Sitting of 20 April 1999

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

  IMPERIAL COLLEGE BILL
  Order for Third Reading read.
  Queen's consent, on behalf of the Crown, signified.
  Read the Third time, and passed.

Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS
  The Secretary of State was asked—
  FOREIGN AND COMMONWEALTH AFFAIRS

    Kosovo
    Ms Oona King: When he next plans to meet his European counterparts to discuss developments in Kosovo. [79944]
    Dr. Norman A. Godman: When he last met his colleagues from other member states of the European Union to discuss matters relating to the current political and military circumstances in Kosovo. [79965]
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): I speak nearly every day to Madeleine Albright and to Foreign Ministers of other major allies. Recent meetings of the Foreign Ministers of the European Union and of NATO have endorsed unanimously the objectives of our military campaign in Yugoslavia. Those objectives are a ceasefire in Kosovo with the withdrawal of all Serb forces from Kosovo, and the return of the refugees under international military protection.
    The meeting last week of European Heads of Government confirmed that there can be no compromise on those objectives. Anything less would reward President Milosevic for his brutal and deliberate programme of ethnic cleansing and would be a betrayal of the right of the Kosovo refugees to return to their homes in safety.
    Ms King: A constituent of mine, Fadil Dugolli, visited me on Friday. He is a Kosovan refugee. His mother has died since the conflict began, and his two sisters are currently unaccounted for in Albania. He said to me, "Tell them not to stop the bombing. Milosevic has been killing us—murdering us—slowly, for years." Does my right hon. Friend agree with those words? Does my right
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    hon. Friend agree that, if we want a United Nations protectorate and self-determination for the Kosovans, we must be determined to use ground troops?
    Mr. Cook: I said to the House yesterday that the international community would have to accept more direct responsibility for the interim administration of Kosovo than was previously envisaged. We want, if possible, to get agreement from the other permanent members to secure a UN resolution giving us a mandate for that administration. My hon. Friend is right to say that that would need to be backed up by ground troops to guarantee security and to underwrite a ceasefire.
    However, I also echo the point with which my hon. Friend began. One of the issues that gives us the resolve and determination to see through this conflict is the solid support that we have received from the Kosovar Albanians. None of them has said that they fled the NATO bombing: all of them are clear that the military action must continue until they are able to go home.
    Dr. Godman: May I remind my right hon. Friend that last week, in evidence to the Select Committee on Foreign Affairs, he said that the international community had the right to intervene to protect the human rights of individuals, communities and peoples against tyrants? However, does he agree that such intervention is out of kilter with extant international law and the modus operandi of the Security Council? In the long run, after peace has been secured in Kosovo, we must ensure that international law—which is itself out of kilter with the modern world—is brought into line so that it can cover the intra-state wars which are increasingly common.
    Mr. Cook: First, we are confident that the action that we are taking is fully based on international law. However, I agree with my hon. Friend, and I echo the statement of UN Secretary-General Kofi Annan, who has said that the rights enshrined by the UN should be enjoyed by peoples, and should not be confined to Governments. No Government have the right to defend, on grounds of sovereignty, oppression of their people and ethnic cleansing such as has occurred in Kosovo. For that reason, we are right to act, and it will be right to ensure that this becomes the basis for an approach to future conflict.
    Mr. Menzies Campbell: Today, in Brussels, the Prime Minister said that the Government intend to see the matter through to the end. Does the use of such an expression not imply that, if the option of using ground troops arises, NATO will be willing to impose its will on Kosovo and will not rely on receiving the agreement of Mr. Milosevic before determining to put troops into Kosovo?
    Mr. Cook: There can be no question of President Milosevic having a veto. I very much hope that we would be able to obtain UN backing for making sure that we can carry through a solution. However, we must be realistic. We have said from the start that we do not intend to fight our way into Kosovo. We cannot: to do so would require a much larger invasion than we have in that theatre at present. It would require agreement from countries in the neighbourhood that we do not have, and it would also mean that our troops would be taking part in an armed invasion in territory that was very inhospitable and did not lend itself easily to such an operation.

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    We are willing to provide the ground troops to secure a ceasefire. We are also willing to put in ground troops at the point at which there may be no organised armed resistance, but an armed invasion would incur far greater casualties on both sides than the present military campaign.
    Mr. Michael Colvin: Following on from what the Foreign Secretary said, is there not a danger that we are fighting a war in which we believe that no one can get hurt except the enemy? The right hon. Gentleman talked about a protectorate. Am I to understand that there would be troops on the ground under NATO command to give the necessary protection? Does that mean that he has ruled out the partition of Kosovo and independence for the Kosovars, even if there were safeguards for the very holy Serb places in Kosovo?
    Mr. Cook: No one in the Government imagines that we can fight a campaign of this intensity without anyone getting hurt. The Prime Minister said at the outset that we cannot give a guarantee of no casualties on our side. Everyone will share our relief that there have been no allied casualties, but we cannot guarantee that that will necessarily continue.
    On ground troops, we are committed, and have been ever since the Rambouillet talks, to committing forces as part of international military protection to Kosovo. Forces from NATO would be under NATO command, but I would hope that other countries would join us. I assure the House that we have no intention of consenting to the partition of Kosovo. To do so would be to legitimate the policy of ethnic cleansing and a new apartheid in Europe.
    Mr. Chris Mullin: Given that we have almost total air superiority and that the bombing has succeeded, or is succeeding, in cutting oil and other supply routes into Kosovo, will there not come a time when it is possible feasibly to introduce ground troops?
    Mr. Cook: I think that I have already touched on that point in answer to the right hon. and learned Member for North-East Fife (Mr. Campbell). It is possible to conceive of a situation in which it may be feasible to commit ground troops in circumstances in which they would not meet organised armed resistance and in which the Serb army would already be withdrawing from Kosovo. I repeat to the House: that should not be confused with any commitment, intention or capacity on our part to mount an armed invasion against organised resistance.
    Mr. Michael Howard: Yesterday, the Foreign Secretary said that, after the fighting, the administration of Kosovo would need to be placed in the hands of international bodies, including the United Nations, the Organisation for Security and Co-operation in Europe and the European Union. A few moments ago, he appeared to indicate that he had not yet obtained agreement to that among the members of the Security Council of the United Nations. Has he obtained agreement from our NATO allies, the neighbouring countries, the OSCE and the European Union?
    Mr. Cook: I have to say to the right hon. and learned Gentleman that, if it is to be a condition of making a policy announcement to the House that we first obtain the
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    agreement of the 19 members of NATO, the 15 members of the Security Council and the 40-odd members of the OSCE, the House will not often hear a statement that will come as news to it. What I indicated is the preference and policy of the Government. We have shared that with close allies, and I am at present confident that it commands a consensus, but not unanimity.
    Mr. Howard: It would inspire much greater confidence if, yesterday or today, the Foreign Secretary had been prepared to answer the question. The answer to the question is no. There is no difficulty about giving that answer, but it does not inspire confidence if the right hon. Gentleman does not give a clear answer. Concern was expressed yesterday in many quarters of the House about the lack of clarity in the way in which the Government were expressing their goals and methods of achieving their objectives. It would inspire much greater confidence if he gave straight answers to simple questions such as those that I have asked.
    Mr. Cook: With respect to the right hon. and learned Gentleman, who I know is trying hard to build bipartisan support for our case, my reply to him could not have been clearer. There is no doubt whatsoever about the clarity of our objectives. They have been restated in identical terms twice in the text of European Union meetings and of the North Atlantic Council meeting. They have been repeated in the House on several occasions. Indeed, I am now so familiar with them that they are etched on my brain like the Lord's prayer. There is no doubt about the clarity of our objectives. It is about time that the Opposition, if they really support our campaign, accepted that they understand and share them.

    EU Enlargement
    Ms Claire Ward: What progress is being made on the negotiations for the enlargement of the European Union. [79945]
    The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): Good progress is being made on enlargement. By June, it is intended that half the chapters to be examined in the accession negotiations will have been opened with Hungary, the Czech Republic, Poland, Estonia, Slovenia and Cyprus. The Berlin European Council confirmed the priority that the European Union attaches to enlargement, and the Agenda 2000 agreement makes financial provision for enlargement of up to six new member states between 2002 and 2006.
    Ms Ward: I thank my right hon. Friend for that reply. Does she agree that the discussions in June on the size of the Commission and the voting weight of members must seriously deal with the prospect not of six new members, but of an even larger European Union? Does she agree that a cumbersome and bureaucratic Commission will do nothing to further partnership for all EU members?
    Ms Quin: The points that my hon. Friend makes are important and need to be considered by the Council of Ministers. It is clear that the stimulus to enlargement comes not only from the six countries that I mentioned, but from other countries that have a natural desire to be part of the European Union in future. It is therefore

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    incumbent on the Council to ensure that decisions are made that will facilitate that enlargement in a climate of efficient, transparent and open decision making.
    Mr. Michael Trend: Despite the rhetoric that the Minister employs and the good speech that she made at the Royal Institute of International Affairs, the reality of what happened at Berlin simply does not stack up with what she is saying. Does she not understand that the European accession countries have realised that? Did she notice that the enlargement section of the 35-page document on the conclusions of the Berlin summit amounted to no more than four small sentences tucked away right at the end? With the Agenda 2000 process now clearly seen as a means of fixing differences between existing members of the EU, what encouragement has she to offer to those countries that long to benefit from the stability and support of membership of the EU?
    Ms Quin: It is not a question of rhetoric; it is a question of putting in place the necessary measures and mechanisms to ensure that enlargement can take place. That is exactly what we are committed to do. The Agenda 2000 negotiations were all about that. I recommend that the hon. Gentleman look at some of the reactions to Agenda 2000 from various Governments in the applicant countries. They have expressed satisfaction that we kept to the timetable because they feel that that is a guarantee that enlargement can take place.

    India and Pakistan
    Ms Margaret Moran: What assessment his Department has made of future relations between India and Pakistan; and if he will make a statement. [79946]
    The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): Good relations between India and Pakistan are important for regional stability. The resumption of talks between the two countries, including the meeting of Prime Ministers in Lahore in February, is a particularly welcome development. We wish India and Pakistan success in their efforts to resolve all bilateral issues, and urge them to refrain from actions that might heighten tensions.
    Ms Moran: I welcome the Lahore declaration, especially the element that relates to both Governments' intentions to intensify their resolve to settle the issue of Jammu and Kashmir. Does my hon. Friend agree that it would be a significant step on the part of the Indian Government if they signified their intentions in relation to the Lahore agreement and allowed more international human rights groups into Indian-held Kashmir? Will he use his powers of persuasion to encourage them in that direction?
    Mr. Lloyd: It is a matter of recorded fact that we deplore the violence inflicted on the civilian population in Kashmir and call on all parties to refrain from acts of violence, which of course infringe the human rights of the people of Jammu and Kashmir. In that context, we have also supported access to the area for the United Nations special rapporteur. We would welcome access for non-governmental organisations that have expertise in the
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    area, but the significance of the Lahore declaration is that a commitment has been made by both Governments. We hope that, whatever Indian Government emerge from the current uncertainty, they will maintain that commitment to take forward bilateral talks to resolve once and for all the problems in Kashmir.

    EU Enlargement
    Mr. Win Griffiths: What discussions he has had on the proposals of the Berlin European Council on EU enlargement. [79947]
    The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): I refer my hon. Friend to the answer that I gave earlier to my hon. Friend the Member for Watford (Ms Ward).
    Mr. Griffiths: I congratulate my right hon. Friend on the deal that the Foreign Secretary and the Prime Minister secured on Agenda 2000 at the Berlin summit. Does she agree that an important part of successful enlargement will be for the economically weaker parts of the United Kingdom, such as west Wales and the valleys, to raise their business and economic performance by taking full advantage of objective 1 status in preparation for the new markets that enlargement will offer?
    Ms Quin: My hon. Friend is right: the overall result that we obtained at Berlin was excellent. In particular, he is right to refer to the deal on structural funds that has especially benefited certain areas of the UK, including his own. The point that he makes about preparing business for the enlargement of the EU is tremendously important. The Government are keen for business throughout the UK to prepare for enlargement, in order to build up good commercial and trading links with the new countries that will join in the future.
    Dr. Julian Lewis: Does the Minister realise that many of the countries that she listed as applying for membership of the EU were held under the undemocratic structures of the Warsaw pact and the Soviet bloc only a few years ago? In the light of the statements made recently by Mr. Prodi, the new head-to-be of the Commission, that his aim is to create a single economy and a single state in Europe, will she ensure that those new applicant countries are clearly warned that, having recently regained their democracy, they are in danger of losing it if they apply to a Europe headed by such a man with such aims?
    Ms Quin: I assure the hon. Gentleman that the countries applying to join the European Union see that precisely as a way of safeguarding and emphasising democracy and security. Indeed, that is one of the most attractive aspects for those countries of belonging to the EU.

    East Timor
    Mr. David Taylor: If he will make a statement on his policy towards the future status of East Timor. [79949]
    The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): We continue to support the efforts under United Nations auspices to secure a future for East Timor that will fully respect the interests and legitimate aspirations of the East Timorese people.
    Mr. Taylor: Will my hon. Friend tell the Indonesian Government that they must exercise far tighter control over the paramilitaries in East Timor? If Indonesia is ever to be a full and respected member of the global community, it must accord full democratic rights to the people of East Timor; it is certainly not doing that at present.
    Mr. Lloyd: My hon. Friend raises two important issues. There is a need for a solution in East Timor that respects the rights of its people. It is certainly true that this Government are strongly committed to the UN process. I can tell the House that, over the forthcoming days, there will be meetings between Foreign Minister Alatas of Indonesia and Foreign Minister Gama of Portugal to pursue that agenda.
    We also urge strongly that there should be respect for the fundamental human rights that were so appallingly betrayed in recent incidents in Liquica and Dili, where there were about 50 and 30 deaths respectively. My right hon. Friend the Prime Minister has written to President Habibie drawing his attention to our great concern about that matter and, of course, we shall continue to press the Indonesian Government to ensure that the Indonesian military offer protection not only to pro-integrationists, but to all the people of East Timor.
    Mr. John Wilkinson: I welcome the initiative of the Prime Minister in writing to President Habibie. Is it not true that, apart from Portugal, the United Kingdom is especially well placed to intervene to help to secure an appropriate political destiny for the people of East Timor, who have been oppressed for far too long? Is it not also true that President Habibie, who has worked in the aircraft industry and knows the United Kingdom, and his brother, who was a respected ambassador for his country to the Court of St. James, have a family interest in maintaining good relations with the UK? We could say that, if Indonesia does not grant autonomy or self-determination to East Timor, we will not provide the financial assistance that Indonesia so badly needs.
    Mr. Lloyd: With the exception of Portugal, which has a unique role in respect of East Timor, Britain has been at the forefront in Europe's debates with the Government of Indonesia and more generally. It is true that we have used our influence to press for precisely the type of progress and process that is now beginning to take place at the United Nations. We welcome the more positive notes that have been struck since President Habibie came to power and shall continue to maintain the pressure that we have already applied so that matters come to fruition through the UN process and the people of East Timor become the masters of their destiny.
    Ann Clwyd: Given that the Indonesian army is responsible for training and arming the paramilitaries who are wreaking havoc throughout East Timor and who are likely later to frustrate the UN ballot, will my hon. Friend raise that matter in the meeting of EU
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    Foreign Ministers next week and call on the Indonesian Government to disarm and disband the paramilitaries and get all the Indonesian troops out of East Timor, or the ballot will not take place?
    Mr. Lloyd: There is no doubt in our mind that the Indonesian military has a responsibility not only to pro-integrationist forces, but to all people living in East Timor. During the recent appalling events in Liquica and Dili, where deaths occurred, protection for the people from the armed forces was not forthcoming. Both publicly and privately, we remind the Indonesian military of its responsibility to offer security to everyone. That is the gist of the strong message that my right hon. Friend the Prime Minister sent to President Habibie yesterday.
    Mr. David Heath: In view of the atrocities that have occurred in East Timor, in view of the fact that the Indonesian Government have been arming the paramilitaries and in view of the apparent acquiescence of the Indonesian Government, will the Minister ensure that the views of the British Government are expressed in terms as strong as those used by both the Portuguese and the Australians? In addition, will he give an assurance that the British Government will not sell more arms to Indonesia?
    Mr. Lloyd: On the second point, I invite the hon. Gentleman to read the recently published report on arms sales. He will discover that, despite rather lurid accounts that spoke of this Government having licensed the sale of quite sophisticated and complex weapons systems, the annual report proves that there is no truth in those allegations. The letter that my right hon. Friend the Prime Minister sent to President Habibie was couched in the most clear-cut and strong terms, and President Habibie is in no doubt about our strong concern about current events and our view that he, as President, has a responsibility to ensure that the Indonesian military plays its part in restraining all sides from committing acts of violence.

    European Commission
    Mr. Bob Blizzard: If he will make a statement on the future role of the European Commission. [79950]
    Mr. John Bercow: If he will make a statement on the appointment of the new President of the European Commission. [79955]
    The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): The Government are in favour of a European Commission that is efficient, transparent and accountable. The independent experts' report revealed a catalogue of deficiencies in the Commission's internal structures and practices, but the resignation of the Commission gives us an opportunity to ensure that, in future, the Commission carries out its functions more effectively and makes much better use of taxpayers' money. The Berlin European Council took a decisive step towards that by agreeing the nomination of the new Commission President.
    Mr. Blizzard: Does my right hon. Friend share my view that the only sensible words ever uttered by the

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    noble Baroness Thatcher were that "advisers advise, Ministers decide"? That is the principle that underlies the civil service in this country; should it not also be true of the European Commission? Will the people of this country not accept more readily the institutions of the EU if they are confident that decisions are taken by democratically elected Ministers, rather than by unelected bureaucrats? Will my right hon. Friend use this opportunity to press for reform of the European Commission that brings about that state of affairs?
    Ms Quin: The Government have tabled a number of proposals for reforms. It should be emphasised that, in European decision making, the elected Council of Ministers has the final say and is responsible for making final decisions; that is a system of which we approve. As for the accountability of the European Commission, a great deal can be done to improve matters in terms of its relations with both the European Parliament and the Council of Ministers, and we have made proposals in that respect.
    Mr. Bercow: In backing for the presidency of the European Commission Mr. Prodi, who says that economic and monetary union and political union are two sides of the same coin, why can the right hon. Lady not admit in Britain what is widely acknowledged on the continent—that Mr. Prodi is a committed "federast", who is determined to create a single defence policy, a single economic policy, a single foreign policy, a single immigration policy, a single social policy, a single constitution, a single Government and a single state called Europe?
    Ms Quin: First, I remind the hon. Gentleman that the appointment of Mr. Prodi at the Berlin Council was linked firmly with Commission reform, and that is why he received the support of all member Governments. Secondly, the hon. Gentleman obviously has a short memory. I am not sure whether he was in the House when Romano Prodi's predecessor was appointed, but I remember the press coverage at the time about the fiercely federalist Jacques Santer, who was the Conservative Government's appointee.
    Mr. Bill Rammell: Does the Minister agree that, in taking forward the essential reform process, we must establish a mechanism whereby individual acts of proven misconduct against individual Commissioners can result in their disciplining or dismissal? We should not always have to take the nuclear option of forcing the entire European Commission to resign.
    Ms Quin: My hon. Friend makes a very important point. We must not only move ahead in appointing a new Commission, but consider the terms and conditions that govern such appointments in order to address some of the issues to which my hon. Friend referred.
    Mr. Michael Howard: Mr. Prodi has declared his intention to use his presidency to create a single economy and a single political unity; yet the Foreign Secretary said recently that the Maastricht treaty was a high water mark of integrationism. How can those positions be reconciled?
    Ms Quin: I am always surprised by the contrast between Opposition Members' present paranoia about the
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    word "integration" and the policies that they adopted in government, which led to much greater integrationism than those that we have pursued. We have said that we will consider proposals on their merits and agree to policies that are in our interests. We have even introduced our own initiatives in the defence sphere, for example. That is the way to proceed in Europe. I urge the right hon. and learned Gentleman to look at the reasons why Mr. Prodi was appointed and the important tasks that we expect him to carry out and about which he will report to the Cologne European Council.

    Libya
    Mr. Iain Coleman: If he will make a statement on the United Kingdom's relations with Libya. [79952]
    Mr. Russell Brown: If he will make a statement on the United Kingdom's relations with Libya. [79953]
    Helen Jones: When he next plans to meet the United Nations Secretary-General to discuss the handover of the Libyan Lockerbie suspects. [79957]
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): I welcome the handover of the two Libyans accused of the Lockerbie bombing in response to our initiative to offer a trial before a Scottish court in the Netherlands. I would like to record our warm appreciation for the generous co-operation of the Government of the Netherlands in making that possible and of the United Nations Secretary-General in arranging the handover.
    We have since fulfilled our commitment to suspend UN sanctions against Libya. Further steps in our bilateral relations will depend on satisfactory progress with Libya on the case of WPC Fletcher. In the meantime, the breakthrough in the Lockerbie bombing has ended a 10-year diplomatic stalemate and enables us at last to bring before a criminal court this case of mass murder.
    Mr. Coleman: I thank my right hon. Friend for that reply. Does he agree that the most important outcome of this affair is that at last the families of those who were brutally murdered at Lockerbie will be able to see the men accused of that terrible crime stand trial?
    Mr. Cook: I have met the relatives in Britain on several occasions in the past two years. I met them again on the day when the two suspects were handed over, and the families expressed their immense relief. Those meetings were difficult because I was unable to share with the relatives the evidence that we hold and the information that we have gathered, because to do so would have prejudiced any future trial. A great advantage of the breakthrough that we have secured is that that evidence and information can come out in open court and be shared with both the relatives and the public.
    Mr. Brown: I thank my right hon. Friend for achieving a major success for British diplomacy in ensuring that the two Libyan suspects have been brought forward for trial. The people of Lockerbie realise that, initially,

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    that development will mean only that the town will, once again, be a focus for the world's media. What comments has my right hon. Friend received from UK business about the lifting of sanctions?
    Mr. Cook: I immensely appreciate my hon. Friend's support and constant interest in this case. I am well aware of the dignity and restraint with which his constituents have handled their grief in the past 10 years.
    We have not been under great pressure from business on sanctions. Business understands that any active trade promotion must wait for the restoration of full relations with Libya, which in turn requires a resolution of the case of WPC Fletcher. British companies are, on the whole, free to trade with Libya. The UN sanctions have now been lifted, as have many of the European Union sanctions. In those circumstances, I am sure that British business will be seeking opportunities for trade, but the extent to which we can help them will depend on the progress that we make with Libya in the case of WPC Fletcher.
    Helen Jones: I congratulate my right hon. Friend on at last ensuring that the case will come to a fair trial, for which the families have long waited. He mentioned the case of WPC Fletcher; until further progress is made on that, normal relations, rightly, cannot be established with Libya. What is being done to make progress in that case so that we can move forward in our relations with Libya?
    Mr. Cook: We have had exchanges at official level. Last week, I met a representative of the Libyan Government—the first time in 10 years that a Foreign Minister has done so—at the Stuttgart meeting of the Euro-Med conference. On the margins of the conference, I raised with him our concerns about the case of WPC Fletcher. We are pressing Libya to co-operate with the Metropolitan police inquiry, to accept responsibility for what happened and to make a fresh offer of compensation. I hope that we can maintain that dialogue and reach a conclusion on that matter, so that we can not only resume full relations with Libya, but deal with the concerns of WPC Fletcher's family and her colleagues in the Met.
    Mr. Douglas Hogg: What will the Government do if, in the course of the trial in the Netherlands, it appears that the bombing of the aircraft was authorised by the Libyan Government and those who were responsible for the authority being given are still present in the Administration?
    Mr. Cook: I make it clear to the House, as I have done throughout the case, that the indictment is of the two accused, whom we sought to stand trial. The charges are against them and it is for the prosecutor and the judges now to proceed with those charges. We have, of course, pressed Libya to recognise that, in the event of those two being found guilty—that is a matter for the court, not the Government—we shall look to Libya for compensation. Libya recognised that in its letter to Kofi Annan. I hope that we shall be able to proceed with the trial in due course. I stress to the House that our obligation as a Government was to secure the surrender of the two accused so that a trial could take place. That will be a free, fair trial, and the Government are not under an obligation to secure one outcome from that trial.

    Middle East Peace Process
    10. Mrs. Ann Cryer: If he will make a statement on the declaration on the middle east peace process at the Berlin European Council. [79954]
    Mr. Neil Gerrard: What assessment he has made of the current situation regarding the middle east peace process. [79956]
    Mr. Ernie Ross (Dundee, West): If he will make a statement on progress with the middle east peace process. [79960]
    The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): The United Kingdom played a leading and positive role in negotiating the text of the European Union declaration on the middle east peace process which issued from the Berlin European Council on 24 and 25 March. The declaration signals to the parties the importance that the European Union attaches to a negotiated settlement.
    Together with our EU partners, we remain concerned about the continuing deadlock in the middle east peace process and will seek renewed progress, including progress on Wye implementation, after the Israeli elections, whatever Government emerge from those elections.
    Mrs. Cryer: I congratulate my hon. Friend on the UK's contribution to the Berlin declaration on the middle east peace process, and thank him for his constructive comments. Will he give an assurance that, in the months to come, we shall not lose sight of that declaration, particularly its penultimate paragraph which, with Madam Speaker's permission, I shall quote? It says that
    "the creation of a democratic, viable and peaceful sovereign Palestinian State on the basis of existing agreements and through negotiations would be the best guarantee of Israel's security and Israel's acceptance as an equal partner in the region."
    Mr. Lloyd: I thank my hon. Friend for her opening remarks. Let me make it clear that the United Kingdom, as one of the major parties that worked for the declaration at Berlin, is obviously very much committed to all the sentiments expressed. Certainly, we want a return to a negotiating framework in which the problems between Israel and the Palestine National Authority can be resolved and brought to a satisfactory conclusion. Obviously, within that, although the declaration is deliberately non-prescriptive, it certainly refers to the right of the Palestinians to self-determination, including the option of a state.
    Mr. Gerrard: I welcome my hon. Friend's reply to the question about support for the Palestinian right to self-determination, but specifically in respect of Jerusalem, will he confirm that it is still the Government's view that there is no Israeli sovereignty over either east or west Jerusalem, and that the final status of Jerusalem remains open to negotiation as part of the final settlement?
    Mr. Lloyd: Yes, I can confirm that the status of Jerusalem is roughly as my hon. Friend set out to the House. We recognise, of course, the de facto control of Israel over west Jerusalem, but we consider east Jerusalem

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    to be under illegal military occupation. In that context, we do not recognise any de jure sovereignty over the city. The status of Jerusalem has to be determined in the final status talks. We hold that position to be binding on all parties.
    Mr. Ross: Will my hon. Friend join me in condemning the recent burst of settlement activity on the west bank and in Gaza, which has been particularly encouraged by the present Israeli Government? Will he comment on US satellite information which suggests that 25 per cent. of existing settlements are uninhabited? Does that not clearly show that the land grab has more to do with affecting the final settlement processes contained in the Oslo accord than with the need for homes?
    Mr. Lloyd: I am not in a position to comment on those particular reports. The Berlin declaration calls on all parties to refrain from unilateral actions, which of course include settlement activity. If my hon. Friend is right and some settlements remain unoccupied, that would at least encourage the view that it is possible for the Israeli Government to accept that it is in their own interests now to move forward on the basis that those unilateral actions of further settlement should be avoided. The necessity now is for whichever Government emerge from the coming election to recommit themselves to the negotiating process.
    Sir Sydney Chapman: Some months ago, the Israeli Government offered to reduce any military presence that they may have in southern Lebanon if there was an equivalent response from the Syrian Government. Has any progress been made in that regard, or is there any prospect of progress, because surely, demilitarisation of Lebanon would be an important piece in the jigsaw in realising a durable and fair peace settlement in the middle east?
    Mr. Lloyd: Of course, existing Security Council resolutions make it clear that southern Lebanon should be vacated by outside military forces. That must remain the position of the British Government. Clearly, we look to the election in Israel to produce a Government who will recommit themselves to a comprehensive package which will include not only southern Lebanon, but negotiations with Syria in respect of the Golan heights.
    Dr. Jenny Tonge: Further to the question before last, given that the settlement policy is against international law, what representations are the Government making directly to the Israeli Government on this subject?
    Mr. Lloyd: The Berlin declaration openly calls for all parties to avoid unilateral actions that could damage the peace process, and it is clear that among those actions would be the continuation of settlement activity. That has been a long-standing demand, not only of this Government, but of the European Union. The Israeli Government, whichever parties they emerge from, can be in no doubt of the position of the international community in the European Union, including Britain, on that issue.
    Mr. Nicholas Soames: Does the hon. Gentleman, pursuant to those answers, agree that—
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    especially in light of the admirable Berlin declaration—the continuing behaviour of the Israeli Government in pushing ahead with what are, and are known to be, illegal settlements puts the Israeli Government beyond the pale? After the election, will the Foreign Secretary see to it that there is convened in London a European conference to decide how Europe should move ahead in light of the new elections—perhaps decoupling ourselves slightly from the American process, which has been dismally unsuccessful in the middle east—and promote a European initiative to bring about progress in the middle east, to lead us out of the current impasse?
    Mr. Lloyd: I make it clear to the House and to the hon. Gentleman that the Berlin declaration was published when it was in order to ensure that both Palestinians and Israelis were in no doubt about the views of people here in Europe. Those views certainly contained a clear warning against any unilateral actions, and, as I have told the House, the continuation of an illegal settlements policy would be such a unilateral action.
    We await the election. We hope that the new Government will commit themselves, and we urge any Government in Israel to recommit themselves, to a negotiated process, because a return to the Wye declaration and the spirit thereof is the only way forward, not simply for the Palestinians but for the people of Israel.

    Environmental Protection
    Mr. Brian White: What instructions he has given to posts abroad in relation to policy on environmental protection. [79962]
    The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): The environment is an important and increasing priority for the Foreign and Commonwealth Office. Through our posts abroad, and our role in a wide range of international organisations, the Foreign and Commonwealth Office makes a real contribution to the Government's environmental agenda, which is of course led by the Department of the Environment, Transport and the Regions. Recent instructions to posts have covered a variety of subjects, from institutional aspects of oceans governance to negotiations on the biosafety protocol and the environmental aspects of the Budget.
    Mr. White: I thank my hon. Friend for that reply. Given that globalisation is still having an adverse effect on many parts of the world—for example, rain forests are still disappearing at an alarming rate—does he agree that there should be widespread reform of global institutions such as the World bank, the World Trade Organisation and the United Nations, to ensure that environmental protection is placed at the top of the agenda?
    Mr. Lloyd: My hon. Friend raises an important point. The need to ensure a greening of global governance is high on the Government's agenda. That includes the international financial institutions, the World bank and the International Monetary Fund. My hon. Friend will be glad to know that precisely those ideas appeared on the agenda of the G8 recently, and that the G8 has called on the IMF and the World bank to consider their own environmental responsibilities. We very strongly support the United

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    Nations Secretary-General's demand for reform of environmental governance at United Nations level. We are therefore trying to meet my hon. Friend's requests.
    Mr. Owen Paterson: The environment around the Falkland Islands is being devastated by the poaching this year of up to 30,000 tonnes of illegally taken squid. The Falkland Islands Government have had approval for the delivery of a 20 mm weapon, which has suffered lamentable delays. They have put in an application to use a locally available 0.5 inch gun. What instructions has the Foreign Office given the newly appointed governor of the Falkland Islands to save the Falkland Islands environment by arming with locally available weapons?
    Mr. Lloyd: Let me say—
    Dr. Julian Lewis: Answer.
    Mr. Lloyd: Yes, I will answer. We have given permission for the arming of the naval protection vessel with an appropriate weapon, but the hon. Member for North Shropshire (Mr. Paterson) and the people of the islands must take into consideration the fact that, although there is a right to protect fishing stocks, and in this instance that right includes permission for the use, under carefully controlled rules of engagement, of a lethal weapon, they also have duties to ensure that any use of force does not go beyond those rules of engagement. Consideration of what are acceptable rules of engagement is obviously central to the deployment of any system. We are working hard and we are in close and detailed discussion with both the Falkland Islands Government and the fishing industry there to ascertain how we can provide a satisfactory framework to deal with poaching. We have, as I have said, already given permission for a cannon to be available for fisheries protection.

    St. Helena
    20. Mr. Bob Russell: When he plans to introduce legislation to restore full British citizenship to the people of St. Helena. [79966]
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): I confirmed in the White Paper last month that we shall be extending British citizenship to all citizens of the overseas territories, including St. Helena. The Government of St. Helena have since expressed their welcome for this. The House will be aware that it is the convention not to announce in advance of the Queen's Speech when parliamentary legislation will be introduced, but we shall seek to do so as soon as practicable.
    Mr. Russell: I certainly welcome the Government's best intentions to put right the 18 years of wrongdoing by the previous Government. I think that the 5,500 islanders are looking for the speedy passage of legislation. I would welcome any assistance that the Foreign Secretary can give to put right the 18 years of neglect and rejection of the previous Government.
    Mr. Cook: I congratulate the hon. Gentleman on the number of times that he has raised this issue, which I
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    know is a matter of interest to his constituents who, as I understand it, share the same patron saint, St. Helena. I am glad for the hon. Gentleman's support and I look forward to it when we introduce legislation. It will be a complex and detailed matter, as any nationality legislation must be. However, I can assure the hon. Gentleman and the House that, having secured the agreement, we intend to act on it as soon as we can to put right the injustice that we inherited from the previous Administration.
    Mr. Ted Rowlands: May I add my warm thanks and my congratulations to my right hon. Friend on making such a decision, not only for the people of St. Helena but for many other people in other overseas territories who wish to take advantage of what is proposed? Does my right hon. Friend have any idea how many citizens in the other overseas territories are saying that they intend to take up this right?
    Mr. Cook: We would expect that most of the citizens of the overseas territories would take up the right to British citizenship. That does not mean, of course, that they will wish to take up the right to settle in Britain. We should remember that our overseas territories are now so vigorous and successful in terms of prosperity that most of them enjoy a standard of living that is higher than that of the United Kingdom.
    It is not immediately apparent why the residents of Caribbean islands with a higher standard of living than that of people in Britain should necessarily choose to leave their home to come to settle in Britain. However, they will find what we propose an important step in demonstrating that we are as proud of them as they are of their British connections. They will welcome the opportunity to travel freely throughout Europe without going through the non-EU channel when they visit other countries of the European Union.

    Visa Applications
    Dr. Evan Harris: On what basis he determines the charges for processing visa applications in overseas consulates and embassies. [79967]
    The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): In accordance with Government policy, the visa fee is set so as to allow the full costs of providing the global visa issuing operation to be recovered.
    Dr. Harris: In working out what the charges are, do the Government pay any regard to the standard of living in countries where charges are operated or to the quality of decision making, at least on initial application? Some of my constituents have spoken to me about people who have tried to visit them from Russia and South Africa, telling me that the very high charges prevent would-be visitors from applying to visit relatives or fiancés in this country.
    Mr. Lloyd: We have a duty to operate a visa regime in a way that is helpful to those wishing to visit this country, but it is legitimate in terms of taxpayers, who gain no direct benefit from the visa regime, that it should recover full costs. Within that context, I understand the

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    point that the hon. Gentleman makes about charges for unsuccessful visas. However, the cost of processing a visa, whether successful or unsuccessful, is pretty much the same. It would be rather unfair on successful applicants to say that they may have to bear the costs that are borne by those who apply unsuccessfully.
    A differential charge for different parts of the world would be quite contentious. It would be a highly subjective matter which areas deserved low-cost visas and which areas should have super-cost visa charges. That would be a little difficult to implement.
    Mr. Peter L. Pike: I know that my hon. Friend recognises the problems in Pakistan and Bangladesh of getting to Dhaka, Karachi or Islamabad, and the cost involved. What is his opinion of the screening process, which deters many people from submitting a visa application, although they would probably have succeeded if they had gone ahead, as they had a genuine case?
    Mr. Lloyd: I know that my hon. Friend has dealt with many such cases over a long period, as I have. He will know that the best advice that he can give to his constituents is to make sure that the application goes in, and that it is submitted on the basis of the fullest possible information. People cannot be advised by Members of Parliament, and certainly not by Ministers, not to submit applications for fear that they might be refused.
    Mr. Ian Bruce: Does the Minister find that people who are resident in the United Kingdom are making applications to overseas posts for visas? I have a constituent who has been waiting seven months for his wife's visa to be renewed through the Passport Agency in the UK. The collapse of the IT system there is causing many problems. Will the Minister have urgent discussions with his colleagues in the Home Office to make sure that the renewal of visas for people such as married women who came from Russia is dealt with properly?
    Mr. Lloyd: The hon. Gentleman raises an important point. There is no doubt that the Passport Agency is in a state of chaos because of decisions made by the previous Government on these matters. I undertake to draw the attention of my hon. Friends at the Home Office to the points that the hon. Gentleman makes to see whether there is an easy resolution. However, I remind him that, as a supporter of the previous Government, he might consider his own responsibility and perhaps say to his constituents that he is sorry.

    Chile
    Mr. John Wilkinson: How many Ministers of the Government of Chile have visited his Department since 2 May 1997. [79969]
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): We are aware of eight visits by Chilean Ministers during this period. I have met the Foreign Minister, JoséInsulza, and the Deputy Foreign Minister, Mariano Fernandez. I meet JoséInsulza again tomorrow for breakfast.
    Mr. Wilkinson: Is the Foreign Secretary aware that only two of Her Majesty's Ministers have visited Chile
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    since his Government came to power—the Lord Clinton-Davis and the Minister of State, the hon. Member for Manchester, Central (Mr. Lloyd)? Is it not the case that, if rather more Ministers had visited, there would be a better understanding of that country as it now is, rather than a mentality locked in the 1960s and early 1970s? Is it not the case that Chile desires good relations with the United Kingdom four times as much as Britain does with Chile?
    Mr. Cook: As I said, I have already met both Foreign Ministers of Chile, and I meet the senior one again tomorrow. We have had regular contact and dialogue with them, and we have encouraged them also to understand the nature of modern Britain, where the rule of law applies and the Government intend to uphold the due judicial process. This is the umpteenth time at Question Time that the hon. Gentleman has invited us to depart from the due legal process, which we have no intention of doing.
    Mr. David Winnick: When my right hon. Friend has met Chilean Ministers, have they said that they are grateful to this country for the way in which, in 1974, when a Labour Government were elected, we gave asylum to so many Chileans who were fleeing from the terror following the coup of 1973? Is that not a great tribute to our country? Is it not a fact that those who found asylum in Britain at the time well understand what is happening and want the rule of law to continue?
    Mr. Cook: My hon. Friend makes a fair point. The decision taken by my right hon. Friend the Home Secretary was taken in a quasi-judicial role and with the strict application of the legal rules. It was not taken in response to public opinion. However, if we are being invited to have regard to public opinion in Chile, it is important for the House to recognise that there is more than one opinion in Chile. The last opinion poll in Chile found that the public were split down the middle on whether it was right for Senator Pinochet to be detained in the United Kingdom for extradition and trial in Europe.
    Mrs. Cheryl Gillan: When the Foreign Secretary has breakfast with the Chilean Minister tomorrow morning, will he make it clear that it would have been lawful for the Home Secretary to exercise his discretion so that Senator Pinochet could be returned to Chile? Will he also make it clear that he will raise a protest over the stopping of LanChile flights to the Falkland Islands at the end of last month as a direct result of the Government's treatment of visitors to this country from Chile? The matter is of great concern to the Falkland islanders, who believe that the Government have sacrificed them on the altar of their own incompetence.
    Mr. Cook: LanChile's decision was a decision made by LanChile as a company, not by the Chilean Government—and the Chilean Government have no right to order it to resume a service, any more than I have the right to order any airline to resume a service.
    As for the hon. Lady's wider point, the Home Secretary made a decision involving strict application of the legal rules, having regard to the due process, and rightly decided that this was a matter for the courts, not politicians, to decide. There was a time when the

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    Conservative party prided itself on the rule of law; that pride deserts it when the rule of law is applied to one of its own political cronies.
    Mr. Tam Dalyell: On a point of order, Madam Speaker. The relationship between the House of Commons and the courts is always very delicate. May I refer to questions 8, 9 and 13, which dealt with Lockerbie? We shall have to study what was actually said in Hansard, but it seemed to some of us who have spoken to the lawyers acting for Pan Am's executors, and to
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    Professor Black, the professor of Scots law, that to say much about this subject is sailing very close to the wind. Will you reflect on what was said, Madam Speaker, and possibly make some ruling on what can be said in the House in future? After all, a trial is about to start at Zeist.
    Madam Speaker: I was conscious of the exchanges that took place today, and I very much doubt that they offended against the sub judice rule—if, indeed, such a rule applies. The hon. Gentleman is quite right, however: I want to give some careful thought to the matter, and I hope that he will allow me to do so.

Freedom of Tax Information
3.32 pm
Mr. Tim Loughton: I beg to move,
That leave be given to bring in a Bill to require the Government to issue taxpayers with an annual schedule detailing the taxes they have paid compared with previous years and to require information concerning the taxable component of prices on products sold to be made available.
I am currently engaged in a detailed questionnaire xercise in my constituency. One of the questions that I ask is whether constituents think that they are paying more tax now than they were two years ago. Most say yes, and of course they are right, but a great many say that they do not know. It is very complicated to make proper comparisons.
Until a few years ago, I completed my own tax returns. Despite having spent 15 years working in the financial services industry advising clients on investment matters, I now have to employ an expensive accountant to do it for me. The titanic complications of the capital gains tax system resulting from last year's Budget were the last straw. Last week, a large package from the Inland Revenue landed on my doormat with a resounding thud. It contained a 12-page tax return, a 40-page guide to filling in the tax return and an eight-page help sheet, as well as separate forms for parliamentary calculations, sundry other advice forms and—the final straw—a sheet of helpful hints from a bowler-hatted "Hector the tax inspector" pushing a particularly archaic-looking lawnmower bearing the logo "Self Assessment—A clearer tax system".
In fact, it is about as clear as mud. I have little idea of how much tax I have paid or am due to pay; I have little idea whether I shall be paying more tax this year than last year, in gross terms or as a percentage of my earnings, let alone all the stealth taxes used increasingly liberally by the Government. The plethora of forms gives me no indication of how the total Government tax revenue is made up, or of how it is then spent.
I believe that the system has become far too complex for the ordinary man or woman in the street, who will have little chance of making a fair assessment of whether he or she faces an increasing tax bill, in what form the taxes are paid and in what areas the tax revenues are spent.
I believe that it is the basic right of all taxpayers who contribute to the national Exchequer to have easy and transparent access to that information, so that they can make informed choices about what to spend their money on and on whether the tax record of the Government of the day matches up with the rhetoric of the tax policies promised.
This year's Budget underlined the confusion and arbitrariness of the whole system. Indeed, the Prime Minister and the Chancellor of the Exchequer seem to have been particular victims of that confusion and complexity. Before the election, the Prime Minister assured us categorically that Labour had "no plans to increase tax at all". Before the Budget, he tried to claim that it had not, but on 3 March he was forced to admit that
"the tax burden will increase over this Parliament".—[Official Report, 3 March 1999; Vol. 326, c. 1075–76.]
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Indeed, we have calculated that it will increase by £41 billion as a result of Budget announcements made so far.
On Budget day, the Chancellor claimed that the Budget offered "tax cuts for business". Simultaneously, the president of the Confederation of British Industry maintained that
"over the next four years as a result of Budgets which we've seen in the last two years, we are going to face something like a £20 billion increase in business taxation."
The Adam Smith Institute has calculated that tax-freedom day has been delayed by a further two days this year, to 27 May, as a result of Budget increases by stealth. Incidentally, tax-freedom day comes as soon as 9 May in the United States, but as late as 21 June in the eurozone.
The truth is that people are being deceived by a Government who pretend that taxes have not gone up by pointing to the headline rates of tax while the overall tax burden goes on rising by stealth. The overall burden, rather than just the rate, is all-important and difficult to extrapolate.
Tables available from the House of Commons Library reveal about 300 different types of taxes and reliefs available to the Chancellor to alter at his will: 25 main headings, under "Public Sector Current Receipts", which include the usual suspects such as income tax and corporation tax; 83 "Principal Tax Expenditures and Structural Reliefs", ranging from exemption from value added tax on burials and cremations to—hon. Members should just wait—VAT refunds to the BBC and ITN when that tax is incurred on non-business purchases; 42 minor tax allowances; and 146 tax allowances and reliefs for which the Government do not know the cost, ranging from the exemption for agricultural societies on profits of shows to gains on sales of motor cars.
In short, there are about 300 ways to skin a cat. This Chancellor has been doing a lot of skinning by stealth—not to mention fleecing, too. It is no surprise, therefore, that, after the use of smoke and mirrors which reclassified the treatment of the abolition of mortgage interest relief at source and the introduction of the working families tax credit in particular, the Select Committee on the Treasury criticised the Chancellor's use of selective figures and called for clear tables showing the cumulative effect of tax changes and the separate effects of new announcements. As the Financial Times put it, more succinctly:
"Government spin does not always stand up to scrutiny."
My Bill therefore proposes three main measures. The first is an annual tax and spend statement. Each taxpayer would be entitled to receive an annual statement of how much income tax and national insurance he or she has paid and on what that money is being spent. The statement would have to be clear, concise and user-friendly. The aim would be to provide people with objective and useful information so that they can better understand how much they contribute each year to the provision of public services and how the Government are spending that money.
The second measure is the requirement for the Government to establish an independent Budget office. It would scrutinise and audit the contents of the Budget and other documents and statements made by the Treasury. It has become almost impossible to trace tax changes

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over years. To rebuild public trust, I believe that an independent body is required to audit the Budget's contents and ensure consistent methodology and presentation of figures.
Thirdly, the Government would be required to institute ways of ensuring that the amount of tax that people pay for goods—particularly road fuel, alcohol and tobacco—is clearly displayed at the point of sale. It has taken the recent furore over the penal increases in petrol and diesel duty and the uncompetitive extension of the fuel escalator, all under the dubious guise of environmental taxation, to alert the public to the fact that, typically, 85 per cent. of the price of a litre of fuel represents tax. A litre of fuel costs 67p and 57p of that is derived from duty and VAT; only 10p is for the petrol.
A packet of cigarettes costs —3.69, 82 per cent. of which is accounted for by duty and VAT, so just 68p of that sum is for the cigarettes. Similarly, 66 per cent. of the price of a bottle of spirits is made up of tax. I believe that consumers should have easy access to those figures, which should be clearly and unequivocally presented, rather than having the money removed from their pockets by stealth. That is achievable, without loading prohibitive extra costs on retailers—most obviously by including details of the tax element on till receipts at the point of sale, which would require only minimal adaptations of cash tills.
Producers and retailers have welcomed the idea. The Petrol Retailers Association has said that it
"would most certainly be interested in a more open approach being taken to highlighting the total amount of taxation included in the retail price of commodities".
The Automobile Association's "Fair Deal for Motorists" campaign seeks to give drivers access to that taxation information, and the Scotch Whisky Association says that
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the campaign to highlight the tax element in the cost of alcoholic drinks is a matter that it has been pursuing for a number of years.
The aim of the Bill is simple and achievable, at minimal cost, but with enormous benefits to the ordinary taxpaying members of the public, who have a right to easy access to clear information about where their taxes are going and where they are levied.
Raising the tax threshold by stealth, as the Government have become increasingly adept at doing, means dishonest tax. My Bill seeks nothing more than freedom of information for the public, enabling them to make informed choices and comparisons.
The Government have declared that they are committed to freedom of information, so I hope that they will be able to support my own amateur home-grown effort and hasten its passage on to the statute book, ahead of their own long-awaited opus on the subject.
Question put and agreed to.
Bill ordered to be brought in by Mr. Tim Loughton, Mr. Francis Maude, Mr. David Heathcoat-Amory, Mr. John Whittingdale, Mr. Nick Gibb, Mr. Archie Norman, Mr. Howard Flight, Mr. Dominic Grieve, Mr. Robert Syms, Mr. Andrew Tyrie and Mrs. Ann Winterton.

Freedom of Tax Information
  FREEDOM OF TAX INFORMATION
  Mr. Tim Loughton accordingly presented a Bill to require the Government to issue taxpayers with an annual schedule detailing the taxes they have paid compared with previous years and to require information concerning the taxable component of prices on products sold to be made available: And the same was read the First time; and ordered to be read a Second time on Friday 21 May, and to be printed [Bill 85].
Orders of the Day

  Finance Bill
  [Relevant document: The Fourth Report from the Treasury Committee, Session 1998–99, on the 1999 Budget (HC 325).]
  Order for Second Reading read.
  3.42 pm
  The Chief Secretary to the Treasury (Mr. Alan Milburn): I beg to move, That the Bill be now read a Second time.
  This is the third Finance Bill of this Parliament, and it builds on our previous two Bills in reforming and strengthening the British economy. It implements the most recent Budget delivered by my right hon. Friend the Chancellor of the Exchequer—a Budget that rewards work and enterprise, rewards families and will help to deliver a stronger economic future for our country.
  The Budget will do that by locking in the economic stability that the Government have been creating over the past two years. Our approach has been right and necessary. When we came to office, we inherited an economy that was going off the rails. The national debt had doubled, the public finances were spiralling out of control, inflation was back in the system, and the economy was fundamentally weakened—[HoN. MEMBERS: "No."] The Tories do not like hearing that, but it is true. The economy was fundamentally weakened after two decades of Tory boom and bust.
  Mr. Andrew Tyrie: Is the Minister aware that, in the 1960s and 1970s, the British economy grew at about two thirds the average rate of those of our European competitors, whereas, in the 1980s and 1990s, it grew faster than our European competitors' average? Does he think that that had nothing to do with the reforms that Conservative Governments made over 20 years?
  Dr. Norman A. Godman: Where did they go wrong?
  Mr. Milburn: As my hon. Friend asks, why, then, did the Conservatives go so badly wrong? I remind the hon. Member for Chichester (Mr. Tyrie) that they inflicted on this country the two deepest and most damaging recessions that this country has ever seen. Only a Tory party as out of touch with reality as the modern Conservatives could describe that pitiful history as a golden economic legacy.
  Mr. John Bercow rose—
  Mr. Milburn: Talking of golden economic legacies.
  Mr. Bercow: The right hon. Gentleman will be aware that every Labour Government in history, without exception, have left office with levels of taxation and unemployment higher than those that they inherited. If the right hon. Gentleman is so cocksure about the future, is he prepared today to guarantee that this Government will be the exception, and that when they eventually leave
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  office—sooner rather than later—taxation and unemployment rates will be lower than they those that they inherited?
  Mr. Milburn: The hon. Gentleman is an assiduous attender of these debates, and I can tell him that we would be pleased to match our record against that of his party any day. We would be pleased in particular to contrast our record on tax promises with that of Conservative Governments. I remind him that the Labour party keeps its tax promises, whereas his party breaks such promises.
  Mr. Barry Jones: I marvel at my right hon. Friend's patience. I urge him to tell the official Opposition that, in two short years in the 1980s, the policies of Mrs. Thatcher, Keith Joseph and Geoffrey Howe led to Britain losing 2.5 million jobs. Will he please remind the Opposition of that?
  Mr. Milburn: My hon. Friend represents a constituency that is thankfully still rich in manufacturing companies, and he knows fine well that what those companies most dread is a return to the days of the 1980s and early 1990s when a million manufacturing jobs were lost, manufacturing output declined by 8 per cent. and manufacturing investment fell by a quarter. Those companies know that, far from leaving a golden economic legacy, the policies of Conservative Governments fundamentally weakened the British economy.
  Mr. Jim Cunningham: Does my right hon. Friend recall that, under the previous Government, industry was decimated, particularly in the west midlands; unemployment reached record levels; and, more importantly, people suffered from negative equity, which Opposition Members have failed to mention?
  Mr. Milburn: My hon. Friend is absolutely right. During the 1980s and early 1990s, inflation and interest rates were in double figures. Indeed, interest rates were at 15 per cent. for a full year. Tens of thousands, if not hundreds of thousands of home owners who had voted Conservative because they believed the promises that the Tories had given, found themselves with negative equity, as my hon. Friend said.
  Mr. Michael Jack: Does the Chief Secretary agree that, when the Government took office, they took over the tax plans of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke)? Those plans, together with my right hon. and learned Friend's plans for the economy, delivered inflation at the target rate of 2.5 per cent., which increased tax flows, and imposed the constraints on public expenditure. They amounted to the golden economic legacy.
  Mr. Milburn: The right hon. Gentleman feels that he must defend his own legacy, because he was a Treasury Minister at the time and I shadowed him in that job. I remind him that, if the Tories had got back into power on 1 May 1997, the tax projections in the final Budget proposed by him and his right hon. and learned Friend would have landed the British people with a higher tax burden than they will pay this year, next year or the year after.

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  Not all Conservatives have been as reticent about the past as those who have spoken this afternoon. The recently announced Scottish Tory party manifesto was a model of the new confessional style of Conservatism, about which we have heard much from the right hon. Member for Richmond, Yorks (Mr. Hague).
  Madam Speaker: Order. We have had a robust exchange to begin with, and I have enjoyed it enormously. I hope that we can now get to the Finance Bill.
  Mr. Milburn: I fear that I was provoked, Madam Speaker. You are quite right to correct me.
  In the past two years, we have been putting the economic fundamentals in place for lasting, long-term prosperity. Inflation is now under control, long-term interest rates are at their lowest level in decades, mortgages have not been cheaper for more than 30 years, youth and long-term unemployment rates have halved, and a record number of people are in work—over 400,000 more than at the time of the general election.
  Public finances have been transformed and this Finance Bill continues that process of transformation. We have cut public sector borrowing by some £30 billion, so that the Government are now living within their means, but we have been able to give hospitals and schools the biggest increase in extra funding they have ever seen—increases that were opposed by the Conservatives as reckless. What the Tories now need to declare is whether they think that the further increases in funding that we announced in the Budget and that are taken forward in the Bill are also reckless. Is it reckless to invest an extra £60 million in school books? Is it reckless to spend an extra £170 million on tackling and preventing crime, or to invest an extra £470 million on spreading the benefits of computer learning to every community in the land? Is it reckless to invest extra resources—an additional £430 million on modernising hospital accident and emergency departments and making access to primary care services in the community faster and easier? If the Tories think that it is, they should have the courage of their convictions and they should say so.
  Mr. Andrew Rowe: It is not reckless, if one has the money. Of course one has the money if one is prepared to take it, for example, from some of the poorest pensioners. Even if the amount taken is very small, it is still a high percentage of their income.
  Mr. Milburn: In that case, I am sure that the hon. Gentleman will welcome the £1 billion package that my right hon. Friend the Chancellor announced in his Budget for those pensioners, including a dramatic increase in the amount of money to help them with their winter fuel bills.
  Dr. Godman: May I make a plea for a more sympathetic tax regime for our much reduced merchant shipping fleet? I know that Lord Alexander is carrying out a study of that issue, but were a more favourable tax regime to be introduced more ships would come under the British flag, more British sailors and officers would be recruited and our nautical colleges would receive a fillip.
  Mr. Milburn: Those points are well made by my hon. Friend. They are precisely the sort of points that
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  Lord Alexander will examine in his inquiry into the reliefs and support that we should give to the merchant fleet, now and in the future.
  Mr. John Burnett: I endorse the comments of the hon. Member for Greenock and Inverclyde (Dr. Godman) on a tonnage system for taxation of shipping, on which I tabled a new clause at the Report stage of the previous Finance Bill. I hope that the Government pay attention to that point, because there was much sympathy for it in the House. I also hope that the Government will start to unravel the unfair system of long-term capital allowances, which were introduced in the previous Government's last Finance Bill.
  Mr. Milburn: I shall ensure that the hon. member's comments and those made by my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) are passed to Lord Alexander, who has now begun his inquiry and will report in due course. The approach that we are taking is prudent and disciplined. We are locking in stability by keeping the public finances under control. Over the next five years, there will be a current budget surplus of some £34 million. This Government's approach will allow us to meet our tough fiscal rules while at the same time providing a £6 billion boost to the economy at just the point in the cycle at which it is most needed.
  The Government are steering a course for stability in what is an uncertain and troubled global economy, but stability is a means, not an end. It is the essential precondition for economic prosperity and progress. In the Finance Bill, we build on that platform of stability to improve the productivity performance of the economy for the long term. For too long, Britain has faced a competitiveness gap with our competitors. There is now a 40 per cent. performance gap between the UK and the United States of America and a 20 per cent. gap between us and France and Germany. This Finance Bill will help tackle that productivity problem. It does so by taking forward measures to improve investment, to strengthen the links between business and education and to improve the tax position of growing firms.
  Clause 69, for example, extends capital allowances to help bridge the investment gap that has opened up between Britain and our competitors. Too many British firms find themselves outgunned by higher levels of investment in plant and machinery among their overseas competitors. In the most recent international business cycle, for every £100 per worker invested in the UK, the US and Germany invested £140, and France invested almost £150.
  We have listened carefully to representations from business organisations and have decided to continue enhanced first-year capital allowances to help small and medium-sized firms to grow and to invest. Similarly, clause 53 provides tax relief for companies seconding staff to schools, colleges and universities. It is part of our wider effort to bridge the gap between business and education.
  We believe that education and business working together in partnership have a vital role in helping to prepare young people for the world of work. During our pre-Budget consultation with businesses, we found enthusiastic support from firms of all shapes and sizes for a measure that will help business shape the future work

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  force that it will need. It is another small, but significant, step towards making Britain a modern, high-skill, high-learning and high-earning economy, whose success will be due to the investment that we make in the quality of our work force.
  Mr. Ian Bruce: Will the Minister give way?
  Mr. Milburn: No. I have given way several times and I must press on.
  Success will rely also on giving businesses the right incentives to invest. Clauses 24 to 26 reform the corporation tax system to give Britain the lowest rates of company taxes in our history. Indeed, those clauses give Britain the lowest company tax rate of any major European country and the lowest rate of any major industrialised nation in the world. Moreover, these new rates—of 30p, 20p and 10p—will not apply just for one year. They, or lower rates still, will apply for the rest of this Parliament. They are evidence of this Government's determination to make Britain the best place for business investment.
  The new lop rate of corporation tax for small companies in particular halves their tax rate and will benefit almost 270,000 growing firms. Two in three companies that pay tax will benefit. Those fundamental changes will leave more money in the hands of those who are best placed to create wealth and to create jobs.
  These enterprise initiatives are complemented by the other measures announced in the Budget. They include a new research and development tax credit for firms with the brightest ideas and the best potential, new rewards for the best entrepreneurs and new incentives for the best investors. There will also be a new Small Business Service, to provide help for those firms that will be the biggest source of new job opportunities in the future.
  The Bill builds on the platform of stability that the Government are creating by helping to develop an economy that is based on enterprise and knowledge. However, it also recognises that our country cannot have an enterprise economy without also developing a fair society. The one sustains the other. We cannot have a successful economy without a fair society, in which the talents of all our people are deployed to the full: nor can we have a fair society without a successful economy in which wealth creation provides the surest foundation for job creation.
  The Bill takes forward measures to modernise and make fairer the whole tax system. Taxes are being cut for low and middle-income families. More than that: according to the independent Institute for Fiscal Studies, people in every decile group—from bottom to top—will gain from the measures. These are tax cuts for the many, not just for the few. The average household will be £380 a year better off, and the tax burden on the average family will fall to below 20 per cent. for the first time in more than 20 years. However, these are not just tax cuts. They are tax reforms, too. They are tax cuts for a purpose: to reward work, enterprise and families. In our previous two Budgets, we developed new measures to help people move from welfare to work. Now we are taking that fundamental reform a stage further by ensuring that work pays. For years, successive Governments have taken too much tax from those who work hard but are by no means
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  wealthy. For years, successive Governments of both persuasions connived in the situation where the working poor, facing marginal tax rates sometimes in excess of 100 per cent., were penalised simply for trying to move off benefit.
  The Finance Bill, with the Government's other measures, such as the minimum wage and the working families tax credit—both opposed by the Conservatives—begin to end the perverse incentives that encourage benefit dependency. Instead, it aims to encourage independence by allowing working families to keep more of their income rather than paying it out in taxes. We do so in the recognition that work is the best way out of poverty and that, for too many people, financial uncertainty has acted as a real barrier to work for far too long.
  Clause 20 introduces the lowest starting rate of income tax the country has seen for 35 years. The new 10p rate on the first £1,500 of income will halve the tax rate for almost 2 million people, most of them low-paid. Our reforms to national insurance will lift almost 1 million people out of paying contributions at all. From next April, every basic rate and top-rate taxpayer will benefit from our 1 p reduction in income tax. On any count, those are major reforms to the tax system.
  Mr. Bercow: Will the right hon. Gentleman give way?
  Mr. Milburn: I have given way to the hon. Gentleman already; I am counting.
  Our reforms will make working families better off and, in contrast to the practice of the Conservative party in power, the tax cuts honour our promises at the general election.
  Mr. Malcolm Bruce: I assure the Chief Secretary that I am listening carefully to what he says and agree with his broad thrust. Does he accept that he could have done more to increase the personal allowance so that people at the bottom end pay tax at a lower level: not at 25 per cent. but at 50 per cent. of the average wage, as was the case at the end of the war? Why should people on the minimum wage still be paying tax not only now, but for the foreseeable future under this Government?
  Mr. Milburn: I hear that from the Liberal Democrats consistently. We carefully compared their policy of increasing the allowances with our policy of introducing the 10p rate. In terms of benefit to the low-paid and the worst-off, there is no comparison at all. The biggest gains go to the lowest-paid as a consequence of the introduction of the 10p rate. The hon. Gentleman may argue about it, but that is the situation.
  I say to the Conservative party that, by introducing the 10p rate, we have honoured the pledges that we gave at the general election. We said that we would not increase the top or basic rates of income tax. We have honoured that pledge. We said that we would not extend VAT to food, children's clothes, books, newspapers, and public transport fares. We have honoured that pledge, too. We said that we would cut VAT on fuel and we have done so. We also said that we would introduce the lop rate. We have now done that too, and millions of families will see the benefit in their pay packets from next month.

