly understand that my Amendment No. 81 is probably not very sensible, given my noble friend's explanation. However, I would point out that Amendment No. 195 gives an extra power to the Government to recognise an alternative curriculum. They do not have such a power at present. The Government can only disapply the national curriculum, apply it, or make modifications to it. They have no power to promulgate a different curriculum from the national curriculum.
I wonder whether the Government might recognise that fact and think that there may be an occasion in the next few years when they might see it as beneficial to have the power to promulgate a different curriculum. We do not know what changes will happen within the education system over the next few years. We have the introduction of education action zones, and there are other factors. It would be a pity if we had to wait some years for a relevant education Act before the Government could take powers to promulgate an alternative curriculum.
I recognise the willingness of the Government to communicate and have dialogue with the Steiner movement in particular. However, I hope that they recognise that having the power to promulgate an alternative curriculum could be useful for them in the future. It may be that they will never have to use it; but it would be available in the event that it was useful to do so.
Amendment, by leave, withdrawn.
[Amendment No. 82 not moved.]
Clause 29 [Notice by governing body to discontinue foundation or voluntary school]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 83:
Page 29, line 40, leave out subsection (14).
On Question, amendment agreed to.
Schedule 6 [Statutory proposals: procedure and implementation]:
Lord Whitty Lord Whitty moved Amendment No. 84:
Page 129, line 8, after ("prescribe") insert ("the").
The noble Lord said: My Lords, in moving Amendment No. 84 I shall speak also to Amendments Nos. 85 to 88, 125, 126, 198, 202, 208, 215 to 219 and 222 through to 232. These are technical drafting amendments and are specific changes suggested not by Ministers or the department but by the parliamentary draftsman. Clearly, in putting together a Bill of this size there will inevitably be drafting amendments which make the Bill easier for the reader, introducing cross-references or clarifications. This group of amendments all fall squarely into that description.
I can assure noble Lords that these amendments contain no matters of policy at all. They are the result of a professional suggestion to improve a professional job of work. Despite any hesitations that noble Lords may have, they do not themselves raise policy issues. I beg to move.
Baroness Blatch: My Lords, I rise simply to make this point. The Bill was printed last November/December and we are now heading for the end of the Session yet we are still receiving large tranches of amendments. Is this positively the last group of technical amendments?
I know that these amendments have been blamed on counsel. However, my understanding is that counsel drafts all amendments and we have had large groupings on every single day that we have met on this in Committee, with technical amendments that have been afterthoughts, corrections and a rewriting of the Bill. It seems to me that we have had a surfeit of amendments and I wondered whether this was the last we could expect.
Lord Whitty: My Lords, I believe that during the rest of Report stage further technical amendments will be needed. However, these are of a different character to the ones that have been introduced elsewhere, in that
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the majority of them are amendments which reflect new cross-references as the Bill passes through its various stages. Indeed, right at the end of the Bill I am sure that parliamentary counsel will require us to have further cross-references and clarifications, but these are not of the same class of technical amendment that we dealt with earlier today and at earlier stages of the Bill.
On Question, amendment agreed to.
Schedule 7 [Rationalisation of school places]:
Lord Whitty Lord Whitty moved Amendments Nos. 85 to 88:
Page 142, line 19, after ("prescribe") insert ("the").
Page 143, line 32, after ("prescribe") insert ("the").
Page 143, line 40, leave out ("the case") and insert ("any case where the proposals are for the alteration").
Page 145, line 29, leave out ("the case") and insert ("any case where the proposals are for the alteration").
The noble Lord said: My Lords, with the leave of the House I should like to move these amendments en bloc. I beg to move.
On Question, amendments agreed to.
Lord Whitty: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly and, on Question, Motion agreed to.
House adjourned at twenty-nine minutes past eleven o'clock.

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