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  We said that we would do something else as well. We said that we would give more support to families. The record rises in child benefit are a reminder that it is Labour that increases support for families with children and the Conservative party that freezes it. It is Labour that will pay up to an extra £416 a year into the pay packets of families with children. The new children's tax credit in clause 27 provides most help to those who need it most, when they need it most: families when they are bringing up children. We have been able to do that by abolishing the married couples allowance and related allowances and focusing their help where it is most needed.
  Our reforms to child support have been widely welcomed as a decisive step to tackling the disgrace of child poverty in Britain. I remind the House that the Child Poverty Action Group, for example, said the day after the Budget:
  "The Chancellor has proved today that he supports the family and is genuine in his commitment to end child poverty".
  The National Council for One Parent Families said:
  "This is a clear-thinking, modernising Budget which will help direct help where it is most needed: to families with children, especially those in poverty."
  In total, 700,000 children will be taken out of poverty by the measures that we are taking.
  Almost the only organisation that opposes the new children's tax credit is the Conservative party, despite what the Leader of the Opposition said in his freedom and the family speech just last year. Then he said:
  "If we were going to phase out the married couples allowance we should have replaced it at the same time with a new allowance, better targeted on families who really need the help."
  We have delivered precisely what the right hon. Gentleman was calling for, but of course that was then; that was a year ago. The Tories are now singing a different tune. Now they oppose the abolition of the married couples allowance, despite the fact that they repeatedly cut it when they were in office, more than halving its value for some people. They had a Chancellor of the Exchequer who described the allowance as an anomaly. They allowed the MCA to be available to people whether they were married or not, separated or not, or had children or not. It is as if collective amnesia has taken hold of the entire Conservative party.
  I know that the former Chancellor Lord Lamont said that the Conservatives were a party in office, not in power, but they cannot wash their hands of all responsibility for what they did while they formed the Government of the day. That is precisely what they are trying to do now. Tory political amnesia is not confined to only one part of the Bill. The same symptoms of doing one thing in office and saying another out of it are evident in the Conservatives' approach to the fuel duty escalator. They huff and puff and complain about it now, but there was no huffing or complaining when they were in office, or when they introduced it. Indeed, the shadow Chief Secretary, the right hon. Member for Horsham (Mr. Maude), was a Treasury Minister at the very time.
  Mrs. Ann Winterton rose—
  Mr. Milburn: I remind that right hon. Gentleman and other Conservative Members of the warning issued by the
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  then Tory Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), about the escalator—the hon. Member for Congleton (Mrs. Winterton) should listen to this. He said:
  "Any critic of the Government's tax plans who claims also to support the international agreement to curb carbon dioxide emissions will be sailing dangerously near to hypocrisy."—[Official Report, 30 November 1993; Vol. 233. c. 939.]
  Mrs. Winterton: The Chief Secretary obviously has a very short memory. When the Conservative party was in government, it introduced the tax to which he referred at 5 per cent. per annum. The Labour Government have put the tax up to 6 per cent. in each and every Budget, which is three Budgets in two years. They have done it at a time when dery is much cheaper on the continent than in the UK. That is why the road haulage industry is thinking of flagging out. The right hon. Gentleman ought to be consistent in what he says.
  Mr. Milburn: If I were the hon. Lady, I would be extremely cautious. She should look at the figures. Since the general election, the fuel duty escalator that we have imposed on diesel has led to an increase of 7p per litre. The Conservatives increased the price of dery by 26p per litre. I also remind the hon. Lady of the other measures that the Government have taken to help Britain's haulage industry. We have frozen vehicle excise duty for 98 per cent. of lorries. We have doubled VED reductions for the cleanest lorries and we have widened the differential between cleaner diesel and ordinary derv. And, of course, the cuts in corporation tax will benefit haulage firms, just as they will benefit other firms.
  Even at this stage, it is not too late for the hon. Lady and her party to say now what they said when the Conservatives were in office—that the escalator is a necessary environmental measure that will help Britain meet our international legal obligations and contribute to better air quality in our country. The Tories should be supporting the escalator duty now rather than opposing it, but their opposition to the Bill speaks more of them than it does of the Government. They failed in government, just as they are now failing in opposition. They failed to keep their promises then and they are failing to maintain their policies now. They say that they want to put their past mistakes behind them, but their opposition to the Bill shows that they have failed to learn any lessons from their defeat in May 1997. Isolated in Britain and determined to isolate Britain in Europe, they have put themselves on the margins of British politics. They are incapable of knowing what is good for Britain because they are so out of touch with the British people.
  The Conservative party belongs to the past. By contrast, the Labour Government are delivering for the future. The Bill will help to build a stronger economic future for our country; it will help to create an enterprise economy and a fair society in which there is opportunity for the many and not merely for the few. The Bill provides the right incentives for people to work and for businesses to invest. It offers a better deal for British business and a better deal for the British people. I commend the Bill to the House.
  4.11 pm
  Mr. David Heathcoat-Amory: I beg to move, To leave out from 'That' to the end of the Question, and to add instead thereof:
  "this House declines to give a Second Reading to the Finance Bill because it imposes further hidden taxes on families, on homeowners, on motorists, on consumers and on business, adding extra costs to business at a time of economic uncertainty and rising unemployment and fails to reverse the damaging measures introduced by the last two Finance Acts which introduced similar damaging and hidden tax increases together with increases in the tax burden on companies and tax rises on savings and on pension funds."
  There was nothing new in the Chief Secretary's speech, but there is something new in the Finance Bill this year. It begins, on its introductory page, with the Chancellor of the Exchequer's assertion that it is compatible with the European convention on human rights. It is just as well for the Government that the provisions of that convention do not include the right of the public to honest and straightforward accounts and descriptions of the amounts that they will be paying in the coming year. The whole Budget exercise—from Budget day to the Finance Bill—has been a story of half-truths, fiddled descriptions and cooked statistics. We heard some more of those in the Chief Secretary's speech today.
  The story began in the Chancellor's speech on Budget day, but was heard in the Prime Minister's words the following day when he told the House that there was
  "a net tax cut of £4.5 billion.—[Official Report, 10 March 1999; Vol. 327, c. 358.]
  That is a complete invention. If we try to piece the crime together from the Red Book, it seems that what the Prime Minister did, and what the Treasury is still trying to do, is to reclassify all the spending measures in the Budget table as tax reductions; they have reclassified all the spending measures as negative taxes. One can take an example more or less at random; there is a pledge of an extra £5 million a year for green transport plans. We might think that an extra £5 million a year is a pretty insulting amount to set beside the £1.7 billion that the Government are raising in this Budget alone from extra fuel duty. However, the point is that that extra expenditure on green taxation is classified not as an expenditure measure, but as a reduction in taxation. That is how the Government and the Prime Minister arrived at that £4.5 billion tax cut.
  It was not only the Prime Minister; in the Budget debate of the following week, the Chief Secretary referred to a £4 billion tax reduction—he lost £0.5 billion somewhere during that week, which the Chancellor does not care much about. However, there is no possible way that the Budget and the Finance Bill can be construed as cutting taxes on anything like that scale. Indeed, the House of Commons Library has described it as, in total, a tax increase measure of £200 million over the next three years.
  Mr. Barry Gardiner: Will the right hon. Gentleman tell the House whether his party's policy is now to abandon the fuel escalator and so achieve the tax reductions he seeks?
  Mr. Heathcoat-Amory: Yes, it is our policy to abandon the fuel escalator, and I shall talk about that later.
  I am dwelling—perhaps to the embarrassment of Treasury Ministers—on the fact that they have fiddled the figures so as to try to dress up a tax-raising Budget as a
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  tax-reducing Budget. They did so on a spectacular scale by classifying the working families tax credit not as an expenditure item, but as a reduction in taxation. I do not ask the House to accept my word for that: the Chief Secretary, in an answer to a question asked by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), confirmed that the WFTC is an expenditure item and should be classified as such.
  The Chief Secretary has broken his own rules by permitting the Prime Minister and his colleagues to claim a tax reduction. If the right hon. Gentleman goes on like that, he will end up describing the extra cost of the war in Kosovo not as an expenditure item, but as a tax reduction. Does he have any idea how much damage he does to the cause of transparency and honesty in public accounting by abusing his own definitions in the way I have described?
  Mr. Roger Casale: The right hon. Gentleman appears to be arguing that, if one looks in the Red Book and adds up the figures, one will conclude that a benefit is the same as a tax reduction. However, if he leaves the Red Book for a moment, visits my constituency and meets some of the young people who have passed through the gateway to the Government's new deal and who are now going into work, he will notice that there is a great difference between a benefit and a tax credit. A tax credit gives a person an incentive to return to work that a benefit does not give. The whole thrust of the Finance Bill is to give people an incentive to work and to reward work, and I hope that the right hon. Gentleman accepts that that is the reason why some of the changes have been made.
  Mr. Heathcoat-Amory: I agree that there is a big difference between a benefit and a tax cut; our point is that the Government are deliberately confusing the two. It is not me but the Chief Secretary who calls the WFTC an expenditure item, but the right hon. Gentleman has not followed that through in the presentation of his figures, on the basis of which he claims that the Budget is a tax-cutting Budget. I strongly support the Bill presented to the House earlier this afternoon by my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton). It is designed to put some honesty and straightforwardness back into the presentation of the national accounts.
  Jacqui Smith: In the spirit of transparency and honesty, will the right hon. Gentleman now explain which tax he would increase, or which section of expenditure he would reduce, so as to recover the £1.6 billion lost by getting rid of the fuel escalator, which is now Conservative party policy?
  Mr. Heathcoat-Amory: If the hon. Lady will wait, I shall explain. One of the items that I intended to raise later was the Government's failure to reform the welfare state as they promised. The House will remember that the Prime Minister promised to fund the extra expenditure on health and education by reforming the welfare state, as the Conservative Government had been doing. In the last three years of our Administration, the Conservatives achieved a flat expenditure profile on social security expenditure: it went up in real terms by a total of 1.5 per cent. over those three years. That contrasts with

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  the 3 per cent. annual real-terms increase to which we have now returned. If the Labour Government had continued the successful reforms that the Conservatives had implemented, there would be plenty of money available to use an alternative to the tax-raising measures that I criticise.
  Mr. Bercow: Does my right hon. Friend recall that, writing in The Times of 11 March this year, the respected economic commentator Anatole Kaletsky dismissed the Government's claims for the Budget as "simply false"? Mr. Kaletsky went on to say:
  "As shown unambiguously in the Government's own Budget Statement, taxes have risen in each of the past two years and will rise even more in the next financial year."
  That is surely clear beyond doubt—even to the Chief Secretary to the Treasury.
  Mr. Heathcoat-Amory: My hon. Friend is entirely and absolutely correct. The Treasury Committee reached a similar conclusion. The Committee—which has a distinguished Labour Chairman, the hon. Member for North Durham (Mr. Radice), and a Labour majority—deliberated about the precise matter to which my hon. Friend referred, and concluded:
  "The tax burden will increase during the coming financial year."
  The Committee echoed the evidence given by Andrew Dilnot, the director of the Institute for Fiscal Studies, who said:
  "the aggregate tax burden is certainly rising."
  People want to know whether their tax burden will be higher next year than it was last year. The fact is that, according to independent commentators and a Committee of the House, the tax burden is increasing and will continue to increase next year.
  Mr. Ian Bruce: When the Government came to power, they introduced a utilities tax—the so-called windfall tax—to retain the totals and make it appear as though taxes were not rising. More important, has my right hon. Friend noticed that, although the new deal—which has operated for a whole year for 18 to 24-year-olds—reduced youth unemployment in the Government's first year, it is now rising again? The Government have taxed the utilities, wasted the money and put more people out of work.
  Mr. Heathcoat-Amory: My hon. Friend is correct. All the make-work and employment schemes in the world do not compensate for a job market that is going in the wrong direction. If one taxes businesses excessively, one will create fewer jobs. It is quite simple, and my hon. Friend is right to draw that fact to the attention of the House. The only people who do not understand are those sitting on the Government Benches. The truth has been revealed: this is a tax-raising Chancellor and a tax-raising Government, it was a tax-raising Budget, and we now have before us a tax-raising Finance Bill—and we will oppose them all.
  One would not know all that if one were to rely on the propagandist leaflet published by the Treasury on Budget day. Some 1.5 million copies of the pamphlet, called "Budget 99", were printed and circulated. A post office
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  in my constituency has refused to distribute the leaflet on the ground that that would be in breach of its contract with the Post Office not to deal in partisan and party political literature.
  The postmaster in my constituency has spotted several curious omissions and misleading statements in that leaflet. For instance, it asserts that the 10p starting rate applies to the first £1,500 of income. That is flatly untrue—we did not discover that from the Chancellor on Budget day, but we have since read the Red Book and the small print. We now know that all those who rely on savings—and the Government are trying to encourage people to save—will continue to pay tax not at the new 10p rate but at the rate of 20p on that band of income.
  The Government have compounded that injustice by failing completely in the Finance Bill to reverse the injustice already referred to whereby 300,000 non-taxpaying pensioners will not receive their dividend tax credits. That scandal remains uncorrected. The Government are compensating better-off savers and taxpayers for the withdrawal of dividend tax credits. However, those who, by definition, are the poorest savers—those who do not pay tax—will not receive from April this year any of the dividend tax credits.
  The Chancellor and the Treasury leaflet also misdescribed the nature of the 10p tax band in another respect because they did not refer to the fact that, although the Government are introducing a 10p band, they are abolishing the 20p band. More than 4 million people will now be paying a higher marginal income tax rate of 23 per cent. instead of the previous rate of 20 per cent. In other words, they are being pushed upwards into the 23p band rather than downwards to the new 10p band.
  Exactly the same habit of stealth is apparent in the treatment of the married couples allowance. We shall vote and argue to retain that allowance because it is important that the institution of marriage remains recognised in the tax system. Not only have the Government abolished that allowance, but the children's tax credit, which the Chief Secretary just described, will not replace it until a year later. For a full year between the abolition of the married couples allowance and the introduction of a new and unsatisfactory alternative, the Government have the use of nearly £2 billion.
  I turn now to the savings fiasco. The Government came into office committed to a radical reform of the welfare state. They had great plans to reform and reduce expenditure on social security. As I have already explained in reply to an intervention, they failed to do that. Conservative Members understand that reform is a question not only of cutting social security benefits, but of getting people into employment, ending their reliance on benefits and helping them to rely on their own savings and pension provision. So what are the Government doing? They are enmeshing businesses and savings in a web of regulations and extra taxes.
  That is well illustrated by the Government's spiteful abolition of the most successful vehicles of all time—tax-exempt special savings accounts and personal equity plans. They were established over many years and have a proven record of success. They have genuinely established a savings habit among the British people. I do not know whether the Government's action is due to a lack of business experience on the Treasury Front Bench or to stupidity, but they are abolishing those tried and

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  tested savings vehicles and replacing them with a scheme that is wholly untested and not trusted. People do not trust the new individual savings accounts because the Government cannot be trusted on savings ever since they introduced their annual £5 billion raid on pension funds. No member of the public trusts the Government on pensions or savings.
  Mr. Gardiner: Does the right hon. Gentleman accept that the take-up rate in ISAs suggests that the Government have maintained the public's trust and have, in particular, targeted the means to save at those on lower incomes, rather than those who, rightly, took up PEPs in the past, most of whom were on higher incomes?
  Mr. Heathcoat-Amory: No, the hon. Gentleman is entirely wrong. I do not know whether he read The Sunday Times last weekend, but it reported that the take-up of ISAs is running at about 50 per cent. of the previous commitment to PEPs. In contrast to the Economic Secretary's complacent remarks at Question Time last week, the record on the take-up of, and savings through, ISAs is extremely disappointing. ISAs are less generous, more expensive and more complex than what they are replacing. The Prime Minister used to refer to an army of an extra 6 million savers that he was going to attract to this new savings product, but we do not hear any more about that from the Government; perhaps the Financial Secretary, who is to reply to the debate, can give us some updated figures. How many of those extra 6 million savers are applying to save through this new and untried savings vehicle?
  Another awkward statistic for the Government, again from their own Red Book, is that the savings ratio has fallen from 11 per cent. in 1997 to 7 per cent. last year. The Government's effort to create a savings culture to replace a welfare culture has failed, and they have only themselves to blame.
  Business taxation—
  Ms Sally Keeble: Will the right hon. Gentleman give way?
  Mr. Heathcoat-Amory: I hope that the hon. Lady will forgive me, but I have been fairly generous in giving way. I must make progress because several of my hon. Friends wish to contribute to this important debate.
  Exactly the same propaganda machine has been busy in respect of business taxes. The Government came into office saying that they wanted to be friendly to businesses. Well, they have been friendly to a number of business men, but the general taxpaying business community has experienced nothing but an increase in the regulatory and tax burden on their enterprises. There are pages and pages of extra regulations and a massive extra complexity in the tax system.
  The Government do not understand that a complex tax system, with multiple rates and complicated allowances, is itself a form of overhead that has to be borne by the productive sector of the economy. The Government have taken a tax system that we were simplifying and lowering, and made it more complex and raised it. I ask the House not to take my word for it, but to listen to what outside commentators and trade bodies are saying.
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  The president of the Confederation of British Industry, Sir Clive Thompson, said on Budget day:
  "over the next four years as a result of Budgets which we've seen in the last two years, we are going to face something like a £20 billion increase in business taxation".
  If the Government do not agree with that figure, perhaps they would like to say so now.
  The problem does not lie only with the taxes inherited from the previous two budgets. The Association of British Chambers of Commerce, again in response to the Budget, said that its members faced an extra £3.2 billion increase in taxes over the next three years from the 1999 Budget alone. It concluded in a press release:
  "business today is more heavily taxed, more heavily regulated than we were two years ago".
  These are the very firms on which the Government are relying to produce the extra jobs for their employment schemes, a point made in an intervention by my hon. Friend the Member for South Dorset (Mr. Bruce).
  Unemployment in my constituency is going up because firms are simply not able to take on extra unemployed people because of the extra regulations and taxes heaped on them in one Budget after another. The Prime Minister goes to Milan and lectures other European Union leaders on the need to follow the United States model of low regulation and low taxes, yet in the Finance Bill he is converging not on that model but on the European Union model of more regulations and higher taxes. A very good example is what the Chancellor is doing with stamp duty, which is going up again. Contrary to what the Chancellor implied in his Budget speech, three quarters of the revenue is paid by businesses, not by individuals. Again, he is heaping extra burdens on the very sector of the economy that he hopes will provide extra employment.
  The leaflet to which I have already referred is entirely silent on stamp duty, even though stamp duty raises more than three times as much as something that the leaflet does describe—a new research and development tax credit. That is proudly stated in that propagandist leaflet which has supposedly gone to 1.5 million households, even though it is not in the Finance Bill and will not come into effect until 2001. That is what the taxpayer is paying for—propaganda issued by the Treasury, which talks about measures not in the Finance Bill and covers up tax-raising measures that are in it.
  I have dwelt at length on the fiddled figures. I shall end by mentioning indirect taxes. We shall debate the subject at greater length tomorrow, which is an Opposition day, but let me simply say that it is now beyond doubt that the Government are engaging in a deliberate and systematic raising of fuel duties, which not only does great damage to the rural motorist and those who have to use car transport, but is making an entire British industry uncompetitive in European terms.
  Not only have the Government increased the escalator: they have had an extra Budget. Moreover, they have targeted the increases on the fuel of industry—diesel. They have made it nearly twice as expensive as it is for most of our competitors on the continent. Diesel duty is now exactly twice the European Union average.
  All that is done under the guise of helping the environment. Will the Government explain how it helps the environment to have fuel smuggled across the border into Northern Ireland? How does it help the environment to have British lorries going to the continent to fill up

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  with cheap fuel? How does it help the environment to have foreign lorries coming into the country, using cheap fuel and taking jobs from British haulage companies? People in the haulage industry want an answer of the Government—how will putting them out of work help the environment?
  I confirm that we, the Conservatives, now commit ourselves to ending the escalator and ending this fiasco of fuel duties.
  Mr. Christopher Leslie rose—
  Mr. Heathcoat-Amory: I shall not give way. I am ending my remarks now. I hope that the hon. Gentleman will catch your eye, Mr. Deputy Speaker, if he has something original to say—which would be very unusual.
  I wish to end on the following point. The fuel duties—
  Jacqui Smith: Will the right hon. Gentleman give way?
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The right hon. Gentleman has indicated that he is not going to give way.
  Jacqui Smith: He promised me.
  Mr. Deputy Speaker: Order. I do not care what he promised the hon. Lady.
  Mr. Heathcoat-Amory: I ask the hon. Members for Redditch (Jacqui Smith) and for Shipley (Mr. Leslie) to forgive me. I usually give way generously, but I am aware that time is moving on.
  What the Government are doing on fuel duties is symptomatic of their approach to taxation. Before the Budget, the Prime Minister said that he had
  "no plans to increase taxation at all".
  The Government have broken that promise repeatedly and deliberately and, by a mixture of stealth taxes, cooked statistics and sheer ignorance, they are putting at risk the golden economic legacy that we left them. Conservative Members will expose and oppose them. I ask all my right hon. and hon. Friends to join in that endeavour.
  4.38 pm
  Mr. Giles Radice: I welcome this Finance Bill, which enacts an excellent Budget that has provided help for most families and for business, and also useful tax cuts and public spending increases, all within a highly prudent fiscal framework.
  The Opposition have quoted what various people think about the Budget. It might be worth quoting Mr. Samuel Brittan in the Financial Times. He says:
  "Mr. Brown has removed two obsolete and harmful reliefs—that for mortgage interest and the so-called married couples allowance. He has improved the national insurance progression to increase incentives and lower the poverty tax. He has also undertaken desirable measures of redistribution towards families with children, where much of today's poverty tends to be found, and to provide top-up benefits for those who prefer to work for modest pay rather
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  than try to claim the dole. He has moreover made a good start on his declared aim of integrating tax and social security into what might eventually be called a negative income tax."
  That is the opinion of someone who is not a member of the Labour party. That is Samuel Brittan speaking about the Budget. We did not hear much of that from the right hon. Member for Wells (Mr. Heathcoat-Amory), the Opposition spokesman.
  It is an excellent procedural device that the report of the Select Committee on the Treasury is discussed with the Second Reading of the Finance Bill. It is right that it should be, because we examine the economic background to the Budget and some of the issues that arise from it. I want to refer to both approaches. First, I think that the report reflects the fact that on our Select Committee there is broad support for the Government's economic and fiscal strategy. I shall quote from one of our expert witnesses, Mr. Gavyn Davies, who described quite well the dilemma facing the Government when they took office. He said:
  "When the present Government took office two years ago, the economy was in the midst of an intense consumer led boom, and the key issue for the new Chancellor was whether he could control this boom without inducing a hard landing, with sharp increases in unemployment. Past history was not encouraging in this regard—without exception, all previous consumer booms of this type in the post-war period had been followed by a period of negative growth in real GDP, usually accompanied by new peaks in unemployment."
  When we think about post-war history, there was the Maudling dash for growth, the Barber boom, the Lawson boom and the Clarke boomlet. I was a supporter of the right hon. and learned Member for Rushcliffe (Mr. Clarke), who I thought was an excellent Chancellor, but at the end of his period in office he allowed the economy to get slightly out of control. I accept that the Labour party has shared in some of that history. I can remember standing unsuccessfully for election to this place in 1964 on the promise that we would manage to increase growth.
  Basically, we now know that the aim of fiscal policy is to provide stability on the ground that, if we can secure that stability, growth will to some extent look after itself. I think that that is a sensible economic policy. It is one that has the support, by and large, of the Treasury Committee irrespective of party. If we study the figures, it seems that the Treasury forecast of 1 to 1.5 per cent. growth in 1999—that is predicting a soft landing rather than a hard one—is now quite a possibility, in a way that we would not have thought six months ago, for example. It seems that we shall have a successful slowdown without recession.
  Of course, there are potential problems.
  Mr. Tyrie: Will the hon. Gentleman give way? Mr. Radice: I shall finish this part of my speech.
  There is the international economic situation, the United States and the level of the pound and what that might do for the British economy. We conclude in our report that the Treasury forecasts are not unrealistic.
  Mr. Tyrie: The hon. Gentleman has partly covered the point that I wanted to make. However, does he not think that, if there is to be a soft landing, that will have far more to do with the fact that there has been a global slowdown—I think particularly of the collapse in Russia and the attendant

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  effects that that has had throughout the rest of the global economy—than with any change in economic policy by the Bank of England or in fiscal policy?
  Mr. Radice: I understand what the hon. Gentleman is saying. However, the Russian experience might have produced a hard landing or a recession rather than a soft landing. I think that the pick-up in consumer confidence that we are now seeing and the impact that that is beginning to have on output give us some hope at least that growth will be resumed. That is extremely good news. We did not hear anything of that from those on the Opposition Front Bench.
  Two possible suggestions for this change were put to us on the Select Committee. There was, in a sense, an unholy alliance between Patrick Minford and Gavyn Davies, who both said that beneficial structural changes in the labour market had made it possible for the economy to be run at an unemployment rate substantially below that which had previously been consistent with stable inflation. If that is so, it is good news for the economy, as it means that the equilibrium or sustainable level of unemployment will be much lower than we previously thought. That background has enabled the Bank of England to implement the 225 basis points cut, which has helped the economy.
  The second suggestion—here I come to the Chancellor and the Government's policy—is that so far the co-ordination in macro-policy between fiscal and monetary measures has been effective. We comment on that in our report, and it receives support from all quarters of our Committee.
  A year ago, there was criticism of the Chancellor for failing to tighten fiscal policy sufficiently. However, it is now clear that, because of the tight control over public spending, and also because of tax increases, there has been a 3 per cent. tightening of gross domestic product since 1997. That is fairly substantial, and it is the Goldman Sachs definition, which is not challenged nowadays.
  There is no doubt that, in the present Budget, despite some marginal fiscal stimulus, that tightening has continued. That has enabled the Monetary Policy Committee to cut faster and further than it otherwise would have been able to do. That vindicates the Chancellor's decision to give operational independence to the MPC to run interest rates. It has also shown that it is possible at the same time to co-ordinate monetary policy with fiscal policy. The Chancellor has tightened, and that has enabled the Bank to reduce interest rates. So far, that has worked successfully to produce not the recession that people feared six months ago, but, hopefully, a soft landing.
  We comment on those matters, but we also examine some of the controversial issues about which we have been hearing this afternoon. What is the fiscal stance, and what about the tax burden? Of course, truth is many sided. We heard one aspect of the truth from the right hon. Member for Wells.
  Let us consider the fiscal stimulus. The Chancellor says that his measures will produce a £6 billion fiscal stimulus over three years. That is true, but overall the Budget will be neutral or slightly tightened. If one considers the Budget in isolation, there will indeed be a £6 billion stimulus, but that does not reverse the fiscal tightening previously announced.
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  The Budget is basically neutral, as the MPC said in its inflation report. When the Treasury representative reported to the MPC about the Budget, the MPC stated that the overall position was reported to remain stable, which has allowed a further 1.25 per cent. interest rate cut since the Budget. The Budget is not unrealistic or irresponsible. It allows further cuts, which is good news for the economy.
  Mr. Bercow: Given the inextricable link that exists between monetary policy and fiscal policy—a link that the hon. Gentleman highlighted—does he accept as a matter of plain logic that the arrogation of powers to the European central bank to run monetary policy will in due course inevitably have to be followed by a similar arrogation of powers to the central bank to run fiscal policy as well?
  Mr. Radice: That is a debate for another day. As the hon. Gentleman knows, I shall be pleased to take part in it, but I will not be tempted down that path this afternoon.
  I shall now deal with the tax burden issue. Mr. Andrew Dilnot, of the Institute for Fiscal Studies, told the Select Committee that
  "it is possible for anybody to … say, 'The changes announced in this budget will cut the tax burden' … while it is also a true statement to say that, as a result of all the budgets of this Parliament, taxes will be going up in April."
  Our conclusion, with which neither of the two Front Benches may entirely agree, was that, both on the basis of including rebates and scoring them as expenditure and on the basis of excluding rebates scored in that way, taxes are cut in this Budget. There is no doubt about that: I have done the sums, and looked at the proposition in all possible ways.
  On the other hand, if we also take account of increases—mainly in company taxation—that were announced in previous Budgets and will come into effect, we see that the tax burden will increase. I do not think that that is anything to be ashamed of, however, because there has been a reduction in tax on people, and some increase in tax on companies, during the period concerned. That is a sensible policy: it has allowed tax rates to be reduced, and has allowed us to control the Government's fiscal policies.
  Mr. Ian Bruce: Surely, at the beginning of a tax year, people want to know whether they will pay more tax than they did in the previous year, rather than when the Government announced that they would pay the increased taxes.
  Mr. Radice: As a result of this Budget, most individuals will pay lower taxes. The Institute for Fiscal Studies has said that. It is not just coming out of my head; it is what we were told when we took evidence. That is the point of Select Committees: experts come and tell them things.
  Mr. Heathcoat-Amory: I hesitate to intervene, but I must correct what the hon. Gentleman has said about the evidence from the Institute for Fiscal Studies. Mr. Dilnot specifically said that, although it appears that families are

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  better off, the taxes raised by increases in corporation tax and the removal of tax credits are, in effect, eventually borne by individuals. He said that
  "we can be certain it is people who will pay them."
  The distinction between company taxation and the taxation of individuals is, to that extent, rather artificial.
  Hon. Members: What is the reference?
  Mr. Heathcoat-Amory rose—
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. We cannot have sedentary exchanges. The hon. Member for North Durham (Mr. Radice) gave way to an intervention; he must now deal with it.
  Mr. Radice: The right hon. Member for Wells quoted from our report without giving us any reference.
  Mr. Heathcoat-Amory: I quoted from Mr. Dilnot's response to a Conservative questioner. On page 4 of the minutes of evidence, he says that it is rather artificial to suppose that company taxes are borne by companies. He makes the point—a point that is familiar to tax specialists—that all taxes are eventually borne by the public and by individuals.
  Mr. Radice: That is a possibility, but it does not apply in the short term, and it may not even apply in the medium term.
  Mr. Bercow rose—
  Sir Michael Spicer rose—
  Mr. Radice: No, I will not give way for the moment. I want to make some progress.
  Sir Michael Spicer rose—
  Mr. Radice: Oh, all right.
  Sir Michael Spicer: The hon. Gentleman is giving a fair interpretation, certainly of what the Select Committee has said and of what the facts are, but why are his own Front Benchers so coy about the net effect of all these taxes in respect of the percentage of gross domestic product if the position is exactly as he describes?
  Mr. Radice: My Front Benchers have been making the point that this Budget reduces taxes. That point has been denied by Opposition Front Benchers.
  Sir Michael Spicer: The Chancellor, in evidence, refused to accept the precise point that I am now raising. He constantly refused to accept that taxes were going up over a period in respect of the percentage of GDP, even if the various Budgets were compounded. Why does the Chancellor think, in his own mind, that that is the case?
  Mr. Radice: The Chancellor must answer for himself. I am saying that the Government have been trying to make it clear this afternoon that taxes will decline as a result of
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  this Budget; they will be lower than they otherwise would have been. I am not sure that that point is accepted by Conservative Front Benchers, but they must consider that fact—it is the real issue.
  The tax burden depends on which definition people accept. We have looked at different ways of calculating the tax burden as a percentage of GDP. The excellent table 2, which is on page xi of the Treasury Committee report, shows that, in all three aspects, there is a reduction in the tax burden related to GDP as a result of this Budget. It goes up in latter years. It is only fair to say that, in respect of the national accounts definition of the tax burden, receipts rise year by year—including this year.
  Jacqui Smith: When considering the tax burden, would it also be fair to say that figures in the 1999 Red Book are lower than those in last year's Red Book and lower than those in the last Conservative Budget?
  Mr. Radice: Both those points are correct and, in the light of our report, it is quite absurd to accuse the Government of fiddling the figures. That is a stupid charge to make against them. It is also absurd to talk about smoke and minors—everything is in the Red Book, if hon. Members trouble to read it.
  I accept that, in some instances, the Red Book is not as clear as it might be and takes some reading. Therefore, our report contains some presentational suggestions, which I hope the Treasury will look at. [Interruption.] The right hon. Member for Fylde (Mr. Jack) smiles, but some of those suggestions would have been applicable when he was in government. Our experience over a number of years prompted me, as Chairman of the Committee, to draft those suggestions. They were accepted by the Committee.
  Mr. Jack: I smiled because I have read those three paragraphs in the conclusion. I was quite amused by the fact that it took this Budget to provoke the hon. Gentleman and his Committee to administer a real rap across the knuckles to the Treasury for having gone so far in making it so difficult to find out some of the detail.
  Mr. Radice: It was very much the same when the right hon. Gentleman's party was in power, so he cannot come up with that kind of line. He knows that perfectly well.
  There is no table setting out the basis on which the Budget changes are estimated. They are difficult to work out—one has to be a considerable scholar to do so—and they are not easily accessible. The figure in question is the £18 billion from which the Government were able to derive tax cuts and increase spending.
  As our report says:
  "We … asked for a note on how the figure could be derived. This note explains that the £18 billion figure is reached by subtracting from the expenditure changes listed in table B13 the figures in lines 3, 6, 15, 16 and 19 to 27 of table 1.11, which are the budget measures affecting spending as distinct from taxation."
  I can see that, but it is rather a difficult way for the ordinary individual to work out what is happening. We suggest that, next time, the Government give a clearer table so that we can understand the figures better.
  Mr. Jim Cousins: I am grateful to my hon. Friend for giving way, because he has given me the opportunity to be a total Government loyalist.
  Mr. Radice: A sycophant to the end.
  Mr. Cousins: Indeed.
  Does my hon. Friend accept the fact that one does not have to explore the highways and byways of accounting conventions to understand that for workers earning half to three quarters of the average income—those are the workers about whom we, as Members of Parliament from the north-east of England, are concerned—the Budget represents a substantial reduction in net direct income tax and net national insurance contributions, as well as, for those who have children, a considerable, almost staggering, increase in support through family credit and working families tax credit?
  Mr. Radice: I accept that. Indeed, I started my speech by making some very favourable remarks about the Budget, and I quoted Samuel Brittan, who also made favourable remarks.
  I shall finish by offering the Government some more of the Select Committee's suggestions. We would like the tables illustrating the financial effects of successive Budgets to show them not only separately, but combined. That would make it easier to see what was going on.
  We would also like to be able to divide taxation and those benefits that are scored as expenditure. Again, that would make it easier to work out what was going on. There should also be a table in the Red Book on distribution, so that we could see the good things that the Budget has done. We should not have to rely on parliamentary questions.
  I am in favour of the Budget leaflet suggested by the Chancellor, and I think that it should be delivered to every household—but there should be an independent element. The National Audit Office, for example, or the Institute for Fiscal Studies could look at it so that there could be an agreed view. As I have been trying to show, truth is many sided, but, if such an exercise in providing broad public information is to be undertaken, it is important that it should not be seen as a Government propaganda exercise. In the long term, that could undermine its value. A Government who have made as many innovations in open government as the present Administration should have no difficulty in responding to what I believe are our constructive and helpful suggestions.
  The Treasury Committee does not exist to be the Chancellor's cheer leader. If we have suggestions or criticisms, we shall make them. However, we do not exist to provide opposition, either—although, having heard the Opposition spokesman today, I realise why proper opposition is needed.
  We have made it clear that we support the Government's overall economic strategy, because we think it highly sensible. We did not hear a word about that from the Opposition. The real role of the Treasury Committee is to ensure that people who come before us, including the Chancellor—and, indeed, my right hon. Friend the Chief Secretary to the Treasury, to whose appearance before us we very much look forward, and my
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  hon. Friend the Paymaster General—are accountable. That is what the Committee is there for. That is why we ask them questions.
  We want to be able to elucidate the issues and problems, try to explain them, make what we hope are helpful and constructive proposals and suggestions, and then report them to the House and to the Government. That is what we have been trying to do with the Budget.
  5.5 pm
  Mr. Malcolm Bruce: It is a pleasure to follow the hon. Member for North Durham (Mr. Radice). The Treasury Committee produced an excellent report. It will be interesting to see the Government's reply to the Committee's specific recommendations. I hope that they will reply not only to the letter, but to the spirit of the report. They may say, "Yes, we might deal with the problems raised," and then find other ways of obscuring the presentation. If we are to have intelligent debate in the House and across the country to inform people, we need a more genuine statement of what Budgets are doing and what the Government intend them to do, and some independent assessment of what is happening.
  The Select Committee did not mention the fact that a parliamentary answer on the impact of the Budget on the taxation of the average family is no longer provided. That was the practice for 22 years and was discontinued by the Chancellor after his first Budget. That makes it much more difficult to compare the impact of past, present and future Budgets. No doubt that was the reason for the change. There is, therefore, some justification for the suspicion that the Government do not want, contrary to the spirit of the report, to present an open and clear picture that can be assessed properly and provides a comparison with the past. The Select Committee has done a good job, and is pointing in the direction in which we should go.
  Mr. Jack: I sympathise with the hon. Gentleman's point about the parliamentary answer, which has traditionally been the practice since 1981, when the now Secretary of State for the Home Department, the right hon. Member for Blackburn (Mr. Straw), first tabled such a question. I agree with the hon. Gentleman that the Government have seemed reluctant to tell the truth about the impact on different households of their tax proposals. Is the hon. Gentleman aware that, in their latest attempt to answer such parliamentary questions, the Government are praying in aid the difficulties of measuring the impact of indirect taxes—hence the fact that they will not come clean on that aspect?
  Mr. Bruce: I am grateful for that intervention, not least because it leads me to the increasing complexity of the tax system that the Chancellor has introduced. Before I refer to that, I shall briefly give the overall economic background to the Finance Bill.
  I welcome the fact that we hope to secure a soft landing across the economy. Overall, we will not sink into negative growth and we may start to see a recovery. That is to be welcomed: it is what we hoped the strategy would achieve. Our concern was that the Government took risks early on that may have heightened the risk of moving into recession. The Chancellor's first Budget did not tackle the apparent consumer boom through fiscal policy, so the Monetary Policy Committee of the Bank of England was

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  left with no option but to increase interest rates sharply. That caused borrowers considerable difficulties, and it still remains a serious problem for our divided economy. If the overall situation is looking reasonably encouraging, the situation for manufacturers and exporters is getting worse. We are now predicting a dip into recession.
  On today's exchange rates, the pound has almost hit the DM3 level. We have a strong pound and interest rates running at almost double the European rate. All the indications are that that gap is not only likely to be retained in the short to medium term, but could even widen in the not-too-distant future. If recovery starts to show itself strongly in the United Kingdom against a background of fairly flat growth in the European economy, by the middle of the year the Monetary Policy Committee may be putting up interest rates when the European Central Bank is continuing to reduce them. That will inevitably increase the upward pressure on the pound. It remains a concern for us that the Government do not seem to have a strategy for dealing with that problem. We are not suggesting that it is easy for the Government to find a solution.
  Ministers are keen to boast about the economic position, with some justification. We predicted that long-term interest rates would come down sharply if the Bank of England was made independent. That was part of our election strategy, and because the Government adopted that policy that is exactly what has happened. The Government, perfectly reasonably I suppose, are claiming the credit.
  That being the case, should we not produce policies to encourage more long-term borrowing that can import those lower, long-term interest rates to the short term. [Interruption.] That is a serious point, although the hon. Member for Shipley (Mr. Leslie) is laughing at it. He should recognise that it would be a help in narrowing the interest rate divide between the UK and Europe and taking some of the pressure off the pound.
  It is a matter of some regret to us that the Government have not sought to introduce in the Finance Bill some strategy and incentive to make that switch. One hopes, even without incentives from the Government, that institutions, and possibly individuals, will move towards more long-term borrowing. The problem with that—and it must be addressed by the Treasury—is that most individuals are at the mercy of what the financial institutions are prepared to offer. Many of them are not prepared to offer long-term fixed interest rates that give the full benefit of those long-term interest rates. The Treasury could have done more to make that more likely to happen.
  We hope that the economy will show an ability to recover, although we expect more job losses and more closures in the manufacturing sector, if the situation continues—as seems likely. Although our reasoned amendment has not been selected and I do not wish to trespass beyond the rules of order, the House will understand that it summarises our main concerns about the Bill and why we will vote against it. One of our concerns is that the Chancellor has made the tax system much more complicated than necessary. It is worth recording that Nigel Lawson, who was a reforming Chancellor, reduced the number of personal taxes to four. When the right hon. and learned Member for Rushcliffe
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  (Mr. Clarke) was Chancellor, he raised that to eight. Under the present Chancellor, the number has peaked at 54, including the capital gains tax, which forms a significant part of it.
  I notice that the Chancellor, in an exchange in the Select Committee on the Treasury with my hon. Friend the Member for Twickenham (Dr. Cable), suggested that the capital gains taper was a virtue that we should support. However, we do not regard that reform as progressive. It hits small businesses especially, for which capital gains is an integral part of their business, and allows a small number of very fat cats to get away with massive tax breaks—something that one would not have expected of a Labour Chancellor. It is regrettable that he has pursued it. The Chancellor has made the system much more complicated. It is a wonderful Budget for tax accountants; it is not a good Budget for small businesses and individuals trying to cope with self-assessment and calculating their tax liability.
  The debate about the tax burden has become like the mediaeval argument about the number of angels dancing on the head of a pin. It has been generally accepted that the tax burden went up under the Tories by a marginal amount and is probably going up by a modest amount under the present Government. Perhaps it would be much better for the debate if everybody accepted that and started to talk about the merits of the particular taxes and what burden might be acceptable in relation to what we want to do with the economy and with the resources that are generated.
  Mr. Tyrie: In countries where the tax burden has risen very fast—for example, in continental Europe—growth performance has been most desultory. In countries where the tax burden has been kept down, long-term economic growth has been outstanding. The United States is the best example and, as I mentioned in an earlier intervention, the United Kingdom is another example. Growth performance has been remarkable, and part of the reason is that the tax burden has been kept down.
  Mr. Bruce: It is not worth allowing the hon. Gentleman to intervene for such a predictable comment. It is not as simple as that. I do not suggest that the level of the tax burden does not matter or is not a legitimate matter for debate. It is, and we have taken part in that debate. We have a relatively low tax burden, but we also have seriously underfunded public services. There is a genuine debate about where the balance should rightly be struck. Although France and Germany are currently experiencing difficulties—we should be concerned about that, because they are our trading partners—over 30 and 40 years they have sustained higher long-term growth and a higher tax burden. It may not be unconnected to note that they used the yield on their economies to invest in quality public services, which are substantially superior to our own.
  I am not prejudging what is a matter for legitimate debate. However, it would be helpful if we could agree about the basic situation without spending too much time on academic theorising as to the niceties of exact definition—a direction in which I fear that the argument has strayed.
  We regret the Budget's impact on the tax system's complexity, and we have articulated our concerns about the 10p tax rate. We do not dissent from the basic

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  argument that that tax, and the overall tax changes related to national insurance, will help to reduce the tax burden on people on lower incomes. Our argument is about whether that is the most efficient way to help those people and whether more could be achieved through a better targeted and more accurately costed proposal, such as the one that we have made. These are legitimate points for debate and genuine discussion.
  Our Budget proposals involve an element that the Government do not appear to be prepared to acknowledge—the 50 per cent. tax rate on earnings above £100,000 a year. Given the other allowances that the Government have abolished, that 50p rate could have been used to raise the personal allowance to £5,600. The result would be that 2.5 million people could be taken out of taxation altogether, and the take-home pay of full-time workers on low wages would be boosted significantly.
  We think that Labour Members should regard that as desirable, and we ask them to accept that there is a genuine difference between our parties on how the reforms should be targeted to benefit the groups of people that we all want to help. Our proposal is more radical and far-reaching than anything in the Bill.
  Although the Chief Secretary seemed deliberately to fail to grasp the implication of my earlier intervention, perhaps Labour Members will be able to connect with my argument if I couch it in terms of the minimum wage. If it is considered that a minimum wage is necessary and that people are not to be expected to work for less, is it not reasonable to aspire to put that wage out of the tax bracket altogether? It is ridiculous that people in full-time work earning the minimum wage should pay tax and also qualify for housing benefit and other benefits.
  The sooner the minimum wage is taken out of the tax bracket, the better. In his Budget speech, the Chancellor of the Exchequer said that that was an aspiration, but we consider that he is going more slowly than he needs to with that reform.
  The Financial Secretary to the Treasury (Mrs. Barbara Roche): Will the hon. Gentleman explain how what he has said is compatible with his party's opposition in Committee to the national minimum wage? Liberal Democrat Members at that time argued for a regional minimum wage.
  Mr. Bruce: It is perfectly compatible. We share with the Government a recognition of the need to tackle the problem of low wages, but our approach in the Committee considering what became the National Minimum Wage Act 1998 was different. The Government wanted a national minimum wage, but we considered that significant regional variations could and should have been taken into account. Interestingly, many of us took the view that the old wages councils dealt with that problem, as they were able to take account of different industries and different regional factors.
  We are worried that the national minimum wage is too blunt an instrument, but we agree with the Government that there is a need to reduce the tax burden on people on low incomes, and that very low incomes should be boosted to more acceptable levels. We believe that the aspiration should be to put people on the national minimum wage outside the tax bracket altogether. That is what the Chancellor says he is aiming for, but, unless he
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  finds a more radical approach, he will take two or three Parliaments to achieve it. If he is looking for a radical approach, he should talk to us: we are still a radical party, not frightened to propose radical policies.
  The introduction of the 10p tax rate seems to have trapped the Chancellor in another of the anomalies that arise whenever changes to the tax system are introduced. We now have the absurd situation where people who earn a lowish wage will benefit from the reduction from 20p to 10p on £1,500 of their income. The 10p tax rate is a worthwhile reduction that justifies the claims being made. However, if that same income is derived from the savings of, for example, a pensioner with a small nest egg, it qualifies for a 23 per cent. tax rate. The Chancellor does not accept that, for people on low incomes, it makes no difference whether income is obtained by people of working age going out to earn it or by people who have made some provision for a retirement nest egg and depend on it but do not get the same benefit. The cost to the Treasury of extending the 10p rate to savings for the first £1,500 would be about £85 million. When I asked the Chancellor about that at Treasury questions, I was surprised that he was so contemptuous of the argument. He accused me of being irresponsible with Exchequer funds. Chancellors lose billions easily, so it is reasonable to ask the Treasury to consider £85 million for a reform with a particular purpose.
  There are two reasons why Treasury Ministers should consider my proposal. First, last year's Budget abolished the tax refund to non-taxpaying dividend holders or recipients. The then Paymaster General told my hon. Friend the Member for Twickenham (Dr. Cable) and an all-party delegation that he intended to seek a solution. His promise disappeared with his demise. The problem with Ministers is that they do not pass on their promises to their successors. People are still angry about what the Government did and promised to put right. My proposal would provide some recognition that the Government understand that pensioners with small savings deserve consideration.
  Secondly, financial institutions say that it is difficult to pass on the full benefit of the latest interest rate cut to borrowers because of their concern about the lower rate for savers. Many of them have not passed it on. If the Government were to introduce this tax change, it would benefit savers by ensuring that they did not pay tax on such earnings and make it easier for financial institutions to pass on the benefit of lower interest rates to borrowers. It would help both parties. It is a small change of real benefit to many people.
  Mr. Gardiner: I am grateful to the hon. Gentleman for the unpartisan way in which he makes his remarks. He mentioned the fiscal regime and how it meshes with monetary policy. He alluded to a key plank of the Government's fiscal policy, the abolition of advance corporation tax and the fiscal tightening, which his party called for after the general election, of £5.3 billion. However, his party rejected that fiscal tightening. The new deal money from the windfall tax was rejected by his party. He must explain how he would produce the effects of such a fiscal tightening.
  Mr. Bruce: The hon. Gentleman got confused between the windfall tax and the ACT changes. They add up to £10 billion, which is a substantial tax change. We said

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  clearly that a fiscal tightening was needed, but it should have been targeted to take the heat out of inflationary pressure by aiming not at businesses but consumers. The Chancellor chose not to do that. I do not intend to unravel what might have been done two years ago, because the opportunity has been lost. However, he will know, as the House will know, that the Liberal Democrats consistently produce a fully costed manifesto and annual alternative Budgets that explain exactly what different measures we would introduce and where we would derive the income from. We have been complimented on them by external bodies. The Institute for Fiscal Studies said at the election that they were a reasonable presentation of our priorities and how they would be paid for. We are proud of that, and we intend to continue that process.
  Our motion contains a reference to the duty on sparkling cider, which we voted against after the Budget statement. The sparkling cider industry is small. It involves relatively small numbers of people, but it is a long-established home industry in the west country of England. It is now subjected to a 400 per cent. tax increase in a single year. It seems to us unreasonable that small businesses should be expected to absorb such an increase as a result of some irrelevant complaints about Italian wine manufacturers. How on earth anyone could presume that people cannot tell the difference between Lambrusco and Somerset cider, I really do not know. It is absurd that we should force people out of business. The cider manufacturers are in no doubt that the consequence of the tax change will be an end to the industry. Their businesses will cease, the income will be lost and people will be put out of work. It is an unjustified change.
  A more important measure in the Budget was the change in the fuel tax, which has already been mentioned in today's debate. The Liberal Democrats accept the basic principle of green taxation, or using taxation to encourage environmentally beneficial behaviour. However, certain conditions need to be attached to such taxation. It should not be used as a back-door way of increasing revenue. It should be used specifically to achieve behavioural changes. The revenue should be used clearly to offset taxes in other areas.
  The Government have simply banged up the tax on petrol and diesel, with no corresponding offset apart from a minor one for small cars, and have put the revenue straight into the general exchequer. There is very little difference between that and the Conservatives' putting 5 per cent. on domestic fuel and, after the row, claiming that it was an environmental tax and introducing a whole load of benefits for those affected. They had to give half the revenue back to try to allay the outrage that was engendered. The Labour Government will not be able to continue the policy unless they think it through much more carefully.
  The Liberal Democrats' proposal on petrol was to abolish vehicle excise duty on fuel-efficient cars below 1600 cc. That would have given people the clear message, "If you do not want to pay the extra tax on petrol, switch to a smaller car and you will not pay vehicle excise duty." People would have known that, if they drove a gas-guzzler, they would pay, but, if they drove a fuel-efficient car, they would get money back. They would know what to do and make their behavioural switch.
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  Many haulage contractors have no such viable alternative, partly because the Government have not thought through what alternatives people are supposed to use. I should be interested to hear the Government's answer to those in the industry who say that switching to low-emission, fuel-efficient trucks and benefiting from the lower vehicle excise duty will not offset the cost of the escalator. I am assured by haulage contractors in my constituency that, even if the Government paid the entire cost of converting vehicles and abolished vehicle excise duty, the contractors would still be in an uncompetitive situation.
  In anticipation of the Minister's reply about corporation tax rates and the whole package, I tell him that most haulage companies say that, to pay tax, a company first has to make a profit. Two major haulage companies in my constituency have gone into liquidation in the past three months and most others say that they are shedding labour by between 20 and 50 per cent. I have heard from other companies that they will relocate part of their business nearer their markets in the south of England. Ministers should be aware that the manager of one company in my constituency pointed from his office window to a yard where there were 30 articulated vehicles and told me that no duty had been paid to the Exchequer of the United Kingdom for any of those trucks in rural Aberdeenshire, because all of them contained diesel that had been bought in continental Europe. He also told me that, as he had good contacts elsewhere, he could cut his duty costs by a further 20 per cent. simply by contracting Irish haulage companies. However, he was not prepared to do that because he wanted to support his local contractors. Those are real problems, facing real companies, and the Government must acknowledge that they need to think those matters through more than they have done so far.
  Mr. Ian Bruce: I am a little wary because I see that the Ministers sitting on the Treasury Bench are taking notes of the Liberal Democrat suggestions. Does the hon. Gentleman remember that, before the Conservative Government introduced VAT on domestic fuel, a Liberal Democrat policy document called for a carbon tax on domestic fuel? Indeed, the Liberal Democrat candidate who fought me at the general election said that the very minimum that should be done was to put VAT on domestic fuel. Surely, if the Government were to follow that policy, they would be criticised for doing what the Liberal Democrats had suggested.
  Mr. Malcolm Bruce: It has often been said that Liberal Democrats provide policy initiatives for the Tories. Perhaps that was one that the Tories should not have taken up. The hon. Gentleman cannot cite the words of one candidate as the official policy. The truth is that our policy—[Interruption.] It has never been Liberal Democrat policy to put VAT on domestic fuel; it has been our policy to have a carbon tax and it remains our view that there should be pollution taxes. We would use the yield from such taxes to raise the threshold at which people start paying tax, so that we can remove people on low incomes from tax altogether. One can make a connection between green taxes and helping people on low incomes to have more take-home pay and life-style choices—including choices that do not pollute the environment.

  731
  However, we must be realistic as to the choices that people can make; it is clear that the impact of the escalator on the haulage industry does not allow that industry the necessary latitude. The Government must acknowledge, or explain in ways that are acceptable to the industry, which choices they believe can realistically be made. I assure the House that there is no way other than trucks to transport timber from the depths of the forests of the highlands and the north-east of Scotland. It is a joke for a Minister at the Scottish Office to produce a brochure showing timber being drawn by trains, when some of those forests are 100 miles from the nearest railhead. It is absurd to suggest that that is a viable solution.
  The Liberal Democrats want the Government to reconsider those particular concerns about the Budget. I hope that it is accepted that many of them have been expressed in a constructive way, because we share some common objectives, even though we disagree about the means to achieve them and the speed at which they might be achieved.
  The one matter on which we shall not have the opportunity to vote was referred to in the last words of the Chancellor's speech: his announcement of his intention to cut the standard rate of income tax by a penny in his next Budget—presumably, therefore, in the next Finance Bill. What astonishes Liberal Democrat Members is why, if the Government can find money to cut the standard rate of income tax, they cannot find enough money for the investment required to deal with the problems of health and education. That certainly astonishes many people throughout the country who have spoken to me since the Budget. I know what the Government's reply is: "We are finding £40 billion; it will all be sorted." However, Ministers fail to grasp the fact that damage was done, not only by the Conservative Government's squeeze, but by the continuation of that squeeze—with intensification—during the first two years of the Labour Government. There is a long way to go before even the Government's own objectives of reduced class sizes will be achieved.
  The other day, my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) very effectively challenged the Deputy Prime Minister. We are told that the Government's priority is to cut class sizes for the first three years of primary education, but that is done at the cost of increasing class sizes for the remaining years of primary and secondary education. Achieving that priority will require more resources than the Government have identified. The fact is that the cost of reducing class sizes has exploded, to about six times the Government's estimate, and that is only for the first three years of primary education.
  In the health service, there is a major problem with recruitment and retention of nurses and doctors. We simply cannot go on plundering the third world for its scarce trained nurses and doctors; we have to redeploy and train our own staff. Although it takes several years to train such staff, Ministers should remember that there are many nurses and quite a few doctors who are not working in the national health service, and some who are not working in the health sector at all—because staff calculations do not have built into them the ability to produce flexible rotas that take account of people's real circumstances, or provide rates of pay for part-time work that, once transport and split-shift problems have been taken into account, are adequate to cover child care and other expenses. Such sorts of issues need to be addressed,
  732
  but they are not being addressed; solving them will require resources that the Government have not even begun to think about.
  In every Minister's speech, we hear of the Government's determination to end boom and bust in the economy, but I want to know when they are going to end boom and bust in the public sector and let that sector have clear access to a long-term climate in which real investment and real redress of their problems can be costed through. The Budget gives an indication of changed priorities—a mind change within the Government. The Government tell us that they have sorted out the problems in health and education, even though not a single person in this country believes that. In the second half of this Parliament, the Government are going to move to an agenda of fighting the next general election on the basis of cutting taxes, before they have delivered material improvements in health and education. Following that course will cost the Labour party dear.
  In addition, the Government have created an increasingly complicated tax system that is extremely difficult for individuals and businesses to understand. That will provide rich pickings for tax accountants, but cause real difficulties to most individuals and companies. In the next reshuffle, the Prime Minister might want to look for a new Chancellor, one who can sort out the complicated mess into which the current, supposedly reforming, Chancellor has got us. We want a Chancellor who will simplify and reform, not one who will make the system infinitely more complicated.
  5.37 pm
  Mr. Mohammad Sarwar: I am pleased to be able to speak in the debate and to welcome the Finance Bill. I am glad that, by putting families and pensioners at the heart of the Bill, the Government have gone a long way toward helping those who suffered the most during the 18 years of Tory rule. For that reason, I shall focus on the Bill's provisions relating to pensioners and families.
  In my constituency, we are extremely lucky to have active and public-minded pensioners. There are several pensioner groups and organisations which not only help pensioners with their individual needs but take a close interest in issues that affect the wider community, such as the problem of drug taking among young people or environmental matters. The elderly play a central role in the life of the local community in Govan.
  However, those same people, who worked hard all their lives and made a valuable contribution to society, have found that their needs and concerns have been ignored by the state to such an extent that they have become one of the most disadvantaged groups in our society. It was time that that was put right, so I am glad that the raft of measures in the Bill that are directed at the elderly will help to reward pensioners for the contribution that they have made, and continue to make, to our society. Increasing personal allowances above inflation, linking rises in the minimum income guarantee to earnings and retaining the married couples allowance for pensioners will substantially improve the quality of life for the poorest pensioners.
  I should like to mention particularly the decision to increase winter fuel payments fivefold from £20 to £100. Combined with the reduction in VAT on fuel, that move

  733
  has been welcomed by pensioners in Scotland, where the colder climate makes the increase all the more important for the elderly. The decision contrasts with the increases in VAT on fuel introduced by the Conservatives in government and demonstrates the importance that this Government attach to improving the lives of pensioners. The measures provide an additional £ billion for the elderly, which will help to assist some of the poorest members of society and will ensure that the elderly are not left behind as Britain continues to prosper under this Government.
  At present, 700,000 pensioners do not claim income support and will, unfortunately, lose out on the increases in the minimum income guarantee. I hope that the Government will introduce initiatives to encourage such pensioners to apply for the benefits to which they are entitled. Perhaps the Government could launch a public information campaign targeted at such pensioners. That would ensure that all pensioners who need help are able to benefit from the measures in the Bill.
  Equally importantly, this is a Bill for families and for work. The welfare system that we inherited from the previous Government has failed to bridge the gap between benefit and work. In fact, the benefit and tax systems have constructed increasing barriers for people on benefit who are desperate to return to the workplace and have thus contributed perversely to widening inequality and increasing poverty. That has served to undermine families, resulting in family breakdown and an increasing number of families living in poverty and on low pay. The system needs drastic changes, and I am glad that the Bill delivers them.
  The new tax credit for children, set out in clause 27, is a radical and innovative policy which is designed to meet that challenge. The married couples allowance was given at a flat rate to all married people, regardless of income and irrespective of whether they had children. It was very ineffective at directing help where it was needed most. By contrast, the new children's tax credit will direct support to families and people with responsibility for children. As it will not go to those on high incomes, the measure will ensure that help is channelled to those who are most in need.
  Five million families will benefit from that bold measure. Together with the working families tax credit and the increase in child benefit, the children's tax credit will go a long way towards easing conditions for families with children—particularly the poorest families. Combined with the measures that my right hon. Friend the Chancellor introduced earlier, the reform will serve to lift 700,000 children out of poverty.
  In addition to tackling child poverty and low pay, the changes will help to break down the barriers between benefit and employment. By making work pay, they will make the transition from benefit to work much smoother and easier. The proposal to reduce national insurance payments for low earners and the working families tax credit will assist children whose parents are out of work or receive means-tested benefits by making work more financially attractive through enabling those who depend on benefit to make the difficult transition to employment without being impoverished in the process.
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  The far-reaching changes that have occurred in the economy, particularly in the labour market, and the impact that they have had on other areas—most notably the welfare state—make the need for an interrelated and integrated approach to welfare policy even more urgent. However, the fragmented benefits and tax system that we inherited from the Tories has served to increase unemployment, the social security budget, inequality and poverty.
  The approach embodied in the measures in the Bill and the working families tax credit takes account of the close, complex connections involving benefits, families and employment and how they impact on each other. By introducing measures that will increase the income of poorer families and at the same time enable people to make the difficult transition to work and to stay in work, the Bill and the Chancellor's other reforms mark an important step forward in meeting the challenges presented by the radically different economic environment that we face today.
  I hope that the Bill will be followed by further measures to bridge the gap between welfare and work. The Red Book states that the Government are examining long-term proposals to integrate the new children's tax credit with the child allowances that are paid to unemployed families through income support and to in-work families through the working families tax credit. I hope that the Government will be able to give serious consideration to such changes and build on the Bill's measures to create a single, fully integrated system of tax and benefits, making entry into the labour market for those on benefits much easier.
  I congratulate my right hon. Friend the Chancellor and his Treasury team on a Bill that contains a plethora of innovative measures. It combines fairness and justice with a long-term strategic vision. I am glad that, although nothing is smooth in life, there has been no intervention on my speech, for which I thank hon. Members on both sides of the House. I commend the Bill to the House.
  5.47 pm
  Mr. Michael Jack: An intervention on the hon. Member for Glasgow, Govan (Mr. Sarwar) could have been arranged, but he had obviously given great care and attention to his remarks, and I wanted to hear him out. Had I intervened on him, I would have pointed out that the very pensioners to whom he referred at the beginning of his speech, whom he sought to help, have suffered as a result of, for example, the Government's removal of the payable tax credit. Some of the poorest pensioners in the hon. Gentleman's constituency, who perhaps receive a small income from shares bequeathed to them by earlier generations, are now paying more tax as a result of the proposals in the Government's previous Budget, which he so fulsomely supported.
  The hon. Gentleman referred also to the removal of 700,000 children from poverty. We all desire an end to poverty conditions, but I recently tabled a question to the Prime Minister to find out his exact definition of child poverty. When I discovered that the definition was rooted in an analysis of what were called "households below average income", I suddenly realised that poverty was a moving target. Households with an income below average will find that their income increases over time, as overall incomes increase, so we may find that those 700,000

  735
  children remain within the same category for ever and a day. That is a false target. The hon. Member for Govan was lucky that I did not interrupt him on that point.
  The debate is the start of the long process of considering the Finance Bill, which is shorter than those that we have been used to. The last Finance Bill that I had the pleasure of taking through the House was nearly twice as long as this one. However, the fact that there are fewer clauses does not mean that there are not plenty of proposals to question and criticise. That will be my purpose during my remarks.
  On the day of the Budget, The Sun exclaimed in triumph, "Everyone a winner!" I am afraid that The Sun got it wrong because, like everybody else, it was seduced by the Chancellor's presentation on the day and did not examine the detail. Over time, people who have a house and no children will lose out because of the Budget. Honourable couples—married couples—who look after an aged relative for example, will lose out as a result of this Budget. Single people will also lose out. Right hon. and hon. Members have already mentioned those in industry and the road haulage industry who will lose out. Something like 4 million people will lose out as a result
  i of the Budget, and I hope that in the course of the debate we shall tease out who the losers will be.
  In his usual perceptive and carefully argued way, the hon. Member for Gordon (Mr. Bruce) put his finger on a very important point. This is a fiddly little Budget. It is a gift to accountants—it has so many intricate details that one really will need an expert to sort it out. I shall later show how in the arcane matter of, for example, schedule 3, which relates to clause 27, the Treasury draftsmen have done their worst and opened up a minefield. I hope that the Financial Secretary, who no doubt has penetrated schedule 3, will be able to answer the questions that I shall put to her.
  The hon. Member for North Durham (Mr. Radice), who is the Chairman of the Select Committee on the Treasury, rather pulled me up when I smiled on hearing his Committee's findings on the Budget, but I was much taken by its conclusions on presentation. Given our involvement with Treasury matters, I suppose that we know something about presentation, and the hon. Gentleman was right to point the finger at me and say that I perhaps did some of that too. We all sometimes have to handle difficult messages, but this Budget took smoke and mirrors to the level of a new art form. I can think of some of the people who might have assisted in this, and they have clearly lost none of their skills in the transfer to the new Government.
  I was particularly interested in the Select Committee's proposal for an element of independent audit, involving the National Audit Office and the Institute for Fiscal Studies. There is merit in that. It is important that people understand what the Budget is about. The voyage of exploration that we all have to undertake, looking at the detail of the "Financial Statement and Budget Report", is difficult. The Chancellor wanted to triumph on the day, and I am sure that he does not want his triumph taken away later, but he lays himself open to criticism.
  I also welcome the Select Committee's finding that the Government should not wait for parliamentary questions to be tabled before reporting on the distributional effects of the Budget. The hon. Member for Gordon touched on that very point. I should like the Financial Secretary and
  736
  the Economic Secretary to answer fully the question that has recently been tabled and follows the same format as that asked by the right hon. Member for Blackburn (Mr. Straw) in 1981. Will they stop falling back on the excuse that it is difficult to estimate the impact of indirect taxation in terms of the overall impact of tax changes on many different levels of income? However difficult that task might be, the Treasury should at least be consistent. When the Government were in opposition, they were happy to have that information and to use it against the then Government—I have to say that they used it effectively. In this age of open government, the least that the Financial Secretary can do is to ensure that, when that question is retabled, it is properly answered. We need that transparency.
  Several people have implied that the Bill's overall effect on the tax burden involves a rather arcane, ethereal debate with which we should not soil our hands. I shall spend a few moments considering that argument and refreshing our memory as to why it is important that we do not lose sight of such important points.
  The measures that will determine the overall tax burden of the next three financial years combine measures introduced in the 1998 Budget with those introduced in 1999 Budget. We should not forget the interaction between the two. One of the elements of the lack of transparency displayed in the Budget is the Chancellor's unwillingness to relate that which is already in train to that which is coming. The Chancellor owed it to the House to present a more coherent picture by putting the two together. I shall make up for that deficiency.
  Let me remind the House of one or two measures which have already been agreed and are coming. Mention has been made of the abolition of advance corporation tax. I shall touch on two aspects of it which I am sad that the Bill does not seek to address. The Bill does not address the £400 million hit on charities caused by the removal of payable tax credits. There is much in the Bill about new ways of charitable giving. There is something about companies being able to write off the full cost, for example, of materials that they give charitably, as if that will somehow make up for the £400 million.
  I asked the Church of England what the impact would be on its accounts—it will lose £12 million. I am not certain how that money will be found in the rather sparse collections made at my church—I make no criticism of my constituents, but there are not many in church at 8 am on Sundays. Indeed, there are only about 25, and there are limits to what they can give. All the Churches, not just the Church of England, will have to make up the deficit. That is the kind of detail that the Chancellor does not like being exposed.
  Mention has been made of what is turning into a savings farce—the introduction of individual savings accounts and the abolition of PEPs and TESSAs. It is interesting to note in the Red Book that that gives the Treasury a profit in the financial year that we have just entered of £60 million, and £10 million next year. This is just another subtle way of trying to make savings look good and make money for the Treasury.
  Right hon. and hon. Members have also mentioned the 6 per cent. increase in the fuel duty escalator, and we shall mention it again.
  The debate so far has saddened me in that there has been no real consideration of the level of taxation. What is the right level of tax burden? We have not had a proper

  737
  discussion about what we should tax. Comparisons are made between the lower marginal rates of tax in parts of continental Europe on items such as alcohol and diesel fuel and rates in the United Kingdom, but I am sure that no political party would advocate the 5 per cent. rate of VAT on fresh food which is typical of French taxation. That is a no-go area. It is important that all Front-Bench Members take note of the fact that, if they are to discuss levels of taxation, we should decide how much it is right for the public sector to take from the private citizen. At the same time, we should be honest with ourselves and say what are the tax go and no-go areas.
  Another question that I want Ministers to answer is, what has happened to tax simplification? What has happened to the tax rewrite? Where are the clauses that people have been labouring on for the past two or three years? Labour embraced the exercise with enthusiasm when the idea was first mooted—I think that the hon. Member for Wrexham (Dr. Marek) was its appointee to the Committee. Neither the Finance Bill nor any Bill published in parallel with it contains any clauses relating to tax simplification. Indeed, tax complication is the essence of this Bill. What has happened to that exercise? The Bill and the Budget make no mention of it.
  The Government cannot escape the fact that, over the next three years, taxation levels are set to rise because of various measures in the Bill. Table 1.3 of the Red Book reveals that some of those measures that have not been discussed are, for example, the next financial year's delayed action hit in terms of national insurance charges—£430 million in 2000–01 and £750 million the following year.
  That table has an intriguing little section called "Securing the tax base". I should be grateful if, when the Financial Secretary winds up the debate, she would give a little more detail about what is going on in securing the tax base, because I discover that, in that section of the Red Book, the abolition of mortgage interest relief is said to be securing the tax base—as though it were a tax fiddle. However, in the Customs and Excise and Inland Revenue press release for that item—press release CW 3—I find an oddball collection of measures under the heading "Securing the tax base".
  The press release says that the measures will yield "more than £1 billion". That sounds good. One might suppose that it meant £1 billion a year, but no: it is £1 billion over the next three years. A third of a billion—£300 million or £350 million—is not much, so would the Financial Secretary care to tell us what those inspectors, whom I bequeathed to the Treasury before I left, and who deal with the complicated tax issues of larger companies and other institutions have been doing for the past two years? They were retained because of their detailed tax knowledge. I remember that the last tax fiddle that they found was worth about £0.5 billion a year, and they told me that, every so often, they found such things; so why is such a small sum being spent on securing the tax base? What has been going on? Parliament deserves a report about that.
  In opposition, Labour Members were fond of saying, "We shall close the tax loopholes." Judging by press release CW 3, they have gone to sleep on this issue. We should be given more detail about that.
  Mr. Ian Bruce: I am not sure that my right hon. Friend is doing his mathematics the new Labour way. When he
  738
  described a saving of £1 billion over three years, he assumed that that meant a third of billion a year. In new Labour mathematics, one starts with a sixth of a billion, in the second year one gets a third of a billion, in the third year one gets half a billion, and all three figures must be added together to reach £1 billion. My right hon. Friend said that a third of a billion was a small amount; a sixth of a billion is even less.
  Mr. Jack: I am grateful to my hon. Friend for admonishing me on the arithmetic, and he may well be right, which emphasises the point on which I am probing the Treasury Minister—what has been going on about something about which Labour Members were, in opposition, zealots and now, in government, they have gone to sleep over.
  The Government have been very sneaky in the way that little measures such as the 1 per cent. increase in insurance premium tax have crept in. I seem to remember Labour opposing the introduction of that tax, which took place at a time when my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) was seeking ways to address the state of the public finances. Now the Government are slipping in measures to gain another couple of hundred million, rising to £300 million at the end of the period outlined in the "Financial Statement and Budget Report". Not much has been said about that but, when people start to renew their insurance policies, they will realise what this new Labour Budget is about.
  The sum total of the effect of all those tax changes is to be found in table B9 in the Red Book, dealing with current receipts, which is the sum total of the financial effects of this Finance Bill. In this financial year, gross receipts encompass 39.4 per cent. of gross domestic product. The percentages will be 39.5 next year, 39.6 the year after, 39.6 the following year and 39.7 at the end of the series, in 2003–04. Those figures take into account netting off, for example, the windfall tax, VAT, excise duties, social security contributions, other taxes and royalties, as well as income tax and the allowance for the tax credit. The percentage does not take into account the other hidden taxes—the increases in council tax, which people must bear as part of their personal tax burden.
  Whichever way the Government try to wriggle on the hook of the question, "How are taxes going up under Labour?" the answer is that, in GDP terms, they are. It is no use Labour Members saying, "But if we had followed the Tories' forecasts, the percentage would have been higher." Well, I am sorry; on 1 May 1997, the present Government took over, and the responsibility for the economy passed to them.
  When I consider in cash terms the combination of the measures that were introduced in 1998 but are yet to be introduced, and those in this year's Budget, I find that there is a net increase in the tax take over the next three financial years of, respectively £2.6 billion, £3.6 billion and £4 billion. Those are inescapable figures and cannot be denied. They are from the "Financial Statement and Budget Report".
  In his opening remarks, the Chief Secretary to the Treasury told us that this was a business-friendly and investment-friendly Budget. If that is so, will the Financial Secretary explain later why chart A6, on page 141 of the "Financial Statement and Budget Report", shows business investment declining over the next two

  739
  years? She has until a late hour this evening to answer that question. When I asked the Minister for Small Firms, Trade and Industry that question, he frothed at the mouth. He did not recognise the truth in the graph that the Government have published.
  Much of the Finance Bill is predicated on what the economy will do. Barclays bank, in its assessment of the Budget, told us that the projections on growth were more optimistic than it, and many other commentators, would predict. It will be interesting to note the extent to which the tax revenues anticipated in the statement are realised. Barclays bank's overall commentary on the Budget detail was more telling. It praised the
  "Chancellor's emphasis on macroeconomic stability",
  but continued,
  "but some of the detailed structural reforms could be criticised as being confusing, over-complex and expensive to administer, particularly for small businesses. The structure of personal taxation has become more complex with an increase in the number of tax rates. Simplicity, stability and minimal compliance costs are important virtues for a fiscal framework looking to promote effective planning and productivity."
  That is a telling and damning criticism of a Budget, and a Finance Bill, that have been published in the name of the so-called reforming Chancellor. If the Government consider themselves to be individual-friendly and company-friendly, they had better address that criticism, because it is not unique to Barclays bank.
  The CBI bears out that point in its judgment about the Budget, in which it also draws attention to the growing burden of tax—£5 billion—on its members. It talks about the fact that
  "Budget 99"
  increased
  "the burden of business taxation"
  and it said there was
  "little recognition of the concern about administrative burdens".
  There we have it from the CBI, from Barclays bank and from other commentators.
  The CBI says that the Budget reality disappointed after the pre-Budget rhetoric. It said:
  "Against … encouraging background"—
  the pre-Budget consultation—
  "the steps actually taken in Budget 99 were somewhat disappointing."
  That is from a body that is trying to do business with the Government.
  The CBI also observes that a clause dealing with the lop starting rate of income tax is a bit of a gimmick, and it similarly describes the 10p starting rate of corporation tax as such—because it applies only to the first £10,000 of profit. Thereafter, as profit increases, the tax increases very sharply. Those are not my words but those of the CBI, and it makes other detailed criticisms of the Bill.
  The Association of Chartered Certified Accountants made another damning criticism of the cost of administration of the Budget, especially to small and medium-sized enterprises. It said:
  "The cost of administration is around a third of the total tax bill. These new measures will impose further costs."
  740
  That is a damning criticism—[Interruption.] If the hon. Member for Dudley, South (Mr. Pearson) disagrees, will he intervene and tell me why he disagrees with that respectable private body?
  Mr. Ian Pearson: If the right hon. Gentleman reads the ACCA's newsletter more closely, he will see that it refers to many other measures in addition to the one that he has mentioned.
  Mr. Jack: The first paragraph of the document reads:
  "ACCA is disappointed that the government introduced further complex tax changes in last month's Budget."
  There could be no more damning a sentence than that.
  In the magazine Taxation we start getting towards some of the detail of the Bill and some of the problems that it contains. In a leading article, Malcolm Gunn points out the enormous complexity that is brought about by the number of tax rates with which we are now having to cope. He observes that there are four different rates of income tax plus the schedule F upper rate of 32.5 per cent. I would like to know from Ministers on the Treasury Bench why they are prepared to sanction such a complex range of taxes. As has already been said, savers will not get the benefit on their savings of the l0p starting rate, but will have to pay on the basic rate. Why is that? Why is it that people with modest savings, whom, the hon. Member for Govan spoke about with such passion, are once again clobbered by the Government, who will not visit the benefit on savers, as we did, at the lowest starting rate for tax? The Government are wedded to complexity.
  As Mr. Gunn said:
  "This must be one of the most complex personal tax systems ever devised for the United Kingdom and the taxpayer, an uninformed layman".
  As he observes, they have to operate the system on the pain of penalties and surcharges if they get it wrong. It is important that we take note of such comments, which are a damning criticism of what the Government are up to.
  At the conclusion of his article, Mr. Gunn states:
  "All this complexity is apparently to satisfy the political objective of introducing 'the lowest rate of income tax this country has seen for more than thirty-five years'—a statement which many consider to be little more than a devious political soundbite—coupled with the Treasury's insistence that the 20 per cent tax deducted from bank interest should not be repayable to the tiny number of taxpayers who are within the starting rate only."
  That is how the experts see it, but let us consider in more detail clauses 19 and 20, which deal with the starting rate of 10p for tax.
  I wonder whether Ministers on the Treasury Front Bench have had a chance to study the report produced by Mr. Paul Gregg of Her Majesty's Treasury and the centre for economic performance at the London school of economics, Mr. Paul Johnson of the Financial Services Authority and by Mr. Howard Reed of the Institute for Fiscal Studies. They have costed the effect of the measures to which I have referred. In their study, published by the Rowntree Trust, they state that the cost per person who is helped back into work by the 10p starting rate of tax will be £3,947. They calculate that 76,000 will be helped back into work. They calculate also that the working families tax credit, which they estimate will help about 92,000 people back into work, costs a

  741
  mere £869 per person. The national insurance reforms, which will help 115,000 people back into work, will cost £1,826 per person.
  Messrs. Gregg, Johnson and Reed conclude that the 10p starting rate of income tax appears to be the least cost-effective reform, perhaps because it is not as well targeted on specific people who are more likely to move into work as the working families tax credit. They go on to press the benefits of the national insurance changes.
  Mr. Gardiner: Given that the right hon. Gentleman has quoted the Rowntree figures with such approbation, will he confirm that it is his view that, as a result of the Budget and the changes that will be effected therein, more than 260,000 people will be brought back into work?
  Mr. Jack: The report does not highlight the alternative to that, which is whether there may have been other relevant activities in the economy. Although there has been a slowdown in some sectors, unemployment had until fairly recently carried on declining. When talking about a new deal, there was an argument about the dead-weight effect of that measure. The argument involved whether the natural cycling of jobs and changes in the economy might well have produced new employment opportunities.
  I must be fair to the hon. Gentleman because, having quoted an analysis, I must accept that it indicates, in the judgment of those who produced it, that some people will be induced back to work. If someone finds a job after a period of unemployment, we would wish to support that and none of us would disagree.
  I am talking about the effective use of money that we are asked to approve in the Bill. The report to which I have referred imputes a cost of £3 billion for the lop starting rate of tax. That money could have raised the starting point to £5,000. That could be said succinctly to be £100 a week tax free. That might have had an even greater effect in inducing people back to work.
  Mr. Ian Bruce: I must caution my right hon. Friend. If he reads the Red Book, it tells us that 58,000 people have been helped back into work by the new deal. In fact, that is simply the churn. There are more than 30,000 additional people in the 18 to 24-year-old group who are unemployed than when the new deal started, and the scheme has not even been going for a year yet.
  Mr. Jack: My hon. Friend, who studies these matters with keenness and assiduousness, makes an important point. I hope that when he makes his own contribution to the debate he will be able to develop these matters.
  The Bill seeks to make changes to vehicle excise duty. The Government were happy to triumph the fact that they had taken £50 off VED. However, they increased by £5 the licence fee for any cars with engines larger than 1100 cc. Perhaps Treasury Ministers could tell us how they decided that 1100 cc was to be the start-and-finish point of this measure. I am struggling, but I suspect that the real answer is that there are 25.6 million cars, of which about 2.3 million have engines smaller than 1100 cc. The cost of exempting 2.3 million cars from that increase in order to reduce VED by £50 equates exactly with £5 on for the remaining 23 million vehicles.
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  The bizarre feature is that the Government have triumphed this measure as a way of encouraging more environmentally friendly cars. I do not know whether the Financial Secretary is aware that the target that 1100 cc cars are supposed to be able to meet is a CO2 volume emission of 140 g per kilogram per year. There are cars in the 1.5 to 1.9 litre category which achieve that objective already. They are diesel cars. If the Treasury is being consistent, why did it draw the line at 1100 cc in trying to encourage environmentally friendly cars, when there are other environmentally friendly cars with larger engines that do the same thing that are clobbered by an increase in VED?
  Will the Financial Secretary promise to publish the detailed sales analysis that shows that the consultation exercise that the Chancellor of the Exchequer is carrying out on the tiered structure of VED will achieve its objective? I cannot see that changing VED by £100 or so a year will have the slightest effect on the purchase of the majority of cars in this country, when 55 per cent. of those cars are purchased by companies. Employees have little chance to influence the sales decision. It seems that the Government have introduced a Trojan horse to try to raise yet more money from the motorist. It was introduced as a revenue-neutral measure, yet the Red Book tells us that there will be an increase in tax revenue in the first year of £40 million. Perhaps the Financial Secretary will explain how a revenue-neutral measure will raise an extra £40 million in the first year.
  Mr. Gardiner: I am grateful to the right hon. Gentleman for giving way to me again. On his argument about diesel, it is important to reflect on the fact that more than 85 per cent. of the diesel that is consumed in this country is consumed by large lorries and not by small cars such as the ones to which he referred.
  Mr. Jack: The hon. Gentleman misses the point. I do not think that he has read in full the Chancellor's consultation document. I urge him to do so because it is very good for insomniacs. The document shows where the direction that the Chancellor's thinking is taking. We see in the proposal a piecemeal approach and, for the sake of a headline—reduced vehicle excise duty—a limit of 1100 cc. There is no logic to that, or to the rest of the consultation exercise.
  Other right hon. and hon. Members who have contributed to the debate mentioned the fuel duty escalator. I find it intriguing that Labour Members attack the former Conservative Administration for having introduced it, but I notice that, when Labour came to power, it did not seek to reverse that policy. If the Government had wanted to get rid of the escalator, they could have done so, but they did not do so—they just doubled it.
  Mr. Leslie: Am I right in recalling that the right hon. Gentleman was Financial Secretary to the Treasury between 1995 and 1997? Am I right in thinking that he was responsible for partially implementing a fuel duty escalator? Will he now say that he was wrong to increase diesel duty by more than 10 per cent. in each of those years while he was a Minister?
  Mr. Jack: If the hon. Gentleman was aware of the duties of the Financial Secretary when I had the honour

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  to hold that post, he would realise that I personally did not introduce that tax. However, I take collective responsibility. The Administration of whom I was a part did that. I do not want to trespass into an "all our yesterdays" debate on the state of the economy—[Interruption.] If you would allow me to do that, Mr. Deputy Speaker, I should be happy to do so, as I am proud of our record.
  The short answer is that we are dealing with the Labour Government's response to our criticism of the fact that, as a result of their escalator, diesel fuel in the United Kingdom is the most expensive in Europe. I remember that, when the fuel price was going up, we looked forward to an ending of problems in the middle east, so that the lower oil price would constitute a lower input cost for Britain's business and transport, but that has not happened under new Labour.
  A reduction in the oil price to $10 a barrel—the lowest price ever—results in the most expensive diesel fuel and highly taxed petrol in Europe. That is a perverse situation. The increase in inflation that has been announced is entirely down to the Budget measures.
  Mr. Ian Bruce: In trying to be fair to the House, my right hon. Friend is perhaps being unfair to himself and the previous Government. Is he aware that the Automobile Association has conducted a survey on the effect of the Conservative Government's escalator on fuel prices, which found that people economised and that the amount of fuel burnt has gone down, despite mileage going up? The AA concluded that further taxes would be foolish. It would simply ensure that people bought their fuel in France.
  Mr. Jack: I am grateful to my hon. Friend. If the Government wanted to be radical, why did they not assure motor manufacturers that they would examine the VAT rate on the price of cars, and find a way of recognising more environmentally friendly cars by making them genuinely cheaper? If they had wanted to, the Government could have made an adjustment to the corporation tax of motor dealers to reflect the sales pattern of more environmentally friendly cars. Why did the Government not use the carrot, instead of using the fiscal stick? That is what worries me.
  I shall now examine three clauses in detail. Clause 45 deals with the provision and support of bus services. Can the Financial Secretary explain why the Government have sought to provide help for services using buses with a seating capacity of 17 or more? Do they not realise that, in a rural environment, a company that hires a small minibus to pick up people and bring them to work, for example, to save wear and tear on the rural transport infrastructure, will specifically not get help under the provision?
  Is that yet another anti-rural measure from the Government? Can the Minister explain why London-based companies are induced by the measure to clog up London's roads even more with large buses, whereas no relief is given on the provision of season tickets for employees wishing to use the rather more environmentally friendly transport system in London—the railway? Why is that?
  In clause 47, we see that Treasury Ministers have been busy. The clause deals with tax relief on company-provided cycles and cyclists' safety equipment. We discover that that
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  relief is available only for the purposes of the "qualified journey", which is a journey between the individual's home and workplace or between one workplace and another. Does that mean that representatives of the Inland Revenue will be outside Tesco on Saturday, watching to see whether an employee has ridden on his company bicycle to do his shopping? It is the theatre of the absurd. The Financial Secretary should consider in more detail the practical application of the measure.
  Finally, I shall deal with clause 27 and schedule 3. Clause 27 introduces the children's tax credit. I am intrigued by the wording at the beginning of schedule 3. In order for us to judge whether the measure is practical, can the Financial Secretary explain the wording in paragraph 1, which states:
  "Paragraphs 2 to 5 below apply where at any time in a year of assessment—
  (a) a husband and wife are living together or a man and a woman are living together as husband and wife"?
  What period does the phrase "at any time" cover? Is it one minute or the whole year? How are people to know whether they have fulfilled the time criterion to qualify? Will we see "Blind Date"-type marriages being entered into so that people can gain the benefit of the tax relief? What is the Treasury's definition of a man and a woman who are living together as husband and wife? I do not know how the Government will deal with the practical implications of that.
  I recommend that the Financial Secretary look at paragraph 8(4) dealing with change of circumstances. That is a direct read-across from the provisions applying to the Child Support Agency. All right hon. and hon. Members should examine the provision. If our constituents ask how the tax relief is to be apportioned when two parents have care of the child and both might be eligible for the tax relief, right hon. and hon. Members will find that paragraph 8(4) is a nightmare of complexity. It is typical of the Bill.
  I look forward to a detailed examination of the measure in Committee. It will be interesting to discover how the Financial Secretary defines marriage, cohabitation and all the other intimate activities of the same people who might be using their company-provided bicycle to do their shopping, and who may not be able to ride on a small bus to their workplace. The Bill contains some interesting and intimate details, but it all adds up to a tax fiddlers charter and an accountants benefit.
  6.28 pm
  Mr. Robert Sheldon: The right hon. Member for Fylde (Mr. Jack) did not welcome the introduction of the 10p starting rate of income tax. I take a longer view of such matters. I look on it as an early instalment of what I hope will be a more progressive tax system which will in due course be made possible by self-assessment.
  To me, the most important part of the Finance Bill and the aspect that I particularly welcome is the ending of mortgage interest relief and the married couples allowance, and the use of that money for industry, children and the introduction of the lop rate, among other measures.
  Why have we had mortgage interest relief for so long? What was it for? We all know that housing is a necessity; the need for a roof over one's head and the need for basic

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  amenities are therefore a case for subsidy—or at least for freedom from certain forms of taxation. In common with other forms of expenditure, however, once those essential needs have been met, further expenditure becomes not a necessity but an option.
  If a person lives in a small council flat or house, that needs to be subsidised, or at least to be outside the tax system. A person must be housed. If that person has funds available for more expensive and comfortable housing, at some stage such housing must be seen, if not as a suitable subject for tax, at least as a suitable subject for the removal of any element of subsidy. It is an anomaly that sumptuous housing has been given substantial subsidies, while the fitting out and furnishing that are part of that more expensive move are not subsidised but taxed, mainly at the rate of 17.5 per cent. That needs to be included in the consideration of all aspects of subsidies set against taxation.
  Moreover, the number of anomalies has increased rather than being reduced. For a house owner, expenditure on housing is treated as an investment comparable with other forms of investment. Dealing with that was the main purpose of the old schedule A income tax, which attributed notional income from the ownership of a house and treated it in the same way as income from other forms of investment. That tax, which was always modestly assessed, constituted at least an attempt to balance expenditure that produced a benefit with the return on other investments that produced dividends. It is supremely nonsensical that investment in a company that creates employment, and enriches the community through its overseas sales and by providing and using industrial and technical expertise, should be taxed, while the use of funds to improve a person's life style is not only not taxed, but subsidised.
  House ownership provides other forms of subsidy. When capital gains tax was introduced, people's main residences were exempt, which ratcheted up the financial advantages of purchasing a house. As a result, many people now look to a housing ladder of opportunity, not just to improve their comfort or convenience—which is subsidised—but to enrich themselves by engaging in a purchase whose profits will not be taxed. Of course such moves have always been made, and no one can fault them; but encouragement has been introduced on a grand scale, and, to a large extent, house price inflation has been a consequence of that.
  On top of all the advantages that I have mentioned, mortgage interest relief confers the ability to borrow at a subsidised rate to secure the benefits involved. The Chancellor of the Exchequer was right to remove one of the greatest distortions in the tax system, and I applaud him unreservedly for doing so. The other distortion that he is removing, by means of clause 28, is the married couples allowance.
  Before the war, income tax was essentially a tax on the middle class. On marrying, a woman—even if she had been working—was expected to stay at home to look after the home and the children. Indeed, in the case of many professions and occupations, she was debarred from continuing in her job. The banks traditionally provided jobs for middle class women. There was no glass ceiling for those who married; they received the bank's good wishes, and their employment automatically ended. In the
  746
  case of many couples, there were not two earners. The taxable capacity of the single earner was reduced, and the tax laws took that into account. Looking after his wife was a financial burden for a man.
  The war brought about a number of important changes in the taxation structure. The amount of overtime worked took many employees into the income tax structure, which now applied not just to the middle class, but to many members of the working class. That led to the pay-as-you-earn system. There was a need for married women to be brought into the work force, which meant that the disincentive caused by the removal of the wife's allowance on her taking up of employment had to end. The allowance therefore continued, although the working wife no longer represented the financial expense for which the allowance had been intended to provide. That nonsense has persisted for 60 years—up to the present time, when 67 per cent. of wives work.
  Having children is an expense that reduces taxable capacity. The child tax allowance took account of that in the same way as the wife's allowance took account of the reduction in the taxable capacity of the earner. In this instance, whether or not the partner of the earner is working, the child and its needs will clearly reduce the taxable capacity of the family. On that principle, when child benefit was introduced in 1976–77, an agreement was made between the main parties that it would not count as public expenditure. I am therefore sorry to note the apparent uncertainty in the Opposition's attitude to some of these matters. Nowadays, I am much more relaxed about the distinction between tax reliefs and negative expenditures: if it proves satisfactory, I am happy to accept it.
  I believe that the fundamental principle of taxation is taxable capacity, which refers to the income that is available after all essential expenditures have been allowed for. That, of course, begs the question of what is "essential", but, as Members of Parliament, it is a question that we must assess ourselves. A consequence is that actions that reduce taxable capacity ought to be considered for tax allowances, or concessions of some kind. I think it right to bring the matter into the open now, while we are discussing two clauses that have such a bearing on it.
  We all know the position relating to employees' expenses that are allowable against income tax only when they are wholly, exclusively and necessarily incurred. Little difficulty is involved in dealing with expenses that are wholly and exclusively incurred, which must remain eligible for tax relief; the problem arises with the condition of their having to be necessarily incurred. The trouble with that condition is that employees are not often in a position to pick and choose. It is often a case of, "Do you take this job or not?"
  People used to work close to where they lived. They would live around the corner from the pit, the mill or a factory that dominated the local scene. That is not the case today, however, and we need to deal with the anomalies in expenditures that are incurred in what is defined as earning a living. The main expenditure is caused by the cost of travel to work, which has increased substantially, especially for those with fairly modest incomes, who used to work locally.
  Today, people travel distances that used to be typical only in London. A number of my constituents travel daily across the Pennines to Bradford and Leeds, a regular

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  journey which would have been inconceivable 20 or so years ago. The travel-to-work area has expanded and continues to expand as people seek job opportunities where they can be found. There must be a strong case for recognising that, and recognising the need to take it into account in the tax structure.
  I know the difficulties. I understand the nightmares that the Inland Revenue would experience if a breach of the rules were sanctioned. In the context of returning people to work, however—an important element of the Budget and the Bill—the problems need to be addressed.
  There are other expenditures. People must wear reasonable clothes to work. That used not to be the case: many people who worked in the pit or the mill could wear what they liked.
  Mr. Burnett: As the right hon. Gentleman will know, expenses incurred in travel to and from work are not allowable in the case of either schedule E or schedule D employees. Not even self-employed people are allowed to claim them against tax. Is the right hon. Gentleman aware of the huge cost that such an allowance would generate in revenue terms?
  Mr. Sheldon: I am not asking for an allowance; I am merely saying that the facts need to be recognised in some way.
  I was talking about clothing. In a famous case, a barrister's clothes were deemed to be allowable as an expense. As for meals, workers used to take a jam butty to work, but nowadays more substantial meals are involved, which means further expenses.
  Mr. Cousins: Does my right hon. Friend not think that the Government have for the first time begun to recognise return-to-work expenses? Introducing to income support a provision under which lone parents who return to work under the Government's policies and schemes retain income support payments for the first two weeks of their return to work acknowledges the costs of going back to work. I accept that that is but a small step, but does he agree that recognising such expenses for the first time is important?
  Mr. Sheldon: That is exactly what I am arguing for. Such expenses cannot be wholly allowable for income tax, but they have to be recognised and must receive some understanding and some concession in respect of the way in which these matters are raised or are to be considered.
  People who are not in work have to accept a whole range of such costs when they come into work, as my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) rightly points out. For example, when my constituents add up the cost of travelling across the Pennines against remaining on benefit, they might say that working is not worth their while. We have to make it worth their while. I regard travel expenses as legitimate and, although they should not be taken wholly into account in relief from tax, there should be some understanding of the problems that people face.
  The Scottish National party has joined the Liberal party in wanting to refuse the 1p reduction in income tax, in order to use that 1 p for expenditure. It is difficult to persuade people that tax increases will lead to increased spending; we find them rather sceptical about that,
  748
  because, before they will accept tax increases, they need to be confident that the taxes will be used for the purposes that they support. The relationship between taxation and the particular expenditure that people want is based on a trust which many do not have. In present terms, that is the case for relating taxation to expenditure in certain very limited circumstances.
  Anyone who has served in the Treasury has a visceral feeling about hypothecation; the road fund licence still casts its shadow 70 years on. An important weakness of hypothecation is that it does not take account of changing patterns of priorities in expenditure. In a moment of weakness, one might hypothecate a tax and regret it subsequently, because an element of expenditure has become less important than it was when the tax was introduced.
  There is, however, one instance in which the objections to hypothecation are met—the national health service. One thing is clear to me: the cost of the NHS will rise ever faster than the rate of inflation or even growth in the economy. That is because the population are ageing—there are also other reasons—and, as wants are met, those of health will perhaps become the major area of increasing expenditure.
  The time is coming when we shall need to think more about either private medicine, which I do not favour, or a special NHS tax. As I have said about health, one certain aspect is that demand will increase into the indefinite future. People may be more willing to accept an NHS tax—rather than other taxes, which disappear in the vast generality of public expenditure—if they can see the direct consequences of that expenditure. The time has surely come when the introduction of such a tax ought to be explored sensibly and not rejected out of hand, which it always is.
  Mr. William Ross: I am greatly interested in what the right hon. Gentleman has said about hypothecated tax, particularly in relation to the NHS. Given the willingness of all Governments eventually to cheat on any hypothecated tax, does he agree that, if such a tax were introduced for the NHS, the NHS would have to be funded in perpetuity from one tax that would be clearly targeted on that item of expenditure, with no subsidies from other forms of taxation?
  Mr. Sheldon: The hon. Gentleman discusses a particular form of a tax; I am putting the general point that this matter needs to be explored sensibly. Demand for the NHS will increase and people do not have confidence that the money that they have to give up to spend in taxes is going on the purposes on which they want it to go. In this particular instance, a closer relationship between taxation and expenditure is called for.
  I welcome the Finance Bill as I have welcomed the Budget. My right hon. Friend the Chancellor has tackled two of the major distortions of our tax system. They have been known for many years; he had the courage and the resolution to deal with them.
  6.45 pm
  Sir Michael Spicer: It is always a great pleasure to speak after the right hon. Member for Ashton-under-Lyne (Mr. Sheldon); I have always respected him. In the mid-1970s, I kept him up all night

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  when he was a Treasury Minister and we were fighting each other—not physically, but across the Floor of the House—on Finance Bill Committees. He was involved with the development land tax.
  I want to dwell for a moment on the idea of taxable capacity, to which the right hon. Gentleman referred. I may have misunderstood him, but the effect of what he said seemed to be that we should work out someone's taxable capacity and then tax him to the hilt, according to the definition that had been established for him. That is not my idea of a tax; at least, I would draw the line very much lower than the right hon. Gentleman probably would. Taxation should be minimised and used as sparingly as possible, and people should be allowed to keep as much as possible of the money that they have earned so that they have an incentive to work and invest. Perhaps that is why he is on that side of the House and I am on this side.
  I return to the central question of taxation, which has been troubling the House throughout the evening, although there is common ground. We are almost unanimous that, taking into account the accumulated effect of all the Budgets introduced by this Government, taxes will go up over the next three years. Even the hon. Member for North Durham (Mr. Radice), the Chairman of the Select Committee on the Treasury, distanced himself from the one organisation that apparently does not agree with the proposition that tax is going up—the Government.
  The hon. Gentleman was very fair on this matter. He is a powerful and highly respected Chairman—I hope that I have not done his career, which is beginning to burgeon, enormous harm—who has the command and respect of the Committee. He has tried to produce as fair a report as he can in the circumstances. It is remarkable—mystifying, to be honest—that the Government are sticking to the position that taxes are not going up.
  Proof that the Government are sticking to that position comes from the Committee itself. When the Chancellor appeared before us, he was quite clear. I asked:
  "Would you not accept that the net effect of your three budgets over the next three years has been to raise taxes"?
  He answered:
  "No, I do not accept that".
  The Government are still maintaining the position that taxes are not going up over the next three years, even if all the Budgets are compounded, so it is worth spending a little time trying to draw from them either a confession that they are wrong or further justification for their perpetuation of this extraordinary myth. The public will rumble to it, and soon. As has been said, it does not matter too much to the taxpayer whose taxes are going up when a tax was announced; what really counts is the fact that it is going up.
  Evidently, one has to go over this ground again and, to begin, I shall raise with the House certain relevant matters which have not been mentioned in the form that I wish to use. First, no one has yet mentioned the Committee's general acceptance of the fact that, if one compounds all the Budgets, one finds that taxes are going up over the next three years. Its report says that
  "the Red Book … publishes a table … which lists the impact of pre-announced changes which are due to come into effect over the next three years. These pre-announced changes amount to a tax
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  increase of £3.7 billion for the year about to start, a tax increase of £5.0 billion for the following year and a tax increase of £7.7 billion for the year after that. These tax increases are larger than the tax cuts announced in the Budget. Hence as our expert witness Andrew Dilnot of the Institute for Fiscal Studies summarised: 'In terms of tax changes, there is no question but that taxes will be going up in April of this year, up in the April after that and up in the April after that."'
  That is all very plain English. As has been said already, Government supporters are in the majority on the Treasury Committee, so that is an extraordinarily significant quotation.
  The Government say, "Ah, but it is all a question of taxes as a percentage of gross domestic product over the next three years." However, as the hon. Member for North Durham pointed out, even if we take account of the various different ways in which GDP is presented, the picture still shows that taxes will rise as a percentage of GDP over the next three years.
  That conclusion can be drawn even on the basis of the Government's assumptions in the Red Book about what GDP will be, which are that it will increase by 1 to 1.5 per cent. in 1999, and by 2.25 to 2.75 per cent. in 2000. Those figures look increasingly over-optimistic, and, if they turn out to be so, taxes as a percentage of GDP will go up even faster than the Government—or the Treasury Committee, which has accepted the Government's figures for GDP—now presume.
  It is therefore fair to ask whether the forecast GDP figures are accurately estimated. The Red Book forecast for 2000 expects growth, having tapered off, suddenly to jump up again. There is not much explanation for that jump, so it is reasonable to ask why it has been forecast.
  When we look at the changing features of the economic landscape, we see at least two reasons for being concerned about the figures. The first, which has already been mentioned, is the strength of the pound, especially against the euro. Unless the euro is expected suddenly, out of the blue, to strengthen against the pound, that relative position is likely to be maintained through the period to which the GDP forecast applies. [Interruption.] The hon. Member for North Durham says, "Not necessarily." I shall give way to him if he wants me to.
  The German economy looks as if it might be teetering on the brink of another recession. Given the weaknesses of that economy, and the present signs that the French economy, too, may be going back into weakness, the argument that the pound may fall in value against the euro lacks any real basis.
  The Government should at least say what they think will change—to speed up growth in exports, for example—so as to give their GDP figures some sort of credibility. Even today, another factor has emerged that has to be taken into account. It would seem that the Government's inflation target will be exceeded.
  Mr. Pearson indicated dissent.
  Sir Michael Spicer: The hon. Gentleman shakes his head, but today the underlying rate of inflation has risen to 2.7 per cent.—0.2 percentage points above the target. To be fair to the Government, the target is not vague; they have enshrined it in law. It is a legal target, with which the Monetary Policy Committee has to comply, and towards which its interest rate policies must be directed.

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  When representatives of the MPC appear before the Select Committee again, I shall certainly ask them, "Why are you bringing down interest rates when there are strong indications—in the labour market, they have been there all along—that inflation is moving upwards again? It is the MPC's duty not to lower interest rates, but to raise them."
  Most commentators would at least accept the fact that interest rates, which are still relatively high, will not come down very fast in the near future. Indeed, on the basis of today's evidence, they will rise. There is therefore a serious question mark against the present forecast for GDP, especially as manufacturing industry is in the middle of a bad recession.
  I do not know what the unemployment figures will show tomorrow, but it would come as no surprise to many hon. Members if they began to register an upward movement, or at least were higher than the Government expected.
  As I have said, it is fair to ask whether the GDP figures represent an accurate forecast. If they do not, and GDP is lower than forecast, that puts even more of a question mark against all the forecasts, including those by the Government, of taxation as a percentage of GDP. To me, at least, it would be a serious matter if taxation were to rise as a percentage of GDP.
  That may be a serious matter to me, because philosophically, that is where I come from. I cannot understand, however, why the Government are so coy on the subject. The right hon. Member for Ashton-under-Lyne was, in a sense, enunciating a policy of higher taxation. He said, "Find out people's capacity to be soaked, and then get them."
  Mr. Sheldon: I must defend myself. I simply said that, whatever the level of taxation was, the principle that I enunciated applied. Within that principle, taxation can be low or high. The important point that I made was about the cost of getting people back to work when they considered themselves disadvantaged by the costs involved in earning a living. I was saying that, through taxation or in some other way, that must be taken into account.
  Sir Michael Spicer: Perhaps I did not understand the right hon. Gentleman; perhaps I was caricaturing his view—but I do not think that I was caricaturing the view that is held, by and large, within his party. There are certainly hon. Members sitting around him—although not directly behind him, where we see the hon. Member for North Durham—who think that the Government's job is to find out what the capacity for tax is, to tax people and then to spend and distribute the money. That is what socialism is all about.
  What happened to the real socialists? There are lots of them. Where are they all? They will come out of the woodwork at some point. What is the Government's problem? They would be cheered by their Back Benchers if they were truthful and said, "Actually, we are a socialist Government, and that means that we shall put up taxes and expenditure."
  That is what socialism is all about. That is what people vote for or against at general elections. That is why most of the time they vote Conservative, and why they will go on voting Conservative in the future—because, basically,
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  they do not like that approach to life. None the less, it could be seen as perfectly reasonable. Indeed, it has gone on for thousands of years. [Laughter.] The idea of taxing people has an honourable parentage. I suppose that it has its basis in the work of Rousseau. That may not date back a thousand years, but the idea also goes back to Aristotle and various other philosophers who had the idea of taxing people and distributing wealth. People had their reasons for that—so it is a mystery to me why the Government are confusing themselves, and trying to confuse the public, about taxation.
  One fact, if nothing else, will emerge from the debate: there is a common position among members of the Treasury Committee that taxes are rising. It is up to the Minister to stand up at some point and tell us why.
  Mr. Radice: Will the hon. Gentleman give way?
  Sir Michael Spicer: Of course I shall give way to my boss.
  Mr. Radice: There is a common position that, taking all three Budgets into account, the tax burden, in terms of tax receipts as a share of GDP, will rise over the period. That is right, but there is also a common position that this year's Budget cuts taxes. I hope that the hon. Gentleman—whom I was about to call my hon. Friend—agrees with that, because it is what the Select Committee report said, and he did not vote against it. Nor did he vote against the Committee's general approval of Government economic strategy, about which we have heard little.
  Sir Michael Spicer: The Opposition are wise to keep very quiet when they are getting something through that they thought they might not get through. In this case, it was a massive achievement; it made sense to keep very quiet when we accepted the consensus that taxes would go up in the next three years. That was a significant statement, and it was worth sitting quietly and not stirring up matters too much.
  My view is that it has still not been fully determined whether taxes have gone up in the Budget. I am willing to concede that there may have been some comeback on the swingeing wave of taxation that was introduced in previous Budgets and from which we shall suffer. It is extraordinary that the Government do not accept that taxes are going up. Even the hon. Member for North Durham distanced himself from the Government and said that they must answer for themselves. I hope that they do, but at the moment they are still trying to maintain the myth that taxes are not going up when everyone accepts—the Treasury Committee included—that they are.
  There is one tax in the Finance Bill that dare not speak its name. It hangs like a black thundercloud over our economy. A withholding tax of 20 per cent. on financial savings may be introduced. It hangs like a thundercloud because the Government will not say that they will prevent such a tax. The proposition is on the table through a European Commission directive. It was discussed at the informal summit of Finance Ministers at ECOFIN last week, and it was not rejected.
  I had the honour of asking the Deputy Prime Minister a question last Wednesday. I can think of three reasons why it was strange that he did not have the faintest idea what a withholding tax was. First, if such a tax were

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  introduced, it would be of enormous significance to the City of London. Financial services, direct and indirect, account for 25 per cent. of our GDP. That is more than the 23 per cent. accounted for by manufacturing industry, which is likely to shrink further as a result of the Government's policies. Financial services represent a higher proportion of GDP than the entirety of our manufacturing industry. The Deputy Prime Minister did not know that this tax may be imposed on our financial sector. There is no question what the effect would be, because it would be exactly the same as it was when it was imposed in New York. The whole of the bond market there moved across to London—from where it would move straight to Switzerland were this tax to be imposed in this country. It is strange that the Deputy Prime Minister did not have the faintest idea of what this tax is about, given that it is so important.
  The second reason for surprise at the right hon. Gentleman's lack of knowledge is the fact that a withholding tax was due to be discussed at ECOFIN in Dresden last Saturday. Other Cabinet Ministers also did not have the faintest idea about this tax—I bumped into one yesterday, but I shall not reveal who it was, because it would not be fair. The significance of that is that it has not been discussed in Cabinet. It is of great concern that the Government are giving mixed assurances on a matter that is of such vital importance to a sector that accounts for 25 per cent. of our GDP without having discussed it properly in Cabinet.
  The third reason why the Deputy Prime Minister should have known what was going on is that, in the past few months, Ministers have been giving mixed, but sometimes firm, assurances on this matter in the House of Commons. In the Treasury Committee, I asked the Economic Secretary:
  "Does that mean you would veto any tax regime which included a withholding tax?"
  She answered:
  "We would not accept a directive that required Member States to introduce a withholding tax."
  I said:
  "That means you would veto any such regime."
  She replied:
  "That is correct."
  That was a serious answer by a Treasury Minister to the Treasury Committee. Were the Government to give way on this matter, and were there not to be a veto, the Economic Secretary's position would be extremely difficult to maintain—I wish that she were here to hear me say that, as she has been present for most of the debate. She told the Treasury Committee that the Government would veto the withholding tax if it were necessary to do so.
  In a way, she was supported by the Chancellor in his evidence to the Treasury Committee, which is published in its fourth report. He began on good form. I asked him:
  "Will you be vetoing the withholding tax if it is necessary to do so when it comes to finance ministers on 17 April?"
  The Chancellor said:
  "We will take whatever action is necessary. I have said before that we are not prepared to introduce the withholding tax in Britain".
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  So far, so good. He went on:
  "We are fully appraised of the national interests in this matter and I do not think you and I would be in disagreement about that."
  I replied:
  "Except that I cannot actually hear you saying you will veto the tax."
  We went on like that for a bit, and then I said:
  "Are you going back on what your economic secretary said when she said, 'That is correct'?"—
  which was in answer to the question I had put to her about a veto. The Chancellor said:
  "Of course I am not going back on it. In many ways, I think the statement I am making is the strongest that can be made."
  Again, so far, so good. He gave a firm assurance on the matter. He then said:
  "I think you are misunderstanding me. I am saying we will take whatever action is necessary to protect our position in this matter."
  I asked whether that included the veto. He replied:
  "That includes taking whatever action is necessary."
  I again asked:
  "Does it include the veto?"
  To which he replied:
  "It may on certain occasions include the veto; it may not".
  It is a serious matter when senior Ministers, including the Chancellor of the Exchequer, give mixed signals on a tax that would cause untold damage if it were imposed on this country. It is serious because a Minister is on record as saying that a specific action would be taken, and the Chancellor has said that he would do everything necessary to prevent such a tax being introduced, but that he might or might not use the veto. When it came to the ECOFIN discussions last Saturday, according to the reports of the meeting, the Government seemed to back away from any confrontation on this matter. The issue was deferred for two or three weeks, and no pronouncements were made to reassure people who are extremely worried about this tax, because it would cripple much of our financial sector, which is the strongest in the world bar none. It is stronger than New York and any other financial capital in the world. It is the great British success story.
  It is outrageous that the Government should even flirt with the idea of imposing a tax on the City that would threaten that position: people in Frankfurt and New York would dearly love that to happen. As a result, the business of the City of London would move to Switzerland, and the buildings that are currently being erected would remain as shells. That may not be music to the ears of the Labour party because it does not care too much about the City, but this Government are the custodians of our economy and those facts are, therefore, enormously important.
  Mr. Cousins: The hon. Gentleman's argument is somewhat tortured. Is he suggesting that, if the Government were to negotiate a position with the other members of the European Union so that the eurobond market in the City was outside the scope of any of the taxes that he is imagining—so no veto had to be exercised—he would regard that as a satisfactory outcome? Or is he saying that because he lived under the lash of the handbag and was subjected to that pain for so many years that he wants the Government to exercise the veto as a proper display of power? That is a ridiculous position.
  Sir Michael Spicer: I am saying that one has to establish one's position firmly in any negotiations if one

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  wants them to go the right way. I do not have any confidence from recent public pronouncements that the Government will do what they initially said that they would do—to defend this country's interests. The Government have begun to show mixed signals. We no longer need a crystal ball, because we can read the book—in so far as it has been printed—of the meeting that took place last Saturday, and it seems that the Government shied away from taking a firm stance. The hon. Gentleman may not care too much about that because it may not be part of his philosophy to defend the City, but—in so far as the Government's policy was to defend the City and its interests, and its contribution to GDP—the emerging picture is a shabby one. If that is the case, the Government's position will be traded off, and that will be serious for this country and for the Government because of the commitments that have been made by some Ministers.
  Mr. Tyrie: If such an exclusion were negotiated for the UK, is it my hon. Friend's view that we would be hurt anyway because financial services are increasingly seen in a European or global context and our exclusion would not be sufficient fully to protect us? Is not the whole history of the European Union one in which, if countries have exclusions, the Commission makes proposals some years later to bring them back into the ambit of the tax or controls?
  Sir Michael Spicer: I agree with my hon. Friend. The attacks on the City are coming from different directions, with most of them originating from Brussels. The most significant was mentioned by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), who said that one of the most worrying aspects of what the Government were doing to the City, and to the economy generally, was the introduction of massive new regulatory regimes. The FSA, and the Bill that will introduce it, are a source of enormous concern. The FSA started as a smallish operation to try to help a few consumers who the Government claimed had had a bad deal, but it has turned into a monster. The Bill will give the FSA huge powers; and it will be able to determine its own size and powers. That is causing grave concern among those who have the interests of the financial sector at heart. The withholding tax is just part of a much wider picture of a Government who are not interested in what really makes a market such as the City of London flourish.
  Mr. Tyrie: The Government have not grasped it.
  Sir Michael Spicer: That is another way of looking at it. The Government do not have much more time to grasp it—only another year or so.
  The Government are a tax and spend Government. They try to disguise that, but their whole philosophy is based on tax and spend and the distribution of the taxes they collect. The Government have created their strange and rather absurd golden rule, which allows expenditure to take place without proper funding and rules about taxation. Therefore, it is doubly surprising that they should try to pretend that the Budget is not part of a tax-raising strategy. It manifestly is, as has been determined by outside commentators and by the Select Committee on the Treasury.
  7.16 pm
  Mr. Eric Risley: I do not intend to follow the hon. Member for West Worcestershire (Sir M. Spicer) in analysing the Treasury Committee's report, because I wish to make a few brief points, especially about excise duties—on cigarettes, alcohol and the fuel duty escalator—and their effect on my constituency.
  I welcome the Finance Bill and the Budget. The measures they contain will have a marked effect on my constituency, which is an area of high unemployment. We are trying to regenerate the local economy and many of the measures in the Bill will do much to help that—in particular, the lower rates of income tax, the measures to help families, the increases in child benefit, the children's tax credit and the investment in schools and hospitals. The measures to encourage work will also be of great benefit.
  In the past few years, I have welcomed successive Governments' commitments to reducing smoking. My constituency suffers from a high incidence of smoking-related diseases and we would welcome any initiative that reduced levels of smoking. Sadly, increasing numbers of young women are taking up smoking, which is very worrying. Successive Governments have used the Budget and the Finance Bill to increase tax on tobacco products to try to reduce smoking, but for young women the effect of those measures has slowed down or they are simply not working. One of the reasons for that—although it is not the only reason—is the difference in duty between cigarettes legally purchased in this country and the duty in France and the other countries of Europe on cigarettes and tobacco products which are smuggled into this country and illegally resold through various outlets or by individuals. It is easy to obtain cheap tobacco products, which defeats the worthwhile objectives of successive Governments in increasing tobacco taxes to reduce smoking.
  An interesting article recently described an analysis of discarded cigarette packets at a football ground. Three out of every four packets collected were imported and had not been sold legally in the UK. That gives some idea of the amount of smuggling, which is, to some extent, defeating the Government's objective and removing revenue from the Treasury.
  Smuggling also affects retailers. A constituent of mine, a former miner, invested some redundancy money in cigarette machines, but has begun to regret it because he cannot compete with the prices of cigarettes smuggled into the United Kingdom and then resold.
  Mr. Rowe: The other end of that chain lies in my constituency, which is full of sinister criminal families who have moved to Kent because there is more profit to be derived from smuggling tobacco than from almost any other substance. Kent police are particularly anxious about that movement.
  Mr. Illsley: I am aware of the hon. Gentleman's concern and shall refer later to a slightly amusing incident that he will appreciate in which smugglers from my area went to his.
  Smuggling is affecting Government policy and revenues. It also hits retailers in my constituency. I fully support initiatives to reduce smoking taken by this Government and their predecessor, and I support plans to

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  ban tobacco advertising. I do not advocate reducing duty on cigarettes, but more resources should be given to Customs and Excise—and perhaps to Kent police—to try to stop tobacco being smuggled into the UK.
  We must try to remove the reasons for wanting to smuggle tobacco. As the hon. Member for Faversham and Mid-Kent (Mr. Rowe) said, it is one of the easiest ways to make a lot of money these days. The Government could consider moving our duty rates closer to those of our continental counterparts more quickly than is envisaged. They could, in short, try to make smuggling less economic.
  I welcome the freezing of duty on alcohol, except for cider. The difference between our levels of duty and those in Europe is substantial. Ours are much higher. The duty on a pint of beer, for example, is around 33p, but in France it is about 5p. Some of our European partners have cut their duties towards a target of 8p a pint, and it is easy to see how far we are from that rate. Even if we freeze alcohol duties for a few years, it will take some considerable time before European duties approximate to Ours.
  About one and a half million pints of beer enter the UK each year on which duty has been paid in France. That has a huge effect on domestic beer sales, just as tobacco smuggling affects tobacco retailing. Breweries have closed over the past few years and consumption of beer in pubs has decreased. The Treasury is losing an estimated £800 million a year as a consequence of alcohol smuggling.
  There is a knock-on effect for my constituency, which is one of western Europe's largest producers of glass, by volume. We produce glasses and beer bottles, among other things, and the industry is feeling the pinch.
  The hon. Member for Faversham and Mid-Kent mentioned families descending on Kent with the sole intention of smuggling illegal quantities of beer and tobacco. More than 12 months ago, Channel 4's "Dispatches" programme focused on several people from my constituency who had been convicted of smuggling. They had travelled from South Yorkshire to Kent, lived there and gone across the channel with vans to come back with as much alcohol and tobacco as they could carry. They were unemployed, some of them ex-miners. They had no income, and they spotted a way to earn some easy money.
  Those people were caught and convicted, but they were detected not by Customs and Excise but by the good people of Kent, who became fed up with lads from Barnsley having a good time and spending money that they had not previously had. The lads stood out a bit in the hostelries of Kent, speaking in good old-fashioned Barnsley accents and spending lots of money, as generous Barnsley people do. The people of Dover reported that an unusual group was camped in that part of Kent; it was not customs who caught them. The Budget announced extra funds for tackling smuggling, but we must try to reduce the differences in duty between ourselves and mainland Europe to remove the reason behind smuggling.
  It is often suggested that many smugglers emanate from Sheffield. However, Sheffield is a vehicle registration area. A lot of vans and trucks that are clocked crossing
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  the channel from ferry ports happen to be registered in Sheffield, but they are not always driven by people from Sheffield or South Yorkshire.
  The more topical issues of the fuel duty escalator and the perceived effect on the haulage industry of vehicle excise duty on commercial vehicles have already been raised tonight. Like other Members, I have been heavily lobbied by the haulage industry and by local hauliers. In January, Truck, Headlight and other trade magazines ran similar articles calling on hauliers to lobby MPs and drawing attention to VED and the fuel duty escalator. They all carried stories about the possibility of Eddie Stobart moving abroad to take advantage of cheaper VED and cheaper diesel.
  The Government are aware of that lobby and have acted to try to reduce the burden on small companies. The 1 per cent. reduction in corporation tax, the 1 per cent. reduction in small companies tax, the quarterly payments of advance corporation tax and the extension of capital allowances have all been cited as Government action that will ease the burden on hauliers. However, as the hon. Member for Gordon (Mr. Bruce) said, companies must be making profits if they are to take advantage of reductions in corporation tax and so on, and must not have costs imposed on them.
  A small company with few staff will not receive the advantages of the national insurance initiative that the Government have rightly taken. The smaller the profit, the less benefit there will be from reduced taxes. Our fuel is the most expensive in Europe, and vehicle excise duties for 30-tonne or 32-tonne lorries are, at about £3,200, the most expensive in Europe, too.
  We have been through the environmental arguments for imposition of the fuel duty escalator. However, having an 1100 cc engine does not necessarily make a car cleaner than a 3.5 litre, superbly tuned, brand new car with catalytic converter. The smaller motor could easily be twice as dirty as the car with the larger engine. To take advantage of the £1,000 reduction in vehicle excise duty for cleaner engines would mean a hell of an investment to hauliers with few lorries.
  The Government should consider the state of research. My research showed that the most recent work on European Union comparisons in respect of the costs of the road haulage industry is quite old. Both the Road Haulage Association and the Freight Transport Association estimate that 8,000 jobs will be lost over the next 12 months. One takes that with a pinch of salt, because they will try to make the best case that they can in respect of the escalator. There has been considerable press coverage and direct action by the hauliers. I condemn such action, which does the industry no good.
  I appreciate what the Government have done in freezing VED for most commercial vehicles, but we must consider doing research to compare the situation with that in Europe. The Minister of Transport has mentioned a study—I think it was by KPMG—of comparative costs, but that was predicated on a 50-vehicle fleet. Many hauliers have fewer wagons. There are self-employed people who own one lorry and are contracted to other haulage companies. They cannot can take advantage of the things that I have mentioned and are not considered by the KPMG report. Some such operators are small family businesses, which are finding it difficult to cope.

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  Some 30 per cent. of lorry journeys are made by empty wagons. Too many lorries deliver fresh air because of our packaging systems, which mean that we cannot make optimal use of containers. We could improve fuel efficiency and route planning to take advantage of joint initiatives where one company contracts with another to bring loads back rather than bringing the lorry back empty.
  Mr. Nick St. Aubyn: Can the hon. Gentleman say which countries are doing that so much better than we are?
  Mr. Illsley: I cannot. Our industry, and, I think, the Government, would maintain that we have a very efficient haulage industry. No matter how good the industry, packing a 32-tonne lorry with food, carpets or whatever, still means that a lot of space and fresh air is carried. Some issues cannot be addressed without research and development in the areas of packaging and freight haulage. We need up-to-date research to find out whether the arguments of the haulage industry are correct and whether it is true that it is disadvantaged vis-a-vis our European partners.
  I welcome the Finance Bill and the Budget. I hope that the Government will consider the matters that I have raised in more detail in Committee.
  7.33 pm
  Mr. William Ross: It is a pleasure to follow the hon. Member for Barnsley, Central (Mr. Illsley), if only because I intend to address many of the issues that he raised from the point of view of Northern Ireland. As he will discover, if things are bad with him, they are a great deal worse with us.
  It would be interesting first to consider the debate so far and cast our minds back to the things that used to exercise us when there was much talk about the public sector borrowing requirement and how it could be reduced. The Government, and the previous Government, are to be congratulated in that we have sometimes got to the stage of repaying public sector debt, which I strongly favour. I hope that the Chancellor will keep it firmly in the forefront of his mind, because the saving in interest alone that would result from getting rid of the huge burden of Government debt is a fair prospect that he should try to realise. We pay out far too much money servicing public sector debt, which is often much the priciest way of securing investment. In addition, much borrowing is spent not on investment but on current expenditure, which means that we get no return for the public sector debt. I favour reducing it to nil if it can be managed.
  The estimation of the tax demand that the tax-paying public will bear, however grudgingly, has exercised the brains of every ruler and Chancellor since taxation began. Get it wrong, and there will be resistance. At its most benign, that means tax fraud and avoidance. The next level up is smuggling. Formerly, the next level was rebellion and violence; now, it means moving overseas or across borders, as happens in Northern Ireland, to a lower tax regime.
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  I note from the CARE—Christian Action, Research and Education—brief sent to Members that in his 1997 Budget speech the Chancellor said:
  "The tax system sends critical signals about … activities that a society wishes to promote and deter."—[Ofcial Report, 2 July 1997: Vol.297,c.311.]
  I hope that he has not forgotten that, but keeps it firmly stuck to the front of his desk when he considers future Budget proposals. It might be better to replace "society" with "Government", but the principle is correct.
  The statement illustrates an objective of taxation that is often ignored: the desire of the Government to achieve aims other than the mere raising of revenue. In a world where travel was slow and difficult and economies were isolated, it was relatively easy to ring-fence an economy. There was always some leakage, but in today's world, and especially in a borderless Europe, the leaks have turned into a raging torrent driven by widely different tax rates. Some of our rates have been set for laudable reasons besides raising revenue; but, in pursuit of those objectives, the balance has gone far beyond the willingness of the targeted population. The unwillingness to pay is rooted in the resentment felt by citizens when they compare like with like in other economies and countries.
  Some years ago, the previous Government was well warned of the consequences of increasing tax on tobacco. I mentioned it several times. As long ago as 1994, in relation to tobacco, I said:
  "we simply cannot go on allowing important sectors of the economy to be undermined or destroyed because we are so out of step with other countries"—[Official Report, 13 December 1994; Vol. 251,c.854.]
  That was echoed by the hon. Member for Barnsley, Central. We have now arrived at that point. The tobacco situation has developed exactly as the management and trade union representatives at the Gallaher's factory in Ballymena forecast. Every year they visit the House to meet Members not only from Northern Ireland but from elsewhere in the Kingdom. They will confirm, if confirmation is needed by Treasury Ministers, that those forecasts were made. They have now been borne out.
  The smuggling of tobacco in its various forms is swelling from a trickle to a flood because of the vast difference in tax rates between United Kingdom and continental Europe. Those interested in what we were told by Gallaher's workers and management have only to look up my previous speeches. I will not weary the House with all that now, but it is clear that they were correct. Seventy per cent. of hand-rolling tobacco sold in this country is stuff that was exported mainly from Gallaher's. It is back here in a fortnight—smuggled in. The loss to the Revenue is immense. Gallaher's forecast that, if taxation on cigarettes went up, the same thing would happen, and it duly did. That is why I believe that we went far beyond what was fair and reasonable or what people were prepared to pay.
  The benefits to the health of the nation from increased taxation on tobacco have not been realised. The tobacco industry is being wrecked and revenue is being lost. As I said in the Budget debate, the Red Book forecasts that the tobacco industry will decline in the next few years because the tax on tobacco has gone beyond what any citizen will willingly pay. Criminal activities have taken over, the revenue stream has been wrecked, and there is no benefit to the country. People are still smoking.

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  We have used the stick to stop people smoking, but it is not working because people are now avoiding it. It is time to get back to the carrot, and the carrot has to be rooted in education, starting with the very young.
  If the desired end of the tobacco tax regime was health rather than revenue, the desired end of the road fuel and vehicle excise duty regimes was environmental rather than revenue-inspired. We all know, of course, that both revenue and environmental considerations brought the road fuel escalator into being. At least that is what we have been told by both the present and previous Administrations.
  The explosion of anger and frustration witnessed in Great Britain on the streets of this city and others since the Budget is clear proof that road taxes have passed beyond what most people affected by them believe to be reasonable, fair or equitable compared with those in other countries. I raised that matter in a debate as long ago as 15 December 1994. I pointed out the effect of the cost of fuel on every item that we purchased and the need for urban and suburban, comprehensive, high-frequency, cheap public transport to replace private cars in cities if there was to be any real environmental benefit.
  I also drew attention to the consequences of high road fuel taxes for the rural dweller, for whom a car is not an option but an essential. The previous Government, and now the present Chancellor, have continued on the same line of action and have increased road fuel taxes, with the inevitable and foreseeable consequences. So there is no excuse for being where we are today. It should not have happened. People should have known enough to put the brakes on tax increases long since.
  I understand that there is to be a debate on fuel taxation and the road haulage industry in the House tomorrow. I personally regret that it is to be held before the report on the effects of the policy in Northern Ireland has been made available. The Northern Ireland Select Committee has done such a report. I fear that it will not be published before tomorrow, but I understand that damning evidence was given as to the effects of the policy in Northern Ireland. I shall content myself by saying that it now seems that the figure that I gave to the House in March of £100 million of lost revenue in Northern Ireland alone in the past year appears to be wide of the mark. That figure is only a fraction of the true cost, which was anything up to £400 million last year. That is the cost of fuel smuggling between the Irish Republic and Northern Ireland.
  Any hon. Member besides me who had the opportunity of watching the television news in Belfast just after the Budget would have seen one lorry driver interviewed. I think that he was the owner of one truck, who did most or probably all of his work in Ireland. He told the television crew and the people of Northern Ireland that he did not buy any fuel in Northern Ireland. He bought it all in the Republic, saving £2,200 a month—£550 a week. I suppose that most people would be happy with that as profit, never mind extra profit. But perhaps the driver was not making any profit. He was not the only person buying all his fuel in the Irish Republic.
  Many operators are now transferring their fleets to the Republic to take advantage not only of the cheap fuel there. but of the lower vehicle excise duty. I hope that
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  whoever is in the Chair tomorrow will call some of my hon. Friends who are members of the Select Committee. They will be able to give other illustrations of the activities of the smugglers, many of whom in the border areas appear to be tied to the most violent and ruthless of the terrorist organisations. They will be able to describe the role of those organisations in fuel smuggling, the amount of money that they make, the amount of fuel shifted and the damage that is being done to all legitimate businesses in the border towns of Northern Ireland. The damage is colossal, and there is no point in saying, "We are doing our best." The best that has been done so far is not nearly good enough. A system of smuggling of outrageous criminality exists and it has to be defeated.
  One story that the Select Committee was told was of a character who had got himself a stock lorry. He built a large tank inside it, stuffed all the ventilation holes with sheep's fleeces, put a dozen old ewes into the back bit, filled up the tank with fuel and drove backwards and forwards across the border all day until the Revenue caught him. Whenever officers glanced into the ventilation holes, they saw a few sheep blatting in the back end of the lorry. They did not realise that there were thousands of gallons of smuggled fuel in the front half of the vehicle.
  Smugglers are an ingenious and ruthless lot. They have cost the Treasury an enormous sum of money. The damage that they are doing to the haulage industry in Northern Ireland is beyond comprehension. That has to be dealt with in Northern Ireland and the rest of Great Britain, especially in the light of what the hon. Member for Barnsley, Central (Mr. Illsley) said.
  Hon. Members will recall that in Question Time last week the Minister of Transport gave the impression that accurate figures were available in respect of the costs for the road haulage industry in each EU country. I tabled written questions asking for those costs, which were due to be answered on Friday. The reply to the five or six questions that I tabled was that the Minister would answer me shortly. I hope that he will. I had hoped that the answers would be available today: they are not. That will surprise the House, because the Minister suggested that the information was sitting there and we had only to ask for it. Perhaps the details that I have asked for are so comprehensive that it has taken some time to assemble them. Let us hope that they are available tomorrow. I hope that they will give us a clear picture.
  If the figures show that the costs in the United Kingdom as compared with those in EU countries are as the Government allege, hauliers will recognise that it is in their financial interest to stay within the United Kingdom. Given some of their reactions to the new tax rates in the past few weeks, I think that hauliers will take some convincing. We shall wait and see. It is sufficient for today's proceedings to say that the situation is intolerable and it has to be resolved.
  I am glad to see that the provisions of the Bill in relation to road fuel will be considered on the Floor of the House. I look forward to those debates, but I regret that we are not taking on the Floor of the House the provisions relating to vehicle excise duty.
  My final point is on an unrelated matter. Do the Government really believe in marriage? Will the tax system send out a clear signal that the Government want

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  marriage to be the foundation of a stable society in this country? If so, will the Government take steps to make it financially prudent to become and stay wed?
  7.50 pm
  Mr. Ian Pearson: Budget 1999 takes a major step towards building a stronger economic future for Britain and I warmly welcome the Finance Bill that takes it forward. The Bill adds to the two previous Finance Bills of the new Labour Government and, in many ways, will be seen as the most radical of the three. With 129 clauses and 20 schedules in 169 pages, it is certainly shorter than the two previous Finance Bills, but is none the worse for that—although it continues to surprise me that there are no fewer than eight schedules covering various aspects of stamp duty. However, there is a great deal of meat on the Bill and I am sure that all those who discuss it in Standing Committee will find that there is plenty of work to do.
  I have served on every Finance Bill Standing Committee since I was elected to the House in December 1994, so I am becoming something of a connoisseur. Although 1995 and 1996 were good vintages for Bordeaux and Burgundy, they were very poor indeed for Birmingham, Brighton, Bristol and the rest of Britain. That meant that, when the new Labour Government took office in May 1997, we inherited an extremely fragile economy, a national debt that had doubled and public finances that were in a terrible state.
  Our first two Budgets laid down a sound macroeconomic framework for the United Kingdom and this Budget builds on that. The Budget is finely balanced. The overall fiscal stance of all three Budgets has clearly benefited the British economy, and will put us in a position that ensures that, in the next century, British companies will have the ability to succeed in Europe and our European home market.
  Mr. St. Aubyn: The hon. Gentleman tells us that the situation that his Government inherited at the election was unsound. We could argue about that for a long time, but will he tell us whether he believes that the situation was better or worse than that which the Conservatives inherited in 1979?
  Mr. Pearson: I have no desire to spend Second Reading giving the hon. Gentleman a history lesson, but, if he wants to pursue that matter outside the Chamber, I shall be happy to engage in debate with him.
  It is clear that the Budget and the Finance Bill will make work pay and help to build a fairer society. I particularly welcome the 10p starting rate for income tax; that will benefit many hundreds of thousands of people throughout Britain. It sends an important signal as to the Labour Government's views on personal taxation. I also welcome other measures, such as the national insurance reforms that have taken place. They will relieve almost a million people from paying tax at all. The minimum income guarantee means that families with one wage earner will be able to earn slightly more than £10,000 before they have to pay tax. A package of reforms totalling £1 billion will benefit pensioners. We should also welcome the increases in child benefit that were announced in the Budget.
  I want to devote most of my speech to the effects of the Budget on business. The first point to acknowledge is that the 10 per cent. starting rate of corporation tax
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  is widely welcomed by small businesses. The research and development tax credit is also welcomed by small and medium-sized businesses. The Opposition have lost the plot when it comes to issues such as the R and D tax credit. Britain's future clearly lies in building a knowledge-driven economy. Research and development encouraging innovation and the development of value-added products and services must be the future for the British nation. It is essential that we have an R and D tax credit and I am sure that it will be used by businesses.
  The extension of the scheme for employee share ownership is welcome; a vast body of evidence suggests that that is an extremely sensible measure that will help to improve company performance. Likewise, the 40 per cent. capital allowances regime will be significant in helping to encourage investment and growth—I shall say more about that later.
  Finally, in respect of measures that are welcomed by businesses, there is the announcement of the establishment of the small business service. For too long, small businesses have received short shrift from Governments of whatever political persuasion. Now, the small business service has the potential to do something radical and to ensure that the voice of small business is heard at the heart of Government. My hon. Friend the Financial Secretary and her colleagues on the Treasury Bench are keen that that should happen, and I hope that we follow through on that matter so that we develop a powerful body with the same clout as the Small Business Administration in the United States.
  As other Members want to contribute to the debate, I shall be brief. I want to focus on three matters: road fuel duty; the climate change levy; and the capital allowances regime. In relation to road fuel duty, I have no time for the opportunism of the Tories. The Conservative Government introduced the road fuel duty escalator and it is a bit rich for the Conservatives to say that they have changed their minds on that issue now, late in the day. The road hauliers, too, have not been especially well served by having as their chief spokesman a former Tory Minister with ambitions to be the mayor of London.
  Countless local road hauliers have talked to me about the road fuel duty. I have seen their balance sheets, profit and loss accounts, cash-flow forecasts, management accounts and order books, and I know that many of them have real problems. The problems are not confined to road hauliers; large swathes of manufacturing industry are beginning to be hit by the tax. As no other Government in Europe are following the road that we are going down, and as the pace of technological change is such that new developments in clean fuel technology and alternative propulsion systems mean that year by year our cars are becoming cleaner, we need to reconsider the road fuel duty escalator. We have reached the stage—we may even have gone past it—when it is time to take our foot off the gas and to say that the road fuel duty has now achieved what we could have reasonably expected for it without damaging the competitiveness of British industry. Common sense says that we must take our foot off the escalator at some time; I should like to think that, after this year, we shall decide to discontinue the road fuel duty escalator policy—perhaps that is an early Budget 2000

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  representation. I should welcome any review or detailed proposals that the Government might want to make on that matter.
  Mr. St. Aubyn: I applaud the courage of the hon. Gentleman in standing up to the pressure from his colleagues on the Treasury Bench on that matter. However, if he accepts that it is right to call a halt to the escalator, why does he criticise the Conservatives for saying that we should call a halt before the Finance Bill is passed and not afterwards? Surely, we are on the same side; it is only a question of when we call a halt. The road hauliers in his constituency are telling him that we should call a halt before this latest increase, not after it.
  Mr. Pearson: I can assure the hon. Gentleman that we are not on the same side. The Conservatives' opportunism beggars belief: they have wound up hauliers and they have given tacit support to some of the recent demonstrations, which I condemn. However, the issue will not go away. The hon. Member for East Londonderry (Mr. Ross) was right to say that the problem is especially acute in Northern Ireland. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) also made some sensible points in respect of the road fuel duty escalator.
  On the question of technological progress, every major automotive manufacturer is currently spending a lot of money on research into battery-operated vehicles and fuel cells. Daimler-Chrysler has already announced that, in 2004, it is to start production of a fuel cell-powered car, and Toyota, Ford and GM are all following suit. The technology already exists and the costs are being driven down, if not by the minute, then by the day. If we were able to fast-forward to 2010 and look back on the period between now and then, we might feel rather silly at having taken action that damaged British competitiveness when cleaner, more fuel-efficient cars were coming along to remove the problem. If we do not have a European solution to the problem, we do not have any solution at all.
  The climate change levy will not be introduced until 2001, and consultation will be carried out in respect of the proposals, which is welcome. I remain concerned that the primary impact will be on manufacturing industry, so we must take care during the consultation phase to do all that we can to ensure that extra burdens are not imposed on manufacturing. I am sure that the Government will come up with an exemption scheme for high-energy users, but I should like to highlight the glass industry, which is important to my constituency.
  Glass manufacturers operate in an extremely competitive environment and they are significant energy users. The industry uses fairly large pieces of capital equipment, so changing to investing in more efficient technology in anything less than the medium term would create insuperable business burdens and threaten the future of large sections of the industry. I raise those issues as part of my early representations and hope that they will be considered during the consultation process.
  The 40 per cent. capital allowances regime is extremely welcome—perhaps in the next Budget, the Government will announce that it is to be a permanent feature of their policy. The specific matter which I want to highlight is leasing, which is currently excluded from the proposals
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  for the capital allowances regime. I have no qualms about saying that some of the scams that went on in finance leasing occupied a lot of our time, as we tried to do something about them in previous Finance Bills. No one wants the tax base to be eroded by purely artificial schemes, but let us consider leasing in connection with information technology.
  The current tax system has the potential to distort investment decisions, because, if a company has the money or the financial security to borrow the money to do so, the existing regime provides an incentive for it to buy, or to take out a loan to buy, capital equipment such as IT equipment. Most sensible companies consider leasing as a means of purchasing IT equipment, but the companies are unable to benefit from leasing arrangements under the current regime. That is wrong, because leasing computer equipment is a sensible option that gives small businesses the opportunity to upgrade their equipment, which is not possible if they buy the equipment. As a Government, we should not in effect be encouraging companies to buy IT equipment when leasing deals would be far more efficient.
  I know that, because the benefits of the capital allowances would go to the leasing companies, it is not a simple matter to bring leasing under the capital allowances regime in a way that would help small and medium-sized businesses. However, it is not beyond the intelligence of Treasury officials to develop arrangements whereby the benefits of those capital allowances could be passported through to the small and medium-sized businesses. If we did that, we would have an improved capital allowances regime. I already think that it is good, but if the regime could include a sensible leasing package, it would be better.
  This year's Finance Bill represents a tremendous step forward in building a stronger modern economy in Britain. It has been welcomed by people in my constituency and by the vast majority of businesses. A recent study by Manchester university reported that small businesses will be 5.7 per cent. better off as a result of the Budget; that is a testament to the Government's commitment to small businesses in this country. I warmly welcome the Bill.
  8.7 pm
  Mr. Ian Bruce: I am grateful to have been called to speak in the debate. I suspect that this is the first time that I have spoken in a debate on a Finance Bill. When I came into the Chamber, I thought that I had little to say but, the more I read of the Bill, the more issues I find on which I want to comment seriously.
  I am pleased that some Labour Members are starting break away from their Trappist tendencies, or from the sycophancy whereby they say nothing bad. The one issue that appears to unite hon. Members on both sides—even though some would deny it—is the fuel duty escalator. When a Conservative Chancellor introduced the escalator, he did not do so without taking a good deal of criticism from Conservative Members. Therefore, although I doubt that I shall be a member of the Standing Committee on the Bill, I am sure that, if the hon. Members for Dudley, South (Mr. Pearson) and for Barnsley, Central (Mr. Illsley) are on that Committee and they get together with the Opposition, we shall be able to table an amendment that will be passed with support from both sides of the Committee. I should not make such suggestions while the Whips are listening.

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  It was with the support of hon. Members on both sides of the House that the previous Conservative Administration moved toward having a unified Budget, so I am concerned that, although the Government have carried out their comprehensive spending review and decided what is to be spent over the next three years, this Budget has again split the two processes of taxation and spending. However good their crystal ball, I cannot believe that any Government can state their spending totals for the next three years and be absolutely certain of achieving them.
  The Government can set targets and try to achieve them, but unexpected issues always arise—for example, Kosovo will have increased defence costs and aid spending. There is considerable pressure to be far more generous in paying nurses and teachers, but proper analysis of the increased funding for the national health service and education shows that that pay pressure will continue, because the money is not there even to pay what has already been promised to those two groups of people.
  It is a tradition in such debates to say something positive. I must declare an interest as I am an adviser to the Telecommunication Managers Association, and I welcome without reservation the removal of the tax on mobile phones. The tax was introduced by a Conservative Chancellor who thought that he made a rather good joke about being disturbed in restaurants by mobile phones. That joke was not appreciated by anybody in business. It was completely wrong to tax an individual because he owned a mobile phone and could be contacted by his employer at any time of the day or night. Many mobile phones are now equipped with vibrators and messages appear on the screen to identify the caller. One may be contacted by telephone even in the Chamber. I am surprised that no one has decided to tax pagers, but I am grateful that that decision has not been taken.
  Unfortunately, I have no more praise for the Bill. Many clauses of Finance Bills have gone down in infamy, and clause 31, which abolishes the right of widows to receive bereavement allowance, might be the infamous clause in this case. That is one of the very few benefits—probably the only one—that a married woman receives when her husband dies prematurely. At present, it is a non-means-tested benefit that is paid for by national insurance contributions—I understand that the size of those contributions may decrease, but that does not matter to individuals who are now in their 50s and who have paid contributions all their working lives so that, if they die, their wives may benefit.
  No matter what their level of income, it is always more expensive for people to carry on alone. Many women who have chosen to be home makers will be forced back into work and perhaps into low-paid jobs because they lack workplace skills. Perhaps even more serious is the plight of the woman who is in work when her husband dies. Under the non-means-tested benefit system, that woman was able to stay in work because she also received the widows benefit. The removal of that allowance is most appalling. I asked the Prime Minister during Question Time whether he was proud to be the Labour Prime Minister who abolished the widows pension. He gave me a fair answer: he said that it was a matter of balance and that we must decide which direction to take. I think it is totally wrong for a Labour Government to introduce means testing of the widows pension.
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  Many Conservative Governments signalled their desire to abolish stamp duties and we had almost reached that point, but duties have now been cranked up again. It is a wholly wrong-headed tax. For example, someone who moves house every few years because of his job—perhaps he is in the armed forces—must pay a tax for occupying exactly the same size house as someone who remains in one place in the same dwelling. Stamp duty will hit people hard and hinder labour flexibility. It is a particularly strange imposition because this Budget is supposed to help people back into work.
  I am particularly worried about economic policy. The Government claim constantly that they have a stable economic policy, but stability may be defined as zero growth. I do not think that Labour Ministers, even in their wildest dreams or nightmares, would aspire to zero growth. I think they want an economy that is growing at a steady rate, with no sudden moves up or down. That sounds wonderful: we would all love to see it. However, what has happened? We have moved from the ideal position of 3 per cent. growth to 1 per cent. growth or lower and a near-recessionary situation, yet the Government claim that they have achieved stability and moved away from Tory boom and bust. We may have a soft landing, but the economy that was growing so well has gone bust.
  Hon. Members may argue about the way in which we share the cake, but, unless the economy is growing—hopefully at a steady rate, but perhaps by fits and starts—we will not be able to pay for additional services for our constituents. We might argue about the size of allocations to the health service or to defence, but, if the cake is not growing, we are fooling ourselves, because we cannot achieve anything. I do not see where that steady growth will come from in this Budget. It provides penny packet assistance for companies, but will not, for example, compensate for the massive increase in fuel duty, which will deflate the economy and retard growth.
  The Government have produced all sorts of glossy brochures which do not say anything in an attempt to persuade people that they are either preparing the economy to join the euro or at least preparing to put the membership question to the people. Nothing in the Bill suggests how those outcomes will be achieved. What has happened to the euro since the Government's strategy began? I do not know whether the euro has devalued by 7 or 8 per cent. against the pound, but it has had enormous effects on the United Kingdom economy.
  I do not blame the Labour Government: the European central bank must take much of the responsibility for that devaluation. After all, it suggested to the world that the euro would be a stable reserve currency. It is stable for the 11 countries in economic and monetary union, but it is certainly not stable for anyone else. At one point, there was a 1 per cent. devaluation every week. If that had continued for a year, the euro's value would have halved and it would have been worth as little as the rouble.
  The Chancellor can no longer knock on the door of the Bank of England and say, "Excuse me, Governor, but I think that you have got interest rates wrong." However, unlike the 11 EMU member countries, the Chancellor can knock on the door of the president of the European central bank and tell him to do something about the euro. The devaluation of the euro will cause all sorts of problems for our economy, and therefore the Government's Budget. When we take off 0.25 per cent.,

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  euroland takes off 0.5 per cent. We must address that problem if this economy is to work and if the gross domestic product figures in the Budget are to be achieved. Everything depends on it; the Government must not be pushed off course.
  A few months after losing office, former Chancellors will usually admit that Treasury forecasts are never right. One can bet one's shirt on it. That is understandable because the Treasury does not have a reliable forecasting mechanism: it has only a crystal ball.
  I shall deal now with one of the main issues in the Bill. My right hon. Friend the Member for Fylde (Mr. Jack), who has had much experience in trying to achieve simplification of tax, referred earlier to the previous Government's attempts at that and said that all hon. Members, including Labour Members, had signed up to that aim. We are moving towards increased complexity, which is not what we want. I used to work out wages for the companies that I worked for, and I know how much time and effort go into that task when there are multiple tax rates. Having a single tax rate for the vast majority of people and raising the upper tax rate out of the reach of many people were good moves.
  The previous Conservative Government set themselves a target. They could not reduce the basic tax rate to 20p overnight, so they said—their proposal was complex, but it was at least a development—that they would introduce a lower rate of 20p and try gradually to bring down the standard rate to 20p. This Government have said, "We shall have a 10p rate because we promised one and it sounded really good." That is paid for by abolishing the 20p rate, but is anybody suggesting that the standard 23p rate of income tax will, over the next five or 10 years, go down to 10p? Layers are being introduced to the income rate structure which will become permanent.
  People jump up and down with joy and say that lower tax rates will benefit the low-paid, but those rates will be the accountants' delight because they allow people to move income around. I have always wanted national insurance rates to be close to tax rates, and I welcome the move towards that, but I caution the Government that many households can move income around, and they will start to do so.
  It has always been advantageous for a man who is in business for himself and whose wife is a home maker and looks after the children to say that she does the books or answers the phone once in a while, so that he can pay her up to the national insurance minimum. That practice is widespread, and I am not giving away any secrets. By increasing the national insurance limit, the Government have introduced a greater incentive for wealthy people who run their own limited company to indulge in that practice. Treasury Ministers say that they want to close loopholes, but they might well find that they have just widened a loophole, and that will create difficulties for them.
  Some people might say that the introduction of the working families tax credit is a generous move. There is certainly a case for saying to individuals who are at home, "We shall give you an incentive to get back to work." That proposal is more complicated than previous measures. If the Government wanted to give people more help through income support or other means, they could
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  have done so more simply. In addition to dealing with all the different tax rates, employers must now work out the working families tax credit. It is a negative income tax, and this is the first time that we have had such a tax.
  The Government will face problems with people fraudulently manipulating the working families tax credit. My right hon. Friend the Leader of the Opposition stated the case perfectly when he said that people would be able to look after other people's children and get paid for it. They will find devices so that they can say that they are working for somebody else, and income will be going backwards and forwards, but the Government will be topping up that money.
  I do not know how many hours people will have to work before they will be entitled to the working families tax credit. That may well be in the detail of the Bill, but I suspect that it is not. I believe that the figure may be 30 hours.
  Mr. Tyrie: It is 16 hours.
  Mr. Bruce: In that case, the situation is a great deal worse than I thought, as we would realise if we divided the guaranteed minimum income of £200 a week by 16, which would give an awfully high hourly rate. That provides an incentive for people to get jobs paid at £3.60 an hour or, if they are under 22, £3 an hour, and claim the rest of their income from the tax system. We can imagine the scams that people could set up because we know of the present scams in social security fraud, such as people having multiple identities.
  Mrs. Louise Ellman: Is the hon. Gentleman saying that he and his party are committed to repealing the working families tax credit? How would he explain that to the families who stand to gain by about £23 extra a week?
  Mr. Bruce: The hon. Lady must be a little careful. We expect the Labour party to be in government for at least another year, probably two. That will give us the opportunity to find out how the working families tax credit works and whether it is better than income support and the other systems that we have had. We have always attempted to ensure that people are able to go back to work, and hon. Members are united in their desire to remove poverty traps from which people cannot escape.
  I shall make a prediction to the hon. Lady. People in the Treasury, even under a Labour Government, are not stupid, and I suspect that the problems that I have warned the Government of will come back to haunt them. It may well be a Labour Government, rather than a Conservative Government, who will abolish the working families tax credit. We must remember that the Labour Government have just abolished student grants. Who could ever have predicted that? In the Bill, they are abolishing the widow's mite and means-testing widows' pensions, for which their husbands paid. I do not exonerate the Government from any of their actions. They will find out how the working families tax credit works, and I suspect that an awful lot of rules and regulations will be introduced to try to prevent it from being abused.
  I decided that my speech would be about the utilities tax. There are a small number of measures in the Bill relating to the new deal. To keep in order, as the new deal

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  was in the previous Finance Bill, and is already in place, I ask the Government to consider seriously how the new deal is working. When a Government raise £5 billion by taxing the utilities and then announce a new deal, it would be a strange beast who would not try to make the best of the new deal figures. However, I started examining the new deal figures in my constituency. I meet regularly with the staff of the jobcentre in my area, with whom I have a very good working relationship. I was the only Member of Parliament in my area who turned up at a meeting to launch the new deal for the region—I wanted the new deal to work and be effective.
  The Government's aim—to target the long-term unemployed—was a good one. Under the previous Government, long-term unemployment was coming down rapidly. It also declined under the first year of the Labour Government, before the new deal was introduced. Whenever one challenges the Government about the new deal figures, they repeatedly claim that they have slashed long-term unemployment among 18 to 24-year-olds. That was true until the new deal was introduced.
  The new deal is due to cost £5.2 billion over four years. After three months of the new deal, it looked as though about 9,000 people had been put back to work. That figure refers to people coming off the long-term unemployment register—never mind the complex figures that the new deal people provide. After six months—the period for which the new deal was meant to help people—the number had gone back up by 9,000 or 10,000. After nine months, the number had gone up by another 22,000. The figures that are cited—I am sure that every hon. Member receives such a figure every month, showing how many people have "found a job" under the new deal—are the churn that always existed: if long-term unemployed people find a job, they come off the long-term unemployment register; and others who might have been unemployed for rather a long time go on the register.
  What is interesting is that, in the three or four years before the previous Government lost power, and for the year that the present Government continued our policies, the number of the long-term unemployed was falling rapidly. Indeed, the number of the unemployed in general was going down rapidly. We have to be careful with the statistics. If someone signs off from long-term unemployment, does a week's bar work and then signs on again, he is on ordinary unemployment as he has a fresh claim. In other words, there may be long-term unemployed people who are never included in the six-month unemployment figure.
  The Government are spending £5.2 billion on the new deal, but the one group of people that has had the "advantage" of the new deal for virtually a year is the group that is growing faster than any other. I asked the Prime Minister a question about this after six months. One group—the long-term unemployed—had increased by 43 per cent. over a quarter, which is absolutely unbelievable. One could say that the statistics are wrong, but I tried to investigate what was really happening, as I could not understand how the group of people that we were trying to help could grow in number.
  It seems that the Employment Service is concentrating all its efforts and resources—its resources have been cut by this Government—on people who have been unemployed for six months. Perhaps who have not been
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  unemployed for six months are left on their own. Also, more might be coming up to being unemployed for six months because less effort is being made to help them in that time. Effort is being made, not to find people subsidised jobs but to send them on a training course, a do-gooding course or a make-work course. There are people in every constituency who have signed contracts with the Department for Education and Employment to provide such schemes. These people are great advocates for the schemes. I am sure that they are very good, but they are not bringing people back into work.
  Mr. Gardiner: Does the hon. Gentleman agree that young people's capacity to achieve skills, at least at general national vocational qualification, level 2, is vital for their long-term employment prospects? Will he take on board the very real need to make sure that young people in the labour pool have those skills if they are to get jobs that they will retain in the long term? He was rather dismissive of the need to establish a skills base.
  Mr. Bruce: I follow the hon. Gentleman's argument. When the new deal was first suggested, I would have agreed that, by providing those skills, we would improve people's employability. We might have wonderful ideas in this place about what might happen if only we gave people additional skills, but I am reporting what has actually happened. Unfortunately, what the hon. Gentleman suggests has not happened.
  Unless one finds a job for someone in the first place, it is like bringing an unemployed person and employee together and saying to the employer, "I know you don't want to take on this individual now, but, if I promise to give him a six-month course to do this, that and the other, will you promise to give him at least a chance of employment?" I am afraid that schemes set up by every Government have had that feature. A group of people goes off into education and, although the educational establishment does its best, the scheme never achieves what it was intended to achieve.
  The Government admit that the original plan was that about 40 per cent.—perhaps 50 per cent.—of people entering a new deal scheme would enter subsidised employment. However, the subsidised employment is almost non-existent. In my constituency, supposedly, only 10 people have gone into a new deal subsidised employment option.
  I was heavily criticised by Labour councillors in my constituency, whose message is, "These damn Tories do not care about the long-term unemployed," so I telephoned the local authority and asked, "How many people do you have working from the new deal?" The reply was, "We have not discussed it with those responsible." I have persuaded the council to get together with the jobcentre.
  I want the council to take people on. I want the £5 billion to be sensibly spent. I am simply telling the Minister that the fiddly little things that the Government are trying to do in the Bill are not enough. We need to take a fundamental look at what is happening, because the money is running out and is not doing what we intended it to do.

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  On page 54, in box 4.1, although the "Financial Statement and Budget Report" says:
  "The New Deal for 18-24s has already secured 58,000 jobs for young people. Among them are",
  that is untrue. The new deal did none of that. It has actually slowed down what was happening without the new deal. It has been a failure. Before the hon. Member for Brent, North (Mr. Gardiner) shakes his head, let me say that, tomorrow, we get the first year's full figures in relation to long-term unemployment, and I suspect that they will cause great concern.
  I suggest that the hon. Member for Brent, North and other Labour Members table questions to the Minister to find out what has happened in their constituencies. It is not enough to know the flow of people through the new deal scheme, because masses of people are moving from the gateway on to a scheme and so on, but they are falling off the other end and going nowhere. More people are disappearing off the books to who-knows-where than are being helped. We must find out what is happening.
  I shall now discuss ISAs and PEPs. We should remember why the previous Government introduced tax-free savings schemes. At the time, a person might save long term for a pension by entering a pension scheme with all the tax benefits, allowing someone else to manage that money, but managing one's own money to a certain extent and putting an amount away for retirement was not allowed.
  Appallingly, when the Labour Government decided to introduce ISAs, they intended to tell people with PEPs to cash them in. I am glad that, as a result of protests by the Conservatives, by the industry and by the people who held PEPs for their long-term retirement benefit—which would ensure that the state would not have to keep people—the Government very quickly abandoned that intention.
  Now that the Government have introduced ISAs, a simple piece of arithmetic may explain why ISAs will not be right for people, even as a short-term savings method. At the moment, individuals receive only about 3 per cent. interest. When financial institutions tell the investor, "We shall charge you 1 per cent. to manage your money and then you can have a tax-free allowance," that 1 per cent. is, in effect, the 33.3 per cent. tax; so, although one may save 10, 23 or even 40 per cent. tax, one pays the guy—I am sorry, the person; the woman or the man—who sold the ISA more than one would pay the taxman. People must therefore consider the matter very carefully.
  If we had interest rates of 15 per cent., and if one paid tax on that 15 per cent. and then paid someone 1 per cent. to manage the money, the individual would obviously do better. I did not mean to suggest that interest rates would reach 15 per cent. under the present Government. I cannot remember—was it 23 per cent. or 25 per cent. inflation that Labour got at one time?
  If interest rates are very low, the management charges on a complicated product such as an ISA or a PEP may outweigh the benefits. The Conservative Government had problems after persuading people to take out personal pensions. I hate to think that, in a few years' time, the Chancellor may be pulled up and asked by individuals, "Please, will you pay back billions of pounds? We were persuaded to take our money out of the building society to put it into an ISA, and it is worth less than it would have been if we had left it in the building society."
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  The first PEP that my wife and I took out performed appallingly. The guys who were running it—they were guys in this instance, but I shall not name them because I think that others were in the same position—were getting their 2 or 3 per cent. for managing our funds, but the stock market was doing nowt and our PEP was doing even worse. Eventually things turned round and it is now a reasonable long-term investment. However, there has to be an element of return on which tax would be paid in the normal way to pay for the management of these funds.
  I think that 1SAs are being badly directed. The Government say, "But people can take the money in and out ever so easily." However, ISAs may become investments into which people transfer their building society savings or their ready-money account, when they should keep those savings where they are. We should be encouraging people to save so as to keep up the savings ratio, which is good for government. That should be done by encouraging people to enter into long-term savings that the Government are providing. That is an alternative to putting money away into a pension scheme.
  Mr. Gardiner: Will the hon. Gentleman give way?
  Mr. Bruce: I will, indeed. The hon. Gentleman is very energetic.
  Mr. Gardiner: Does the hon. Gentleman not realise that one of the most important ways of persuading poor people to save is to ensure that the funds that they put into a savings account are not locked up? The fact that they can withdraw their savings does not mean that they will, but the ability to do so acts as a great incentive for people with not much money to put it into a savings vehicle.
  Mr. Bruce: I understand what the hon. Gentleman is saying. I am disappointed that he did not listen to my economic argument.
  We already have the Giro bank, National Savings and many building societies, banks and other establishments that spend a fortune persuading people to invest with them on the basis that it will be easy to get their money out. In effect, some are saying, "I will even give you more money than you put in." Much is being done to encourage people to save. However, at the end of the day, if someone does not really have enough money on which to live, is scraping all the time and is trying to decide whether he can afford to buy a tin of baked beans or a tin of cat food at the end of the week, he will not save. That will be the position whatever we politicians say to encourage such people to save.
  I accept that some people are regular savers. Some kids put half their pocket money away and accumulate. Other kids are always coming to mum by Wednesday, saying, "Can I have some more pocket money, because I have spent all that I was given?" People are like that. I remember that, whenever I gave one of my employees her pay slip—I used to pay my employees with cash—she would say, "That is for the mortgage, that is for my club, that is for this and that is for that, and I have £5 to last me till the end of the week." Some people spend in advance and other save.
  I am not suggesting to the Government that they should not try to encourage people to save. I am saying that it is a good thing to encourage people who can put a good

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  deal of their money away every year because it is tax advantageous to do so. Such an approach should not be destroyed. I cannot see any logic in anything that acts against those investors in the vain hope that people who are poor will suddenly start saving lots of money. That defeats me.
  Several Members have spoken about the fuel escalator. It may be known that I am the vice-chairman of the all-party motor group. The Automobile Association has spent much time and trouble analysing what happened over the years during which the Conservative party had a fuel escalator. I can assure the House that, in looking after a rural constituency, every time that fuel tax has increased, I have said, "I don't think that you should have done that, Chancellor." However, we know that Chancellors want to raise money. They also have the excuse that Rio has intervened.
  Sir Robert Smith: Did the hon. Gentleman feel a slight pang of guilt when, in 1992, the Conservative party fought a fairly hefty campaign implying that a fuel escalator was a very bad thing? Was there not then a slight element of hypocrisy when the then Conservative Chancellor introduced it?
  Mr. Bruce: I do not recall fighting the 1992 election and saying that there would not be a fuel price escalator. If the hon. Gentleman tells me that that was my manifesto, I shall defer to his greater knowledge.
  On the carbon tax issue, if the Chancellor had said, "I shall not put VAT on fuel. I have read the Liberal Democrat manifesto. I have read the Labour party's policy papers. Although my Conservative colleagues tell me that it is a bad idea, I am persuaded that we should introduce a carbon tax at 17.5 per cent," who could have argued against that? It is presentation, presentation, presentation, is it not?
  We had given certain undertakings that we would reduce carbon dioxide emissions into the atmosphere. We as a country should be proud, and I believe that the Government are proud when they go to environmental conferences and say, "We Brits have done what we said that we would do."
  The tax on domestic fuel was highly unpopular. I am a realist and I was in favour of removing it as soon as possible. That was an unhappy experience for Conservatives. We decided to squeeze the motorist, and we raised a lot of money from that. We spent a considerable amount of it on new road building, but that programme has now been slashed. Much of the money that was raised from the escalator was spent on hospitals, schools and so on. If people are willing to pay a tax and it also has the effect of reducing carbon dioxide emissions, that could be a good thing.
  When the Automobile Association carried out a survey of how much fuel was burned by our cars in the UK, the findings were amazing. Despite the fact that the economy had been booming and people had been buying cars and driving further in their cars, the amount of CO2 being produced by those cars had gone down. People had got rid of their old gas guzzlers and bought more economic cars. We in the House have changed the way in which we pay our allowances so that it is more economic for hon. Members to take on smaller cars.
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  In the Bill, the Government have tried to avoid complicated ways of getting more fuel-efficient cars on the road. They have decided that any car under 1100 cc will be cheaper to run, and any car over 1100 cc will be more expensive. I have made the same comment on several occasions. My wife used to have a Vauxhall Nova that was just under 1100 cc. After seven or eight years, she changed the car to another Vauxhall Nova of the same size and shape, but with a 1.4 litre engine—a more modern engine—but she uses less fuel with that engine than with the previous one.
  The data provided by the Government laboratories on buying a car and the different engine sizes show that it does not follow that a bigger engine in the same car uses more fuel—on the contrary. If one puts a diesel engine, which is the largest of all, in the car, it uses a good deal less fuel. In trying to achieve simplicity, the Government have missed the point. The escalator has done its job of persuading people to change to more fuel-efficient cars, but it is wrong to continue with the measure. If the Government decided to give a special boost to fuel cells and provide a subsidy that was not available to other types of car, that might do some good, but they are not tackling the problem in the right way.
  With their measures relating to diesel in lorries, the Government have lost the plot entirely. If they make diesel so expensive that people will drive to the nearest port, cross the channel, fill up with diesel on the other side paying French taxes, drive back via the port and do a week's work on that diesel fuel to save money, or if they encourage drivers from eastern Europe with clapped-out old lorries to come over and do all the cabotage, they will increase the amount of fuel used. That strikes me as wholly logical.
  When I was on a radio programme with a Labour MP recently, he boasted, "We are spending an extra £21 billion on the health service. You have never been able to match that." What is more, he claimed that our Treasury Front Bench team had said that the expenditure was too extravagant. I said, "I think that your smoke and mirrors were so efficient that they fooled even our Front-Bench team."
  What does an extra £21 billion actually mean? Let me analyse it. Labour Members laugh. They must wonder why those who run schools in their constituencies telephone them to say that they have not received the £19 billion that was supposedly going to arrive.
  Let us deal with the £21 billion, because that is an easier amount with which to deal. The period involved is three years. My right hon. Friend the Member for Fylde suggested a moment ago that £1 billion over three years meant a third of that amount in each of those years, but that is not the case. The £21 billion does not mean that, in each of the years involved, the Government will add £7 billion to the total, so that, at the end of the three years, an extra £21 billion will go to schools.
  Let me explain the system. It is wonderful: it is like magic. I am sure that all hon. Members are very attentive. In fact, the Government will give an extra £3.5 billion—I believe that that is 0.2 per cent. more than the amount that we used to give in every one of our 18 years in office—to the health service in year one. In the next year, they will provide another £3.5 billion—a little over inflation, but there we are—and, in the year after that,

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  they will provide a further £3.5 billion. That amounts to £10.5 billion. Where does the £21 billion figure come from?
  To achieve that figure, it is necessary to add three figures together. First there is £3.5 billion, then there is £7 billion, then there is £10.5 billion—and that adds up to £21 billion. Those who want to know how much extra they will receive over a year according to new Labour arithmetic must cut the amount by half to start with—because we are talking about the extra amount that will be received in the third year—and then cut the final amount by a third to find the annual income.
  Inflation, however, is knocking most of that out. Let us now return to the £19 billion figure. I know that hon. Members are attending carefully to what I am saying. That will give us a starting sum of £3 1/6 billion. I mention that because I know that the Hansard reporters will have a job reporting it, because there is no one sixth on their word processors. The figure then becomes £6⅓ billion, and then £9½ billion.
  Just in case anyone is running away with the thought that the House is providing £19 billion, let me say that it ain't. The Red Book tells us that those are the totals that are being provided, the stealth tax—the rise in council tax—being included. This is what the Budget actually means for education spending, and what will happen in the next three years. Over the coming year, £0.8 billion will be spent on education; during the following year, £1.3 billion will be spent, and in the year after that, it will be another £1 billion. That is what is being contributed from the central Exchequer. The rest of the money will come from the stealth tax—the council tax—and I hope that people will understand that on 6 May.
  Mr. Allan Rogers: Will the hon. Gentleman give way?
  Mr. Bruce: I was about to sit down, but I shall give way.
  Mr. Rogers: The hon. Gentleman is not suggesting that Labour Front Benchers are being deceitful, is he?
  Mr. Bruce: I cannot add anything to what the hon. Gentleman has said, but I think that Labour Front Benchers are very, very clever. I would never tell my constituents that they are a deceitful, lying bunch, because I am much too parliamentary. I say that they are very clever. We have new Labour, new economics, new arithmetic: it just has to be explained to people.
  8.54 pm
  Ms Sally Keeble: It has been interesting to listen to the speeches today. They have shown, first, that many Opposition Members do not have much of a handle on what is in the Bill—a good deal of the debate has concerned what is not in it—and, secondly, that they do not have much of a handle on what they want to happen to the tax system and the income of the general public.
  Opposition Members have spent a lot of time criticising what they call tax increases. Some have said that they are stealth taxes; others have said that they have been discussed publicly and that everyone knows about them. There is a lack of clarity there.
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  A number of Opposition Members have criticised the different types of spending that we are proposing which are not in the Bill but were in the Budget that the Bill implements. To a great extent, this is familiar territory for Labour Members, because we have heard Conservative Members criticising taxes and public spending before. However, those criticisms do not square with the latest relaunch of the Conservative party, which I heard being discussed quite fulsomely by the right hon. Member for Hitchin and Harpenden (Mr. Lilley), the deputy leader of the Conservative party.
  The right hon. Gentleman said that the Conservative party now understands that the public are generally concerned about the national health service, education and spending on them, and that people want more provision—not from the private sector, but in the public sector. The money has to come from somewhere; if it is public sector money, it has to come through taxation.
  The Bill represents a fair judgment about taxation and where taxes should come from that also equates with the amount of money that the Government propose to spend on services. We have got that balance right, which has put an end to the futile discussions that used to go on about by how much taxes should go up or down. The public think that we have raised taxes through fair means and we have spent money on the things that people want money to be spent on, which accounts for the Government's continued good standing with the public. Although some might say that their standing is surprisingly high for this point in a parliamentary term, many of us have found that our constituents give a general welcome to the Budget, which is a tribute to the Government.
  In many ways, the Bill is the mirror image of Conservative Finance Bills of the mid and late 1980s, which were extremely radical and extremely bold. Those Bills said clearly what the Conservatives wanted to happen in society and shifted money sharply from ordinary people to the privileged few. This Bill is part of the long-term and continued restructuring of the economy and of our society, which will ensure that people see that work pays. The Bill supports families and, more important, children. It also supports pensioners and small businesses. Conservative Members have talked about growth. The Bill will provide sustainable growth, which provides security and enables people to plan their lives and finances.
  I shall pick out from the Bill proposals that deal with some of the financial issues confronting families and will solve some of the deep-seated problems with which families have to deal. In particular, I shall discuss the children's tax credit, the introduction of the new lop rate and the raising of the threshold for national insurance contributions.
  It is possible to over-egg a particular part of a proposal which, taken in the round, would help people on low and middle incomes. I am more concerned about my constituents who are on middle incomes than those on low incomes. The Bill will ensure that people are given incentives to work and to provide.
  It is easy to underestimate the financial pressures that families face. I recently conducted a questionnaire survey in my constituency. It was linked to campaigning on a wider range of policies for families, but it is relevant to some of the issues that have arisen in the debate. All the findings pointed to money as the biggest problem for

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  families—and that in an area where most people are in work, so unemployment and hardship are not the issue. The fact remains that the incomes of working people are often inadequate to meet all the extra costs of bringing up children.
  When people were asked what the biggest pressures on family life were, the answer that came out top for most people was finances, with balancing home and work in second place. When they were asked what would most help them to balance home and work, the single biggest issue mentioned by 25 to 40-year-olds—those with the biggest family responsibilities—was financial help with child care. For people going through family breakdown, too, the single biggest pressure identified was financial. We know from official statistics that those who are least likely to have savings are single parents and couples with children, and that having a child is the biggest likely indicator of poverty.
  The proposals in the Bill, on top of the other measures introduced by the Government, will be of real help in providing the support that people want, which is financial help at the point of most need—when they have their children. That is why I welcome the children's tax credit provided for in the Bill.
  I also welcome the fact that the credit is to be extended to stepchildren, which is a recognition that many children now live with step-parents, who often provide a supportive and caring home. The right hon. Member for Fylde (Mr. Jack) drew attention to the schedules, and talked about the problems of calculating who would get the credit when families split up. Of course that will be an issue, but I am glad that we are recognising the fact that families are changing. If we are serious about supporting children, we must support them where they are, not where we might like them to be.
  The hon. Member for East Londonderry (Mr. Ross) said that the Bill did not support marriage. However, the aim is to deal with the financial pressure points, not with issues about life-style choices. Looking after children is the financial pressure point.
  I realise that the consequence of the introduction of the new credit is the abolition of the married couples allowance, which some people will regret. However, I believe that the Government have done the right thing in targeting children, and the parent who supports those children.
  That is borne out by all the statistics about incomes and savings. A couple without children are likely to be among the more affluent in our society, especially now that so many women go out to work. It is not realistic to regard marriage of itself as a financial liability. Gone, thank goodness, are the days when a married man took financial responsibility for his wife. My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) spoke clearly and eloquently about that. Having children, however, is a financial liability, and that is where the Government's help should be targeted.
  The coming generation of women pensioners will be the first in which many have a proper record of contributions and savings for their pensions. It is therefore right that, as reflected in the Bill, we change the tax and benefit structure to ensure that those changes are carried through in a realistic way.
  I am pleased to see that the married couples allowance is being retained for the over-65s. The lives of that generation were different; fewer women went out to work,
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  and more were financially dependent on their husbands. They have fewer opportunities to adjust their income, so I am glad that the Government are keeping the married couples allowance for them. That is a welcome recognition of their position.
  I welcome the proposed increase in the threshold at which pensioners have to pay tax, and the higher threshold for over-75s. During a recent consultation about pensions organised by Nationwide on my behalf, a cross-section of its employees made it clear that they regarded self-provision, not state provision, as the future for pensions. What they looked for from the Government was a supportive tax regime, rather than a series of handouts.
  Many of today's pensioners have occupational pensions and other sources of income, and for them tax relief is the most effective form of financial help. That applies to many of the pensioners in my constituency. They are not reliant only on the basic state pension and associated benefits. The changes set out in the Bill are part of a wide-ranging series of changes for pensioners that I believe will make the Labour party the party for pensioners, just as it has made it the party for families. The right hon. Member for Wells (Mr. Heathcoat-Amory) tried to cast aspersions on the Labour party's record on pensions. That was a smokescreen to hide his party's failure over the pension mis-selling scandal.
  The Labour Government have introduced the minimum income guarantee, the change to the threshold and the pension for carers, which will be extremely important in ensuring a continued level of contribution for women who look after children at home or disabled relatives. That, more than anything else, will encourage the caring attitude and support for family life that the Conservative party says it believes in but does little to promote.
  I should like briefly to deal with savings because, although those measures are not in the Bill, they have been discussed at great length. Much of the discussion has been misdirected and destructive of some of the changes that will affect people and for which the Government are right to make provision. Much has been made of the high level of PEP and TESSA sales, especially in the past year. Those sales have resulted from major advertising campaigns.I would have expected people to pile into those savings vehicles during the last few months for which they were available.
  The individual savings account deals with some of the changes in the financial regime that people will face. The hon. Member for South Dorset (Mr. Bruce) said that high interest rates were good for savers. It is true that they were good for savers, but wildly fluctuating interest rates were extremely damaging to many private individuals and to industry. The regime into which we are now entering will, I hope, be a permanent one of sustainably low interest rates. That means that some of the conventional savings vehicles will not be so attractive. I believe that the individual savings account will enable people to have different types of savings, including equity-based savings, which will provide them with advantages that have so far been reserved for people on higher incomes.
  The measures to deal with families and pensioners are just a small fraction of the provisions of the Bill. They are part of the Government's wide-ranging measures to support family life. They recognise the profound changes in families that have been brought about by women going out to work, and they recast the way in which we provide

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  for our retirement. They are part of a much wider agenda; I believe that they will be welcomed by the public at large; and I commend them and the rest of the Finance Bill to the House.
  9.8 pm
  Mr. Andrew Tyrie: The hon. Member for Northampton, North (Ms Keeble) made a thoughtful speech. If I had plenty of time, I would take issue with her on a few points, but I do not intend to speak for as long as some hon. Members. On the crucial issue of savings, the hon. Lady said that some of the comments made by Conservative Members had been destructive of the climate in which savings take place.
  The savings culture in this country was badly damaged in the 1960s and 1970s— particularly the 1970s—and it took a huge effort to restore it in the 1980s and 1990s. That is why the savings ratio took a long time to recover. It eventually recovered: PEPs were introduced as part of an attempt to restore it.
  It is important to bear in mind the fact that, although the Conservative party did not say so at the time, when PEPs were introduced they were a bit of a flop. It took several years of reforms and adjustments to the PEP regime for them to become part of the mass savings culture. What is destructive of savings is constant change to the regulations.
  What the Government have done is to remove a brilliant brand. A successful part of the savings culture has been replaced with something that many people do not understand, and I fear that we will see a further dip in the savings ratio as a consequence.
  My main theme is the macro-economic background, the fiscal and monetary judgment, that underpins the Finance Bill. I will briefly address three questions. First, do the Finance Bill and the Budget judgment make early entry into monetary union more or less likely? My hon. Friend the Member for South Dorset (Mr. Bruce) touched on that issue earlier. Secondly, does the growth forecast support the overall fiscal position? Thirdly, are the measures in the Budget likely to encourage growth?
  Let me first, in a short digression, pick up on the points made by my hon. Friend the Member for West Worcestershire (Sir M. Spicer). I was in the Treasury when the Germans and the French made their previous great push for the withholding tax. I well remember a lunch I attended with Nigel Lawson and Pierre Bèrè govoy, when he was French Finance Minister. He leaned across the table at a crucial point in the discussions and said, "Look, unless we can have our withholding tax, all bets are off on this capital liberalisation directive." That was being discussed at the time. I thought that that had upped the ante. Lawson replied, "As a matter of fact, all those capital controls you have are great news for the City and we would prefer you to stick to them." That is how we fended off the withholding tax in the late 1980s. However, we must grasp the fact that the pressure for the withholding tax is relentless and remorseless, and it will not stop. If we fend it off this time with only a partial protection, we face the risk of erosion of the protection, in ways that are not always easy to foresee. That is why it is very important that the Government stick to what they have said and veto any measure for a withholding tax.
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  Unusually, the judgment in the Budget statement and Finance Bill was overshadowed by an earlier statement by the Prime Minister in which he changed the mood on EMU. He appeared to say that he wanted Britain to join economic and monetary union. The right hon. Gentleman came off the fence. In fact, his words were more equivocal than that, but that was the briefing given to the press. That was the background to the Budget.
  If policy has changed, the Government will have to agree, sooner or later, to abide by the terms of the stability pact, which require a balanced budget or a surplus over the cycle. In the short term, of course, revenue is pouring into the Treasury, and the Government will not have too much of a problem. However, the Government are currently committed to a looser fiscal stance than contained in the stability pact, because they have formulated the golden rule for the public finances. That gives the Government licence for substantial borrowing. They can borrow almost as much as they like by reclassifying it as capital—although so far they have only done that to the tune of £7 billion, or a little less than 1 per cent. of GDP. The fact that the capital-current distinction is virtually meaningless—
  as everybody who has considered the issue agrees—means that the Government have enormous scope for flexibility. The Government will have to find a way to abandon that and tighten their fiscal stance, if they are to agree to the stability pact. But there was nothing about that in the Budget.
  Then there is the issue of cyclical convergence. Our interest rates are nearly twice as high as those in the eurozone. Early entry to EMU would imply either tighter fiscal policy or, even more implausibly, a higher exchange rate than we have at present. Faced with a worse problem of the same type, the Irish did a bit of both, revaluing the punt just before entering EMU, and tightening fiscal policy. If the UK were to consider early entry, we would have to follow a similar course. We would not be able to allow the currency to depreciate. We would have to tighten fiscal policy. There is no mention of that issue in the Budget, even by implication.
  The Government's exchange rate policy is the most important for EMU. Whatever the legal requirement—and there is some dispute over it—there will have to be a period of exchange rate stability before rates are locked. The Budget says nothing about that, and nor has any Government statement suggested that the Government believe that the Monetary Policy Committee should start to take the exchange rate into account as a target. The MPC will be told to stick to its last and to stabilise the internal value of the currency, not its external value.
  The fact that the Budget and the Finance Bill virtually ignore EMU tells us that the Prime Minister's statement may have been little more than mood music. Furthermore, buried away in that statement was a new get-out clause from his euro enthusiasm. He added a sixth economic test that must be passed before the UK is prepared to join EMU.
  What the Prime Minister said was scarcely noticed, but it is very important. He said that he understood the worries of those who were
  "concerned about the type of euro zone that we might be joining."
  He said:
  "There are real problems in the EU"
  requiring
  "labour market reform … capital market reform … and product market reform."

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  Before Britain enters, he said:
  "We are determined that these must be in place."—[Official Report, 23 February 1999; Vol. 326, c. 183.]
  In other words, the EU must reform itself. He was talking not only about UK flexibility; greater EU flexibility has been added to the five economic tests, a sixth test.
  There is a gap between the Government's mood music and the reality of policy on EMU. Nothing has been done over the past year that would not have been done in any event. Policy has not been altered in any way to take account of monetary union. If any hon. Member can think of a way in which it has been changed, I shall gladly give way to him or her.

  This resembles the Government's policy making on many other issues. I could mention Kosovo, devolution and House of Lords reform. We have heard a soundbite, and we have seen the first steps towards a policy. But there has been no clear plan for reaching the end point on any of those issues.
  To some degree, the same is true of the growth forecast, which has been given to us as a stated figure without any clear explanation of how such an adventurous forecast can be delivered. Why should we be able to obtain a higher medium-term growth rate? The Government are taking risks with the public finances. The Chancellor has spent a lot of money. The smallest ever spending reserves underpin his plans, and his Budget gave a lot of money away in various lollipop measures.
  The green Budget contained some plausible forecasts, but, under the title "Alternative growth scenarios" in the Red Book, the Chancellor offers an upbeat story of 2.25 per cent. medium term growth, and a very upbeat 2.75 per cent. growth scenario. That is hopelessly adventurous. We have not achieved 2.75 per cent. growth since the 1960s. I will be surprised if it is achieved.
  It is not hard to imagine how the forecast could be upset. For example, does any hon. Member think that equity prices in the United States will avoid a correction? Does anyone believe that Wall street will carry on floating along at these prices? If so, I would gladly give way. No one thinks that the US equity market can carry on like this indefinitely. If there is a sharp fall in equity prices, United States consumer demand will collapse because the household savings ratio is virtually zero. Spending and consumer demand are being sustained from the growth in equity prices.
  Our growth rate would take a huge tumble if the main motor of global growth stalled, as it will if Wall street takes a tumble. If the growth forecast is not achieved, fiscal policy will be in a huge mess, and the measures in the Finance Bill will not add up. That is a serious concern. I was amazed that I could find no mention in the Red Book of the balance of risk of a sharp slowdown in the United States economy as a consequence of overvaluation of equities. A Budget judgment has been taken without the identification of any public discussion of one of the most important risks involved.
  There are many other reasons why I am worried about the public finances. The contingency reserve is half the average of the previous 20 years. A war is going on while the reserve is small. The war will bear on taxes more quickly than it would have if we had had a larger reserve. Asset sales are still written in at £4 billion a year. I will be surprised if the Government achieve that. Welfare
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  spending is still rising faster than even the growth forecast. There is much pressure on the public finances. Everything is underpinned by the optimistic growth forecast. If it is not achieved, the whole pack of cards could collapse and there will be a sharp downturn in the fiscal position.
  That brings me to the next question: will policies in the Finance Bill encourage growth? I will say something that I know Labour Members do not like. The fact is that Labour was not elected to run an alternative economic strategy; it was elected because people finally trusted it to run broadly the policies that it inherited. That is hardly surprising, because those policies had transformed our economic performance over the past 20 years. On economic matters, Labour's electoral chances will be prejudiced to the extent that policy diverges from that inheritance and the new global, free enterprise, conservative, economic consensus.
  In some respects, the Chancellor has entrenched a sense of continuity with past practice. In fact, he has gone further, particularly by introducing Bank of England independence. However, bit by bit, in this Budget, he is diverging from the inheritance. Most important are the tax rises. Previous Labour Governments paraded tax rises as a legitimate instrument of social as well as economic policy, but they have learned their lesson. That was unpopular, so the Government have introduced taxes more stealthily this time.
  All the same, Labour Members will have their work cut out explaining what the Prime Minister meant when he said:
  "We have no plans to increase taxes at all."
  Or when he said:
  "I vow that promises we make on tax we will keep. This is my covenant with the British people. Judge me upon it."
  Or what about the Chancellor? He said:
  "We will not make promises that we will later break, we will not say one thing before the election and another after. Above all, we will be straight with the British people about tax."
  How does all that square with the indisputable tax rises that we have seen in the past two years? It is worth bearing it in mind that those tax rises have taken place in a benign economic environment. What kind of tax rises will we see from a Labour Government in the depths of a recession? We might find out if there is a recession before long.
  Labour talks as if it has abolished the business cycle when it refers to the end of boom and bust, but the business cycle has always been with us. There will be a recession. I do not know when, but I guarantee that there will be one. It may be sooner or later, but, when it comes, the relatively incautious fiscal position that I have described will be found to be extremely vulnerable.
  It is not just on tax that the Chancellor is moving away from his inheritance. The Conservatives bequeathed Labour a tax system that was still too complicated, but was vastly simpler and less distorted than the one that the Conservatives inherited. I do not suggest that the Conservatives did not introduce distortive tax policies in Finance Bills, but the principles underlying Conservative Budgets were clear. We introduced lower and less distortive taxes. What we have in this Budget is higher and more distortive taxes.
  The previous Government showed that, if the Government get out of the job of picking winners and out of the way of the wealth creators, capital will be allocated

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  more efficiently. It should be the job of the Government to reduce the tax burden and simplify the tax system. In the Finance Bill, we are now getting complications of the tax system and higher taxes. That will throttle growth and is a reason why I believe that the growth forecasts are unlikely to be achieved.
  9.26 pm
  Kali Mountford: You will notice, Mr. Deputy Speaker, that my voice has not the same vigour as usual. That will prevent me from responding in my customary style to the many comments made by hon. Members on both sides of the House during the debate and force me to focus on relatively few aspects of this wide-ranging Bill.
  In the previous debates on the Budget, we had some discourse on the principles underlying it and what it was intended to do. Questions were asked about whether it was a Budget for jobs, for the family or for industry. I argued that it refocused priorities and gave greater support to families and children. Since then, I have pondered the question further and I still believe that the Budget epitomises the Government's policy of giving help to the people who need it most at the time when they are in most need, and recognises the needs of children in a way that previous Budgets simply have not. The sure start programme, the children's tax credit and the highest ever rise in child benefit are measures that target children in an unprecedented way.
  The Budget is a Budget for stability. I commend my right hon. Friend the Chancellor's decisions so far on building stability in the public sector. I am impressed with the change from year-on-year public expenditure survey settlements, which were inefficient and ineffective. Expenditure in the public sector has now been refocused. Even more important, three-year forward planning has been introduced. The effect has been that extra money and revenue has been found for the Government's priorities of education, health, youth unemployment and crime. That refocusing has already enabled the Government almost completely to fulfil some of their main pledges, including class size and youth unemployment. Extra money for health is allowing the NHS to reform. The money has been used to abolish the internal market and cut waste. Those are all-important election pledges that need to be kept. The comprehensive spending review has enabled us to focus on them.
  Health managers and local government officers have been telling me that the extra money is welcome and can be used on their local priorities, but three-year planning has had the most impact on some of their local decisions on how they spend cash as part of budget settlements. That has enabled them to make more sensible decisions. It has enabled them to focus their planning on services in local areas, using money more efficiently and effectively. That stability provides the ability to plan and to grow and we need it in the rest of the economy.
  I come now to the rest of the economy, and in particular the textile industry. The labour force survey shows that 4,560 jobs in my constituency are dependent on the textile industry and I want to focus my remarks on how the Budget affects that industry. I take this opportunity to thank members of the Treasury team, especially my right
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  hon. Friend the Chancellor and my hon. Friend the Paymaster General, and the Trade and Industry team, especially my right hon. Friend the Secretary of State for Trade and Industry, for listening so carefully to my concerns about the textile industry and its ability to grow and sustain itself through what has been a difficult trading period.
  If people could be bothered to go to the mills, they would find, as I did on my visits, that mills can be most old-fashioned. The labour force in a mill can be extremely old. Unlike many other industries, which tend to employ people in the 30 to 40 age group, the textile industry is heavily dependent on a work force aged over 40 and possibly over 50. It is hard to find anyone in their 20s employed in the textile industry.
  Mr. St. Aubyn: Will the hon. Lady give way?
  Kali Mountford: I fear that the state of my voice will make it difficult to continue to respond, so I have decided not to take interventions. I apologise to the hon. Gentleman.
  Mr. St. Aubyn: It would give the hon. Lady's voice a rest.
  Kali Mountford: It would give my voice a rest if I was not diverted. The hon. Gentleman must not try to divert me from my course.
  Training is most important for the whole economy, but especially so for the textile industry, because there is a clear skills gap. I do not pretend that that gap can be met by the new deal alone, but I am sad to find that the textile industry has not taken all the opportunities available to employ younger people using the new deal programme, even though some mill owners have told me that they desperately want to employ younger people. Other measures are available to them—the Yorkshire task force for textiles has produced a training programme using the ability of the industry, local universities and colleges and bringing all that expertise together. It is a pity that some people in the textile industry do not even know that the task force exists, but I hope that they will realise that it does exist and that it can benefit them.
  I hope that people will listen to the Transport and General Workers Union, which has produced a plan for textiles, part of which refers to the need to fill that skills gap. The Government's programme contains measures that will enable the industry to fill that gap. However, even if the gap were filled, there would still be more for the industry to do. There are huge gaps in investment in the textile industry, which typify the gaps in investment in a range of our other traditional industries. For example, during one of my visits to a local mill, I was shown a loom that had been there since 1947. That piece of machinery would have been better in a museum than in a modern industrial economy. It was pointed out to me that a machine of that calibre cost only £600, so it was very cheap. People knew the limits of the machine; they knew how many times they would have to repair it and what the costs would be, and they knew about its production run. In other words, they had become comfortable with that old-fashioned technology.
  If ever there was an industry that needed investment, it must be the textile industry. For example, one entrepreneurial mill owner told me that he was trying to

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  invest in new machinery. He was looking at quite old second-hand machinery with newer technology and it cost about £2,500. Even that sort of expenditure formed a large part of his annual budget, as his turnover was relatively low. It is extremely difficult for him to find the extra money that is needed for big investments in high-tech, computer controlled and operated textiles machinery, especially looms. I have seen some highly imaginative machines, mostly from America, that can produce huge runs of high-quality material at low cost, but the investment that they require would completely wipe out an entrepreneur of the calibre of the man with whom I spoke. Small and medium-sized enterprises cannot afford to pay the price that a loom with that sort of technology can command.
  What can we do? An entrepreneurial mill owner such as the man I describe can benefit from the measures contained in the Bill. The measures previously introduced by my right hon. Friend the Chancellor—especially the new 30 per cent. corporation tax rate and the capital gains tax changes in the previous Budget—have enabled that entrepreneur to invest in plant and machinery, but more needs to be done. Therefore, I am pleased by the introduction of the 10p corporation tax rate, which will help small and medium—scale entrepreneurs. I like to think that my right hon. Friend had the mill owner I am talking about in mind when he made that change—he certainly listened closely to me. Like my hon. Friend the Member for Dudley, South (Mr. Pearson), I welcome the extension of the 40 per cent. capital allowance for small and medium-sized enterprises to July 2000. I hope that it can be extended even further, because it would help the industry and the business that I am describing.
  It might be hard to believe that the textile industry needs further research and development. To most people, woollens are woollens and knits are knits, and they have become accustomed to polycottons and other new fibres such as polyester, so they ask why new investment in textile research is needed. However, the competition in Europe and the demands of modern designers have ensured that it is no longer good enough to rest on our laurels and tell ourselves that the British textile industry has always produced the best woollen cloth in the world. Designers demand lighter-weight cloths with new designs and new weaves.
  The relatively new mill owner to whom I spoke showed me some very imaginative designs. I was impressed by his imagination, his innovations and the style of material that he is able to produce, but he is unable to produce it in the right quantity to command the respect of the designers with whom he has to do business if he is to expand his business even further. He is dependent on fairly old-fashioned machinery and he cannot take his research and development programme further because of the constraints of operating within a small industry, so he cannot take advantage of the full scope of the European market for textiles.
  Most of our textile trade goes to Europe—to Italy, France, Germany and Belgium. Companies in those countries are investing in high-tech machinery and, more significantly, in the new weaves of cloth and new types of fibre on whose development the growth of the industry depends. Although the textile industry is one of our more old-fashioned and traditional industries, it is an industry that needs to take on the challenge of change. The Budget and the Bill have the potential to enable the industry to take up that challenge.
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  At first glance, the tax credits for research and development might not appeal to textile manufacturers, but I would urge the entrepreneur I met to take advantage of that measure. If he does so, he will be able to compete on level terms with the Italian designers who are coming up with imaginative new yarns. I believe that he could benefit from the venture capital challenge. When banks do not want to take the risk of supporting a new small business and an unproven new fibre, that exciting measure can provide assistance. The £20 million for research and development, particularly in venture capital, could benefit that entrepreneur and enable his business to grow.
  If businesses are to flourish, there must be economic stability. Several hon. Members asked what the Government mean by "economic stability" and equated the term with zero growth. Of course it does not mean that; it means having sure financial conditions that allow decisions to be taken for the future and enable businesses to invest with certainty, which must have an impact on the stability of the entire economy.
  In the past 10 years, we have witnessed the slow decline and death of the textile industry in my area. Many jobs have been lost, and there are no mills remaining in parts of West Yorkshire that once depended heavily on the textile trade. That must lead to instability in local economies. My local economy has suffered serious instability in recent years and I want that trend to end. However, it must not be stopped by using old-fashioned interventionist measures that retain the same old jobs in the same old sectors.
  We must regenerate the economy and bring the older industrial base into the new industrial age. We must produce the high-quality products that will make Britain successful. It is not right to hark back to some golden age when the means of production and growth were confined to a particular part of the economy. It is right to revisit the old economic values and reconsider how we can help businesses to develop today.
  I believe the traditional industry to which I have referred will have a place in the new economy when it meets the challenges of change. A stable economy will develop if traditional jobs are sustained by producing the necessary high-quality products. The new investment capability in this Finance Bill will make that happen, and that is why I support the legislation.
  9.42 pm
  Mr. Edward Davey: When the Finance Bill was published before the recess, I must confess to feeling slightly elated. Having rushed to the Vote Office and eagerly demanded my copy of the Bill. I was pleased to see that it was rather shorter than usual. The right hon. Member for Fylde (Mr. Jack) and the hon. Member for Dudley, South (Mr. Pearson) also commented on the brevity of the Bill, and I congratulate the Government on that achievement. My elation was due partly to surprise because, on Budget day, the Chancellor of the Exchequer stood at the Dispatch Box and pulled out rabbits, gizmos and fizz bangs as if there were no tomorrow. I remember commenting to my hon. Friend the Member for Richmond Park (Dr. Tonge) that, with all those gimmicks, the Bill was bound to be very long.
  The brevity of this Finance Bill is explained partly by the fact that some of the Chancellor's gizmos are to do with national insurance, which will be covered in other

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  legislation, and some—such as the cut in the basic rate of income tax—will be introduced next year. The Bill is also quite short because the Budget is far less substantial than it first appeared. The Chancellor has no philosophy for managing the tax system, and he has no strategy or direction regarding its development. He is getting a reputation for being a Chancellor of the big picture. He has sorted out the macro-economy by borrowing the Liberal Democrats' idea for an independent Bank of England—we welcome that move—and by laying fiscal foundations and introducing a code of fiscal stability. On smaller-scale economic policy, however, he is found wanting.
  The Chancellor may eventually be starting to have some success, having made mistakes in macro-economic policy in his first two years—he had an awful lot of luck in the process—but he will make a severe mistake if he does not pay attention to the micro-foundations of economic policy. If he gets the micro-economics wrong, he will get the macro-economics wrong later, as sure as eggs are eggs.
  What is the reason for the Chancellor's failure on micro-economics? He seems to be complicating the tax system. It is ironic that even a short Finance Bill contributes to the ever-growing complexity in the tax system, and that is the Bill's key shortcoming. I am sorry that the right hon. Member for Fylde is not in his place, because he made a telling speech earlier in the debate which elucidated many of the extra complications in the Bill. He referred to the extra tax rates, including the l0p rate, and the retention of the 20p rate on savings. A third corporate tax rate has also been introduced. The new children's tax credit, with its rather complicated withdrawal system, will produce a marginal tax rate of 46.7 per cent. on a range of incomes around £30,000. There will therefore be much more complexity in the tax system.
  Much of my speech was delivered by the right hon. Member for Fylde, so I shall ask a question that he did not ask. Why is the Chancellor creating more complexity in the tax system? Many commentators in specialist tax journals and the quality press are asking that question, and three theses have been put forward. The first is that the Chancellor has no interest in that policy area; he is leaving it to others and they are making a mess of it. Secondly, it is a ruse to hide and obfuscate the Chancellor's underlying strategies. Perhaps he has a redistribution strategy, but he does not want to tell anyone about it. The third theory is that tax complexity is a policy that is driven by presentational demands rather than an understanding of the demands of the users of the tax system.
  Of those three theses to explain the Chancellor's tax strategy—or lack of strategy —the first two can be refuted. The Chancellor is hyperactive and he is involved in all aspects of economic and social policy in every Department. He seems to be a workaholic. He has a hand in almost every domestic policy announcement that the Government make, whether it relates to child care, employment or housing policy. The theory that he is not interested in the detail of tax policy does not stand up. He told us before the election and in his pre-Budget report that Labour's policy was pro-tax simplification, which demonstrates that he wants to be involved in tax policy.
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  The second theory is that tax complication is a ruse to hide alternative strategies. There have been many tax rises, as we have heard in this debate. I do not want to engage in what my hon. Friend the Member for Gordon (Mr. Bruce) called the debate about angels on pinheads—the mediaeval debate. Liberal Democrat Members do not want to have a statistical debate about whether the tax burden, as a percentage of gross domestic product, has increased. However, the Chancellor did not need to complicate the tax system to camouflage an increase in the tax burden because he can conceal that increase using statistics, as he has demonstrated in his description of the tax burden for this year, not including tax rises from previous Budgets that feed into the overall tax burden.
  Mr. Gardiner: The hon. Gentleman has been on his feet for six minutes and he has talked about the complexity that the Chancellor has introduced to the tax structure, but he has not yet managed to make a substantive criticism of what the Chancellor has achieved through that process. To talk about complexity and transparency, as Conservative Members have done, is not to deal with the benefits of the Budget that are being delivered to people.
  Mr. Davey: My immediate response to that is, "Oh, dear." Labour Members clearly have no understanding of the tax system if they do not realise that complexity is a very real problem. Compliance costs to business are a serious issue, as is the effect on individual taxpayers. Does the hon. Gentleman realise that more than 9 million people now fill in their tax returns every year? Self-assessment is now widespread. If we complicate the tax system, we make it difficult for people to understand; if we make it difficult to understand, we reduce its transparency and undermine the Government's accountability to the people. Complexity is a major criticism, and I make no apology for its being the main theme of my speech, for however long I end up speaking.
  I was trying to find a reason for the direction of the Chancellor's tax policy. I was considering whether it was a ruse to hide something else. Some people have suggested—I think that The Economist did so in an editorial on the Budget—that perhaps he was trying to hide the fact that there was some redistribution going on in the tax system. If that is the case, he is using a very large fig leaf to cover up that strategy, because the element of redistribution is very small.
  The incomes of the bottom fifth are going up by 2.5 per cent. as a result of tax changes, whereas those of the top two fifths go up by 1 per cent. That is a redistribution, which we welcome, but it hardly requires the degree of camouflage provided by the overgrown complexity of the tax system. The real reason for the complexity is that the Government are driven in their tax policy by presentational requirements, not by the requirement to improve the tax system for the good of business and individuals.
  We are entering an age in which the tax system is driven by soundbite economics and soundbite Budget statements. That is the new Treasury orthodoxy. In days gone by, although we might not have agreed with them, Chancellors of the Exchequer used to go into detail as to whether monetarism or joining the exchange rate mechanism were sensible policies. Those were the sorts of issues that Chancellors used to discuss on Budget day. Now, the Chancellor comes up with a few fizz bangs and soundbites,

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  and that passes as debate on economic policy. Frankly, it is not good enough. It seems that a Treasury mandarin is required to master the media, not macro-economics. That downgrades the economic debate.
  We saw that very failure in the presentation of the Budget. A great deal of time was spent on tiny matters. At the beginning of his speech, the Chancellor spent much time talking about the 10p tax rate for small businesses, as if it were a huge change to the tax system. It certainly introduces an extra complexity, but it will make very little difference to entrepreneurial activity in this country. It costs a small amount and relates only to a small band of profits.
  The Chancellor failed, however, to announce the very large tax changes that he was making. He did not let words to the effect that he was abolishing the 20p tax rate cross his lips. We were all left in some confusion until we read the Budget book and the press releases. As I said, the economic analysis that he provided to the House was devoid of content. The press releases revealed the complexity. We got it not from the presentation, but from the press releases.
  I mention only one press release, on clause 19—the clause that introduces the new 10p starting rate of income tax. One would have thought that that was the simple soundbite tax policy of the Budget statement—the one that would grab voters and hit tabloid headlines. But the press release shows that the Government are introducing that policy into the tax system in a way that is far from simple. Paragraph 18 of the press release explains:
  "The starting rate will not apply to income from savings. The rates of tax on savings income remain at the lower rate of 20 per cent. for income up to the basic rate limit and at 40 per cent. above that, except for dividends which, from 6 April 1999, will be taxed at 10 per cent. up to the basic rate limit and at 32.5 per cent. above that limit."
  That is simple, is it not?
  The tax system is becoming incredibly complex, and Liberal Democrats are concerned for our constituents, who are asked every year to try to understand it when they complete their tax return. As my hon. Friend the Member for Gordon said, the current series of Budgets from the Chancellor, including this year's Budget, is a gift to tax accountants.
  It is even worse because, as tax policy and economic policy become driven by what sounds good and what will fit into a soundbite, the choice of policy is affected; so policies are chosen not for their merits, but because they sell well.
  The Chancellor and many of his Labour colleagues are proud of the fact that they introduced the £100 fuel payment for pensioners. When one starts analysing whether a £100 fuel payment is a good use of public resources, one starts to question it severely. Is it a good policy? It certainly sells well. It may be included in leaflets to be distributed around a constituency. However, it is completely untargeted—it is worth the same to a millionaire pensioner as to a very poor pensioner. Moreover, it is extremely costly to administer. It has cost more than £10 million to set up the system, and the payment has cost more than £10 million every year to administer because it is given on top of the basic pension.
  Mr. Gardiner: Would it be Liberal Democrat party policy to abolish that fuel payment?
  Mr. Davey: We would put the £100 on the pension, so we would give pensioners exactly the same amount but
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  save the country millions in administration costs. The Labour party is the party of bureaucracy and complexity, not just in the tax system but in the benefit system.
  Mr. David Taylor: Will the hon. Gentleman give way?
  Mr. Davey: I shall continue, if the hon. Gentleman will allow me.
  We have a targeted pensions policy, which has been ably developed by my hon. Friend the Member for Northavon (Mr. Webb). It is now becoming the accepted wisdom. Recently, the right hon. Member for Birkenhead (Mr. Field) wrote an article in a newspaper backing up Liberal Democrat policy for targeted increases in pensions.
  Let me tell Labour Members what that policy is. For over-75s, we would increase the basic pension by £3 a week. For the over-80s, instead of the derisory 25p a week that they get, we would give them an increase of £5 a week. Yes, that is targeted, because the poorest pensioners are the oldest pensioners. [Interruption.] Some Labour Members shake their heads, but the figures for income distribution among pensioners and elderly people show a clear correlation between poverty and age. The older one gets, the poorer one is. That makes it essential to target extra resources in a very administratively efficient way, through the basic pension system.
  Pensioners in my constituency feel completely betrayed by the Labour party. They hear that there is a minimum pension guarantee, but, when they read the small print, they realise that they are not eligible, and that it is no guarantee at all—not worth the paper that it is written on. Instead, some pensioners in my constituency are having the dividend tax credits that they used to get every year from the Inland Revenue taken from them.
  The official Opposition were quite right, last year, to use an Opposition day to debate that issue, and we joined forces with them. We were very glad that some Labour Members actually criticised Ministers. Unfortunately, the Government were not to be moved on that, but we shall return to the issue during the Bill's passage—and we warn the Government that we shall return to the issue repeatedly. We shall not support a policy that has taken, on average, £75 a year from the poorest pensioners in our country.
  Mr. Burnett: Does my hon. Friend recall that in the previous Budget a series of measures was introduced that directly penalised the less well-off, not least the change in capital gains tax retirement relief?
  Mr. Davey: My hon. Friend is exactly right. Small business men in my constituency, and small business women, were using the capital growth in their business as part of their pension. They were looking forward to retirement relief on the first £250,000 of that capital growth—a provision which the Government abolished—to fund their retirement. The Government have hit those people, but they have provided new capital gains tax loopholes for the super-rich. We have calculated that partners at Goldman Sachs will cash in to the tune of £500 million That is what happens when a Government go for complexity in the tax system, rather than simplicity. They

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  provide loopholes for the rich, who can afford clever accountants to exploit them. Simplicity is good for redistribution and for fairness.
  The main theme of my speech is that the Budget and the Bill will add extra complications, and I have referred to the policies that affect pensioners. During the debate, however, Ministers and some Labour Back-Bench Members have lauded their policies on children. We support their move to give more money to families. A revolution is taking place in terms of how much money will be put into the hands of families with children. Of course, there are different ways of doing that. The Government have introduced four separate support mechanisms. We have child benefit, which all parties support. In addition, we have the working families tax credit and the child care tax credit, and we shall have the children's tax credit, which is being introduced in clause 27 and schedule 3.
  We must ask ourselves why there are so many mechanisms. Why are they all needed? It is partly because, as my hon. Friend the Member for Northavon can more ably explain to the House, the Government are fixated with the untested dogma that helping people through the tax system is somehow better than helping them through the benefit system. That is part of their rationale, although we do not agree with it.
  The Government also have a plethora of mechanisms for helping families for presentational reasons. There is the desire to fudge the social security spending figures so that they appear to be channelling support through the tax system, thereby getting away with not admitting to the people that they are spending more on social security. If they believe in that approach, why do they not tell the people?
  There is another presentational reason. The Government want to disguise their U-turn on their proposal to tax child benefit paid to higher-rate taxpayers. That is what the children's tax credit is all about. It would have been much simpler to go down the road that the Government opted for previously. That would certainly have been far more honest.
  There is a real problem with having a plethora of mechanisms. First, there is the complexity of having four support mechanisms for families and children. Secondly, there is the cost element. The children's tax credit will mean that tax authorities will become directly involved with the marriages of and relationships between men and women. I would have thought that the Government had learned from the experience of the social security system, and more significantly from the experience of the Child Support Agency. We have seen what happens when Government bureaucracies become involved in the minutiae of relationships between men and women. However, the Government are now suggesting, through clause 27 and schedule 3, that the Inland Revenue will become involved. They will come to regret that. Labour Members will have people saying to them, "I do not understand how this is happening. I do not understand why my husband"—or wife—"is getting more of this tax credit."
  The Government have used four pages of schedule 3 to try to describe how they will work out the different demands of men and women. The right hon. Member for
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  Fylde quoted from those pages, and those Members who were present will understand how complex the proposals are.
  It is not just the bureaucracy surrounding those proposals that is complicated, but the new marginal tax rate of 46.7 per cent. that is to be introduced between the low £30,000s and the high £30,000s as the tax credit is clawed back. Such complexity has a cost for our constituents. There is a lack of comprehension about where the support to which they are entitled is coming from. That is bound to lead to a problem of take-up and a waste of resources.
  This morning, I was at the Playbox playgroup based at Kingston Methodist church, painting a picture with the help of two young children. It was interesting to speak to people who work at the playgroup. They were worried that the Government's policies were pushing up the fees that they had to charge. They did not realise that extra help would come from the working families tax credit.
  The Government have become stuck on their own presentational fork. In trying to make things easy for themselves in the hothouse of Westminster, they are failing to present their policies properly to the people out there. They are shooting themselves in the foot. I do my best to explain the Government's policy for them. My constituents say, "That is a bit complicated," and I advise them to come and see me. I am more than happy to help them out, but, if the Government want to get the benefits of their own policies, they should make them simpler.
  I remember when Labour Members were in opposition. They used to complain about the Tory Government and say that they were fiddling the figures, with 21 changes to the employment statistics—[Interruption.] Indeed, I believe the correct figure is 22. They used to complain that the Tories used to cut taxes nationally and load the tax on to the local taxpayer by increasing the council tax. Now the Labour Government are doing the same thing. Not only have they stolen the tricks of the Tories, but, worse, they have added a bundle of their own.
  We see that in the Red Book, which is set out not as a proper financial report, but with chapters whose headings are politically biased. The chapters are entitled not "The state of the public finances", but "Increasing Employment Opportunity", "Building a Fairer Society" and so on. Is that objective? Does that state that it is the Government's report? No—it puts a spin on it. Spin doctors are determining official Government documents. That is leading to an information deficit in the House. We are not getting the information that we need for our debates, and it is not being set out objectively.
  We on the Liberal Democrat Benches do not believe that the Bill deserves a Second Reading. It deserves to be referred to the Advertising Standards Authority, the Plain English Campaign and many other bodies. It complicates our tax system and makes life far more difficult for our constituents and for businesses.
  10.8 pm
  Mrs. Louise Ellman: I welcome the Bill which, together with other measures that have been enacted or are planned, shows that it is possible to combine the search for social and economic justice with support for initiative and enterprise. The other developments that go with the Bill include public investment, investment in our health and education

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  services, the beginning of measures to address the needs of a public transport service, and wide-ranging and far-reaching support for business, including financial measures and the creation of regional development agencies.
  Both the main Opposition parties seem to be aggrieved by the Bill, the Conservatives because it seeks to change the system that they established and that failed the people of this country so badly, and the Liberal Democrats because they resent the effectiveness of presentation and because they are so trapped by their own rhetoric that they join the Conservatives in opposing the working families tax credit, which will put about £23 extra into the pockets of the families who need it most. The Liberal Democrats seem to be acting under the delusion that it is possible to govern without complexity. Anyone who has tried to govern will know that complexity is an aspect that must be handled. What really matters, however, is that the direction of policy should be correct. The policy in this Finance Bill is directed towards social justice, combined with the development of our economy.
  The right hon. Member for Fylde (Mr. Jack), in response to an intervention, said that he did not want to turn the debate into a debate about all our yesterdays. I am hardly surprised by that, given that the "all our yesterdays" of the last Conservative Government led to more inequality than the country had seen since the last war. As a result of the economic deficit that that Government created, not one region outside London could match the European average in terms of gross domestic product per head, and the social deficit was so marked that the National Institute of Economic and Social Research considered adding a new category— that of the socially excluded—to its social class categorisation.
  The hon. Member for Chichester (Mr. Tyrie) expressed the remarkable view that the Labour Government had been elected to continue the policies of the last Government. In fact, the Government were elected—with a majority rarely seen before—to change what the last Government had done. I am pleased to note the direction taken by the Bill, which builds on the work already done by the Government. That direction is towards social equity, and the development of economic initiative and entrepreneurship.
  One of the most unacceptable features of the economy inherited by the Government was the penal rate of taxation imposed on the poorest people. Because of the way in which the tax and benefits systems worked together, when the Government came to power 750,000 poor people faced effective tax rates of 70 per cent. or more as they tried to better themselves. The number has now fallen by two thirds, although we have further to go. That has happened because of the Government's consistent and determined efforts to deal with inequality, and to look at the tax and benefits systems together with the aim of bringing about more justice and creating incentives for those who are working hardest.
  If we examine the measures in the Bill, we see that the Government's policy is directed towards seeking more social justice. Twenty million households will be better off, including 7 million with children; 700,000 children will be taken out of the worst poverty; and child benefit has already been increased by 25 per cent., which is the largest increase ever. Because of the introduction of the working families tax credit—opposed by both Opposition parties—families will have a guaranteed income of
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  £200 a week. The Government are introducing the long-awaited system under which families whose incomes are no more than £12,000 a year will not be taxed.
  The working families tax credit will bring many benefits, including proper child care credits amounting to up to £100 per week per child. There are also the new low tax rates —the new low base rate, and the new low rate of lop in the pound. That l0p rate will take 300,000 of the poorest people out of tax altogether, and will halve the tax bill of 1.8 million. Cuts in national insurance contributions will mean that 900,000 of the poorest people in work will not pay contributions. The Government have included all those measures in the Bill to address problems of inequality, and to start to make it possible for us to give more justice and incentives to those who need them.
  The Budget does more than look directly at economic injustice; it looks to supporting business—the creation of wealth. The new 10p rate of corporation tax supports small businesses in particular, and the main rate of corporation tax was cut last year.
  I welcome the continuation of support in tax incentives for investment, tax credits for research and development, and the changes in the enterprise investment scheme to permit more small companies to benefit and encourage more start-ups of more new companies. I also welcome the extension of capital allowances and the setting up of the Small Business Service. All those measures, put together, send out a message to business—a strong message that the Government are supporting businesses and that practical measures are being taken, and will continue to be taken, to support them.
  I represent Liverpool, Riverside—an inner-city constituency which must rank among the poorest in the country. It is in the city that is No. 1 on the list of cities with urban deprivation—and one of the poorest areas in Europe, qualifying for objective 1 funding. In that area of urban deprivation there is great poverty, but also great initiative and enterprise. I welcome the Bill because it, together with other measures that the Government have introduced, will assist my constituents, as it will assist people elsewhere in the region and in the country.
  The Bill will give direct assistance to people who are suffering acute poverty, and the extra finance—including the additional £23 a week which will soon go to into the pockets of people with families who are most in need—will make a direct difference to their lives. For someone who is very poor and struggling to survive, £23 a week is a significant amount which will make a real difference. I say: shame upon those who voted against that measure in the Budget.
  I welcome the Bill's support for business. There is great entrepreneurship in Liverpool and businesses are developing and thriving. The regeneration policies being introduced and developed by the Government mean that there are increasing opportunities for business development and business support.
  The Government are backing business, and the Bill will give it further support. General measures are already in place to develop an effective infrastructure and create a supportive atmosphere for business, for business start-ups, for expanding businesses and for businesses growing out of the regeneration initiatives; so the Bill will help businesses to survive and prosper and to create more and much needed employment.

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  The Bill takes us a step further to creating a fairer society—a society that addresses social and economic injustice and supports enterprise that benefits the community as a whole. I welcome the Bill and hope that the whole House will support it. I say: shame on those who vote against the Bill; those who oppose it are opposing help for those who need it most and help for the enterprise economy.
  10.19 pm
  Mrs. Jacqui Lait: I hope that the hon. Member for Liverpool, Riverside (Mrs. Ellman) will forgive me if I do not follow her detailed critique of the Bill with my own, because we are coming under some slight time pressure.
  So many Budgets are greeted on the day with great cheers, but, the more one examines them, the more one sees the flaws. Many of my hon. Friends have analysed in great detail the problems of this Budget and the difficulties that the Government have stored up for themselves.
  I shall mention briefly one or two issues of particular interest to my constituents. For instance, the small businesses that have been badly affected by the increase in red tape are disappointed because the Small Business Service will, so far as they can make out, teach them how to use e-mail, but will not help them with their regulatory problems. There is an even more detailed concern among many people who use their own limited companies to do their work. They are worried that those may be abolished in the sacred name of combating tax avoidance.
  When we add up all the complexities that the Government have introduced to the tax system, it is clear that there will be a return of the tax avoidance industry. If this Budget is for anyone, it is for the accountants.
  I shall spend most of my time talking about the same subject as I have spoken about in Finance Bill debates for the past five years. Indeed, I remember that, when the Economic Secretary to the Treasury was first appointed, I welcomed her to my annual contribution about smuggling and bootlegging. The hon. Member for Barnsley, Central (Mr. Illsley) spoke on the very same subject. It is refreshing that at long last the Government have recognised that the problem is growing by leaps and bounds, and have acknowledged an official figure for lost revenues—£1.5 billion.
  Just before Christmas, I went to Dover harbour and saw an exercise in which Customs and Excise, the transport arm of DETR, the Benefits Agency and the police worked together to pick up the white vans. Twenty-six vehicles were dangerously overweight with beer and tobacco. Ironically, the drivers were allowed to telephone local taxi firms and hire taxis to take away the excess goods, so they got clean away with bringing in excess tobacco and alcohol. Eight of the vans were prohibited as defective, and 90 people were interviewed by the Benefits Agency. I understand that the agency reckons that it saved £31,000 in benefits on that morning alone. There were also customs seizures of about £19,000 worth of tobacco and alcohol.
  If that was the effect of a by no means comprehensive exercise lasting only a few hours on one day just before Christmas, it is easy to imagine the sheer volume of tobacco and alcohol being smuggled and bootlegged.
  798
  The Budget has done nothing to make any difference. The Chancellor patted himself on the back for having frozen alcohol duty, but that will have no effect because the price differential is such that it is still extremely profitable to smuggle alcohol.
  The Chancellor increased the revenue from cigarettes. At least, he thinks that he has increased the revenue from cigarettes, but in fact he has only increased their cost. He is simply encouraging worldwide smuggling. A packet of cigarettes from South Africa costs only 70p, so it is worth smuggling in crates and pallets full of cigarettes from somewhere that far away—not to mention the profits made by smuggling from Europe, especially from Belgium.
  Inevitably, we are seeing the knock-on effects on health. The fact that the number of people smoking in this country is increasing has been confirmed by studies by Mintel, the British Market Research Bureau and several other respectable organisations. The Department of Health's figures prove the same thing.
  We are building up a smoking-related health problem directly related to the increase in cheap tobacco. The Government cannot say any longer that the high price that they have put on tobacco is stopping people smoking—first, because it is palpably not doing that and, secondly, because wherever people are in the country, they can get cheap tobacco.
  It would be logical and sensible to face the problem squarely. The tendency has been for the Government to build up customs services and prevention, and we shall see what effect that has on the return for the revenue men. The Government are now building up greater bureaucracy. Indeed, they have asked for product marking, which will add to the costs of industry. Industry rightly responds by saying that, if the Government would only reduce excise duties, it could afford to pay for that.
  I emphasise again and again that the only answer to this problem is to reduce the excise duty on tobacco and alcohol. If we were going to debate this issue on the Floor of the House, I would table amendments to the Bill.
  Sir Robert Smith: Will the hon. Lady give way?
  Mrs. Lait: I am terribly sorry, I shall not give way, because I want to allow the Front-Bench spokesman time to reply to the debate.
  I seriously suggest that the only solution to this problem is for the Government to grasp the nettle and reduce excise duty on tobacco and alcohol. History shows that, in the long run, revenue would then increase again.
  10.25 pm
  Mr. John Whittingdale: This has been a good debate, with a number of thoughtful and well-informed contributions from hon. Members on both sides of the House. It seems a long time ago that the Chancellor delivered his Budget speech outlining some of the measures that we have debated today. My right hon. Friend the Member for Fylde (Mr. Jack) referred to the initial burst of enthusiasm that greeted the Budget, with headlines in The Sun such as "Everyone's a winner". As he said, it did not take people long to realise that anything but that was the case.
  The first flush of enthusiasm that greeted the Budget barely lasted 24 hours. Since then, enthusiasm has given way to disappointment, which in turn has been replaced

  799
  by anger as more and more details of the stealth tax increases in the Budget have gradually emerged. We were told at the time that everyone would be better off, but it did not take long to discover that many people would face tax increases not tax cuts. Once again, the reality is very different from the presentational gloss.
  The new 10p starting rate of income tax, which has been referred to by a number of hon. Members, is a typical public relations gimmick. By restricting it to the first £1,500 of income, it will make only a small difference to most people's tax bills. However, by reducing the amount of income that is covered by the 10p rate and by abolishing the 20p rate, the Chancellor increased the marginal rate of income tax for a significant number of people.
  According to the Government's own figures, about 4.4 million income taxpayers will have a taxable income of between £1,500 and £4300. As a result of the Budget, the rate of income tax that they pay will rise from 20p to 23p in the pound. As the hon. Member for Kingston and Surbiton (Mr. Davey) said, the Chancellor overlooked that aspect when he made his Budget speech. It is also a direct breach of the Labour party's pledge at the last election not to put up income tax.
  It is not just those 4.4 million people who have been conned by the new 10p rate. It became clear only after the Budget that savers on low incomes will also lose out. In a throwaway line in the Budget debate, the Chancellor said:
  "The tax rates on savings will remained unchanged."—[Official Report, 9 March 1999; Vol. 327, c. 188.]
  Not many people picked up that line at the time, and those who did probably thought that they had misheard it, but it was no mistake. People whose income is derived from a small amount of savings will not enjoy a 10p starting rate: they will continue to pay 20p in the pound on their savings income. As the hon. Member for Gordon (Mr. Bruce) said, as a result of that, almost a million pensioners will get no benefit from the 10p rate.
  It should come as no surprise that a Government who were willing to deprive 300,000 pensioners on the lowest incomes of a tax refund of £75 a year on their dividend payments should now penalise pensioners who pay tax, albeit at the lowest level. As the hon. Member for Kingston and Surbiton said, we shall want to return in Committee to the issue of the dividend tax credits for non-taxpayers.
  The chief executive of the Birmingham Midshires building society was right when he described the 20 per cent. rate on savings as "unfair and contradictory". The Chancellor should even now listen to the representations of Age Concern, the Daily Mail and the "Money Box" programme on Radio 4, which are all calling on him to put the situation right.
  Married couples will also lose out from the Finance Bill. The abolition of the married couples allowance for those under 65 will cost couples almost £200 a year extra in tax. It also finally removes from the tax system any recognition of the state of marriage. In his Budget, the Chancellor said that the allowance would be replaced by the children's tax credit and, as a result, the typical family with children would be left better off. However, they will not be better off next year, as we now find that the children's tax credit will not even come in until 2001. Nor will they be better off if either partner is a higher rate
  800
  taxpayer, because they will lose the credit through the operation of the taper system. The result is the ludicrous situation in which a couple each earning £30,000 a year will receive the entire children's tax credit, while a family with only one earner on £ 36,000 will see it tapered away.
  It does not stop there. Many married couples do not have children or, if they have, their children have grown up. According to the Government's figures, there are 6.4 million married couples who benefit from the married couples allowance but do not have children who are eligible for child benefit, and another 300,000 have children who receive child benefit but those children are aged over 16. They, too, will get no benefit from the children's tax credit and will end up paying more in tax.
  The only exception is the pensioners, who retain the allowance. However, in a phrase the significance of which became apparent only after the Chancellor sat down, he said in the Budget speech that he was restricting the exception to "Today's pensioner couples". Any couples who are unfortunate enough to reach pensionable age after April next year will lose the allowance and gain no benefit at all.
  The Chancellor said in the Budget that he was providing a better deal for families and children, but he certainly did not for one type of family. Couples who have divorced or separated, with one person paying maintenance, will also have to pay a lot more. Some 300,000 taxpayers will lose relief on the maintenance payments that they make for their children, costing each on average about £220. For some, the figure will be considerably higher. Those who separated before March 1988 can currently get tax relief at the higher rate of 40 per cent., but from next year they will receive no relief at all. Many parents paying 'maintenance already resent having to pay large amounts as a result of the actions of the Child Support Agency, as hon. Members know. For those parents, that Budget measure will be another blow. When the Chancellor was asked about it in an interview after the Budget, he did not even know about it, despite its appearing in his own Red Book.
  Home owners will also pay more tax under the Finance Bill, as a result of the abolition of mortgage interest relief. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) described that as removing a massive distortion from the tax system. However, according to the Government, it is not a taxation measure at all. Instead, we are told that it represents a reduction in public spending. That conveniently overlooks the fact that, in the last Parliament, the reduction in mortgage interest relief was cited by the Labour party as one of the alleged 22 Tory tax rises.
  In the Budget speech, the Chancellor said that the allowance was worth on average £ 2.50 a week. Most people are mystified as to how he reached that figure. In fact, it is worth about £4 a week and, in total, about 19 million home buyers will pay a total of £1.9 billion extra in tax each year.
  Those who buy homes worth more than £250,000 face the extra costs of the increase in stamp duty. Last year, 45,000 residential transactions would have been affected. Some would say that those who can afford a house worth more than £250,000 can afford to pay the increase. However, in the south-east, in constituencies such as mine and that of my hon. Friend the Member for South Dorset

  801
  (Mr. Bruce), £250,000 does not buy a mansion. The increase will affect many people with families who aspire to buy a bigger home.
  Business will bear the brunt of the stamp duty increase. Some 65 per cent. of total receipts from stamp duty on transactions of more than £250,000 comes from commercial property and land transactions. The measure will put up the cost of commercial property, and that will hit businesses. Even more seriously, it will have a direct impact on commercial property values, making it harder for small and medium-sized firms to raise loan finance.
  My hon. Friend the Member for West Worcestershire (Sir M. Spicer) spent some time on the threat posed to the City of London by the possible withholding tax. Rightly, he expressed astonishment that the Deputy Prime Minister appeared, only last week, to be totally unaware of that proposal, which puts at risk 10,000 jobs. My hon. Friend suggested that that might imply that the matter had not been raised in Cabinet. I very much hope that he was Wrong. It is, perhaps, more likely that the Deputy Prime Minister was otherwise engaged when the matter came up, possibly looking at tigers or examining a coral reef.
  Whatever the explanation, my hon. Friend was absolutely right to say that the proposal represented a huge threat to one of the most successful component parts of our economy. If it goes ahead, the Eurobond market will be permanently lost to the UK because it will transfer to Switzerland. For that reason, when this proposal was first made in the 1980s, the then Government made it clear that it was utterly unacceptable.
  We heard a fascinating account from my hon. Friend the Member for Chichester (Mr. Tyrie) of the negotiating tactics that Lord Lawson employed to put a stop to that absurd measure. As a result of that action, the proposal was dropped by our European Community partners, but the Government have refused to make the same commitment this time. Instead, weasel words have allowed the other countries of Europe to believe that we are prepared to compromise on this matter.
  One of the Bill's most pointless and counter-productive tax rises is the increase in duty on tobacco. My hon. Friend the Member for Beckenham (Mrs. Lait) has followed that issue closely for many years and she made some powerful points. The Government are already losing at least £1.5 billion in revenue as a result of smuggling and cross-border imports. About 15 per cent. of the market has been taken by imported cigarettes, and each small retailer of tobacco loses about £42,000 in sales revenue each year.
  The Chancellor blindly ignored that evidence as, yet again, he imposed an increase of 5 per cent. The price of 20 cigarettes in the UK is about £3.80, while the price in Belgium is about £2. It is hardly surprising that a huge number of people take advantage of that difference.
  Sir Robert Smith: Will the hon. Gentleman give way?
  Mr. Whittingdale: If the hon. Gentleman will forgive me, I shall not as I have only a couple of minutes left.
  The policy of annual rises in the price of cigarettes has clearly failed, as the hon. Member for Barnsley, Central (Mr. Illsley) was brave enough to acknowledge. According to the Government's own estimates, revenue
  802
  will fall this year. The time has come when the Government must think again. In terms of health, revenue and law and order, their policy is not working, and a new approach is needed. At the very least, they should take their heads out of the sand and freeze tobacco duty at its present rate.
  Of all the many unpopular and damaging measures in the Budget, the worst is the increase in duty on hydrocarbons. Motorists in rural areas bitterly resent being treated by the Government as a cash cow. Many have no choice but to use their cars. The justification that raising the cost of petrol will encourage people to leave their cars at home is entirely spurious. People know that the only justification for raising petrol duty is to raise more money for the Government. It is not an environmental or transport measure, but a tax-raising measure pure and simple. Motorists have no choice but to pay the fuel duty, with the exception of those living in Northern Ireland. I endorse the comments of the hon. Member for East Londonderry (Mr. Ross) on that.
  While most motorists have no choice but to pay the duty, the haulage industry can choose to fill its tanks with diesel in the United Kingdom and pay British rates or in France and Belgium and pay about half the amount. Even before the Budget, hauliers warned that the differences in duty rates threatened to wipe their industry out, yet the Chancellor ignored their pleas. He did not increase the rate of duty by only the 6 per cent. escalator; he increased it by 12 per cent. To ensure that there was no chance of industry being able to compete, he raised the rate of vehicle excise duty on 38-tonne trucks to £5,750—six times the level in Belgium and 12 times the level in France. The anger throughout the industry is genuine and justified. Hauliers see their livelihoods being destroyed by the Government without any benefit to the environment. The only gainers will be their competitors on the continent, who can hardly believe their luck. Even now, I urge the Government to come to their senses and think again.
  The Bill enacts a Budget that we were told would cut taxes. Instead, it contains a catalogue of stealth tax increases on savers, married couples, fathers paying maintenance, home buyers, the self-employed, smokers and motorists. It is the third instalment of a tax-raising programme that directly breaches Labour's promises at the general election. I urge the House to vote against it tonight.
  10.41 pm
  The Financial Secretary to the Treasury (Mrs. Barbara Roche): Let me start by agreeing with the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale). This has been a good debate with valuable contributions from Members on both sides of the House.
  The Finance Bill marks yet another step on the road to delivering a stronger economic future for our country. Conservative Members laugh, but we know the legacy of unemployment and lack of productivity that we were left with and our task in dealing with it.
  The Budget and the Finance Bill build on a strong foundation for economic stability. The Budget offers a better deal to business and delivers a better deal for Britain. The hon. Member for Maldon and East Chelmsford laughs when I talk about business. I know

  803
  that he has strong views on the burdens on business. I recently read an early-day motion that called for
  "ministers within their respective Government departments whose brief includes deregulation to reinvigorate their laconic record".
  I am sure that he agrees. The problem is that that motion was tabled against the Conservative party when it was in government by its own Back Benchers in 1996. He was one of its main signatories. It is not my policy to embarrass him. I want only to make him remember his past mistakes so that he can repent of them.
  The Budget continues to lock in the economic stability that the Government have delivered by keeping public finances under control. We have taken tough and decisive action with a new framework for monetary policy by making the Bank of England independent and setting up a new framework for the public finances based on tough rules. The excellent speech of my hon. Friend the Member for North Durham (Mr. Radice), the distinguished Chairman of the Treasury Committee, noted the effective co-ordination between fiscal and monetary policy. We are already seeing the benefits. Inflation is close to its target, mortgage rates are at their lowest for 33 years and we have cut borrowing by £29 billion in our first two years in office. That is why my right hon. Friend the Chancellor was able to deliver the Budget that the Finance Bill implements—a Budget that is good for those in work, good for families and, very important, good for business.
  The Budget provides a platform for stability. We have as a country to raise our game, to deliver higher productivity for the long term, better skills, and greater innovation and competition. In contrast to the somehow golden legacy that the hon. Member for Chichester (Mr. Tyrie) spoke about, there is a productivity gap that we need to fill. There is a 40 per cent. performance gap between the United Kingdom and the United States of America. We have a duty to fill it. The measures in the Budget, including support for productivity, for research and development and for innovation, which were well emphasised by my hon. Friend the Member for Colne Valley (Kali Mountford), are aimed at just that. We have introduced a new 10p rate of corporation tax for small companies. That halves the tax rate for the smallest companies and benefits a great number of small and growing businesses.
  The hon. Members for Gordon (Mr. Bruce) and for Kingston and Surbiton (Mr. Davey) suggested that, despite all the measures that I have mentioned, this was not a Budget for small business. But the Government feel very supported in their aims by the excellent comments of the hon. Member for Tunbridge Wells (Mr. Norman)—we recognise that he has a great deal of business experience—who said, immediately after the Budget statement,
  "Not a bad Budget for small businesses."
  With recommendations like that, we know that we are on the right track.
  A number of points were made during the debate about savings. The right hon. Member for Wells (Mr. Heathcoat-Amory) and the hon. Member for South Dorset (Mr. Bruce) spoke about the new ISAs. Perhaps Opposition Members have not looked at the figures on the take-up of ISAs. In one week, one of the providers sold
  804
  0.25 million. When many people in this country—half the population—have little or no savings, that is a major step forward.
  My hon. Friend the Member for Dudley, South (Mr. Pearson) and others spoke about the fuel escalator. It was interesting to hear what Opposition Members had to say. The right hon. Member for Wells is not in his place at the moment, but he said that if the Conservatives were fortunate enough to be returned to power they would abolish the fuel escalator; but when asked very tellingly what he would cut to make up the £1.5 billion shortfall, he could not answer. Perhaps that explains why he is not in his place.
  The right hon. Member for Fylde (Mr. Jack) also spoke about the fuel escalator. He was asked by my hon. Friend the Member for Shipley (Mr. Leslie) about his position, because the right hon. Gentleman was a member of the Government who introduced the escalator. The right hon. Gentleman replied that, as Financial Secretary, he was not responsible for the fuel duty escalator imposed by his colleague the Chancellor of the Exchequer. I have heard about the previous Government's lack of collective responsibility, but this takes the biscuit.
  Mr. Jack: The Financial Secretary is being uncharacteristically inaccurate in reporting what I said in my defence. I was asked whether the escalator was my responsibility. I pointed out that it was not, but I also owned up to the collective responsibility that all of us in Treasury at the time had for taking difficult actions to put our public finances right.
  Mrs. Roche: Of course I accept completely the right hon. Gentleman's clarification, although I doubt whether it aids his cause with the House.
  The right hon. Gentleman mentioned the documentation covering the Budget, as did the hon. Member for West Worcestershire (Sir M. Spicer). The hon. Member for South Dorset even used the expression "smoke and mirrors". The documentation accompanying this Budget gives the fullest account ever of the Government's objectives; every tax change has been clearly spelt out.
  The right hon. Member for Fylde also mentioned transparency. I agree with him that transparency is important. That is why we have introduced the new monetary policy framework of which transparency and accountability are central elements. The Monetary Policy Committee is subject to parliamentary scrutiny by the Select Committee on the Treasury and by the House of Lords Select Committee on the Monetary Policy Committee of the Bank of England. Our Budget reporting is underpinned by the code for fiscal stability.
  The hon. Member for Gordon spoke about cider. As he knows, the problems were identified by the Conservative Government in 1996 and the alignment was necessary to fulfil the commitment made by the United Kingdom. However, he did not mention a fact that might perhaps have supported the debate: that the National Association of Cider Makers has supported this Government's action throughout.
  There has been much discussion about tobacco and the worrying problem of smuggling; for instance, it was referred to by the hon. Member for East Londonderry (Mr. Ross), my hon. Friend the Member for Barnsley,

  805
  Central (Mr. Illsley) and, towards the end of the evening, the hon. Member for Beckenham (Mrs. Lait). I was disappointed by the comments of the hon. Member for Maldon and East Chelmsford on that subject. The Conservatives, rightly, introduced the tobacco escalator. I remind the House that smoking kills more than 13 people an hour and there is a particular problem among young. The hon. Gentleman's response to that is that there is a problem with smuggling.
  Smuggling is rather a romantic name for what is organised crime, leading to great criminality in various areas, which hurts decent, law-abiding people. The answer of the Opposition —who used to pride themselves on being members of the party of law and order—is that, because there is a problem with smuggling, we should attack the duty. They attack the duty rather than the criminals. The Government have put resources into tackling that problem. My hon. Friend the Paymaster General has put a great deal of effort in working with Customs and Excise to that end.
  In an extremely well-considered speech of the kind that the House is accustomed to hear from him, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) supported the ending of mortgage interest relief at source and made some important points about the housing market. I am sure that the whole House appreciated his remarks.
  Mr. William Ross: The hon. Lady has correctly pointed out that the tobacco and fuel escalators were introduced by the previous Administration. As I recall, the intention was to double the price of fuel in real terms within a certain period. Does that remain the Labour Government's intention? When can we expect the escalator to stop for tobacco and fuel?
  Mrs. Roche: As the hon. Gentleman will be aware, there are clear environmental and health objectives underlying all our policies on those matters. [HON MEMBERS: "Oh."] I know that the Opposition do not like hearing Ministers speak, but they have made some lengthy speeches this evening—one was 47 minutes long. I am not saying that I was bored—all the speeches were fascinating—but the Opposition might want to hear the Government's response.
  The Government believe that enterprise and fairness can go hand in hand and that one supports the other, and that is why the Budget was a Budget for enterprise as well as fairness. It is why the Finance Bill will help families by paying an extra £416 directly into the pay packet of all lower and middle-income families with children—an important point that was made extremely well by my hon. Friend the Member for Northampton, North (Ms Keeble). It is also why, from April next year, we shall increase child benefit by 3 per cent. in real terms.
  There was discussion about the winter allowance for pensioners, which will increase fivefold to £100 for every pensioner household in this country. That measure was warmly welcomed by my hon. Friend the Member for Glasgow, Govan (Mr. Sarwar). I listened with interest as the hon. Member for Kingston and Surbiton attacked that measure. I wonder whether he lives in the real world, because I know what pensioners in my constituency have said and how warmly the measure has been greeted.
  806
  My hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) spoke about our priorities for public spending.
  There was also discussion about the working families tax credit, and I thought that I detected a split in the Tory ranks on that subject. The hon. Member for South Dorset— someone I know well, having crossed swords with him on several occasions—was asked whether a Conservative Government would repeal the WFTC, and he said, rather fairly, "We'll see how it works—we'll see." It pains me to break the news to him so publicly, and I am sorry to have to do so, but his view is not shared by Conservative Front Benchers—their view on that subject is entirely different.
  In addition to all the measures that I have described, we have been able to add to money for education and health, and we are providing a major new £1.1 billion boost from the capital modernisation fund.
  Mr. Ian Bruce: Will the Financial Secretary give way?
  Mrs. Roche: Of course.
  Mr. Bruce: If she reads Hansard, the hon. Lady may realise that I said that it may well be that the Labour Government will withdraw the WFTC because it does not work.
  Mrs. Roche: I think that I detect another change of heart, but I do not want to add to the hon. Gentleman's misery. It is possible that promotion to the Front Bench is in the offing for him, and I do not want to do anything to spoil his chances.
  The Finance Bill will enact a Budget that builds on a strong foundation of economic stability, advances a modern framework of efficient public services and encourages a dynamic Britain of enterprise and fairness. It represents a better deal for our country, one that puts work, enterprise and families first. The Bill will cut tax rates and implement far-reaching tax reform, while simultaneously boosting public investment, and it will do so at the right time for our economy. The Government are giving all our people a better deal for work, a better deal for the family and a better deal for business. I commend the Bill to the House.
  Question put, That the amendment be made:—
  The House divided: Ayes 132, Noes 341.

  Division No. 146]

  [10.59 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Butterfill, John

  Ancram, Rt Hon Michael

  Cash, William

  Arbuthnot, Rt Hon James

  Chapman, Sir Sydney

  Atkinson, Peter (Hexham)

  (Chipping Barnet)

  Baldry, Tony

  Chope, Christopher

  Beggs, Roy

  Clappison, James

  Bercow, John

  Collins, Tim

  Beresford, Sir Paul

  Colvin, Michael

  Blunt, Crispin

  Cormack, Sir Patrick

  Boswell, Tim

  Cran, James

  Bottomley, Peter (Worthing W)

  Curry, Rt Hon David

  Brady, Graham

  Davies, Quentin (Grantham)

  Brazier, Julian

  Dorrell, Rt Hon Stephen

  Browning, Mrs Angela

  Duncan, Alan

  Bruce, Ian (S Dorset)

  Duncan Smith, Iain

  Burns, Simon

  Emery, Rt Hon Sir Peter

  807

  Evans, Nigel

  Nicholls, patrick

  Faber, David

  Norman, Archie

  Fabricant, Michael

  Ottaway, Richard

  Fallon, Michael

  Paice, James

  Flight, Howard

  Paterson, Owen

  Fowler, Rt Hon Sir Norman

  Pickles, Eric

  Fox, Dr Liam

  Prior, David

  Fraser, Christopher

  Redwood, Rt Hon John

  Gale, Roger

  Robathan, Andrew

  Garnier, Edward

  Robathan, Laurence (Tewk'bry)

  Gibb, Nick

  Roe Mrs Marion (Broxbourne)

  Gill, Christopher

  Ross, William(E Lond'y)

  Gillan, Mrs Cheryl

  Rowe, Andrew (Faversham)

  Goodlad, Rt Hon Sir Alastair

  Ruffley, David

  Gorman, Mrs Teresa

  St Aubyn, Nick

  Green, Damian

  Sayeed, Jonathan

  Greenway, John

  Shepherd, Richard

  Grieve, Dominic

  Simpson, Keith (Mid-Norfolk)

  Hague, Rt Hon William

  Smyth, Rev Martin (Belfast S)

  Hamilton, Rt Hon Sir Archie

  Soames, Nicholas

  Hammond, Philip

  Spelman, Mrs Caroline

  Hawkins, Nick

  Spicer, Sir Michael

  Hayes, John

  Spring, Richard

  Heald, Oliver

  Streeter, Gary

  Heathcoat-Amory, Rt Hon David

  Swayne, Desmond

  Hogg, Rt Hon Douglas

  Syms, Robert

  Horam, John

  Tapsell, Sir Peter

  Howard, Rt Hon Michael

  Taylor, Ian (Esher & Walton)

  Hunter, Andrew

  Taylor, John M (Solihull)

  Jack, Rt Hon Michael

  Taylor, Sir Teddy

  Jackson, Robert (Wantage)

  Thompson, William

  Jenkin, Bernard

  Townend, John

  Key, Robert

  Tredinnick, David

  King, Rt Hon Tom (Bridgwater)

  Trend, Michael

  Kirkbride, Miss Julie

  Tyrie, Andrew

  Lait, Mrs Jacqui

  Viggers, Peter

  Lansley, Andrew

  Walter, Robert

  Leigh, Edward

  Waterson, Nigel

  Letwin, Oliver

  Wells, Bowen

  Lewis, Dr Julian (New Forest E)

  Whitney, Sir Raymond

  Lidington, David

  Whittingdale, John

  Lloyd, Rt Hon Sir Peter (Fareham)

  Widdecombe, Rt Hon Miss Ann

  Luff, Peter

  Wilkinson, John

  Lyell, Rt Hon Sir Nicholas

  Willetts, David

  McIntosh, Miss Anne

  Wilshire, David

  MacKay, Rt Hon Andrew

  Winterton, Mrs Ann (Congleton)

  McLoughlin, Patrick

  Winterton, Nicholas (Macclesfield)

  Malins, Humfrey

  Yeo, Tim

  Maude, Rt Hon Francis

  Young, Rt Hon Sir George

  Mawhinney, Rt Hon Sir Brian

  Tellers for the Ayes:

  May, Mrs Theresa

  Mrs. Eleanor Laing and

  Moss, Malcolm

  Mr. Stephen Day.

  NOES

  Abbott, Ms Diane

  Bell, Martin (Tatton)

  Adams, Mrs Irene (Paisley N)

  Bell, Stuart (Middlesbrough)

  Ainsworth, Robert (Cov'try, NE)

  Benn, Rt Hon Tony

  Allan, Richard

  Benton, Joe

  Allen, Graham

  Bermingham, Gerald

  Anderson, Donald (Swansea E)

  Berry, Roger

  Anderson, Janet (Rossendale)

  Best, Harold

  Armstrong, Rt Hon Ms Hilary

  Blackman, Liz

  Ashton, Joe

  Blears, Ms Hazel

  Atherton, Ms Candy

  Blizzard, Bob

  Atkins, Charlotte

  Blunkett, Rt Hon David

  Austin, John

  Boateng, Paul

  Baker, Norman

  Borrow, David

  Ballard, Jackie

  Bradley, Keith (Withington)

  Barnes, Harry

  Bradley, Peter (The Wrekin)

  Barron, Kevin

  Bradshaw, Ben

  Battle, John

  Breed, Colin

  Bayley, Hugh

  Brinton, Mrs Helen

  Beard, Nigel

  Brown, Rt Hon Nick (Newcastle E)

  Beckett, Rt Hon Mrs Margaret

  Brown, Russell (Dumfries)

  Begg, Miss Anne

  Bruce, Malcolm (Gordon)

  808

  Buck, Ms Karen

  Goggins, Paul

  Burden, Richard

  Golding, Mrs Llin

  Burnett, John

  Gordon, Mrs Eileen

  Burstow, Paul

  Griffiths, Nigel (Edinburgh S)

  Butler, Mrs Christine

  Griffiths, Win (Bridgend)

  Byers, Rt Hon Stephen

  Grocott, Bruce

  Cable, Dr Vincent

  Grogan, John

  Campbell, Mrs Anne (C'bridge)

  Gunnell, John

  Campbell, Rt Hon Menzies

  Hall, Mike (Weaver Vale)

  (NE Fife)

  Campbell, Ronnie (Blyth V)

  Hall, Patrick (Bedford)

  Cann, Jamie

  Hancock, Mike

  Caplin, Ivor

  Harman, Rt Hon Ms Harriet

  Casale, Roger

  Harris, Dr Evan

  Caton, Martin

  Harvey, Nick

  Cawsey, Ian

  Heal, Mrs Sylvia

  Chapman, Ben (Wirral S)

  Heath, David (Somerton & Frome)

  Chaytor, David

  Henderson, Ivan (Harwich)

  Chidgey, David

  Hepburn, Stephen

  Clapham, Michael

  Heppell, John

  Clark, Rt Hon Dr David (S Shields)

  Hesford, Stephen

  Clark, Dr Lynda

  Hewitt, Ms Patricia

  (Edinburgh Pentlands)

  Hill, Keith

  Clarke, Charles (Norwich S)

  Hinchliffe, David

  Clarke, Eric (Midlothian)

  Hodge, Ms Margaret

  Clarke, Tony(Northampton S)

  Hoon, Geoffrey

  Clwyd, Ann

  Hope, Phil

  Coaker, Vernon

  Hopkins, Kelvin

  Coffey, Ms Ann

  Howarth, Alan (Newport E)

  Coleman, Iain

  Howarth, George (Knowsley N)

  Connarty, Michael

  Howells, Dr Kim

  Corbett, Robin

  Hoyle, Lindsay

  Corbyn, Jeremy

  Hughes, Ms Beverley (Stretford)

  Corston, Ms Jean

  Hughes, Kevin (Doncaster N)

  Cotter, Brian

  Hughes, Simon (Southwark N)

  Cousins, Jim

  Humble, Mrs Joan

  Crausby, David

  Hurst, Alan

  Cryer, Mrs Ann (Keighley)

  Hutton, John

  Cryer, John (Hornchurch)

  Iddon, Dr Brian

  Cummings, John

  Illsley, Eric

  Cunningham, Rt Hon Dr Jack

  Jackson, Ms Glenda (Hampstead)

  (Copeland)

  Jackson, Helen, (Hillsborough)

  Cunningham, Jim (Cov'try S)

  Jamieson, David

  Dalyell, Tam

  Jenkins, Brian

  Darvill, Keith

  Johnson, Miss Melanie

  Davey, Edward (Kingston)

  (Welwyn Hatfield)

  Davey, Valerie (Bristol W)

  Jones, Barry (Alyn & Deeside)

  Davies, Rt Hon Denzil (Llanelli)

  Jones, Helen (Warrington N)

  Dean, Mrs Janet

  Jones, Ms Jenny

  Denham, John

  (Wolverh'ton SW)

  Dismore, Andrew

  Jones, Dr Lynne (Selly Oak)

  Dobbin, Jim

  Jones, Martyn (Clwyd S)

  Dobson, Rt Hon Frank

  Kaufman, Rt Hon Gerald

  Drew, David

  Keeble, Ms Sally

  Drown, Ms Julia

  Keen, Alan (Feltham & Heston)

  Dunwoody, Mrs Gwyneth

  Keen, Ann (Brentford & Isleworth)

  Eagle, Angela (Wallasey)

  Keetch, Paul

  Edwards, Huw

  Kemp, Fraser

  Efford, Clive

  Keenedy, Jane (Wavertree)

  Ellman, Mrs Louise

  Khabra, Piara S

  Ennis, Jeff

  Kidney, David

  Fearn, Ronnie

  Kilfoyle, Peter

  Field, Rt Hon Frank

  King, Andy (Rugby & Kenilworth)

  Fitzsimons, Lorna

  King, Ms Oona (Bethnal Green)

  Flint, Caroline

  Kingham, MS Tess

  Flynn, Paul

  Kirkwood, Archy

  Foster, Rt Hon Derek

  Kumar, Dr Ashok

  Foster, Michael Jabez (Hastings)

  Ladyman, Dr Stephen

  Fyfe, Maria

  Lawrence, Ms Jackie

  Galloway, George

  Laxton, Bob

  Gardiner, Barry

  Lepper, David

  George, Andrew (St Ives)

  Leslie, Christopher

  Gerrard, Neil

  Levitt, Tom

  Gibson, Dr Ian

  Lewis, Terry (Worsley)

  Gilroy, Mrs Linda

  Linton, Martin

  Godman, Dr Norman A

  Livingstone, Ken

  Lloyd, Tony Manchester C)

  809

  Llwyd, Elfyn

  Rogers, Allan

  Lock, David

  Rooker, Jeff

  McAvoy, Thomas

  Ross, Erine (Dundee W)

  McCafferty, Ms Chris

  Rowlands, Ted

  McCartney, Rt Hon Ian

  Roy, Frank

  (Makerfield)

  Ruane, Chris

  McDonagh, Siobhain

  Ruddock, Joan

  McDonnell, John

  Russell, Bob (Colchester)

  McFall, John

  Russell, Ms Christine (Chester)

  McIsaac, Shona

  Sanders, Adrian

  Mackinlay, Andrew

  Sarwar, Mohammad

  Maclennan, Rt Hon Robert

  Savidge, Malcolm

  McNulty, Tony

  Sawford, Phil

  MacShane, Denis

  Sedgemore, Brian

  Mactaggart, Fiona

  Shaw, Jonathan

  McWalter, Tony

  Sheerman, Barry

  McWilliam, John

  Sheldon, Rt Hon Robert

  Mahon, Mrs Alice

  Shipley, Ms Debra

  Mallaber, Judy

  Simpson, Alan (Nottingham S)

  Marsden, Gordon (Blackpool S)

  Singh, Marsha

  Marshall, David (Shettleston)

  Skinner, Dennis

  Marshall-Andrews, Robert

  Smith, Rt Hon Andrew (Oxford E)

  Martlew, Eric

  Smith, Angela (Basildon)

  Maxton, John

  Smith, Jacqui (Redditch)

  Meacher, Rt Hon Michael

  Smith, Llew (Blaenau Gwent)

  Meale, Alan

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

  Merron, Gillian

  Snape, Peter

  Michie, Bill (Shefld Heeley)

  Soley, Clive

  Milburn, Rt Hon Alan

  Southworth, Ms Helen

  Miller, Andrew

  Spellar, John

  Mitchell, Austin

  Squire, Ms Rachel

  Moffatt, Laura

  Starkey, Dr, Phyllis

  Moonie, Dr Lewis

  Stevenson, George

  Moran, Ms Margaret

  Stewart, David (Inverness E)

  Morgan, Ms Julie (Cardiff N)

  Stewart, Ian (Eccles)

  Morley, Elliot

  Stinchcombe, Paul

  Morris, Ms Estelle (B'ham Yardley)

  Stott, Roger

  Mounttord, Kali

  Straw, Rt Hon Jack

  Mudie, George

  Stringer, Graham

  Mullin, Chris

  Stuart, Ms Gisela

  Murphy, Denis (Wansbeck)

  Stunell, Andrew

  Naysmith, Dr Doug

  Sutcliffe, Gerry

  Oaten, Mark

  Taylor, Rt Hon Mrs Ann

  O'Brien, Bill (Normanton)

  (Dewsbury)

  O'Brien, Mike (N Warks)

  Taylor, Ms Dari (Stockton S)

  O'Hara, Eddie

  Taylor, David (NW Leics)

  O'Neill, Martin

  Taylor, Matthew (Truro)

  Osborne, Ms Sandra

  Temple-Morris, Peter

  Palmer, Dr Nick

  Thomas, Gareth R (Harrow W)

  Pearson, Ian

  Timms, Stephen

  Pendry, Tom

  Todd, Mark

  Pickthall, Colin

  Tonge, Dr Jenny

  Pike, Peter L

  Truswell, Paul

  Plaskitt, James

  Turner, Dennis (Wolverh'ton SE)

  Pollard, Kerry

  Turner, Dr Desmond (Kemptown)

  Pond, Chris

  Turner, Dr George (NW Norfolk)

  Pope, Greg

  Twigg, Stephen (Enfield)

  Pound, Stephen

  Tyler, Paul

  Powell, Sir Raymond

  Vaz, Keith

  Prentice, Ms Bridget (Lewisham E)

  Vis, Dr Rudi

  Prentice, Gordon (Pendle)

  Walley, Ms Joan

  Primarolo, Dawn

  Ward, Ms Claire

  Purchase, Ken

  Wareing, Robert N

  Quin, Rt Hon Ms Joyce

  Watts, David

  Quinn, Lawrie

  Webb, Steve

  Radice, Giles

  White, Brian

  Rammell, Bill

  Wicks, Malcolm

  Rapson, Syd

  Willis Phil

  Raynsford, Nick

  Wills, Michael

  Reed, Andrew (Loughborough)

  Wilson, Brian

  Reid, Rt Hon Dr John (Hamilton N)

  Winnick, David

  Rendel, David

  Winterton, Ms Rosie (Doncaster c)

  Robertson, Rt Hon George

  Wise, Audrey

  (Hamilton S)

  Wood, Mike

  Robinson, Geoffrey (Cov'try NW)

  Worthington, Tony

  Roche, Mrs Barbara

  Wray, James

  810

  Wright, Anthony D (Gt Yarmouth)

  Tellers for the Noes:

  Wright, Dr Tony (Cannock)

  Mr. David Clelland and

  >Wyatt, Derek

  Mr. Jim Dowd.

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading):—
  The House divided: Ayes 304, Noes 164.

  Division No. 147]

  [11.13 pm

  AYES

  Abbott, Ms Diane

  Connarty, Michael

  Adams, Mrs Irene (Paisley N)

  Corbett, Robin

  Ainsworth, Robert (Cov'try NE)

  Corbyn, Jeremy

  Allen, Graham

  Corston, Ms Jean

  Anderson, Donald (Swansea E)

  Cousins, Jim

  Anderson, Janet (Rossendale)

  Crausby, David

  Armstrong, Rt Hon Ms Hilary

  Cryer, Mrs Ann (Keighley)

  Ashton, Joe

  Cryer, John (Hornchurch)

  Atherton, Ms Candy

  Cummings, John

  Atkins, Charlotte

  Cunningham, Rt Hon Dr Jack

  Austin, John

  (Copeland)

  Barnes, Harry

  Cunningham, Jim (Cov'try S)

  Barron, Kevin

  Dalyell, Tam

  Battle, John

  Darvill, Keith

  Bayley, Hugh

  Davey, Valerie (Bristol W)

  Beard, Nigel

  Davies, Rt Hon Denzil (Llanelli)

  Beckett, Rt Hon Mrs Margaret

  Dean, Mrs Janet

  Begg, Miss Anne

  Denham, John

  Bell, Martin (Tatton)

  Dismore, Andrew

  Bell, Stuart (Middlesbrough)

  Dobbin, Jim

  Benn, Rt Hon Tony

  Dobson, Rt Hon Frank

  Benton, Joe

  Drew, David

  Bermingham, Gerald

  Drown, Ms Julia

  Berry, Roger

  Dunwoody, Mrs Gwyneth

  Best, Harold

  Eagle, Angela (Wallasey)

  Blackman, Liz

  Edwards, Huw

  Blears, Ms Hazel

  Efford, Clive

  Blizzard, Bob

  Ellman, Mrs Louise

  Blunkett, Rt Hon David

  Ennis, Jeff

  Boateng, Paul

  Field, Rt Hon Frank

  Borrow, David

  Fitzsimons, Lorna

  Bradley, Keith (Withington)

  Flint, Caroline

  Bradley, Peter (The Wrekin)

  Flynn, Paul

  Bradshaw, Ben

  Foster, Rt Hon Derek

  Brinton, Mrs Helen

  Foster, Michael Jabez (Hastings)

  Brown, Rt Hon Nick (Newcastle E)

  Fyfe, Maria

  Brown, Russell (Dumfries)

  Galloway, Geroge

  Buck, Ms Karen

  Gardiner, Barry

  Burden, Richard

  Gerrard, Neil

  Butler, Mrs Christine

  Gibson, Dr Ian

  Byers, Rt Hon Stephen

  Gilroy, Mrs Linda

  Campbell, Mrs Anne (C'bridge)

  Godman, Dr Norman A

  Campbell, Ronnie (Blyth V)

  Goggins, paul

  Cann, Jamie

  Golding, Mrs Llin

  Caplin, Ivor

  Gordon, Mrs Eileen

  Casale, Roger

  Griffiths, Nigel (Edinburgh S)

  Caton, Martin

  Griffiths, Win (Bridgend)

  Cawsey, Ian

  Grocott, Bruce

  Chapman, Ben (Wirral S)

  Grogan, John

  Chaytor, David

  Gunnell, John

  Clapham, Michael

  Hall, Mike (Weaver Vale)

  Clark, Rt Hon Dr David (S Shields)

  Hall, Patrick (Bedford)

  Clark, Dr Lynda

  Harman, Rt Hon Ms Harriet

  (Edinburgh Pentlands)

  Heal, Mrs Sylvia

  Clarke, Charles (Norwich S)

  Henderson, Ivan (Harwish)

  Clarke, Eric (Midlothian)

  Hepburn, Stephen

  Clarke, Tony (Northampton S)

  Heppell, John

  Clwyd, Ann

  Hesford, Stephen

  Coaker, Vernon

  Hewit, Ms Patricia

  Coffey, Ms Ann

  Hill, Keith

  Coleman, Iain

  Hinchliffe, David

  811

  Hodge, Ms Margaret

  Moffatt, Laura

  Hoon, Geoffrey

  Moonie, Dr Lewis

  Hope, Phil

  Moran, Ms Margaret

  Hopkins, Kelvin

  Morgan, Ms Julie (Cardiff N)

  Howarth, Alan (Newport E)

  Morley, Elliot

  Howarth, George (Knowsley N)

  Morris, Ms Estelle (B'ham Yardley)

  Howells, Dr Kim

  Mountford, Kali

  Hoyle, Lindsay

  Mudie, George

  Hughes, Ms Beverley (Stretford)

  Mullin, Chris

  Hughes, Kevin (Doncaster N)

  Murphy, Denis (Wansbeck)

  Humble, Mrs Joan

  Naysmith, Dr Doug

  Hurst, Alan

  O'Brien, Bill (Normanton)

  Hutton, John

  O'Brien, Mike (N Warks)

  Iddon, Dr Brian

  O'Hara, Eddie

  Illsley, Eric

  O'Neill, Martin

  Turner, Dennis (Wolverh'ton SE)

  Wright, Dr Tony (Cannock)

  Jackson, Ms Glenda (Hampstead)

  Osborne, Ms Sandra

  Jackson, Helen (Hillsborough)

  Palmer, Dr Nick

  Jamieson, David

  Pearson, Ian

  Jenkins, Brian

  Pendry, Tom

  Johnson, Miss Melanie

  Pickthall, Colin

  (Welwyn Hatfield)

  Pike, Peter L

  Jones, Barry (Alyn & Deeside)

  Plaskitt, James

  Jones, Helen (Warrington N)

  Pollard, Kerry

  Jones, Ms Jenny

  Pond, Chris

  (Wolverh'ton SW)

  Pope, Greg

  Jones, Dr Lynne (Selly Oak)

  Pound, Stephen

  Jones, Martyn (Clwyd S)

  Powell, Sir Raymond

  Kaufman, Rt Hon Gerald

  Prentice, Ms Bridget (Lewisham E)

  Keeble, Ms Sally

  Prentice, Gordon (Pendle)

  Keen, Alan (Feltham & Heston)

  Primarolo, Dawn

  Keen, Ann (Brentford & Isleworth)

  Purchase, Ken

  Kemp, Fraser

  Quin, Rt Hon Ms Joyce

  Kennedy, Jane (Wavertree)

  Quinn, Lawrie

  Khabra, Piara S

  Radice, Giles

  Kidney, David

  Rammell, Bill

  Kilfoyle, Peter

  Rapson, Syd

  King, Andy (Rugby & Kenilworth)

  Raynsford, Nick

  King, Ms Oona (Bethnal Green)

  Reed, Andrew (Loughborough)

  Kingham, Ms Tess

  Reid, Rt Hon Dr John (Hamilton N)

  Kumar, Dr Ashok

  Robertson, Rt Hon George

  Ladyman, Dr Stephen

  (Hamilton S)

  Lawrence, Ms Jackie

  Robinson, Geoffrey (CoVtry NW)

  Laxton, Bob

  Roche, Mrs Barbara

  Lepper, David

  Rogers, Allan

  Leslie, Christopher

  Rooker, Jeff

  Levitt, Tom

  Ross, Ernie (Dundee W)

  Lewis, Terry (Worsley)

  Rowlands, Ted

  Linton, Martin

  Roy, Frank

  Livingstone, Ken

  Ruane, Chris

  Lloyd, Tony (Manchester C)

  Ruddock, Joan

  Lock, David

  Russell, Ms Christine (Chester)

  Chapman, Sir Sydney

  Jack, Rt Hon Michael

  McAvoy, Thomas

  Sarwar, Mohammad

  McCafferty, Ms Chris

  Savidge, Malcolm

  McDonagh, Siobhain

  Sawford, Phil

  McDonnell, John

  Sedgemore, Brian

  McFall, John

  Shaw, Jonathan

  McIsaac, Shona

  Sheerman, Barry

  Mackinlay, Andrew

  Sheldon, Rt Hon Robert

  McNulty, Tony

  Shipley, Ms Debra

  MacShane, Denis

  Simpson, Alan (Nottingham S)

  Mactaggart, Fiona

  Singh, Marsha

  McWalter, Tony

  Skinner, Dennis

  Mahon, Mrs Alice

  Smith, Rt Hon Andrew (Oxford E)

  Mallaber, Judy

  Smith, Angela (Basildon)

  Marsden, Gordon (Blackpool S)

  Smith, Jacqui (Redditch)

  Marshall, David (Shettleston)

  Smith, Llew (Blaenau Gwent)

  Marshall-Andrews, Robert

  Snape, Peter

  Martlew, Eric

  Soley, Clive

  Maxton, John

  Southworth, Ms Helen

  Meacher, Rt Hon Michael

  Spellar, John

  Meale, Alan

  Squire, Ms Rachel

  Merron, Gillian

  Starkey, Dr Phyllis

  Michie, Bill (Shefld Heeley)

  Stevenson, George

  Milburn, Rt Hon Alan

  Stewart, David (Inverness E)

  Miller, Andrew

  Stewart, Ian (Eccles)

  Mitchell, Austin

  Stinchcombe, Paul

  812

  Stott, Roger

  Walley, Ms Joan

  Straw, Rt Hon Jack

  Ward, Ms Claire

  Stringer, Graham

  Wareing, Robert N

  Stuart, Ms Gisela

  Watts, David

  Sutcliffe, Gerry

  White, Brian

  Taylor, Rt Hon Mrs Ann

  Wicks, Malcolm

  (Dewsbury)

  Wills, Michael

  Taylor, David (NW Leics)

  Winterton, Ms Rosie (Doncaster C)

  Temple-Morris, Peter

  Wise, Audrey

  Thomas, Gareth R (Harrow W)

  Wood, Mike

  Timms, Stephen

  Worthington, Tony

  Todd, Mark

  Wray, James

  Truswell, Paul

  Wright, Anthony D (Gt Yarmouth)

  Turner, Dr Desmond (Kemptown)

  Wyatt, Derek

  Turner, Dr George (NW Norfolk)

  Twigg, Stephen (Enfield)

  Tellers for the Ayes:

  Vaz, Keith

  Mr. David Clelland and

  Vis, Dr Rudi

  Mr. Jim Dowd.

  NOES

  Ainsworth, Peter (E Surrey)

  Gale, Roger

  Allan, Richard

  Gariner, Edward

  Ancram, Rt Hon Michael

  George, Andrew (St Ives)

  Arbuthnot, Rt Hon James

  Gibb, Nick

  Atkinson, Peter (Hexham)

  Gill, Christopher

  Baker, Norman

  Gillan, Mrs Cheryl

  Baldry, Tony

  Goodlad, Rt Hon Sir Alastair

  Ballard, Jackie

  Gorman, Mrs Teresa

  Beggs, Roy

  Green, Damian

  Bercow, John

  Greenway, John

  Beresford, Sir Paul

  Grieve, Dominic

  Blunt, Crispin

  Hague, Rt Hon William

  Boswell, Tim

  Hamilton, Rt Hon Sir Archie

  Bottomley, Peter (Worthing W)

  Hammond, Philip

  Brady, Graham

  Hancock, Mike

  Brazier, Julian

  Harris, Dr Evan

  Breed, Colin

  Harvey, Nick

  Browning, Mrs Angela

  Hawkins, Nick

  Bruce, Ian (S Dorset)

  Hayes, John

  Bruce, Malcolm (Gordon)

  Heald, Oliver

  Burnett, John

  Heath, David (Somerton & Frome)

  Burns, Simon

  Heathcoat-Amory, Rt Hon David

  Burstow, Paul

  Hogg, Rt Hon Douglas

  Butterfill, John

  Horam, John

  Cable, Dr Vincent

  Howard, Rt Hon Michael

  Campbell, Rt Hon Menzies

  Howarth, Gerald (Aldershot)

  (NE Fife)

  Hughes, Simon (Southwark N)

  Cash, William

  Hunter, Andrew

  (Chipping Barnet)

  Jenkin, Bernard

  Chidgey, David

  Keetch, Paul

  Chope, Christopher

  Key, Robert

  Clappison, James

  King, Rt Hon Tom (Bridgwater)

  Collins, Tim

  Kirkbride, Miss Julie

  Colvin, Michael

  Kirkwood, Archy

  Cormack, Sir Patrick

  Lait, Mrs Jacqui

  Cotter, Brian

  Lansley, Andrew

  Cran, James

  Leigh, Edward

  Curry, Rt Hon David

  Letwin, Oliver

  Davey, Edward (Kingston)

  Lewis, Dr Julian (New Forest E)

  Davies, Quentin (Grantham)

  Lidington, David

  Dorrell, Rt Hon Stephen

  Lloyd, Rt Hon Sir peter (Fareham)

  Duncan, Alan

  Llwyd, Elfyn

  Duncan Smith, Iain

  Luff, Peter

  Emery, Rt Hon Sir Peter

  Lyell, Rt Hon Sir Nicholas

  Evans, Nigel

  McIntosh, Miss Anne

  Faber, David

  Mackay, Rt Hon Andrew

  Fabricant, Michael

  Maclennan, Rt Hon Robert

  Fallon, Michael

  McLoughlin, Patrick

  Fearn, Ronnie

  Malins, Humfrey

  Flight, Howard

  Maude, Rt Hon Francis

  Fowler, Rt Hon Sir Norman

  Mawhinney, Rt Hon Sir Brian

  Fix, Dr Liam

  May, Mrs Theresa

  Fraser, Christopher

  Moss, Malcolm

  813

  Nicholls, Patrick

  Syms, Robert

  Norman, Archie

  Tapsell, Sir Peter

  Oaten, Mark

  Taylor, Ian (Esher & Walton)

  Ottaway, Richard

  Taylor, Matthew (Truro)

  Paice, James

  Taylor, Sir Teddy

  Paterson, Owen

  Thompson, William

  Pickles, Eric

  Tonge, Dr Jenny

  Prior, David

  Townend, John

  Redwood, Rt Hon John

  Tredinnick, David

  Rendel, David

  Trend, Michael

  Robathan, Andrew

  Tyler, Paul

  Robertson, Laurence (Tewk'b'ry)

  Tyne, Andrew

  Roe, Mrs Marion (Broxbourne)

  Viggers, Peter

  Ross, William (E Lond'y)

  Walter, Robert

  Rowe, Andrew (Faversham)

  Waterson, Nigel

  Ruffley, David

  Webb, Steve

  Russell, Bob (Colchester)

  Wells, Bowen

  St Aubyn, Nick

  Whitney, Sir Raymond

  Sanders, Adrian

  Whittingdale, John

  Sayeed, Jonathan

  Widdecombe, Rt Hon Miss Ann

  Shepherd, Richard

  Wilkinson, John

  Simpson, Keith (Mid-Norfolk)

  Willetts, David

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

  Willis, Phil

  Smyth, Rev Martin (Belfast S)

  Winterton, Mrs Ann (Congleton)

  Soames, Nicholas

  Winterton, Nicholas (Macclesfield)

  Spelman, Mrs Caroline

  Yeo, Tim

  Spicer, Sir Michael

  Young, Rt Hon Sir George Spring, Richard

  Streeter, Gary

  Tellers for the Noes:

  Stunell, Andrew

  Mr. Stephen Day and

  Swayne, Desmond

  Mrs. Eleanor Laing.

  Question accordingly agreed to.
  Bill read a Second time.
  Motion made, and Question proposed,
  That—

  (1) Clauses 2, 28 and 99 be committed to a Committee of the whole House;

  (2) the remainder of the Bill he committed to a Standing Committee;

  (3) when the provisions of the Bill considered, respectively, by the Committee of the whole House and by the Standing Committee have been reported to the House, the Bill be proceeded with as if the Bill had been reported as a whole to the House from the Standing Committee.—[Mrs. Roche.]

  11.25 pm
  Mr. Nick St. Aubyn: I am sure that I am not the only Member who believes that careful consideration should be given to the motion concerning the clauses to be debated on the Floor of the House before the Bill goes into Standing Committee. I welcome the fact that on the Floor of the House we will debate the petrol duty, the loss of the married couples allowance and the unwise proposal, in the view of many people outside the House, yet again to increase stamp duty.
  I suggest that we should consider other measures to be debated on the Floor. Although this is not as long a Finance Bill as the one that we had to suffer last year, it is wide-ranging and covers matters that may not be as well addressed and publicised in Standing Committee, where not as many hon. Members will be able to contribute as would be possible on the Floor of the House.
  For example, I could have referred to clause 53, which deals with employees who work in education and training. I am sure that many hon. Members want to speak about that, but I know that the time on the Floor of the House is limited. I could have suggested that we consider the clauses relating to student loans and to the enterprise investment scheme.
  814
  However, there are two clauses that it will not be possible to debate under the terms of the motion and deserve proper consideration by the entire House. I refer, first, to clause 121, which relates to
  "economic and monetary union: taxes and duties".
  It is a wide-ranging clause which seems to give untrammelled power to the Inland Revenue to spend taxpayers' money promoting economic and monetary union before any referendum on the matter has taken place.
  I am grateful to the Inland Revenue for providing such a clear note in the guidance on clauses. It states that the clause
  "provides legal cover for Inland Revenue and Customs and Excise to spend on preparing for the possibility of UK entry to the single currency."
  The note continues:
  "The Revenue Departments may need to spend some tens of millions of pounds",
  but the amount proposed in the clause is unlimited. We need to debate on the Floor of the House whether there should be a cap on that amount. The note refers to tens of millions of pounds being spent before the United Kingdom even has a referendum on the issue.
  The note goes on to state:
  "Some of this expenditure would go beyond current Parliamentary guidelines."
  If a short clause in the Bill proposes such a radical measure, surely it is right for it to be considered by the whole House, rather than being kicked up into a Committee Room, where Ministers and Labour Members no doubt want to sweep it under the table.
  If we are to have a debate about economic and monetary union and whether the Inland Revenue should be spending money on it, we should also consider whether we should approve clause 59. Clauses 59 and 50 relate to investments and securities, and concern tax avoidance in that context. As we all know, the Government are under great pressure—in connection with a wholly misguided system of tax avoidance—to attack, in effect, investments and securities held through the Eurobond market. A debate on the Floor of the House on those clauses, and on amendments tabled by my hon. Friends and me, would give us an opportunity to prevent the Government from entering into any arrangement with other members of the European Union that might introduce a withholding tax on such securities and investments.
  Only today, representatives of the Swiss Government and Swiss monetary authorities visited London. They have a clear message to deliver about withholding tax on investments and securities. The message—to London, to the Government in particular and to the European Union—is that such a tax cannot work; but we have not debated the matter since it was last raised, over the weekend during a meeting of the European Union Finance Ministers. We need such a debate on the Floor of the House. Not just thousands but tens of thousands of jobs will be at risk if the Government give in to pressure from Germany and other members of the European Union. That is simply not acceptable—and we are talking not just

  815
  about thousands, or tens of thousands, of jobs in London; in constituencies such as mine, job losses will result if the matter is allowed—
  Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Gentleman is now starting to go into the details of a debate that will, in fact, take place in Committee. I should be grateful if he would stick to the point.
  Mr. St. Aubyn: Thank you for helping me to stick to the matter with which we are dealing, Mr. Deputy Speaker. Nevertheless, if we are to consider these clauses, we must consider what is to be the range of the debate about them.
  The clauses relating to the bonds that I mentioned, involving tax avoidance, raise many other issues. It is in the spirit of the Bill to crack down on tax avoidance, and there is no desire on my part—or, I believe, on that of any other Conservative Member—to allow people to get away with it; but we question the methods proposed in the Bill.
  In dealing only with clauses 2, 28 and 99—which, as I have said, concern petrol duty, the married couples allowance and stamp duty—we are not dealing with all aspects of those matters. For instance, it may not be within the ambit of the debate on clause 99 for us to consider a different level of stamp duty for different types of property. If we debated more clauses on the Floor of the House, we could consider that here rather than in Committee.
  If the debate on clause 121 went its way, I would hope that we could discuss the enterprise investment scheme. The Government are now trying to go halfway towards correcting the problems that they created before, while leaving many people who invested in small businesses far worse off than they were before the Finance Act 1998. I believe that the clauses relating to that scheme would also benefit from being discussed on the Floor of the House.
  Finally, there are the clauses relating to value added tax. Given the terms on which the Bill is referred to a Standing Committee, it will not be possible to debate VAT matters. A matter that we tried to debate last year relates to the art market in this country, which is threatened by a serious increase in VAT. Unless we are allowed to debate the VAT clauses on the Floor of the House, it may not be possible for us to raise an important issue that may threaten as many as 5,000 jobs in London alone if no action is taken in the next few months to prevent the increase in VAT on art sales in this country that is in the pipeline.
  Mr. Allan Rogers: On a point of order, Mr. Deputy Speaker. Is it proper for an hon. Member to talk about an issue when he has not declared an interest? I understand that the family of the hon. Member for Guildford (Mr. St. Aubyn) owns St. Michael's mount, the castle and the paintings in it. Now he has advocated—
  Mr. Deputy Speaker: Order. Hon. Members should not make such complaints across the Floor of the House. If any Members have an interest to declare, I have no doubt that they will do so. If the hon. Member for Rhondda (Mr. Rogers) has any complaints, he should pursue them through the normal channels.
  Mr. St. Aubyn: My family has no plans to sell any works of art; besides, the property mentioned by the
  816
  hon. Member for Rhondda (Mr. Rogers) is owned by the National Trust. I hope that he pays it a visit, provided that he is prepared to pay his way.
  The art market affects many Members of this House—
  Mr. Deputy Speaker: Order. The hon. Gentleman has had his time.
  11.36 pm
  The Financial Secretary to the Treasury (Mrs. Barbara Roche): I am astonished at the performance of the hon. Member for Guildford (Mr. St. Aubyn). I was going to say that perhaps he did not realise that the clauses that will be discussed on the Floor of the House were requested by his own Front Benchers, but the hon. Member for Epping Forest (Mrs. Laing) —who is about to leave the Chamber and who is, I understand, a member of the Opposition Whips' Office—was encouraging him.
  Mr. St. Aubyn rose—
  Mrs. Roche: Please sit down. We heard from the hon. Gentleman for long enough.
  I assume that Conservative Front Benchers knew about that arrangement, which suggests how they intend to conduct proceedings. The hon. Member for Guildford could have made those points during today's proceedings; he chose not to.
  Mr. Deputy Speaker: The Question is as that on the Order Paper. As many as are of that opinion say, "Aye". [HON. MEMBERS: "Aye.] The hon. Member for Guildford, having spoken against the motion, must shout, "No".
  Mr. St. Aubyn rose
  Mr. Deputy Speaker: The hon. Gentleman must simply shout, "No".
  Mr. St. Aubyn: No.
  Mr. Deputy Speaker: I think the Ayes have it.
  Question agreed to.
  Committee tomorrow.

  DELEGATED LEGISLATION
  Mr. Deputy Speaker (Mr. Michael Lord): With permission, I shall put together the motions relating to delegated legislation.
  Mr. Patrick McLoughlin: Object.
  Mr. Deputy Speaker: We shall first take motions 3 to 5.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  DELEGATED LEGISLATION

    LOCAL GOVERNMENT FINANCE
    That the Local Government Finance (England) Special Grant Report (No. 42) on the Promoting Independence: Partnership Grant for 1999–2000 (HC 301), which was laid before this House on 23rd March, be approved.
    That the Local Government Finance (England) Special Grant Report (No. 43) on the Promoting Independence: Prevention Grant for 1999–2000 (HC 302), which was laid before this House on 23rd March, be approved.
    That the Local Government Finance (England) Special Grant Report (No. 44) on the Promoting Independence: Carers Grant for 1999–2000 (HC 303), which was laid before this House on 23rd March, be approved. — [Mr. Pope.]
    Question agreed to.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committee on Delegated Legislation),

    EDUCATION
    That the draft General Teaching Council for Wales (Constitution) Regulations 1999, which were laid before this House on 22nd March, be approved.
    That the draft General Teaching Council for England (Constitution) Regulations 1999, which were laid before this House on 22nd March, be approved. — [Mr. Pope.]
    Question agreed to.

  Road Traffic Accidents
  Motion made, and Question proposed, That this House do now adjourn. — [Mr. Pope.]
  11.38 pm
  Jackie Ballard: Despite the lateness of the hour, I am pleased to have secured this debate on an issue that could concern any of us at any time. Each year, about 3,500 people are killed on our roads and many thousands more are injured. Often, they are totally innocent parties—the victims of either accident or recklessness.
  People who have been bereaved or are themselves injured have to deal with trauma and grief as well as the complicated set of procedures that follow a road crash, including insurance claims and possible criminal or civil prosecutions. Research by the European Federation of Road Traffic Victims found that a large proportion of people bereaved on the roads suffer long-term health problems and depression. The federation said that practical and legal support, as well as emotional support for bereaved families, was needed urgently.
  Currently, the Home Office and Victim Support provide valuable help and support for people bereaved through homicide and for victims of crime, but there is no such support package for victims of road accidents. I have been told by the chairman of the all-party group that many victims of road incidents find the term "accident" difficult to cope with because, so often, such incidents are not accidents, but are caused by dangerous or reckless driving or by thoughtlessness.
  Last year, many Members signed early-day motion 1235, calling for automatic support and advice for people bereaved through road accidents.
  The organisation BRAKE, which campaigns for safer road transport, is also campaigning for traumatised victims to receive proper support. It believes that the way in which an individual has been traumatised, whether through accident, recklessness or crime, should not be the basis for discrimination with regard to the provision of care, advice or support.
  I shall give the House some details about constituents of mine who first came to see me more than a year ago, because it is their experiences that have led me to seek the debate. The 18-year-old son of the family was driving his father's car, with his mother in the front passenger seat. They were stationary at a junction waiting to join a major road when an approaching vehicle went out of control and hit their car, causing it to spin round several times before coming to rest. They had done nothing to contribute to the incident.
  The 18-year-old driver had what appeared at the time to be minor injuries, but his mother was more severely injured and was taken to hospital by ambulance. The son found that his injuries affected him physically for a long time, and his confidence in driving was badly damaged. He was about to start a college course, and needed to rely on his father to move him to London and transport him to other places. The family live in a rural area with little public transport, where car ownership is not a luxury but a necessity.
  Since the accident, Mrs. Larcombe, the mother of the driver, and her family have been through much emotional trauma and have had many practical difficulties to

  819
  contend with, alongside their health problems. Following the accident, for example, they lost personal belongings such as clothing that was bloodstained or cut off by the hospital, spectacles and items that were in the car. No one told them to cancel the car tax on what was now an unusable car. That may seem like a small issue, but, when people are counting the pennies, a month's car tax that one could have reclaimed is important.
  The family have now had four years of dealing with insurance companies and solicitors. That, too, was a new experience for them. They say that the insurance companies that they have dealt with have made them feel like victims over and over again as they are sent for medical examinations, sometimes to see a specialist 70 miles away from home. Mrs. Larcombe has visited the local hospital for treatment more than 150 times, and she is still awaiting an operation.
  The Larcombes contacted the local Victim Support organisation, thinking that that was the place to go for help, but were told, correctly, that its code of practice and its constitution limit its work to advice and support for victims of crime.
  The family had taken out legal protection with their motor insurance, but felt that they had little say in the progress of their claim. Mrs. Larcombe says:
  "When the insurance company says you have to attend a medical examination you feel you have to jump".
  When she was once asked to attend a medical examination many miles away, she was sick several times in the car while on her way to be examined by the specialist at the behest of the insurance company. Her son was asked to attend an appointment during his college exams.
  Those people have told me that they feel that information is needed, either on admission to hospital, if people are in a fit state to receive it, or at least when people are leaving hospital, to set them on the right course, with a checklist of what to do and whom to inform. I repeat that, for many people, the experience of being involved in a road incident for the first time brings them into contact with a range of other issues that they have not had to encounter before. There they are, through no fault of their own, having to deal with professionals and organisations that they have not had to deal with before.
  Mr. Andrew Miller: The hon. Lady is raising some important points, and at the beginning of her speech she mentioned the European Federation of Road Traffic Victims. Is she aware that the principal author of the report to which she referred is a Swiss gentleman, who has advised Members of Parliament at an open meeting that in Switzerland a counselling process has been created, parallel to the equivalent of our victim support system?
  Jackie Ballard: I thank the hon. Gentleman for that intervention. No, I did not know that. I understand that there is also an organisation in this country, of which I was unaware, called RoadPeace. Certainly my constituents were not made aware of it when they were in need of advice and support.
  I bring this case to the House's attention because Mr. and Mrs. Larcombe were unfortunate enough, two years after the initial incident, to have a second car written off. It was parked in a London street, so thankfully this
  820
  time they were not in the car. In the past four years, they have learned more than they ever wanted to know about the need for help and support for victims of such road accidents. On the phone to me this weekend, when I told her about securing this debate, Mrs. Larcombe said that the whole experience had made her feel as though she was being screwed into the ground.
  Insurance companies are happy to take our premiums, but are not so eager to deal with claims. We have all had constituents who have had problems trying to get insurance companies to deal with their claims. Companies are not keen to deal with claims, even when it is obvious who the innocent victims are. I appreciate that in some road accidents or crashes it is not obvious who is at fault, but it is sometimes clear who is not at fault.
  Thousands of people each year have experiences similar to those of my constituents. I have two suggestions to put to the Minister. He is from the Home Office, and one of my suggestions is for the Department of the Environment, Transport and the Regions, but I am sure that he can pass it on to his colleagues. Funding should be given to Victim Support to enable it to extend its remit to include victims of road traffic incidents.
  My second suggestion is that the Government should, through the Motor Insurers Bureau, urge insurance companies to draw up a simple checklist which could be issued by the police or by hospitals or other professionals who came into contact with people immediately after a road traffic accident.
  I hope that the Minister will be able to offer my constituents and the thousands of others in a similar situation some hope that in future the system will be improved, so that other people do not have to go through not just the physical problems, but the emotional trauma and the practical difficulties that follow from such incidents.
  11.47 pm
  The Minister of State, Home Office (Mr. Paul Boateng): The House will be grateful to the hon. Member for Taunton (Jackie Ballard) for bringing this important subject to the fore. The Larcombe family have been well served by her interest in this matter. The House will wish to extend its sympathy to them. Their experience is by no means uncommon.
  The debate gives me, on behalf of the Government and, I am sure, the whole House, an opportunity to pay tribute to the police and the road safety organisations that work tirelessly to reduce the terrible toll of death and injury on our roads. I also pay tribute to those who provide care and support for victims and the bereaved during the difficult times that are all too often the consequence of road traffic incidents such as we are discussing.
  My hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) has, over the years, supported RoadPeace in its valuable work of campaigning on behalf of the victims of road traffic incidents. It is worth noting that its contribution has helped to put this issue on our national agenda. The hon. Lady and my hon. Friend referred to the European experience of road crashes. Our record on road safety is very good compared with other countries, but there is no room for complacency, and we can always learn from others, not least about support for victims. It is right that the House should continue to pay attention to this issue.

  821
  I had the pleasure—and it was a pleasure, even though it was also a challenging experience—of appearing recently before the Environment, Transport and Regional Affairs Committee to discuss road traffic and the Government's proposals for an integrated transport system. The Committee is rightly considering the roles of the Home Office and of the DETR together. That is our approach, because we recognise that we need to work across the departmental boundaries if we are to maximise the support that we can give to reducing accidents and fatalities on the road and to advancing road safety policy so as to achieve the most effective impact on road accidents, deaths and injuries.
  My colleagues at DETR who are responsible for road safety policy launched in October a review of speed policy. It will advance our policies as outlined in the integrated transport policy White Paper, and will consider—in relation to safety, mobility, the economy and the environment—ways in which we can draw on informed opinion outside the House and expertise in the civil service. That review will be completed by autumn this year and will make specific proposals on speed policy.
  Later in the year, we will also announce a new road safety strategy, designed to replace Campaign 2000. That too will be designed to target road casualties and to reduce them by 2010 in line with the comparable baseline figures from 1994 to 1998. That strategy will concentrate specifically on child safety, safety for vulnerable road users, speed, driver training, impairment and other issues. It will take forward a raft of proposals on enforcement issues. The police service will put its best efforts into supporting Government strategies designed to reduce road traffic casualties.
  Mr. Miller: Will my hon. Friend consider encouraging Members of Parliament to participate with the police and the Institute of Advanced Motorists in improving driving skills? If we gave a lead, it might encourage progress on some of the safety issues that can stem from better driver training.
  Mr. Boateng: Certainly, hon. Members who drive can help to set an example, although they should always do so with some humility, bearing in mind the pressures and strains under which they operate, which are not always conducive to road safety. It is possible—my hon. Friend is right to draw it to our attention—to encourage in our constituencies the acquisition of the skills that will assist in reducing road traffic incidents.
  The Home Office recently published a report produced by Her Majesty's inspectorate of constabulary that takes a thematic look at the policing of road traffic and related areas. That has been helpful in the promotion of good practice and in spreading it across the country. Indeed, Lord Whitty, the DETR Minister in the Lords, launched that report with me as another example of joint working on this matter.
  A number of important initiatives are occurring on road death bereavement. The Victim Support working party published a report, "Support for Families of Road Death Victims", in 1994. We provide a substantial annual grant to the national charity and its 365 local schemes and
  822
  branches so that they may provide practical help and emotional support to more than 1 million crime victims each year. The charity has dealt increasingly of late with referrals after road deaths.
  In March 1992, Victim Support's national council set up an independent working party to identify problems and ways to resolve them. The hon. Member for Taunton said that we had not always equipped Victim Support to help, and that issue is being addressed. A great deal of progress has been made, and we are working closely with the charity to take forward the recommendations in its report.
  Jackie Ballard: The Minister said that Victim Support can help after road deaths. Is that after a prosecution has found that someone is to blame, or can it help immediately after a death without waiting for a prosecution?
  Mr. Boateng: There is no reason to wait, and good practice suggests that schemes ought not do so. Victim Support regards this as an area in which it wishes to help, and it is being funded to do so. In response to pressure from Victim Support and its work with the charity, the Association of Chief Police Officers has endorsed a service delivery standard that covers road fatalities and support for bereaved families.
  In the past, various police forces have published their own literature to support the bereaved. The Association of Chief Police Officers' traffic committee is in discussion with me and my officials about moving towards a standardised approach to provide specific support literature across the forces. That would deal with some of the distressing practical issues raised by the hon. Lady when an early word of advice or common sense could take an enormous burden off the minds and shoulders of those who live with the consequences of an incident.
  The hon. Lady referred to the road safety research organisation BRAKE, an arm of which, the trauma advisory service, has produced five useful information booklets. The Government, through the Department of Health, are putting money into developing those booklets. The first two—"Coping with grief when someone you love has been killed on the road" and "Procedures following a death on the road in England and Wales"—are in general use by counselling organisations and are used widely by the police.
  Road safety will continue to be of concern. We hope to continue to bear down on the number of road traffic fatalities and injuries. But there is a need for continued alertness and sensitivity. I am grateful to the hon. Lady for raising the issue. We shall continue to work, not least with the voluntary sector and those campaigning organisations without which this important matter would not have received the attention that it deserves. We owe a great debt of gratitude to them and to the many families who live with fatalities and other incidents that cause grief and concern. We owe it to them to get our policy and practice right.
  Question put and agreed to.
  Adjourned accordingly at one minute to Twelve midnight.

INTERNATIONAL DEVELOPMENT

  Kosovo (Disaster Relief)
  Mr. Sanders
  To ask the Secretary of State for International Development what assessment she has made of the speed of the disaster relief response to events in Kosovo; and if she will make a statement. [80786]

  Clare Short
  The international response to the massive refugee outflows was regrettably slow to start with. But the international community has mobilised substantial humanitarian assistance for the refugees in a remarkably short time. The UK has been at the forefront of efforts to speed up the relief operations, notably by providing logistical and other practical support (through airlifts, cargo handling equipment, transport assets, and logistics experts) to overcome practical constraints in assistance delivery.

  Disaster Relief
  Mr. Sanders
  To ask the Secretary of State for International Development if she will make it her policy to set up in partnership with NGOs a permanent disaster relief contact point.[80785]

  Clare Short
  We have an established and effective contact point for disaster and emergency relief in the Department for International Development's Conflict and Humanitarian Affairs Department. We are also working in close partnership with NGOs concerned with humanitarian assistance, and arrangements for regular contact are in place. I do not believe it would be useful to merge government and NGO response to disasters. My department is able to move very rapidly in the early stages, NGO response takes longer but is highly valued and creates aid outlets for public contributions. Both have important roles to play.

DEFENCE

  Yugoslavia
  Mr. Gill
  To ask the Secretary of State for Defence which weapons currently targeted on Yugoslavia contain depleted uranium. [81087]

  Mr. George Robertson
  I refer the hon. Member to the answer I gave my hon. Friend the Member for Bristol, West (Valerie Davey), on 13 April 1999,Official Report, column 43.

  Defence Council Instructions
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence if he will place in the Library a list of unclassified Defence Council Instructions which have been issued since 1 December 1998. [80827]
  472
  Mr.Spellar
  There have been 314 unclassified DCIs issued since 1 December 1998 and I am today placing a list in the library of the House.

PRIME MINISTER

  Berlin Summit
  Mr. Maclean
  To ask the Prime Minister for which areas of gross receipts of EU moneys it was decided that the United Kingdom total would diminish as a consequence of the Berlin summit; by how much; and if he will make a statement. [81224]

  The Prime Minister
  The Berlin European Council decided the ceilings on spending across the EU on each major policy category. It did not decide how much was to be spent in each state: that is largely a matter for the Commission's management of the budget. While the Council did make decisions about the rules for allocating the structural and cohesion funds, the Commission has yet to announce the allocations from the Funds for each Member State. These figures will not be available until the regulations are finally approved in May.

  Political Honours Scrutiny Committee
  Mr. Corbett
  To ask the Prime Minister what changes he has made in the composition of the Political Honours Scrutiny Committee. [81680]

  The Prime Minister
  Members are traditionally Privy Counsellors who are not members of the Government. Following the resignation of Lord Pym, I have appointed the Lord Hurd of Westwell to be a member of the Committee. He will join Lord Thomson of Monifieth and Baroness Dean of Thornton-le-Fylde. Lord Thomson has been appointed to chair the Committee.

NORTHERN IRELAND

  Victims Liaison Unit
  Rev. Ian Paisley
  To ask the Secretary of State for Northern Ireland how much money has been allocated to the Victims Liaison Unit; and how much has been spent and on what projects.[80232]

  Mr. Ingram
  To date the Victims Liaison Unit has been allocated the £5 million announced by the Prime Minister in his statement of 12 May 1998. The Unit has been consulting widely with the victims community with a view to identifying needs and prioritising how this money can best be allocated. In the meantime, I have announced a number of significant funding initiatives to the value of £2,196,170, to support victims and a Newsletter outlining progress has been placed in the House of Commons Library.

  The allocation to date can be summarised as follows:

  £

  Allocation

  Amount

  The Northern Ireland Memorial Fund

  1,000.000

  The Trauma Centre

  700,000

  The Educational Bursary Scheme

  250,000

  Community Groups Projects—to be administered by the Community Relations Council

  200,000

  473

  £

  Allocation

  Amount

  Wave(to extend their outreach service)

  30,000

  Disability Action (a pilot scheme for disabled victims)

  6,170

  Survivors of Trauma (a pilot scheme for elderly, household victims)

  5,000

  Shankill Stress Center (a pilot scheme for adolescent victims)

  5,000

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Genetically Modified Crops
  Mr. Mitchell
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to the answer to the hon. Member for North Cornwall (Mr. Tyler) of 10 February 1999,Official Report, column 285, on research into the production of genetically modified grasses for grazing, what procedures would need to be adopted under what legislation for the production of such crops for (a) research, including legal grazing by animals and (b) sale for grazing; and what powers he has to prohibit such activity. [72181]

  Mr. Meacher
  [holding answer 22 February 1999]: All research releases of genetically modified organisms (GMOs) are governed by the Genetically Modified Organisms (Deliberate Release) Regulations 1992 (amended in 1995 and 1997) which give effect to Part VI of the Environment Protection Act 1990 and implement the EC Directive 90/220/EEC on the deliberate release into the environment of genetically modified organisms.

  Anyone intending to produce or grow genetically modified grasses for research purposes requires a consent from the Secretary of State for the Environment, Transport and the Regions. This includes the requirement to carry out a detailed environmental risk assessment.

  For grazing to be permitted on grasses grown for research purposes, the consent would have explicitly to include this permission. This would be allowed only where the applicant could show that such activities would involve negligible risk.

  The sale of genetically modified grasses is governed by EC Directive 90/220 on the deliberate release of GMOs. No GMO may be sold without a consent issued under this Directive. A notifier may apply through any EC Member State, which then invites comments from all other Member State, before an agreement is reached at Community level. The marketing consent is then valid across the EC.

  The Secretary of State may prohibit or restrict the release of the GMO where information comes to light indicating risk to human health or the enviroment.Where this involves the sale of a GMO product, the provisional restriction must be cleared by the European Community in order to have permanent effect.

  Speed Limits
  Mr. Stunell
  To ask the Secretary of the State for the Enviroment, Transport and the Regions what measures 474
  he plans to take to raise public awareness of maximum national speed limits for various classes of road vehicles; and if he will make a statement. [79691]

  Ms Glenda Jackson
  Details of the national speed limits are contained in the Highway Code. The theory test for learner drivers of all classes of vehicles contains appropriate questions about different speed limits Although we have no immediate plans to publicise vehicle speed limits more widely, we will look at the issue of vehicle speed limit signing as part of the wider review of speed management policy which is currently under way.

  Crosby Driving Test Centre
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what information was provided to staff at Crosby Driving Test Centre, prior to its closure, concerning the future of the test centre and its staff. [80722]

  Ms Glenda Jackson
  Staff at the Crosby centre were kept informed about its future in the months prior to March 1998 by their line management, and relocations to neighbouring test centres in the event of Crosby closing were discussed. On 10 March 1998, the Driving Standards Agency's Northern Area Deputy Manager wrote to staff at the Crosby test centre. The note confirmed oral briefings the staff had already received from their local Supervising Examiner and provided an update about the imminent expiry of the lease on the centre at the end of March.

  London Underground
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to establish a public interest company or trust for the London Underground.[81117]

  Ms Glenda Jackson
  Our plan is to implement a public-private partnership for London Underground. This will require changes to the structure of London Underground as a company, so that it becomes an operations business, responsible for operating train services and stations. It will remain in the public sector and will transfer in due course to the Greater London Authority and Transport for London, restoring local democratic accountability for its performance. We have no plans to establish a trust.

  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions if the financial advice given to his Department and London Transport indicated that a public private partnership for London Underground represented best value. [81116]

  Ms Glenda Jackson
  The financial advice which informed our decision to pursue a public-private partnership for London Underground suggested that this route was likely to offer best value. The reasons for the Government's choice of the option currently being taken forward by London Underground were set out in a paper, "London Underground Public-Private Partnership: Facts and Analysis", which was deposited in the Library on 20 March 1998.

  London Transport
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 25 February 1999,Official Report, column 404, on London Transport, what is the asset value of buildings held by London Transport. [81115]

  Ms Glenda Jackson
  As at 31 March 1998, the total net value for the London Transport Group, net of depreciation and disposals and based on (1) infrastructure and other property and (2) assets in the course of construction, is £6,133.1 million.

  Water Metering
  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what consultations he has had with water companies and the Water Regulator about extending the scope of water metering to include homes which have undergone extensions and conversions since 1990. [80904]

  Mr. Meale
  Under the Water Industry Act 1991, water undertakers may fix charges by reference to such matters, and may adopt such methods and principles for the calculation and imposition of the charges, as appear to them to be appropriate. They therefore have considerable scope to extend metering to customers, including to those whose properties have been extended or converted since 1990.

  However, clause 7 of the Water Industry Bill, currently before Parliament, would introduce a new right for households to remain on an unmeasured charge in their present homes, save where they are meeting certain conditions. My right hon. Friend the Minister for the Environment indicated during the Second Reading of the Bill, 7 December 1998, Official Report, column 46, that we envisaged the right to remain on an unmeasured charge would not apply where premises are used for commercial purposes, where there is a garden sprinkler or swimming pool use, where they have a power shower consuming more than 20 litres per minute or where there is use of a water-softening unit that requires backwashing.

  Regional Development Agencies
  Mr. Harvey
  To ask the Secretary of State for the Environment, Transport and the Regions what representations he has had from each regional development agency concerning the budgets given to them by his Department; what his response has been; if he will list the regional development agencies with which his Department is in dispute over the budget allocation; what mechanisms he plans to introduce to enable regional development agencies to negotiate for their budgets in the future; what impact disputes between the regional development agencies and his Department on the budget allocation are having on the day-to-day running of the agencies; and if he will make a statement. [80795]

  Mr. Meale
  My right hon. Friend the Minister for the Regions, Regeneration and Planning has received a letter from the Chairman of the South West of England Regional Development Agency about funding for staff engaged on projects to regenerate the Royal William Yard, Plymouth and Temple Quay, Bristol. Discussions 476
  are taking place between officials of the Department and officers of the Agency and my right hon. Friend will reply to the Chairman as soon as these are complete.

  There have also been contacts between officials in the Department and officers in other regional development agencies about their budgets. These discussions have been constructive and do not amount to our being "in dispute" with the agencies.

  For future years, the agencies will bid for resources as part of an annual corporate planning round.

  Water Charges
  Mr. Sanders
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to cap the prices charged by water companies which raise their charges by unjustifiable amounts; and if he will make a statement. [80787]

  Mr. Meale
  Water companies in England and Wales are subject to economic regulation by the Director General of Water Services. The Director General sets annual price limits and oversees the operation of the tariff basket, to which overall price limits apply.

  Council Tax
  Mr. Sanders
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the(a) expected and (b) actual receipts from council tax for each year since the council tax was introduced. [80789]

  Ms Armstrong
  The information requested is in the table.

  Expected receipts are the total amount that councils billed for, net of reliefs and council tax benefits, in respect of each financial year and do not, therefore, make an allowance for non-collection.

  The actual receipts are the amounts received in each financial year against that year's council tax bills. Five authorities in 1994–95 were unable to provide this figure, so a figure of their total council tax receipts minus receipts for arrears has been used. The same applies to one authority in 1995–96.

  £ million

  Expected receipts

  Actual receipts

  1993–94

  7,349

  6,807

  1994–95

  7,721

  7,220

  1995–96

  8,220

  7,770

  1996–97

  8,830

  8,404

  1997–98

  9,562

  9,134

  Shorthold Tenancies
  Mr. Willis
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to seek powers to prevent the practice of charging rent premiums on assured shorthold tenancy renewals; and if he will make a statement. [81143]

  Mr. Raynsford
  We have no plans at present to seek powers to prevent the practice of some landlords and letting agents charging fees to renew assured shorthold tenancy agreements. However, we will keep the situation
  477
  under review and if there is clear evidence that there is significant abuse, we will consider whether anything can be done to prevent excessive fees from being charged.

  Genetically Modified Organisms
  Mr. Edwards
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the objectors to the application to release genetically modified organisms in Monmouthshire. [81347]

  Mr. Meacher
  The objectors who wrote to the Department to raise concerns about the proposed release were private individuals and we do not have their authority to publish their names.

  Greater London Authority
  Mr. Ottaway
  To ask the Secretary of State for the Environment, Transport and the Regions when he expects to announce the interim location of the Greater London Authority. [81575]

  Mr. Raynsford
  I expect to be able to make an announcement shortly.

  Dolphins
  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions if he will investigate the appearance on beaches in the South West of beheaded dolphins; and if he will make a statement. [81393]

  Mr. Meale
  The Department continues to contract the Institute of Zoology to post-mortem small cetaceans that strand around the shores of England and Wales. The two animals found since the beginning of 1999 on the south Devon coast, which were reported to have been decapitated, were not post-mortemed because they were in too decomposed a state to yield reliable results.

  Pensioners (Fuel Poverty)
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment, Transport and the Regions what measures the Government have taken to tackle fuel poverty in pensioner households. [80944]

  Mr. Meale
  We have taken a number of actions to help people suffering from fuel poverty, including pensioner households.

  We have reduced the level of VAT on fuel, so that people can more easily afford to keep warm. We have also reduced the VAT on energy saving materials installed through Government grant schemes, so that they can more easily insulate their homes. We are now exploring with the European Commission the possibility of a wider reduction in VAT on energy saving materials.

  We have released substantial additional funds to help improve our housing stock; in total some £5billion is being made available over the lifetime of this Parliament for investment in housing. Most of the additional resources are going to local authorities and will be spent according to the needs and priorities identified in their housing strategy. We estimate that around one third of the money is likely to lead directly or indirectly to improvements in energy efficiency.
  478
  We have also allocated an additional £150 million specifically to tackling fuel poverty through domestic energy efficiency improvements. This is in addition to the existing £75 million a year expenditure on the Home Energy Efficiency Scheme, our main programme to help insulate the homes of the neediest householders.

  But we recognise that many of today's pensioners face particular difficulties, and, in his recent Budget statement the Chancellor announced an increase in the annual Winter Fuel Payment to £100 for every eligible pensioner household.

  We are additionally reviewing our fuel poverty policy, to establish how our increased programme can deliver more help to the most vulnerable households. My Department has held discussions with over 60 organisations active in this field. We will shortly publish our proposals on the way ahead for consultation, reviewing them in the light of responses, with the intention being to act as soon as possible thereafter.

  Elderly People (Social Housing)
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment, Transport and the Regions what steps his Department is taking to improve the provision of adequate social housing for the elderly. [80945]

  Mr. Raynsford
  Our aim is to offer everyone the opportunity of a decent home and so promote social cohesion, well-being and self-dependence. The provision of good quality, efficiently managed social housing plays an important part in meeting that aim for older people and for other groups.

  Over the life of this Parliament, we are making an additional £5 billion available for housing in England, fulfilling our manifesto commitment on the release of capital receipts from the sale of council housing. Most of these additional resources are being directed through local authorities, who need to develop housing strategies for meeting the needs of all groups in their area including older people and to make investment decisions based on robust local assessments of housing need.

  Organic Solvents
  Dr. Godman
  To ask the Secretary of State for the Environment, Transport and the Regions what recent representations he has received concerning the incidence of serious illnesses amongst women employed in the electronics industry who are, or have been, exposed to organic solvents and other chemicals; and if he will make a statement. [81127]

  Mr. Meale
  I have received no recent direct representations on this subject. I am, however, aware of media interest and public concern surrounding the issue.

  Dr. Godman
  To ask the Secretary of State for the Environment, Transport and the Regions what information he has obtained concerning the possible link between the exposure to organic solvents of women employed in the electronics industry and the incidence amongst women of 0(a) leukaemia, (b) breast cancer, (c) other forms of cancer and (d) foetal abnormalities; and if he will make a statement. [81126]
  479
  Mr. Meale
  Some organic solvents used in the electronics industry at exposure levels above the legal occupational exposure limits can cause a variety of known health effects, but the Health and Safety Executive believes there is no link with leukaemia, breast cancer or other forms of cancer.

  There is a body of scientific literature suggesting a possible association between excessive exposure to various organic solvents and foetal abnormalities, but the evidence is inconclusive and it is not specific to the electronics industry.

  Dr. Godman
  To ask the Secretary of State for the Environment, Transport and the Regions what research he has commissioned recently on the effects on workers of the use of organic solvents in industry; and if he will make a statement. [81129]

  Mr. Meale
  Over the past three years, the Health and Safety Executive has commissioned much research on the effects on workers of the use of organic solvents.

  Specific studies have included an investigation into spontaneous abortion in the UK semiconductor industry, an assessment of the hazards from cleaning chemical use in the catering industry, and the neurotoxicity of paint solvents.

  Semiconductor Industry (Miscarriages)
  Dr. Godman
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the risk of miscarriage to women working in the Scottish semiconductor industry relative to that of women working in other industries; and if he will make a statement. [81150]

  Mr. Meale
  In 1998, the Health and Safety Executive published the results of an investigation into miscarriages among women in the UK semiconductor industry, a copy of which is in the Library. No separate assessment was made for women who worked in Scotland. The study found no evidence that the incidence of miscarriage in workers in the UK semiconductor industry was higher than the national average.

  Railway Funding
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his oral answer of 13 April 1999,Official Report, column 5, what plans he has to issue a consultation paper on his proposals for the public funding arrangements for the railways; and if he will list the representations he has received on this matter. [81601]

  Dr. Reid
  We suggested in the White Paper (Cm 3950) "A New Deal for Transport" and in our response (Cm 4204) to the Environment, Transport and Regional Affairs Committee's Report on the Strategic Rail Authority and Railway Regulation that a proportion of access charges might be paid direct by the SRA rather than via the train operating companies. The Deputy Prime Minister asked the Rail Regulator for his views on the advantages and disadvantages of direct funding; we expect to receive them shortly. Since publication of the White Paper and our response to the Select Committee, we have received a number of representations on the public funding arrangements for the railways.
  480

  Steeply Sloping Plots
  Mr. Oaten
  To ask the Secretary of State for the Environment, Transport and the Regions if the definition of a steeply sloping plot within Part M of the Building Regulations which come into force in October will be based solely on the topography of the site. [81445]

  Mr. Raynsford
  The new Approved Document for Part M of the Building Regulations makes no reference to the topography of the site, as this will change with excavation and earth moving. A steeply sloping plot is defined as a plot gradient of more than 1 in 15. Plot gradient is defined as the gradient measured between the finished floor level of the dwelling and the point of access, which is the point at which a person visiting a dwelling would normally alight from a vehicle prior to approaching the dwelling. This point may be within or outside the plot. The guidance in the Approved Document anticipates that in most circumstances it should be possible to provide a level or ramped approach and a stepped approach would be the exception, used only when unavoidable.

PRESIDENT OF THE COUNCIL

  Millennium Compliance
  Ms Dari Taylor
  To ask the President of the Council what information the Government will be giving to the general public about the millennium bug; and if she will make a statement.[81699]

  Mrs. Beckett
  The public should look principally to goods and services providers for advice about the likely effect of the date change on supply. The Government and Action 2000 are encouraging organisations to communicate with their customers. For instance, the British Bankers Association, APACS and the Building Societies Association have published (on 5 March) "Your Money and the Millennium", reassuring customers that cash machines will work and that there will be ample supplies of bank notes, so that customers do not need to hoard them.

  There is a role for the Government in bringing together basic information so that the public can have an overall picture of the likely impact of the Bug on their daily lives. In October 1998, Action 2000 published "Homecheck": this provided practical advice about the impact of the Bug on domestic appliances and PCs. The Government will build on this with the issue of further information, beginning in the late Spring, supported by limited TV and press advertising. This will cost around £5 million. The information will also be available from the Action 2000 Actionline and on its website.

  The information programme will be underpinned by market research tracking changes in public perception of the Millennium Bug, particularly among key sub-groups like the elderly. The first results from this market research are being placed in the libraries of the House and published on the Internet today.

  Action 2000 will continue to release information through the National Infrastructure Forum about the independent assessment of the readiness to meet the date change of providers of critical public services. It will also encourage them to communicate these messages to their

  481
  customers. Action 2000 will be using press advertising to give this important information maximum publicity. This will cost some £2 million.

CULTURE, MEDIA AND SPORT

  Landmark Projects
  Mr. Hancock
  To ask the Secretary of State for Culture, Media and Sport (1) how much money the Millennium Commission has paid to external consultants in respect of each of the Landmark projects; [80693]

  (2) what (a) external advice and (b) consultancy work has been procured by the Millennium Commission in respect of the Portsmouth Landmark Project; [80694]

  (3) what advice and guidelines the Millennium Commission has given to local authorities involved with Millennium Landmark projects; [80700]

  (4) what were the original guidelines agreed for Millennium Landmark projects; and which projects do not meet those guidelines; [80701]

  (5) which members of the Millennium Commission have been involved in the Portsmouth Landmark Project; [80702]

  (6) which Millennium Landmark projects will receive more than 50 per cent. of their funding from the Millennium Commission; [80703]

  (7) how much money the Millennium Commission has (i) paid and (ii) agreed to pay towards the Portsmouth Landmark Project; for what elements of the scheme the money was paid; and what percentage this represents of the total cost of the project; [80704]

  (8) what changes have been agreed with the Millennium Commission on the planned opening date for the Millennium Tower in Portsmouth since the project's inception; and what is the current target date; [80705]

  (9) what are the expected completion dates for each Millennium Landmark project; [80706]

  (10) how much money has been spent to date by the Millennium Commission on each Millennium Landmark project; [80707]

  (11) if he will make a statement on the progress of each Millennium Landmark project. [80708]

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

  Treaty of Amsterdam
  Mr. Mitchell
  To ask the Secretary of State for Culture, Media and Sport if he will list each of the new responsibilities which he will assume when the signed Treaty of Amsterdam takes effect and for each(a) the likely effect on departmental staffing, (b) the bodies or persons in the European Union principally concerned and (c) the relevant section of that treaty and the consolidated treaties of the European Union and European Community. [80412]
  482
  Mr. Chris Smith
  We do not expect the Treaty of Amsterdam to result in any significant new responsibilities for this Department. The Department regularly reviews its staffing arrangements in relation to European Union business but has no plans to alter these specifically in relation to the Treaty.

  Parliamentary Questions
  Mr. Brady
  To ask the Secretary of State for Culture, Media and Sport how many parliamentary questions have been tabled to his Department for written answer on a named day since May 1997; and what percentage of them received a substantive reply on that day. [80730]

  Mr. Chris Smith
  [holding answer 15 April 1999]: Between 1 May 1997 and 15 April 1999, a total of 828 named day parliamentary questions were tabled for answer by my Department. Of these, 26 per cent. (214) received a substantive reply on the day requested.

HOME DEPARTMENT

  National Family and Parenting Institute
  Mr. Kidney
  To ask the Secretary of State for the Home Department if he will publish the constitution for the National Family and Parenting Institute; and if he will place a copy in the Library. [80812]

  Mr. Boateng
  The Government announced the establishment of the Trustee Board of the National Family and Parenting Institute (NFPI) on 15 March 1999. The NFPI is an independent charity which will be supported by Government funding of £2 million over the next three years. The NFPI has just been incorporated as a company. As such, the Memorandum and Articles of Association of the NFPI are a public document held at Companies House. I have requested that a copy be sent to the Library.

  Body Piercing
  Dr. David Clark
  To ask the Secretary of State for the Home Department what consultations he has had with local authorities concerning the body piercing of minors. [81422]

  Mr. Boateng
  In 1996, the then Government consulted on proposals affecting local authority control of skin piercing businesses. We have concluded that legislation which would give local authorities outside London powers to regulate cosmetic body piercing businesses, should be introduced as soon as Parliamentary time can be found. There has, however, been no consultation specifically relating to the body piercing of minors.

  Dr. David Clark
  To ask the Secretary of State for the Home Department (1) if he will introduce legislation to prohibit body piercing of minors without their parents' or guardians' consent; [81424]

  (2) if he will list the statutory provisions which cover the body piercing of minors; [81423]

  Mr. Boateng
  Tattooing of children under the age of 18 is an offence under the Tattooing of Minors Act 1969. As regards the piercing of one person's body by another person, this could, in certain circumstances, be held to be an assault.
  483
  When it comes to other forms of body piercing, the question of what is a valid consent is governed by common law. Whether an offence has been caused therefore depends on the circumstances of each particular case. The degree of competence that can be exercised by children will depend in each case on the relative maturity of the child concerned, as well as upon his or her age.

  In English law, the age of majority is 18 years. If a person under the age of 18 is capable of understanding the nature of the act that is being done, he or she is capable of giving a valid consent to it unless Statute provides otherwise.

  Other types of body piercing, however, are not necessarily subject to these provisions. For example, children under the age of 16 cannot consent to what would otherwise be an indecent assault; whether an indecent assault occurred would depend on the facts of the individual case. Any establishment offering certain types of body piercing would, therefore, need to satisfy themselves as to the age of their customer and that he/she was capable of giving a valid consent.

  Dr. David Clark
  To ask the Secretary of State for the Home Department what representations he has received concerning body piercing of minors. [81425]

  Mr. Boateng
  We have received a small number of letters from Members of Parliament and members of the general public asking us to give further consideration to the introduction of the new legislation.

  Tattoos and Piercing
  Mr. Bob Russell
  To ask the Secretary of State for the Home Department what regulations govern the minimum age at which a person can(a) be tattooed, (b) have their ears pierced and (c) have other parts of the body pierced. [80860]

  Mr. Boateng
  Tattooing of children under the age of 18 is an offence under the Tattooing of Minors Act 1969. There are no specific regulations setting a specific minimum age for other forms of body piercing. The question of what is a valid consent is governed by common law. Whether an offence has been caused therefore depends on the circumstances of each particular case. The degree of competence that can be exercised by children will depend in each case on the relative maturity of the child concerned, as well as upon his or her age. The Courts have held that if a person under the age of 18 is capable of understanding the nature of the act that is being done, he or she is capable of giving a valid consent to it unless Statute provides otherwise.

  Other types of body piercing, however, are not necessarily subject to these provisions. For example, children under the age of 16 cannot consent to what would otherwise be an indecent assault; whether an indecent assault occurred would depend on the facts of the individual case. Any establishment offering certain types of body piercing would therefore need to satisfy themselves as to the age of their customer and that he/she was capable of giving a valid consent.

  Lorry Drivers
  Mr. Brady
  To ask the Secretary of State for the Home Department what advice he has obtained regarding the legality of demonstrations by lorry drivers. [81599]
  484
  Mr. Boateng
  None. The enforcement of road traffic and public order legislation is an operational matter for individual chief officers of police. It is for them to enforce the law in the light of any action taken by lorry drivers.

  Cleveland Police
  Dr. Kumar
  To ask the Secretary of State for the Home Department how many police officers in Cleveland Police Force are under investigation in the Redwood inquiry; how many have been charged; and if he will make a statement. [81165]

  Mr. Boateng
  The "Redwood" inquiry is an on-going investigation and, for operational reasons, it would be inappropriate at this stage to make any further comment.

  Dr. Kumar
  To ask the Secretary of State for the Home Department what proportion of serving CID officers in Cleveland Police Force are under investigation in the Lancet inquiry in the boroughs of(a) Middlesbrough, (b) Stockton, (c) Langbaurgh and (d) Hartlepool; and if he will make a statement. [81164]

  Mr. Boateng
  Operation Lancet is currently investigating 31 Criminal Investigation Department (CID) officers. Eight of the 31 are suspended from duty. The remaining 23 officers are currently serving as follows:

  (a) 15 out of a total strength of 46 CID officers at Middlesbrough

  (b) 1 out of a total strength of 30 CID officers at Stockton

  (c) 6 out of a total strength of 32 CID officers at Langbaurgh

  (d) None at Hartlepool

  (e) 1 out of a total strength of 104 CID officers at Force Headquarters.

  Dr. Kumar
  To ask the Secretary of State for the Home Department if he will list the names of the police operations which are directed towards disciplinary offences in the Cleveland Police. [80798]

  Mr. Boateng
  The identity of police operations directed towards disciplinary offences is an operational matter for the Chief Constable of Cleveland, but it is well known that Operation Lancet is an inquiry into allegations of criminal and disciplinary offences against some Cleveland Police officers.

  Dr. Kumar
  To ask the Secretary of State for the Home Department how many police officers are working on the(a) Lancet and (b) Redwood inquiries into Cleveland Police; and if he will make a statement. [80797]

  Mr. Boateng
  There are 21 police officers currently working on Operation Lancet. Three of those officers are from Northamptonshire Police. I refer my hon. Friend to the reply I gave him on 13 April 1999,Official Report, column 11.

  Immigration Services
  Sir Nicholas Lyell
  To ask the Secretary of State for the Home Department what estimate he has made of the number of applicants who will seek to register with the Immigration Services Commissioner in the first year of operation. [81405]

  Mr. Mike O'Brien
  It is difficult to predict with any certainty how many immigration advisers will seek to register with the Immigration Services Commissioner in
  485
  that body's first year of operation. Our best estimate is that about 200 individuals and organisations will seek to register.

  Citizenship Ceremony
  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department if he will introduce a ceremony to mark the award of UK citizenship. [81353]

  Mr. Straw
  As I indicated in a lecture on Citizenship which I gave in Liverpool on 12 April, I am in principle in favour of such ceremonies. I have asked officials to look into the possibility of introducing them into the United Kingdom. Upon completion of their examination, I shall make a statement to the House.

  Immigration and Nationality Directorate
  Mr. Clappison
  To ask the Secretary of State for the Home Department when the scanning of existing files in the Immigration and Nationality Directorate onto computer is scheduled(a) to commence and (b) to be completed. [80771]

  Mr. Mike O'Brien
  There has never been any intention of scanning onto computer all 4.5 million of the Immigration and Nationality Directorate's existing registered paper files.

  Mr. Clappison
  To ask the Secretary of State for the Home Department what estimate he has made of when the Immigration and Nationality Directorate will return to the level of casework it was achieving prior to the implementation of new work arrangements and its relocation to new offices. [80769]

  Mr. Mike O'Brien
  There are positive signs of improvement in many of the business areas of the Immigration and Nationality Directorate. But before accurate projections can be made of output of casework in a team-based environment, the recovery team I have established needs to review and collect further data on productivity. Projections of output improvement will be available in June.

  Mr. Clappison
  To ask the Secretary of State for the Home Department how many staff employed in the Immigration and Nationality Directorate have(a) resigned and (b) requested a transfer to another department in (i) the last six months and (ii) each of the last five years. [80767]

  Mr. Mike O'Brien
  A total of 112 staff resigned from the Immigration and Nationality Directorate in the six months October 1998 to March 1999. Resignations for the previous five annual years is as follows:

  Year

  Number

  1998

  363

  1997

  250

  1996

  149

  1995

  106

  1994

  110

  The significantly higher 1998 figure can be attributed to a higher than usual number of resignations in the junior grade of Administrative Assistant. This is largely due to
  486
  a significant increase in the number of casual staff employed during this period, a number of whom resigned during the period of their appointment.

  Information on the number of staff requesting transfers to other departments for the periods specified is not available.

  Hillsborough Disaster
  Mr. Field
  To ask the Secretary of State for the Home Department if he will place in the Library a list of all the documents(a) which have been made available for public consultation in respect of the Hillsborough disaster and (b) which have since been withdrawn. [81111]

  Mr. Boateng
  Following the Home Secretary's announcement of the outcome of Lord Justice Stuart-Smith's scrutiny of the Hillsborough disaster, as much of the evidence considered by the scrutiny as possible was placed in the Library. The material is comprised of:Transcripts of interviews with those who gave evidence to Lord Justice Stuart-Smith;
  Other records of discussions held by Lord Justice Stuart-Smith, where transcripts were not made;
  Written evidence provided to Lord Justice Stuart-Smith by witnesses;
  Other written statements consulted at the request of the families;
  Statements by South Yorkshire Police officers (in their original and amended forms);
  Oral and written submissions made to Lord Justice Stuart-Smith by Counsel and others on behalf of the Family Support Group;
  Transcripts of Lord Justice Stuart-Smith's Open Meeting on 6 October and meeting with Counsel for the Family Support Group on 30 September;
  South Yorkshire Police Operational Orders for the 1988 and 1989 semi-finals;
  Statements by the Police Complaints Authority;
  Report produced by David Phillips of Devon and Cornwall Constabulary at request of South Yorkshire Police;
  Report by Noel Burne (structural engineer) at the request of South Yorkshire Police Authority;
  Police videotapes TB 1, 2, 3 and 4;
  Written evidence provided to Lord Justice Stuart-Smith by those whom he consulted.

  The names of those who gave written or oral evidence to the scrutiny, and those whom Lord Justice Stuart-Smith consulted, are set out in Appendix 1 of his report.

  No documents have been withdrawn from the Library.

  Crime Figures (Middlesbrough)
  Dr. Kumar
  To ask the Secretary of State for the Home Department if he will publish for the last six months Middlesbrough's monthly crime figures. [80799]

  Mr. Boateng
  The requested data are not available centrally. Recorded crime data for England and Wales for the 1998–99 year, which are collected quarterly by police force area, will be published by the Home Office in October 1999.

  Police Scientific Development Branch
  Mr. Matthew Taylor
  To ask the Secretary of State for the Home Department in which scientific journals and
  487
  other open publications staff from the Police Scientific Development Branch (Sandridge) have published papers since January 1997; and on what date the papers appeared in each of the journals and publications. [80831]

  Mr. Boateng
  The Police Scientific Development Branch has published the following papers since January 1997:"Replacements for CFC113 in the Ninhydrin Process: Parts 1". D. F. Hewlett and V. G. Sears. J. Forensic Ident., 1997, 47, 287.
  "Replacements for CFC113 in the Ninhydrin Process: Parts 2". D. F. Hewlett, V. G. Sears and S. Suzuki. J. Forensic Ident., 1997, 47, 300.
  "Specification for a Police Video Enhancement System". T. Collins. European Conference on Security and Detection, 28–30 April 1997.
  Testing Times for Body Armour, M. J. Pettit, Police Review Magazine 1997.
  Self Defence Equipment—Performance Standards and Specifications, Dr. J. Tan, APPS Police and Industry Conference Proceedings 1997.
  "Low Angle X-ray Scatter for Explosives Detection: a Geometry Optimization". Luggar R. D., Horrocks J. A., Speller R. D. & Lacey R. J. Appl. Radiat. Osot, Vol 48, No.2, 1997.
  "Exploitation of X-Ray Technology for the Detection of Contraband—Aviation Security Applications". Murray N. C., Lacey R. J. & Mason P. H. ECOS '97 European Conference on Security and Detection, Vol. 437, April 1997.
  "Some Advances in the Use of Raman Spectroscopy in Security Screening Applications". Lacey R. J. ECOS '97 European Conference on Security and Detection, Vol. 437, April 1997.
  "Developments in Contraband Detection Using X-ray Technology". Murray N. C., Lacey R. J., Mason P. M., Rushbrooke J. G. 1997 ONDCP International Symposium, Applied Counterdrug Law Enforcement Technology.
  "The Police Use of CCTV at a Political Conference". R. Rodger. 13th Annual ADPA Symposium and Exhibition on Security Technology. 1997.
  "The Performance Limits of Perimeter Intrusion Detection Systems". M. Thompson. 13th Annual ADPA Symposium and Exhibition on Security Technology 1997.
  "AMETHYST: System for Initial Automatic Video Assessment of Perimeter Alarms". G. Leach INMM Conference 1997.
  "Ergonomic Design Considerations for Public Area CCTV Safety and Security Applications". E. Wallace, C. Diffley, E. Baines and J. Aldridge. International Ergonomics Association, Tampere, Finland 1997.
  "AMETHYST. Automatic Alarm Assessment: becoming a reality" Michael Horner et al. Proceedings of the International Carnahan Conference on Security Technology 1997.
  "Physical Security—where are we going?" G. L. Thomas and M. J. Thompson. Proceedings of the International Carnahan Conference on Security Technology 1997.
  "Specification for a police video enhancement system". T. Collins. Proceedings of the International Carnahan Conference on Security Technology 1997.
  "Active fence structures and toppings" I. Wassell. Proceedings of the International Carnahan Conference on Security Technology 1997.
  "Sensitivity variations in linear microphonic cables". G. Leach & M. Homer. Proceedings of the International Carnahan Conference on Security Technology 1997.
  "Good practice for the management and operation of town centre CCTV". E. Wallace et al. ECOS '97 European Conference on Security & Detection April 1997.
  488
  "A single performance measure for perimeter intruder detection systems". G. J. Leach. ECOS '97 European Conference on Security & Detection April 1997.
  "Enhancing the performance of fences: effects and evaluation". I. J. Wassell. ECOS '97 European Conference on Security & Detection April 1997.
  "A digital fingerprint capture workstation". T. Kent & J. Rason. International Association of Investigations Conference 1998. Little Rock, USA.
  "The dependence of detection system performance on fence construction and detector location". S. Tarr & G. Leach. Proceedings of the International Carnahan Conference on Security Technology 1998.
  "Measuring the image quality of digital cameras". J. J. Rason. RPS Medical and Forensic Imaging Symposium. Both April 1998.
  "Detection of drugs and related compounds by Raman spectroscopy". R. J. Lacey et al. ONDCP International Conference on counter-drug technology. Washington March 1999.

  Kosovan Refugees
  Mr. Waterson
  To ask the Secretary of State for the Home Department what contingency plans he has to house Kosovan refugees in British seaside resorts; and if he will make a statement.[80906]

  Mr. Mike O'Brien
  The Government's priority remains to ensure that as far as possible, Kosovan refugees receive protection in the region so that they can return easily to their homes when it is safe for them to do so. However, contingency planning is well in hand if the United Kingdom needs to receive a programme of refugees from Kosovo.

  We have no specific plans to house refugees in British seaside resorts, but are looking at accommodation throughout the United Kingdom that could be used for reception centres where refugees could be cared for prior to moving into more permanent accommodation.

  Sergeant Virdi
  Mr. Peter Bottomley
  To ask the Secretary of State for the Home Department what was(a) the time when (i) inappropriate material relating to Sergeant Virdi' s case was created on the police computer system and (ii) Sergeant Virdi was recorded as acting as custody officer at Acton early on 24 December 1997, (b) the time when Sergeant Virdi was first (i) interviewed, (ii) cautioned, (iii) arrested, (iv) first and (v) last put under surveillance, (c) the time when inappropriate material was created on the police computer system in January 1998, and which officers were (i) interviewed, (ii) cautioned, (iii) arrested and (iv) put under surveillance; whether he received a report on the investigation and recording of the racial attack in 15 March 1998 in which Sergeant Virdi was an arresting officer; when and why Sergeant Virdi was reprimanded for maintaining his interest in the police activity relating to the racial attack; on which occasions Sergeant Virdi's senior officers used any independent element in investigating the events and complaints; what were the numbers and ranks of police officers involved in searching Sergeant Virdi's home on 15 April 1998, and the time taken in the search; what was the normal purpose and use of a POLSA search; and when and how material from Sergeant Virdi' s locker at Hanwell was taken to the police station safe at Ealing. [80631]
  489
  Kate Hoey
  The Commissioner of Police of the Metropolis tells me that disciplinary proceedings are still being considered in relation to Sergeant Virdi. It would therefore be inappropriate for me to comment: on the points(a)(i); (a)(ii); (c); (c)(i); (c)(ii); (c)(iii); (c)(iv); on the occasions when Sergeant Virdi's senior officers used any independent element in investigating the events and complaints: or on the numbers and ranks of police officers conducting the search of Sergeant Virdi's home on 15 April 1998.

  In relation to points (b)(i); (b)(ii); (b)(iii); (b)(iv); and (b)(v), the Commissioner tells me that Sergeant Virdi was first interviewed at 1.39 pm on 17 April 1998, arrested and cautioned at 10.53 am on 15 April 1998, and put under surveillance on 15 April 1998.

  The Home Secretary is not routinely informed of racial attacks and was not informed of the attack in Ealing Division. The Commissioner informs me that Sergeant Virdi has not been reprimanded in relation to this incident.

  The Commissioner tells me that a POLSA search is one conducted by a team of officers specifically trained to national standards. POLSA teams have a role in counterterrorist searches and undertake evidence gathering in searches in support of major investigations.

  The Commissioner has confirmed that property was taken from Sergeant Virdi's locker at Hanwell Police Station and placed in the safe at Ealing Police Station. This has been reported as a theft by Sergeant Virdi and is under investigation. As at 15 April, it has not been established who moved the property and when it was moved.

  Asylum Seekers
  Mr. Maclean
  To ask the Secretary of State for the Home Department how many Kosovans have appealed for asylum in the United Kingdom per month since 1 January 1998. [80448]

  Mr. Mike O'Brien
  The available information given in the table relates to applications for asylum submitted from nationals of the Federal Republic of Yugoslavia. To break this down into the number of Kosovans could be obtained only by examination of individual case records and is, therefore, available only at disproportionate cost.

  Asylum applications1 received in the United Kingdom, excluding dependants, 1998 and 1999, by month, nationals of the Federal Republic of Yugoslavia

  Number

  January 1998

  270

  February 1998

  270

  March 1998

  280

  April 1998

  385

  May 1998

  315

  June 1998

  680

  July 1998

  845

  August 1998

  905

  September 1998

  870

  October 1998

  1,160

  November 1998

  735

  December 1998

  675

  January 1999

  710

  February 1999

  550

  Total

  8,650

  1 Provisional figures rounded to the nearest 5

  Immigration
  Mr. Malin
  To ask the Secretary of State for the Home Department what estimate he has made of the number of applicants' passports held at the Immigration and Nationality Department awaiting a decision; what arrangements he will make for temporary travel documents to be issued for those whose applications are delayed as a result of reorganisation at IND; and what proposals he has for offering compensation to those who are disadvantaged as a result of the delays. [76615]

  Mr. Mike O'Brien
  [pursuant to his reply, 18 March 1999, c. 720-22]: There are approximately 139,000 cases awaiting action in the Immigration and Nationality Directorate, of which approximately 22,000 contain passports. Travel Documents will be issued only to people who have valid leave to remain in the United Kingdom. It is, therefore, not possible to issue documents where an application for leave remains outstanding, although passports will be returned to applicants where they need to travel. Compensation will be paid only in cases of maladministration where the costs are reasonable and have been actually and necessarily incurred; each case will be treated on its merits.

TREASURY

  Environmental Appraisals
  Mr. Baker
  To ask the Chancellor of the Exchequer, pursuant to paragraph 5.81 in Budget 99 (HC 298), what detailed procedures will be followed to undertake the environmental appraisals.[813961]

  Ms Hewitt
  The procedures to be followed when undertaking environmental appraisals are set out in Government guidance on "Policy Appraisal and the Environment" (Department of the Environment, Transport and the Regions, 1998). These guidelines make clear that a policy should be subject to a full environmental appraisal when it is likely to have a significant effect on the environment, and that the level of resources devoted to each appraisal should be proportionate to the policy or programme.

  This guidance applies equally to the Budget measures, and it is the approach used when evaluating the numerous options which are considered in preparation for the Budget.

  Financial Services Authority
  Mr. Love
  To ask the Chancellor of the Exchequer what estimate he has made of the additional income and staff required by the Financial Services Authority if it assumes regulatory responsibility for loans secured on land as(a) first mortgages within the scope of the Council of Mortgage Lenders Code, (b) other loans secured on land with a value over £25,000 and (c) consumer credit loans with a value below £25,000. [81591]

  Ms Hewitt
  I have asked the Financial Services Authority to carry out this analysis and will take it into account in the review, to be carried out later this year, of whether mortgage advice should be regulated.

  VAT Rules
  Mr. Whittingdale
  To ask the Chancellor of the Exchequer what is the procedure by which Customs and Excise informs businesses of changes to the VAT rules; and if he will make a statement. [81590]

  Ms Hewitt
  Customs and Excise use a variety of ways to inform business of changes to the VAT rules. In all cases, changes are notified by VAT Notes, which are sent to all VAT registered businesses. Changes which stem from the Budget are announced in Customs and Excise Budget Notices, available from local VAT offices on Budget Day, after the Chancellor has sat down. Other changes are notified to businesses by Business Briefs, also available from local VAT offices and issued to subscribers. All these publications are also available on the Internet.

  National Insurance Contributions
  Mr. Rendel
  To ask the Chancellor of the Exchequer what systems are in place to enable his Department to notify self-employed people paying National Insurance contributions by direct debit, that those payments are not being received. [80934]

  Ms Hewitt
  [holding answer 16 April 1999]The Department is not aware of any occasions where payments by direct debit, from self-employed customers, have not been received.

  On those occasions when the Department, as a result of problems, has been unable to collect National Insurance Contributions from Self Employed Customers, it has identified and written to all those affected.

  Cigarettes
  Mr. Whittingdale
  To ask the Chancellor of the Exchequer if he will list the average retail price of a packet of 20 cigarettes in each member state of the European Union. [81587]

  Ms Hewitt
  The information is as follows:

  Cigarettes

  Pence

  Member state

  Retail selling price per pack of 20 cigarettes

  Austria

  163

  Belgium

  184

  Denmark

  283

  Finland

  260

  France

  210

  Germany

  189

  Greece

  128

  Ireland

  280

  Italy

  134

  Luxembourg

  128

  Netherlands

  171

  Potugal

  122

  Spain

  80

  Swedan

  267

  UK

  364

  Source:

  European Commission (Directorate General XXI) Excise Duty Tables (December 1998).
  492
  Mr. Whittingdale
  To ask the Chancellor of the Exchequer if he will list the proportion of the average retail price of a packet of 20 cigarettes which is taken in tax on each member state of the European Union. [81589]

  Ms Hewitt
  The information is as follows:

  Cigarettes

  Percentage

  Member State

  Total Tax as proportion of retail selling price per pack of 20 Cigarettes

  Austria

  74.0

  Belgium

  74.6

  Denmark

  81.7

  Finland

  76.2

  France

  75.4

  Germany

  70.8

  Greece

  72.7

  Ireland

  77.3

  Italy

  74.7

  Luxembourg

  68.6

  Netherlands

  71.9

  Portugal

  79.7

  Spain

  73.1

  Sweden

  70.3

  UK

  79.3

  Source:

  European Commission (Directorate General XXI) Excise Duty Tables (December 1998).

  ISA Advertisements
  Mr. Gibb
  To ask the Chancellor of the Exchequer which authorised person under the Financial Services Act 1986 approved the Inland Revenue ISA advertisements. [81105]

  Ms Hewitt
  [holding answer 16 April 1999]No such approval was needed.

  KPMG
  Mr. Jenkin
  To ask the Chancellor of the Exchequer what(a) consultancy and (b) other contracts his Department has had with KPMG since 1 May 1997; and if KPMG is a prospective candidate for contracts his Department is intending to let. [81421]

  Ms Hewitt
  [holding answer 19 April 1999]: The Treasury has let two contracts with KPMG since May 1997, one for consultancy on "Credit Risk Policy" for the Debt Management Office, and the other to carry out a telephone survey on "Small to Medium Enterprises".

  KPMG is a prospective candidate for future contracts. The contracts cannot be disclosed as they are commercially confidential until an award has been announced.

  Vehicle Excise Duty
  Mr. Laurence Robertson
  To ask the Chancellor of the Exchequer what investigations he carried out into the levels of emissions from cars of under 1100 cc before reducing the vehicle excise duty on those vehicles; and if he will make a statement. [81258]
  493
  Ms Hewitt
  [holding answer 19 April 1999]: My right hon. Friend the Chancellor proposed reducing VED on the smallest cars in the 1998 Budget. He issued a consultation document setting out the options for reforming vehicle excise duty with the Pre-Budget Report in November last year and took into account a range of factors before deciding to reduce VED on cars under 1100cc by £55.

  Public Appointments
  Mr. Brady
  To ask the Chancellor of the Exchequer if he will list the public appointments for which his

  Public Bodies

  Body

  Status

  Appointment

  Salary/fee

  Bank of England Court

  Public Corporation

  1 Chairman

  £227,000 p.a.

  1 Deputy

  £191,500 p.a.

  1 Member

  £153,000 p.a.

  1 Member

  £142,167 p.a.

  1 Member

  £142,167 p.a.

  2 Members

  £125,500 p.a.

  12 Members

  £500 p.a.

  Policyholders Protection Board

  Executive NDPB

  5 Members

  £200 per day

  Financial Services Tribunal

  Tribunal NDPB

  1 Chairman

  £380 per day

  2 Members

  £275 per day

  Section 706 Tribunal

  Tribunal NDPB

  1 Chairman

  £900 p.a.

  8 Members

  £500 p.a.

  Non-Public Bodies
  The Financial Services Authority (FSA) Board consists of an Executive Chairman, two other Executives, one non-Executive Deputy Chairman and 10 other non-Executives. Salaries and fees are set by the FSA. The details of these are published in the Annual Report, copies of which are available in the Library of the House.

  Euro
  Mr. Laurence Robertson
  To ask the Chancellor of the Exchequer by what means he plans to enable businesses which wish to use the euro in Britain to do so; what estimate he has made of the cost of such measures; what plans he has to make it possible for businesses which wish to use other currencies to do so; and if he will make a statement. [80667]

  Ms Hewitt
  [holding answer 15 April 1999]The introduction of the euro in 11 member states at the start of this year signalled a fundamental change in the business environment for UK firms. In recognition of this, the Government have taken a number of steps to facilitate UK business use of the euro. These steps are outlined in the regular Treasury report "Getting ready for the euro", copies of which are in the House Library.

  Where there is demand, and where it is sensible, Government Departments and agencies already deal with UK firms in major foreign currencies.

  New Bank Notes
  Mr. Maclean
  To ask the Chancellor of the Exchequer how long it takes the Bank of England on average to set up and print a new bank note after the initial design is completed. [76194]
  494
  Department is responsible and which carry a fee or salary, indicating for each type of appointment the fee or salary band which applies. [80745]

  Ms Hewitt
  [holding answer 15 April 1999]Much of this information is already available in Public Bodies 1998, copies of which are available in the Library of the House.

  The majority of public appointments are unpaid as most of those who accept a public appointment do so on a voluntary basis. The details of those appointments to public (and other) bodies that attract a fee or salary, which Treasury Ministers are responsible for, are as follows:

  Ms Hewitt
  [holding answer 12 March 1999]The set-up time from approval of note design to the issue of the note is dependent on the specification, the complexity and the required launch volumes. The duration of the origination and plate-making process, and the set-up and proof printing for the Bank of England and other Central Banks in general, is between four and five months. However, if the banknote contains features that require additional equipment, then the lead time of that equipment must be included. Specialist equipment lead times can be up to one year.

  The actual printing can take up to eight months dependent on the number of notes required.

  Euro Notes
  Mr. Maclean
  To ask the Chancellor of the Exchequer what is the approximate number of each denomination of sample euro notes printed by the Bank of England. [76196]

  Ms Hewitt
  [holding answer 12 March 1999]The sample involved the Bank printing some 2 million each of the 20 and 50 euro notes and 5 million of the 5 euro note for pre-production trial purposes.

  European Scrutiny Committee
  Mr. Chope
  To ask the Chancellor of the Exchequer on how many occasions since 1 May 1997 his Department has made available to the European Scrutiny Committee (1) Council working documents; [80542]

  (2) unofficial texts of draft European legislation. [80549]
  495
  Ms Hewitt
  [holding answer 13 April 1999]HM Treasury receives a large volume of both official, unofficial and working texts during the course of negotiations on EU legislation. In order to facilitate the work of the European Scrutiny Committee, Explanatory Memorandums are often submitted on the basis of unofficial texts if an official text, formally circulated to Member States from the Council Secretariat, has not yet been received. HM Treasury keep the Committee informed of substantive progress in negotiations by supplementary Memoranda or Ministerial letter, sometimes accompanied by a draft text if appropriate. It would involve disproportionate cost to provide a definitive list of the unofficial draft documents made available to the Committee since 1 May 1997.

  Euro Task Forces
  Mr. Bercow
  To ask the Chancellor of the Exchequer if he will list the criteria for selection of members of the euro task forces. [81046]

  Ms Hewitt
  The Government have consulted widely in taking forward euro preparations. For instance, in October 1997, the Chancellor set up a Business Advisory Group (BAG), headed by Lord Simon, to advise on the practical issues associated with UK membership. Representative organisations were invited to send their own nominated members.

  Red Book Changes
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will list and quantify the revisions/forecasting changes referred to in Table 2.5 of the Red Book. [80865]

  Ms Hewitt
  Revisions to the forecasts of government receipts and expenditure since the Pre-Budget Report are shown in tables B11 and B13 of the March 1999 Financial Statement and Budget Report.

  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will list and provide an explanation of the changes to the components of Annually Managed Expenditure referred to in paragraph 2.57 of the Red Book. [80859]

  Mr. Milburn
  Changes to the forecast of Annually Managed Expenditure since the Comprehensive Spending Review are listed and explained in paragraph 2.9 and table 2.2 of "Public Expenditure: Statistical Analyses 1999–2000" (Cm 4201), published in March 1999.

  Government Debt
  Mr. Gibb
  To ask the Chancellor of the Exchequer what is his estimate of the total level of Government debt in cash terms in(a) 1996–97, (b) 1997–98, (c) 1998–99, (d) 1999–2000, (e) 2000–01, (f) 2001–02, (g) 2002–03 and (h) 2003–04. [80889]

  Ms Hewitt
  The stock of public sector net debt at end-March 1997 is set out in the monthly Office for National Statistics First Release 'Public Sector Finances'. Estimates and projections of the stock of debt in subsequent years were published in table B8 of the March 1999 Financial Statement and Budget Report.

  Public Sector Finances
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will list the figures used in preparing Chart 2.4 of the Red Book on the basis of(a) per cent. of GDP and (b) cash terms; and if he will estimate the effect of the same assumptions on the public sector net cash requirement over the same periods. [80866]

  Ms Hewitt
  Figures used in Chart 2.4 as a per cent. of GDP can be found in Table 2.6 of the Red Book and are reproduced from 1990–91 onwards in the following table. Figures for the cautious case can be calculated by applying the ready reckoners set out in Table 3.1 of 'Fiscal policy: public finances and the cycle', published on 9 March alongside the Red Book. Figures can be converted to cash terms using money GDP figures from Table 2.1 of 'Economic Trends', published by the Office for National Statistics, and Table B4 of the Red Book.

  The cyclical behaviour of the public sector net cash requirement matches (with opposite sign) that of the current budget. Figures for the cyclically adjusted public sector net cash requirement can thus be calculated by applying the difference between the actual and cyclically adjusted surplus on current budget to the public sector net cash requirement (set out in Tables B26 and B27 of the Red Book). Figures for the cautious case and in cash terms can be calculated by use of the methods set out.

  Cyclically adjusted surplus on current budget, central case

  Per cent. of GDP

  1990–91

  —0.8

  1991–92

  —1.2

  1992–93

  —3.5

  1993–94

  —3.7

  1994–95

  —3.3

  1995–96

  —2.8

  1996–97

  —2.4

  1997–98

  —0.7

  1998–99

  0.2

  1999–2000

  0.6

  2000–01

  1.0

  2001–02

  1.1

  2002–03

  0.9

  2003–04

  1.0

  Source:

  Table 2.6 and Chart 2.4 of the Red Book

  Engagements
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will list his official engagements for 9 and 10 March. [80883]

  Mr. Gordon Brown
  I delivered the Budget statement in the House on 9 March. Over the two days referred to, I also had a number of meetings with ministerial colleagues and others.

  European Central Bank
  Mr. Bercow
  To ask the Chancellor of the Exchequer, pursuant to his answer of 17 March 1999,Official Report, column 658, on the European Central Bank, if he has been informed of the salary of the President of the Bank. [80396]
  497
  Ms Hewitt
  No. As I set out in my answer to the right hon. Member for Penrith and the Border (Mr. Maclean) on 17 March 1999,Official Report, column 658, decisions on the terms and conditions of employment of the ECB Executive Board, including the President, are for the ECB. There is no obligation on members of the ECB Executive Board to reveal details of their terms and conditions of employment, including their salaries.

  Macpherson Inquiry
  Mr. Efford
  To ask the Chancellor of the Exchequer what assessment he has made of the implications for his Department of the Macpherson Inquiry recommendations; and if he will make a statement. [80521]

  Ms Hewitt
  I refer my hon. Friend to the answer given to him by the Minister for the Cabinet Office on 14 April 1999,Official Report, columns 239–40.

  Teenage Pregnancies (Wales)
  Mr. Ruane
  To ask the Chancellor of the Exchequer how many births to girls conceiving under the age of 16 years there were in each local authority in Wales in each of the past 10 years.[81332]

  Ms Hewitt
  The information requested falls within the responsibility of the Director of the Office for National Statistics. I have asked him to reply.

  Letter from Tim Holt to Mr. Chris Ruane, dated 20 April 1999:
  As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent parliamentary question on teenage births.
  The numbers of girls who conceived at under age 16 and went on to a maternity are shown in the table. The areas shown for each of the years 1992–97 are the Welsh Unitary Authorities which were created in 1996. Information on a comparable basis is not readily available before 1992.

  Deaths for persons under 65 in Welsh unitary authorities, 1990–97

  Unitary authority

  1990

  1991

  1992

  1993

  1994

  1995

  1996

  1997

  Blaenau Gwent

  198

  168

  178

  151

  166

  171

  180

  145

  Bridgend

  323

  282

  285

  282

  263

  267

  247

  268

  Caerphilly

  358

  358

  378

  373

  365

  359

  386

  352

  Cardiff

  649

  602

  577

  623

  576

  582

  540

  574

  Carmarthenshire

  401

  368

  384

  362

  345

  384

  364

  362

  Ceredigion

  116

  131

  128

  129

  122

  151

  115

  113

  Conwy

  245

  204

  197

  210

  219

  230

  181

  229

  Denbighshire

  181

  178

  179

  186

  182

  180

  197

  192

  Flintshire

  305

  299

  314

  320

  302

  274

  289

  273

  Gwynedd

  261

  264

  226

  220

  229

  225

  216

  188

  Isle of Anglesey

  167

  142

  145

  156

  159

  139

  121

  118

  Merthyr Tydfil

  146

  157

  130

  149

  145

  130

  158

  152

  Monmouthshire

  148

  142

  149

  145

  146

  145

  150

  156

  Neath Port Talbot

  325

  321

  327

  321

  329

  305

  337

  290

  Newport

  313

  303

  308

  317

  284

  262

  268

  294

  Pembrokeshire

  260

  237

  253

  227

  211

  232

  200

  212

  Powys

  257

  232

  236

  237

  227

  260

  227

  207

  Rhondda, Cynon, Taff

  557

  573

  494

  566

  536

  555

  534

  511

  Swansea

  501

  478

  474

  497

  447

  481

  415

  473

  Torfaen

  213

  202

  189

  213

  206

  195

  180

  180

  The Vale of Glamorgan

  231

  218

  209

  226

  229

  196

  209

  218

  Wrexham

  269

  234

  256

  286

  252

  264

  267

  254

  Note:

  Boundaries as constituted at 1 April 1996
  498

  Conception by girls under 16 leading to maternity, Welsh Unitary Authorities, 1992–97

  Unitary authority

  1992

  1993

  1994

  1995

  1996

  1997

  Blaenau Gwent

  8

  11

  13

  13

  15

  9

  Bridgend

  17

  13

  16

  20

  25

  15

  Caerphilly

  27

  27

  25

  36

  33

  31

  Cardiff

  30

  26

  18

  38

  37

  37

  Carmarthenshire

  9

  9

  10

  7

  10

  12

  Ceredigion

  3

  1

  3

  0

  0

  5

  Conwy

  6

  9

  8

  12

  15

  11

  Denbigshire

  5

  6

  8

  4

  8

  7

  Flintshire

  8

  14

  9

  10

  12

  10

  Gwynedd

  10

  8

  7

  4

  12

  9

  Isle of Anglesey

  6

  8

  5

  5

  5

  1

  Merthyr Tydfil

  15

  11

  14

  12

  6

  9

  Monmouthshire

  5

  2

  4

  6

  9

  3

  Neath Port Talbot

  7

  11

  6

  21

  9

  10

  Newport

  15

  17

  23

  14

  14

  19

  Pembrokeshire

  1

  7

  6

  7

  10

  5

  Powys

  4

  5

  1

  6

  7

  4

  Rhondda, Cynon, Taff

  23

  26

  24

  37

  38

  42

  Swansea

  11

  14

  18

  25

  31

  30

  Torfaen

  9

  9

  17

  11

  17

  9

  The Vale of Glamorgan

  9

  4

  12

  10

  11

  16

  Wrexhan

  12

  9

  8

  13

  13

  14

  Wales

  240

  247

  255

  311

  337

  308

  Premature Deaths (Wales)
  Mr. Ruane
  To ask the Chancellor of the Exchequer how many premature deaths there were in each local authority area in Wales in each of the past 10 years. [81337]

  Ms Hewitt
  The information requested falls within the responsibility of the Director of the Office for National Statistics. I have asked him to reply.

  Letter from Tim Holt to Mr. Chris Ruane, dated 20 April 1999:
  As Director of the Office for National Statistics (ONS), I have been asked to reply to your parliamentary question asking how many premature deaths there were for each local authority in Wales in each of the past 10 years.
  The information requested is given in the attached table.

  Unemployment (Wales)
  Mr. Ruane
  To ask the Chancellor of the Exchequer how many households without work for two years or more there were in each local authority in Wales in each of the past 10 years. [81336]

  Ms Hewitt
  The information requested falls within the responsibility of the Director of the Office for National Statistics. I have asked him to reply.

  Letter from Tim Holt to Mr. Chris Ruane, dated 20 April 1999:
  As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent parliamentary question on workless households.
  The Labour Force Survey (LFS) is the ONS's major source of labour market data. Data by local authority area is not available on the combined economic activity of household members, and categories such as that requested, would undoubtedly be too small to identify at local authority level for both reliability and confidentiality reasons.
  Household datasets are available for spring 1990, each spring quarter from 1992 to 1994 and spring and autumn quarters since spring 1995. An article was published in Labour Market Trends (January 1999 issue), a copy of which is available in the House of Commons Library, giving a range of household data from the LFS using spring 1998 data. Table 8, on page 38, includes workless households by Government Office Region which may be of interest.

  Single Currency
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will list the criteria to be used in determining whether the single currency is successful in accordance with paragraph 2.39 of the Red Book. [80858]

  Ms Hewitt
  A successful single currency will act as a complement to the Single Market. It will reduce transaction costs and exchange rate uncertainty on trade within the euro zone. It will make prices more transparent, boosting competition and providing new opportunities for companies to trade and invest. A successful single currency will also deliver its Treaty aims of price stability as a foundation for sustainable, non-inflationary growth.

WALES

  Task Forces
  Dr. Tony Wright
  To ask the Secretary of State for Wales (1) if he will list all those task forces and policy reviews with external members established by his Department since May 1997 which have set up(a) subgroups, (b) working parties and (c) other subsidiary committees; [79256]

  (2) if he will list for all task forces and policy reviews with external members established by his Department since May 1997 (a) their dates of establishment, (b) those which have issued final reports and their dates of publication, (c) those which have been terminated and their dates of termination and (d) for those bodies still in existence, expected reporting and termination dates. [79279]

  Mr. Michael
  I will write to my hon. Friend as soon as possible and place a copy of my reply in the Library of the House. In general, preparations for the advent of the National Assembly for Wales has led to a good deal 500
  of development work involving participants from business (employers and trade unions), local government and the voluntary sector. Generally, the groups which have been brought together to undertake this work have been short-term "task and finish" groups rather than formal bodies with sub groups or sub committees.

  Small and Medium Businesses
  Mr. Barry Jones
  To ask the Secretary of State for Wales what initiatives he is taking to assist small and medium businesses; and if he will make a statement. [79844]

  Mr. Hain
  In line with the new economic agenda for Wales, Pathway to Prosperity, the Government are keen to secure a more dynamic and competitive business base in Wales. To this end increased resources—£83 million in 1999–2000—are being made available to back business development. This substantial budget will support a wide range of activity, including:increased resources for the TEC enterprise programme supporting over 1,000 new business starts; help for 2,000 firms to tackle the Millennium Bug issue; help for over 500 Sole Traders to take on their first employee; and assistance for over 2,000 firms in addressing skills development and other business growth issues.
  increased resources for Regional Selective Assistance which are expected to create or safeguard 12,000 jobs
  continuation of the Cymru Prosper Wales programme to help small firms benefit from the skills of graduates
  the expansion of the Innovation and Technology Counselling Service assisting some 3–4,000 firms
  the implementation of the Know-How initiative designed to help small and medium sized firms tap into the expertise of Welsh academic institutions.

  In addition a new business-led Management Board—Business Connect Wales Ltd.—was established on 30 March to improve co-ordination of business support in Wales and to improve the operation of the Business Connect information, advice and support service.

  Following the transfer of functions, this issue will be a matter for the National Assembly.

  Lobbyists
  Mr. Wilshire
  To ask the Secretary of State for Wales if he will publish a list, including names and dates, of all meetings that(a) he, (b) his officials, (c) his advisers and (d) his PPS have held during (i) 1997, (ii) 1998 and (iii) 1999 with people who work for political lobbying firms or for businesses that are members of the Public Relations Consultants Association. [79638]

  Mr. Michael
  I refer the hon. Member to the reply given to the hon. Member for Lewes (Mr. Baker) by my right hon. Friend the Prime Minister on 9 March 1999,Official Report, column 168. When a PPS attends a meeting in an official or semi-official capacity he or she has to do so in accordance with the requirements of the Ministerial Code.

  Euro Task Force
  Mr. Denzil Davies
  To ask the Secretary of State for Wales when he expects the Euro Task Force for Wales to complete its work. [80085]
  501
  Mr. Michael
  It is expected that the Task Force will complete its current role within the next six to nine months.

  Mr. Denzil Davies
  To ask the Secretary of State for Wales from whom he sought advice on the appointment of the members of the Euro Task Force for Wales. [80083]

  Mr. Michael
  Advice on appointing the chairman and members of the Task Force was sought from a variety of organisations and individuals including the CBI and European Advisor to the Secretary of State for Wales.

  Mr. Denzil Davies
  To ask the Secretary of State for Wales from what budget the salary of Mr. J. Casterton, the Manager of the Euro Task Force for Wales, is paid. [80082]

  Mr. Michael
  Barclays Bank is paying the salary costs of Mr. John Casterton for the entire period of his secondment as Manager of the Euro Task Force for Wales.

  EU Structural Funds
  Mr. Edwards
  To ask the Secretary of State for Wales if he will make a statement about the eligibility for Objective 2 and Objective 3 funding for Wales following the Berlin European Summit. [80235]

  Mr. Hain
  The agreements reached by Member States at the Berlin Summit provided an important step towards agreeing the whole Agenda 2000 package, including the new Structural Funds regulations. They represent a considerable success for the UK Government and its European partners after many months of hard negotiating. The agreements leave it open for the European Parliament to consider the whole package before the end of May.

  Although the regulations are still in draft form the Government are eager to make progress in the designation of Objective 2 areas and is currently consulting across the UK on criteria to be adopted for their identification. Eligibility under the Community criteria can be for any type of area, industrial or service based, rural, urban or fisheries. The Regulations specify that 50 per cent. of the Objective 2 population should cover industrial or rural areas where these meet the relevant Community criteria.

  All parts of the UK not receiving Objective 1 status will be eligible for Objective 3 funding.

  Community Health Councils
  Mr. Rogers
  To ask the Secretary of State for Wales what consultations have taken place on the membership of, and appointments to, community health councils in Wales. [79884]

  Mr. Michael
  Members of the Community Health Councils (CHCs) whose terms of appointment were due to expire on 31 March 1999 have had their terms extended for one year in advance of the transfer of powers as this issue will be a matter for the National Assembly from 1 July. I announced proposals to develop a new and reinvigorated model of federated Community Health Councils on 15 March with a network of 28 Councils across Wales based on federations linked mainly to local authority areas.

  I intend to meet representatives of CHCs to discuss the implementation of these proposals.

  Complementary Medical Services
  Mr. Barry Jones
  To ask the Secretary of State for Wales what is his policy on complementary medical services. [80840]

  Mr. Jon Owen Jones
  The Government recognise that some people with conditions that do not respond to orthodox treatment can be helped by forms of complementary and alternative medicine and has sponsored research into the use of complementary medicine in general practice. GPs and hospital doctors may arrange for their patients to receive any of the complementary medicine treatments if they feel it is clinically necessary, and is the most appropriate method of treating the particular health need. The doctor should also take into account the patient's wishes, evidence of the safety and effectiveness of the treatment and its cost and availability locally.

  Following the transfer of functions, this issue will be a matter for the National Assembly.

  Job Creation
  Mr. Barry Jones
  To ask the Secretary of State for Wales what estimate he has made of the number of new jobs created since 1 May 1997; and if he will make a statement. [80846]

  Mr. Hain
  Seasonally adjusted figures show that between March 1997 and December 1998 the number of employee jobs in Wales increased by 24,000 to 1,005,000.

  Free Bus Travel
  Mr. Dafis
  To ask the Secretary of State for Wales under what provision the National Assembly is given the power to introduce free bus travel for pensioners. [80511]

  Mr. Michael
  Following the transfer of powers, the National Assembly will be responsible for overseeing the administration of concessionary fares schemes operated by local authorities under the provisions of Part V of the Transport Act 1985. The nature of the schemes is at present a matter for local authority discretion, although the Government are committed to the introduction of legislation to set a minimum standard for pensioners travelling on buses. In the meantime, the Welsh Office has worked closely with local authorities and I have ensured that all authorities in Wales are in a position to operate schemes for pensioners which at least meet a minimum standard of a £5 bus pass entitling the holder to travel at half-fare. We are now working with local authorities and bus operators to prepare the way for the Welsh Assembly to support the introduction of free bus travel for pensioners over the next two to three years.

  Mr. Dafis
  To ask the Secretary of State for Wales what proportion of the funding for the scheme to provide free bus travel for pensioners will come from local authority funds. [80512]

  Mr. Hain
  At present it is for local authorities to make financial provision for their concessionary fares schemes from the resources available to them. I am currently consulting local authorities and bus operators on how best to implement free bus travel for pensioners, which I expect to see over the next two to three years. The method of funding the additional costs will be a matter for the National Assembly to determine.
  503
  Following the transfer of functions, the National Assembly will be responsible for overseeing the administration of concessionary fares schemes by local authorities.

  Mr. Dafis
  To ask the Secretary of State for Wales what role the National Assembly will have in the operation of a scheme to provide free bus travel for pensioners. [80513]

  Mr. Michael
  Following the transfer of functions, the National Assembly will be responsible for overseeing the administration of concessionary fares schemes by local authorities in Wales.

TRADE AND INDUSTRY

  Ministerial Meetings (US)
  Mr. Matthew Taylor
  To ask the Secretary of State for Trade and Industry how many times ministers in his Department met their counterparts in the US Administration between 1 January 1998 and 1 June 1998, indicating the dates and locations of each meeting, the ministers involved and the name of the US counterpart. [81081]

  Mr. Wilson
  I refer the hon. Member to the first sentence of the answer my right hon. Friend the Secretary of State gave to his question, on 26 February 1999,Official Report, column 467. In the period 1 January 1998 to 1 June 1998, these included the meeting between the then-President of the Board of Trade and Charlene Barshefsky, US Trade Representative, at the EU/US Summit in Birmingham on 18 May.

  Libya
  Mr. Austin
  To ask the Secretary of State for Trade and Industry what steps he is taking to promote exports to and trade with Libya. [80806]

  Mr. Wilson
  [holding answer 16 April 1999]Following the end of UNSC sanctions, I am considering a range of support for UK companies wishing to trade with Libya. Our response to the end of sanctions will be a positive one.

  There remain issues to be resolved, including those arising from the WPC Fletcher case. We hope that these can be resolved successfully, so that we can move further towards restoring full diplomatic relations.

  Mr. Austin
  To ask the Secretary of State for Trade and Industry what assessment he has made of the benefits to British manufacturers of the ending of sanctions against Libya; and if he will make a statement. [80805]

  Mr. Wilson
  [holding answer 16 April 1999]I believe there will be considerable commercial benefits to both Libya and the UK arising from the ending of UNSC sanctions. Libya has long been a traditional trading and investment partner of the UK in the Middle East. It is my hope that our long commercial history will give a sound foundation from which to re-build that relationship and restore Libya as one of our principle trading partners in the Middle East.

  I also welcome the fact that many Libyans continue to look to the UK for education and training opportunities.
  504
  There is no doubt that Libya's economy is a large, diverse and sophisticated one which will offer many opportunities for the UK across a range of sectors.

  Mr. Austin
  To ask the Secretary of State for Trade and Industry if he will establish a one-stop-shop to provide information, advice and support to British companies wishing to trade with Libya. [80804]

  Mr. Wilson
  [holding answer 16 April 1999]The Department's trade desk for Libya will provide advice and support for British companies. Its contact details are:

  Libya Trade Desk

  Bay 413

  Kingsgate House

  66–74 Victoria Street London

  SWIE 6SW

  Telephone: 0171 215 8216

  Facsimile: 0171 215 4904.

  Inquiries about the sectors covered by the recently suspended UNSC sanctions and EC Regulations should be directed to:

  DTI Sanctions Licensing Unit

  Telephone: 0171 215 8512

  Facsimile: 0171 215 8386.

  Inquiries about the impact of the suspension of sanctions in the financial sector should be addressed to:

  Bank of England Sanctions Emergency Unit

  Telephone: 0171 601 4607/4768

  Facsimile: 0171 601 4309.

  Correspondence
  Mr. McLoughlin
  To ask the Secretary of State for Trade and Industry when the hon. Member for West Derbyshire can expect a reply to his letter of 30 January and reminder of 9 March concerning the East Midlands Electricity Consumers' Council. [81444]

  Mr. Battle
  The correspondence to which the hon. Member refers was, of course, given full consideration as part of the Department's consultation on consumer councils for the utilities, along with many other submissions on this subject. As a matter of courtesy, following the recent publication of our response to the consultation, 14 April 1999,Official Report, columns 263–67, I am writing to the hon. Member in full explaining the situation.

  US Trade Sanctions
  Mr. Nicholas Winterton
  To ask the Secretary of State for Trade and Industry if he will estimate the total cost to United Kingdom businesses of lost exports as a result of the imposition of trade sanctions on British products by the Government of the United States of America. [79186]

  Mr. Wilson
  US Customs are currently withholding liquidation on some $500m-worth of EU export goods. The United States is likely to be given World Trade Organisation authority on 19 April to retaliate against $191.4m-worth of EU goods. The sectors that are expected to be included in this authorised retaliation, and the annual value of UK exports is as follows.
  505

  £ million

  US tariff code

  Description

  US imports from UK 1997

  Total

  26.8

  85072080

  Batteries

  13.78

  33073050

  Bath Oils

  7.29

  49119120

  Lithographs

  2.20

  63022190

  Bed linen

  1.48

  48192000

  Cartons

  1.42

  85167100

  Coffee makers

  0.37

  42023210

  Wallets

  0.13

  42022215

  Handbags

  0.09

  48055000

  Felt Paper

  0.02

  Source:

  European Commission

  It is difficult to say what the actual impact on the targeted sectors will be, as much will depend on how long any retaliatory measures remain in place, what steps were taken to bring forward orders from the US, and the ability of affected companies to find alternative customers for their goods. Some limited damage will have been caused to sectors which were on but have now been removed from the retaliatory list, due to the uncertainty caused in recent months. However, we believe that the Government's prompt response in offering a bond and duty guarantee scheme for the cashmere knitwear industry pre-empted the serious risk of severe and lasting damage being done to that industry.

  Jane Griffiths
  To ask the Secretary of State for Trade and Industry when he plans to announce measures to assist(a) the fine print industry and (b) other industries in respect of action taken by the US Government as a result of the banana dispute. [80023]

  Mr. Wilson
  The removal of some sectors from the US retaliation list on 9 April was welcome, but other sectors remain targeted, including lithographs. The Government brought forward a bond guarantee scheme in respect of cashmere knitwear in response to the particular circumstances of that industry, especially its highly seasonal nature. The need for the scheme has now been removed, and we have no plans to put in place something similar for other industries on the US list.

  We now need urgent consultations with all the parties involved in the dispute on the options for reforming the banana regime, and on a solution that would avoid US retaliation taking effect.

  European Scrutiny Committee
  Mr. Chope
  To ask the Secretary of State for Trade and Industry on how many occasions since 1 May 1997 his Department has made available to the European Scrutiny Committee (1) Council working documents; [80547]

  (2) unofficial texts of draft European legislation. [80550]

  Mr. Wilson
  [holding answer 13 April 1999]The Department receives a large volume of both official and unofficial/working texts during the course of negotiations on EU legislation. In order to facilitate the work of the European Scrutiny Committee and keep it informed of the progress of negotiations, the Department regularly submits Explanatory Memoranda to the Committee. It would involve disproportionate cost to provide a definitive list of the unofficial/working documents made available to the Committee since 1 May.

FOREIGN AND COMMONWEALTH AFFAIRS

  European Council
  Dr. Stoate
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the Berlin European Council. [79958]

  Mr. Robin Cook
  At Berlin, we won a good deal for Britain.

  For the first time, spending on the existing member states has been brought under strict control, with a lower ceiling for spending in the existing member states in 2006 than in 2000.

  On agriculture, price cuts were agreed to bring milk, cereals and beef prices closer to world prices. A British family of four will benefit by £65 a year.

  We won a good deal for UK regions.

  The proportion of the UK living in regions covered by Objective 1 will increase by two-thirds and include for the first time Cornwall, West Wales & the Valleys and South Yorkshire.

  And we have preserved the British abatement.

  Kosovo
  Dr. Palmer
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in Kosovo. [79959]

  Mr. Robin Cook
  I discussed developments in Kosovo with European counterparts at a Special General Affairs Council on 8 April. I am in regular contact with them, given the very grave nature of the situation in Kosovo.

  Kosovo was also the main topic of discussion amongst EU Heads of Government at the European Council on 14 April.

  28. Mr. Laurence Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Foreign Minister of Russia regarding the situation in Kosovo. [79974]

  Mr. Tony Lloyd
  My right hon. Friend the Foreign Secretary has been in regular contact with the Foreign Minister of Russia, Mr. Ivanov. He last spoke to him on 15 April.

  Ms Bridget Prentice
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next plans to meet European counterparts to discuss developments in Kosovo. [79981]

  Mr. Tony Lloyd
  I refer my hon. Friend to the answer given earlier today by my right hon. Friend the Foreign Secretary to my hon. Friend the Member for Bethnal Green and Bow (Ms King), Official Report, column 679.

  Armenian Genocide
  Jane Griffiths
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans the Government have to make a statement on the Armenian genocide. [79964]
  507
  Ms Quin
  The British Government condemned the massacres of Armenians in Eastern Anatolia in 1915–16 at the time, and views the sufferings of the Armenian people then as a tragedy of historic proportions. But the British Government have not recognised the events of 1915–16 as a "genocide" a term which did not exist at the time and has no plans to make a statement.

  European National Parliaments
  Mr. Sheerman
  To ask the Secretary of State for Foreign and Commonwealth Affairs what new steps he is taking to improve communication between the national parliaments of Europe. [79968]

  Ms Quin
  The Government strongly support improvements in communication between the national parliaments of Europe and between Westminster and the European Parliament.

  In particular, the Government have recently extended the scheme which enables MPs to visit EU institutions so that it now includes visits to national parliaments of EU Member States. Such visits will complement the step change initiative which the Government have instigated in relations with our European partners.

  In addition, our European embassies regularly advise and make arrangements for UK parliamentarians and Select Committees who wish to make contact with national parliamentarians across Europe.

  The entry into force of the Amsterdam Treaty, with the Protocol on National Parliaments, on 1 May will further enhance the role of national parliaments in the EU.

  Closer links between national parliaments improve knowledge and awareness of European issues in Westminster and enable Westminster's views to be heard more clearly across Europe.

  Pakistan
  Fiona Mactaggart
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on UK relations with Pakistan. [79970]

  Mr. Tony Lloyd
  The United Kingdom relations with Pakistan are long-standing and friendly. We have a continuing dialogue on a variety of issues of mutual concern.

  Agenda 2000
  Mr. Barron
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the negotiations on Agenda 2000 relating to enlargement. [79971]

  Ms Quin
  The settlement reached at Berlin on Agenda 2000 provides for the costs of enlargement to be met within the existing 1.27 per cent. GNP Own Resources ceiling. It therefore paves the way for enlargement. Substantial funds will be available to help prepare applicant counties for accession and to provide assistance after they join—£14.6 million (21.8 million euro) and £38.7 million (58.1 million euro) respectively over the next financing period 2000–06.

  Colombia
  Mr. Goggins
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Colombian Government with regard to displaced people [79972]

  Mr. Tony Lloyd
  The British Government take every opportunity to raise the issue of displaced people, and human rights in general, with the Colombian Government at senior level. I have raised these issues on both of my visits to Colombia and regularly raise them with the Colombian Ambassador in London.

  Middle East Peace Process
  Mr. Trickett
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the action proposed to be taken by the European Union as a result of the declaration on the middle east peace process at the Berlin European Council. [79973]

  Mrs. Ellman
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the role of the EU in assisting a negotiated settlement in the middle east. [79975]

  Mr. Burden
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the declaration on the middle east peace process at the Berlin summit. [79979]

  Mr. Tony Lloyd
  I refer my hon. Friends to the answer given earlier today to my hon. Friend the Member for Keighley (Mrs. Cryer),Official Report, column 690.

  Iraq
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to his oral answer of 16 March 1999,Official Report, columns 869–70, on Iraq, if he will define the humanitarian objectives of the no-fly zones. [79976]

  Mr. Tony Lloyd
  As my hon. Friend the Member for Linlithgow is aware from the answer given to his question on 18 March 1999,Official Report, column 764, by the Minister of State, Foreign and Commonwealth Office the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Leeds, Central (Mr. Fatchett), the No-Fly Zones were established in response to a situation of overwhelming humanitarian necessity. Coalition aircraft patrol the No-Fly Zones in support of SCR 688 which called on Iraq to end the repression of its civilian population. The humanitarian objective is therefore to limit this repression as far as possible. This remains a vital task. as the latest report from the UN Special Rapporteur on Human Rights makes clear, the]Iraqi security services continue to persecute opponents of the regime on the ground. Without our continued presence in the No-Fly Zones, they would be free to do so from the air as well. With past atrocities committed by Iraqi forces in mind, including the chemical weapons attack on the Kurds in Halabjah, we are not prepared to countenance that.
  509
  Dr. Iddon
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the sanctions imposed by the international community on Iraq have affected the supply of radioactive isotopes for the treatment of cancer there. [80161]

  Mr. Fatchett
  We are not aware that sanctions have affected the supply of radioactive isotopes for the treatment of cancer in Iraq. Radioactive isotopes are included on the distribution plan for the present phase of the UN "oil for food" programme. We are not aware that any contracts for these isotopes have been put on hold or blocked in the UN Sanctions Committee.

  European Commission
  Mr. Gill
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the disciplinary procedures applicable to employees of the European Commission. [79977]

  Ms Quin
  I believe that a review of these procedures for disciplinary offences should form part of the Commission reform process. Effective arrangements must be put in place under which those who do not meet the standard required of European public servants can be disciplined and, if necessary, dismissed within a reasonable timescale.

  European Union
  Ms Kelly
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his European counterparts about institutional reform of the European Union. [79978]

  Ms Quin
  Heads of Government met Mr. Prodi, the European Council's nominee for Commission President, on 14 April to discuss Commission reform. They agreed to take forward the reform process at the European Council in Cologne on 3–4 June on the basis of more detailed plans drawn up by Mr. Prodi.

  The timing of an Intergovernmental Conference to examine institutional reform prior to enlargement will be considered at the Cologne summit.

  The Government are pushing for profound reform of the way in which the Commission works. We believe that the Commission should be guided by the principles of efficiency, transparency and accountability. Achieving this will require changes in financial control systems, personnel management and structures.

  Nigeria
  34. Mr. Ian Bruce
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's relations with the new Government in Nigeria. [79980]

  Mr. Tony Lloyd
  We are working to build a strong relationship with President-elect General Olusegun Obasanjo, who will be sworn in to office on 29 May 1999.

  My right hon. Friend the Foreign Secretary met him in Nigeria shortly after the February Presidential elections. General Obasanjo subsequently visited London and had a meeting with my right hon. Friend the Prime Minister, which I attended. He also met my right hon. Friend the Secretary of State for Defence.

  BBC World Service
  Mr. Sutcliffe
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the funding of the BBC World Service during(a) 1999–2000, (b) 2000–01 and (c) 2001–02. [79982]

  Ms Quin
  Following the outcome of the Comprehensive Spending Review in July 1998, grant-in-aid to the BBC World Service was increased by £44.2 million to £175.5 million in 1999–2000, £174.0 million in 2000–01 and £177.7 million in 2001 –02, a real increase of on average nearly 3.9 per cent. in each year above the 1998–99 level. This compares with a CSR increase for the FCO of around 2 per cent. per annum.

  International Criminal Court
  Dr. Tony Wright
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress with the establishment of an international criminal court.[79983]

  Mr. Tony Lloyd
  Eighty one States, including the UK, have signed the Statute of the International Criminal Court and two have ratified it. The first meeting of the Preparatory Commission for the Court took place in February; the next will begin on 26 July. The Government continue to lobby for international support for the Court, and are playing a full part in the work of the Preparatory Commission.

  Corpus Juris
  Mr. Sawford
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had on corpus juris; and if he will make a statement. [79951]

  Kate Hoey
  I have been asked to reply.

  The research study entitled "Corpus Juris", published in 1997 under the aegis of the European Commission, contains proposals for common penal rules and procedures to protect the financial interests of the European Community, including the creation of an office of European Public Prosecutor.

  The House of Lords European Communities Committee has recently conducted an inquiry into the Corpus Juris report. The Government provided both written and oral evidence to the inquiry and are awaiting the Committee's findings.

  Although the Government fully share the objective of fighting fraud against the Community budget, we disagree with many of the recommendations of the "Corpus Juris" study. None of the recommendations have been submitted to the Council of Ministers, but if this were to happen, unanimous agreement would be needed for them to be adopted and come into effect. The Government's agreement to the majority of the proposals in their present form is highly unlikely.

  Macpherson Inquiry
  Mr. Efford
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the implications for his Department of the Macpherson Inquiry recommendations; and if he will make a statement. [80523]
  511
  Mr. Fatchett
  I refer my hon. Friend to the reply to his question given by the Minister for the Cabinet Office on 14 April 1999,Official Report, column 239.

  Ambassadors for British Business
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the criteria for selection of Ambassadors for British business. [81038]

  Mr. Fatchett
  The Ambassadors for British Business were elected to represent a wide cross-section of British commercial success. They are people who frequently go abroad on working visits and have a wealth of specialist knowledge backed up by the excellent contracts. They include the chairmen and executives of multinationals as well as smaller concerns. They have been very successful in helping to promote the United Kingdom as a place to do business.

  Papua New Guinea
  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 22 March 1999,Official Report, column 61, on Papua New Guinea, what issues were discussed with the High Commissioner at the meeting of 3 March; what actions were requested of Her Majesty's Government; and what commitments were made on behalf of Her Majesty's Government. [80878]

  Mr. Fatchett
  On 3 March, the Papua New Guinea High Commissioner telephoned officials at FCO. In line with Government practice, I cannot reveal the substance of an exchange conducted in confidence with a representative of a foreign government.

  Chagos Islands
  Mr. Austin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to allow the Chagos islanders to visit their homeland; and if he will make a statement.[80803]

  Mr. Fatchett
  [holding answer 16 April 1999]Any person who wishes to visit the Chagos islands can apply for a permit to do so and each application will be considered on its merits.

  Mr. Austin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the demand of the Chagos islanders to return to their homeland following the recent High Court ruling on this matter; and if he will make a statement. [80802]

  Mr. Fatchett
  [holding answer 16 April 1999]The recent High Court ruling concerned an application for leave to apply for a Judicial Review. Leave was granted and in due course the case will be heard by the full Divisional Court. In the meantime, it will be inappropriate for the Government to comment further.

  Libya
  Mr. Austin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Libyan Arab Jamahirya regarding the re-opening of a Libyan diplomatic mission in London; and if he will make a statement. [80809]
  512
  Mr. Fatchett
  [holding answer 16 April 1999]The re-opening of a Libyan diplomatic mission in London depends on the re-establishment of diplomatic relations which were broken off in 1984 after the shooting of WPC Fletcher outside the Libyan People's Bureau in London.

  Following the handover of the two Lockerbie accused, there remain a number of other bilateral issues between Libya and ourselves. Foremost of these is the WPC Fletcher case.

  Mr. Austin
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he intends(a) to re-open the British Embassy in Tripoli and (b) to re-establish full diplomatic relations with Libya; and if he will make a statement. [80807]

  Mr. Fatchett
  [holding answer 16 April 1999]The re-opening of the British Embassy in Tripoli depends on the re-establishment of diplomatic relations which were broken off in 1984 after the shooting of WPC Fletcher outside the Libyan People's Bureau in London.

  Following the handover of the two Lockerbie accused, there remain a number of other bilateral issues between Libya and ourselves. Foremost of these is the WPC Fletcher case.

  Mr. Alan Johnson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken by the UK and the EU to implement the suspension of UN sanctions against Libya; and if he will make a statement. [81677]

  Mr. Tony Lloyd
  UN sanctions against Libya imposed by Security Council resolutions 748 and 883 were suspended on 5 April, in accordance with UN Security Council resolution 1192 (1998), immediately the UN Secretary-General reported that the two Lockerbie accused had been delivered for trial before the Scottish court established in the Netherlands and that the Libyan Government had satisfied the French judicial authorities with regard to the bombing of UTA 772. The prohibition on payment of performance bonds in paragraph 8 of resolution 883 remains in operation.

  The provisions of those resolutions were implemented in the UK by restrictions imposed in the Libya (United Nations Prohibition of Flights) Order 1992, The Libya (United Nations Sanctions) Order 1993, The Libya (United Nations Sanctions)(Channel Islands) Order 1993 and The Libya (United Nations Sanctions)(Isle of Man) Order 1993. In accordance with Article 1(2) of each Order its operation was accordingly suspended; Article 13 of the three 1993 Orders, which imposes restrictions on the payment of bonds given in respect of contracts whose performance had been affected by the suspended provisions of the Orders, and the provisions in those Orders relating to the enforcement of Article 13, remain in operation. Details of the suspension of UN sanctions and of the Orders have been published in a notice in the London Gazette on 12 April and the Edinburgh and Belfast Gazettes on 9 April. Action is in hand to gazette the suspension of the relevant provisions of the Orders implementing the UN sanctions in the Overseas Territories.

  On 16 April, The Council of the EU adopted a Common Position (7318/99) suspending the measures taken against Libya by the EU in response to UN Security Council resolutions 748 and 883.
  513
  The Common Position also specified that the measures agreed by Member States in 1986 in response to Libya's general implication in terrorism should remain in force (these measures are an arms embargo; restrictions on the freedom of movement of Libyan diplomats and consular personnel; reduction of the staff of diplomatic and consular missions; and stricter visa requirements and procedures). The Common Position will be reviewed in the light of the UN Secretary-General's report on Libyan compliance with the remaining provisions of UN Security Council resolutions 731 and 748, in particular Libyan renunciation of terrorism.

  The Common Position does not affect Regulation 3275/93 which prohibits the satisfying of claims with regard to contracts and transactions the performance of which was affected by UN sanctions.

  Based on this Common Position, the EC adopted a Regulation suspending the application of Regulation 3274/93 which prevented the supply of certain goods and services to Libya.

  In addition to the EU measures against Libya agreed in 1986, national controls on the supply of aircraft, aircraft parts and flight simulators to Libya under the provisions of Dual-Use and Related Goods (Export Control) Regulation 1996, as amended, remain in force.

  The Foreign and Commonwealth Office will be issuing a press release on the suspension of EU sanctions against Libya.

  Inward Investment
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the work he has done to secure(a) Japanese and (b) Korean inward investment into the United Kingdom. [81104]

  Mr. Fatchett
  [holding answer 16 April 1999]The Invest in Britain Bureau (IBB) is jointly managed by the FCO and DTI. It has active promotion strategies aimed at securing the UK's position as the number one European location for Japanese and Korean investment. The IBB runs a programme of company visits (900 in Japan, 220 in Korea in 1998-99), promotional seminars, media campaigns and inward missions aimed at attracting inward investment, as well as working closely with existing investors alongside the UK Development Agencies.

  The Ministerial teams in the FCO and DTI support this both here in the UK and when travelling overseas. For example, I have met a number of Japanese and Korean investors here and when visiting Japan and Korea.

  Prime Minister (Foreign Media Articles)
  Mr. Maclean
  To ask the Secretary of State for Foreign and Commonwealth Affairs what correspondence his(a) Department and (b) office have received from (i) posts abroad and (ii) the Prime Minister's office on placement of articles written by the Prime Minister in the foreign media, which would facilitate identification of those articles; and if he will make a statement. [81237]

  Mr. Fatchett
  We do not maintain the records necessary to provide a comprehensive answer. To do so would be possible only at disproportionate cost.

AGRICULTURE, FISHERIES AND FOOD

  Departmental Staff (Ethnic Origin)
  Mr. Vaz
  To ask the Minister of Agriculture, Fisheries and Food if he will provide a breakdown, in numerical and percentage terms, of the ethnic origin, at 1 March, of(a) his private office, (b) Government special advisers, (c) his Policy Unit and (d) staff in total. [78513]

  Mr. Nick Brown
  (a) The composition of my Private Office on 1 March was as follows:

  Number

  Percentage

  White Origin

  5

  71.4

  Ethnic minority origin

  2

  28.6

  The figures quoted relate solely to my Private Office and do not cover the whole of the Secretariat in my Department.

  (b) I refer my hon. Friend to the reply given by my right hon. Friend the Minister for the Cabinet Office on 22 February 1999, Official Report, column 39.

  (c) My Department does not have a separate Policy Unit.

  (d) I refer my hon. Friend to the reply given by my right hon. Friend the Minister for the Cabinet Office on 31 March 1999, Official Report, columns 710–11.

  New Forest (Hunting)
  Mr. Swayne
  To ask the Minister of Agriculture, Fisheries and Food how many videos his Department has received since 1 May 1997 depicting the activities of the New Forest hounds; and which Ministers have viewed them. [80435]

  Mr. Morley
  Since 1 May 1997, the Forestry Commission has received about a dozen videos of activities during fox hunts in the New Forest. I have seen some of these videos.

  Mr. Swayne
  To ask the Minister of Agriculture, Fisheries and Food for what reasons it took from 1 June 1998, when the Forestry Commission approved a licence for New Forest fox hounds, until October 1998 for that licence to be issued. [80436]

  Mr. Morley
  The Forestry Commission issues licences for fox hunting over its land. The terms of those licences are based on an Agreement between the Commission and the Master of Foxhounds Association. The Agreement for last season was concluded on 18 August, after which the licences and associated maps were prepared in accordance with the Agreement. The Commission completed the New Forest Fox Hounds' licence on 24 September.

  Mr. Swayne
  To ask the Minister of Agriculture, Fisheries and Food (1) what involvement Ministers have in the procedure by which the Forestry Commission issue hunting licences in the New Forest; [80433]

  (2) what involvement Ministers have in the process of issuing a hunting licence once the Forestry Commission have approved the terms of such a licence. [80434]
  515
  Mr. Morley
  None. The Forestry Commission does, however, keep Ministers informed about its policies on hunting and the terms of the licences that it issues.

  Advisory Committees
  Mrs. Ann Winterton
  To ask the Minister of Agriculture, Fisheries and Food if he will list those members of advisory committees to his Department who

  Advisory Committee

  Member

  Declared interest

  Veterinary Products Committee

  Mr. J. M. Jepson

  Glaxo Wellcome, SmithKline Beecham

  Dr. D. F. Wishart

  SmithKline Beecham

  Spongiform Encephalopathy Advisory Committee

  Dr. Peter Goodfellow

  SmithKline Beecham

  Prof. Roy Anderson

  The Wellcome Trust1

  Prof. John Collinge

  The Wellcome Trust1

  Farm Animal Welfare Council

  Dr. Agnes Winter

  Glaxo Wellcome

  1 Declared interest is in Wellcome Trust—not Wellcome Institute.

  Set-aside Land
  Mr. Cox
  To ask the Minister of Agriculture, Fisheries and Food what was the total payment for land put into set-aside in England and Wales in 1998. [80905]

  Mr. Rooker
  At 31 March, £75,589,275 had been paid on land set aside in 1998 under the Arable Area Payments Scheme in England and Wales.

  Genetically Modified Food
  Ms Drown
  To ask the Minister of Agriculture, Fisheries and Food (1) what assessment he has made of the safety of the antibiotic-resistant gene in Novartis's genetically modified maize;[80794]

  (2) what assessment the Advisory Committee on Novel Foods and Processes made of the safety of the antibiotic-resistant gene in Novartis's genetically modified food. [80793]

  Mr. Rooker
  The conclusions of the Advisory Committee on Novel Food and Processes (ACNFP) concerning this GM maize are recorded in the Committee's 1996 annual report which is available in the House of Commons Library. The ACNFP was satisfied that processed food ingredients derived from the maize were as safe as their conventional counterparts but expressed reservations about the use of the unprocessed maize as an animal feeding stuff because of what it considered to be a small, but finite, chance that this could lead to a transfer of antibiotic resistance.

  Subsequent to the ACNFP's consideration of this matter, this maize was assessed by three EC Scientific Committees, the Scientific Committee for Foods, the Scientific Committee for Plants and the Scientific Committee on Animal Nutrition, who took into account the ACNFP's views. Whilst agreeing with the ACNFP's assessment that there was a finite risk of the transfer of antibiotic resistance to cattle fed on the raw maize, all three EC Committees felt that this was too small to warrant recommending a ban on its use for animal feed. EC approval was therefore granted. The Department has however commissioned some research work at the University of Leeds to look further into the issue of the potential for the transference of antibiotic resistance from GM crops. Should any scientific evidence emerge
  516
  have declared outside interests with (a) DiaDexus, (b) Cerebrus Ltd, (c) Cerebrus PLC, (d) Stanford University, (e) Human Genome Services Inc, (f) Glaxo Wellcome, (g) the Wellcome Institute, (h) Monsanto, (i) AgrEvo and (j) SmithKline Beecham.[80129]

  Mr. Morley
  The following members of advisory committees have declared relevant outside interests as listed below:
  from this which in the opinion of the ACNFP shows the risk to be greater than originally thought, the Government will consider taking action under the safeguard clause in the EC Deliberate Release Directive (90/220) to restrict the use of the raw maize in animal feed and press for an urgent reappraisal of the situation by the EC Scientific Committees and the Council.

  Synthetic Pyrethroids
  Mr. William Ross
  To ask the Minister of Agriculture, Fisheries and Food what studies he has carried out to determine the period which elapses before a river or stream's insect life recovers to its former levels after pollution by synthetic pyrethroids. [80875]

  Mr. Rooker
  All veterinary medicines and pesticides, including those containing synthetic pyrethroids, must satisfy statutory criteria including safety. The safety assessment includes safety to the environment. Pollution incidents should not occur if safety warnings on labels are heeded. The period of recovery after a pollution incident is a matter for the environment agencies but is likely to vary according to the conditions in the river or stream concerned.

  Mr. William Ross
  To ask the Minister of Agriculture, Fisheries and Food what has been the result of studies he has carried out into the effect of synthetic pyrethroids in(a) sheep dips and (b) sprays for plants on (1) aquatic insects, (2) soil invertebrates and (3) other animal life; what sums he has expended in each of the last five years on such studies; and what further work is being carried out to determine the effect on fish life in affected rivers and streams. [80874]

  Mr. Rooker
  No veterinary medicine is authorised unless it satisfies statutory criteria of safety, quality and efficacy. Safety includes safety to the environment. As part of the process of approval, the applicant company is required to submit data to the Veterinary Medicines Directorate where they are carefully assessed by specialists qualified in various scientific disciplines including ecotoxicology. No studies are carried out by the Ministry.

  All pesticides are similarly subject to strict statutory control. In considering the approval or review of a pesticide, an assessment is made (on the basis of data

  517
  supplied by the applicant) of the risk to people, wildlife and to the wider environment. Only if this assessment shows that there is no unacceptable risk will approval be granted or allowed to continue following a review. The Ministry has carried out no studies of the kind specified into the environmental effects of synthetic pyrethroid pesticides. However, synthetic pyrethroid pesticides have been used in other MAFF funded research.

  Seals
  Mr. William Ross
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the quantities of fish eaten by seals in the waters of the United Kingdom annually.[80871]

  Mr. Morley
  I refer the hon. Member to the reply given to him on 17 November 1998,Official Report, column 574.

  Public Appointments
  Mr. Brady
  To ask the Minister of Agriculture, Fisheries and Food if he will list the public appointments for which his Department is responsible and which carry a fee or salary, indicating for each type of appointment the fee or salary band which applies. [80759]

  Mr. Morley
  [holding answer 15 April 1999]"Public Bodies 1998"—copies of which are available in the Library of the House—provides information on the levels of remuneration paid to those serving on the boards of public bodies for which my Department is responsible. Some public appointments, however, are unpaid as many of those who accept public appointment do so on a voluntary basis.

  Fisheries Agreements
  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food in which African countries, other than Mauritania, British fishing vessels, British flagged fishing vessels and British registered companies have fisheries interests. [81086]

  Mr. Morley
  There are no UK vessels currently fishing in the waters of African countries.

  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food which(a) British fishing vessels, (b) British flagged fishing vessels and (c) British registered companies have a beneficial interest in the fisheries agreement with Mauritania. [81085]

  Mr. Morley
  There are no UK vessels currently fishing in Mauritanian waters under the EU fisheries agreement.

  Sand Eels
  Mr. William Ross
  To ask the Minister of Agriculture, Fisheries and Food what studies his Department has carried out to determine the importance of sand eels as the prey of(a) salmon smelts and (b) sea trout smelts; and what was the conclusion of such studies.[80876]

  Mr. Morley
  No such studies have been carried out by the Department.

  Seed Certification
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food if he plans to grant any more applications for provisional seed certification under the non-statutory seed certification scheme. [81263]

  Mr. Rooker
  [holding answer 19 April 1999]A number of applications in England and Wales for provisional seed certification under the non-statutory seed certification scheme are being processed through the current growing season. However, the Government will come forward quickly with proposals to amend secondary seeds legislation before the next round of applications are made. If these measures are adopted, there would be no need for the non-statutory scheme to continue.

  Pork Imports
  Mr. Letwin
  To ask the Minister of Agriculture, Fisheries and Food what advice he has received on the compatibility with Article 36 of the Treaty establishing the European Union of placing restrictions on the import of pork products not produced to UK standards. [81364]

  Mr. Rooker
  [holding answer 19 April 1999]In certain circumstances Article 36 of the Treaty allows the maintenance of restrictions on the free movement of goods where these can be justified for the protection of the health and life of humans or animals or on grounds of public morality or policy. However, it is clear from Rulings by the European Court of Justice that we cannot use Article 36 of the Treaty to impose higher UK standards on imports where EU law has been harmonised as it has been in the field of farm animal welfare. Nor is it relevant to the UK ban on the use of Meat and Bone Meal (MBM) in animal feed as this ban is not in place because there is a known health risk to humans or animals in feeding MBM to pigs or poultry. The jurisprudence of the European Court of Justice also precludes reliance on the grounds of public morality or policy in the circumstances with which the hon. Member is concerned.

  Organic Aid Scheme
  Mr. Letwin
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the effect on the amount of grant made under the organic aid scheme of recent changes in the definition of unimproved land for the purposes of the scheme. [81272]

  Mr. Morley
  [holding answer 19 April 1999]The amount of aid granted under the Organic Farming Scheme will be dependent on the number of applications and the type of land involved. We expect demand to be strong.

  Rivers (Over-fishing)
  Mr. Laurence Robertson
  To ask the Minister of Agriculture, Fisheries and Food what powers he has to limit the over-fishing of rivers; what discussions he has had with fishing clubs and river authorities about over-fishing of elvers and salmon; and if he will make a statement.[81261]

  Mr. Morley
  [holding answer 19 April 1999]The Environment Agency, which is responsible for the management of inland fisheries in England and Wales, has powers to make byelaws to regulate fishing for salmon and eels including elvers. It can also make net
  519
  limitation orders to limit numbers of net licences in salmon net fisheries. Both byelaws and net limitation orders must be confirmed by Ministers.

  Following advice from the International Council for the Exploration of the Sea (ICES) that extreme caution should be exercised in the management of multi-sea-winter salmon and that the level of exploitation should be significantly reduced in 1999, the Environment Agency proposed the introduction of byelaws to reduce exploitation of spring salmon by both nets and rods in England and Wales. There was extensive consultation on these proposals including advertising in local and national press. The byelaws were confirmed, with modifications, on 14 April.

  The Environment Agency and the Ministry have recently commissioned research into the state of eel and elver stocks and levels of exploitation. In addition, the independent group established by Ministers to review all aspects of salmon and freshwater fisheries legislation is considering whether the additional powers are needed to regulate fishing for salmon and eels. The group is expected to report to Ministers in the autumn.

  Free-range Hens
  Mr. Letwin
  To ask the Minister of Agriculture, Fisheries and Food what is his Department's definition of free-range hens. [81270]

  Mr. Morley
  [holding answer 19 April 1999]I assume that the hon. Member is referring to free-range egg production from hens. Before eggs can be marketed as free-range, EU Commission Regulations require, among other things, that the hens have continuous daytime access to open air runs, mainly covered with vegetation. They also specify maximum outdoor and indoor stocking densities.

  Goats and Sheep
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to prevent the illegal slaughtering of goats and sheep, involving the removal of hides by oxyacetylene blowtorches; and if he will make a statement. [81394]

  Mr. Rooker
  The Fresh Meat (Hygiene and Inspection) Regulations 1995 (as amended) which implement the EC Fresh Meat Directive (64/433/EEC as amended) in Great Britain, make it an offence for any person to sell for human consumption fresh meat which has not been produced under veterinary supervision in licensed premises.

  The Ministry of Agriculture, Fisheries and Food (MAFF) will investigate any allegations relating to the illegal production of singed sheep and goat carcases, commonly known as `smokies'. Where there is sufficient evidence that such activity has taken place, and it is in the public interest to do so, MAFF will prosecute those involved, in co-operation with Local Authority Environmental Health Departments as appropriate.

  Pesticides
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food if he will require the Advisory 520
  Committee on Pesticides to take account of the effects on biodiversity in reaching decisions about the clearance of pesticides. [81449]

  Mr. Rooker
  The remit of the Advisory Committee on Pesticides is to give advice to Ministers, either when requested to do so or otherwise, on any matters relating to the control of pests in furthering the general purposes of Part HI of the Food and Environment Protection Act 1985. These purposes include"the continuous development of means … to safeguard the environment … ".

  The Committee's members include people with expertise in environmental matters.

  All pesticides are approved on the basis of a thorough evaluation of the risk that they pose in use. No pesticide may be used unless Ministers, advised by the Committee, have given approval to that use. When considering whether to recommend that a pesticide should be approved by Ministers, the Committee will take into account, amongst other things, the possible effects of that pesticide on non-target wildlife and the environment. If the risk is considered to be too great, then no approval is recommended.

SOCIAL SECURITY

  Stakeholder Pensions
  Mr. Webb
  To ask the Secretary of State for Social Security what assessment he has made of the compatibility of his plan to limit charges for stakeholder pensions with the need for those purchasing such pensions to be given proper advice. [81114]

  Mr. Timms
  We recognise that proper information and advice for those who need it will be an important part of the decision-making process for individuals considering a stakeholder pension scheme.

  Details of the minimum standards for stakeholder pensions are subject to further consultation. The standards will include a limit on the level of charges, and in setting that limit we shall consider carefully what allowance should be made for the costs of information and advice.

  Mr. Webb
  To ask the Secretary of State for Social Security what assessment he has made of the implications of the growing use of tracker pension funds for the economy; and what account he has taken of such an assessment in designing his stakeholder pension scheme. [81113]

  Mr. Timms
  No such assessment has been made. We expect that stakeholder pension schemes will, like other pension schemes, have the option of investing in tracker funds.

  Fraud Investigation
  Mr. Field
  To ask the Secretary of State for Social Security what has been the result of his Department's investigation into the nature and extent of identity fraud. [81092]

  Mr. Timms
  The best available measure of the scale of Identity Fraud is provided by the Department's measurement regime (Benefit Reviews). The second
  521
  Income Support review recorded the level of ID fraud at between 1 per cent. and 9 per cent. of the stock of fraud. This translates to between £17.5 million and £154 million.

  Initial characteristics of an Identity Fraudster were identified and further research was proposed to refine these characteristics further. This is a valuable line of inquiry since if the characteristics of an Identity Fraudster can be established, then we can enhance our ability to prevent, detect and target resources at identity fraud.

  The Identity Fraud Management Unit has now been incorporated within the Benefits Agency Security and Investigation Service (BASIS), the organised and serious fraud investigation service, who have extensive intelligence and experience in dealing with Identity related benefit crime.

  Mr. Field
  To ask the Secretary of State for Social Security what steps have been taken towards establishing a criminal intelligence database for fraud investigation in the Benefits Agency and local authorities. [81090]

  Mr. Timms
  The Benefits Agency Security and Investigation Service (BASIS) uses an intelligence database to record all operational intelligence relating to investigations. BASIS liaises with the Benefit Fraud Investigation Service (BFIS) and local authorities and is developing further its interchange and use of intelligence for investigative purposes with BFIS and local authorities.

  Pensioners (Minimum Income)
  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security what estimate he has made of the number of people who will benefit as a result of the new guaranteed minimum income for pensioners on income support. [80948]

  Mr. Timms
  The number of pensioner benefit units that will benefit from the Minimum Income Guarantee for pensioners in 1999–2000 is estimated to be 1.47 million. A pensioner benefit unit represents a single person aged 60 or over, or a couple where one or both members is aged 60 or over.

  Notes:

  1. Figures are rounded to the nearest 10,000 and exclude pensioners in residential care and nursing homes.

  2. The estimates are based on forecasts published in the March 1999 Departmental Report.

  Macpherson Inquiry
  Mr. Efford
  To ask the Secretary of State for Social Security what assessment he has made of the implications for his Department of the Macpherson Inquiry recommendations; and if he will make a statement. [80522]

  Angela Eagle
  I refer the hon. Member to the written answer given by my right hon. Friend the Minister for the Cabinet Office on 14 April 1999,Official Report, column 23.

  Pensioners (Benefits)
  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security what has been the increase in take-up of(a) income support and (b) other benefits among people of pensionable age since 1 May 1997. [80947]
  522
  Mr. Timms
  The information requested is currently unavailable. Estimates of take-up are published annually for Income Support, Housing Benefit, Council Tax Benefit and Family Credit. The statistics for the year 1997–98 are in the process of being compiled and will be published later this year.

  Incapacity Benefit
  Ms Jenny Jones
  To ask the Secretary of State for Social Security how many people were receiving incapacity benefit in(a) the UK and (b) the West Midlands on 31 March. [81162]

  Mr. Bayley
  The information is not available in the format requested. Such information as is available is in the table. Figures for 31 March 1999 are not yet available.

  Incapacity Benefit recipients

  31 August 1998

  United Kingdom

  1,716,488

  (Northern Ireland)

  98,588

  (Great Britain)

  1,617,900

  West Midlands

  141,680

  Note:

  Both systems exclude a small number of cases held clerically

  Source:

  Norther Ireland: 100 per cent. sample of the Benefit computer system

  Great Britain and West Midlands: 5 per cent. sample of the Benefit computer system

EDUCATION AND EMPLOYMENT

  Lifelong Learning
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment what measures the Government are undertaking to promote lifelong learning and develop the skills base of older workers as a means of improving the levels of employment among the over 50s. [80946]

  Mr. Mudie
  The Government believe that lifelong learning contributes to national competitiveness, personal prosperity and to the development of a fair and harmonious society. The aim is to develop a "learning society" in which everyone regularly updates their skills and knowledge throughout life. Action to improve learning opportunities for the over 50s is an important part of our approach to "Better Government For Older People".

  Measures to promote lifelong learning and develop the skills base of older workers include: extending student loans to those aged 54, opportunities through the £15 million Adult and Community Learning Fund; access to Learning Direct and Career Development Loans; and opportunities through work based learning for adults, the New Deals and Employment Zones. In addition, the New Deal for the over 50s who are out of work for six months or more and are on income replacement benefits, and their dependent partners, announced in the budget, includes plans for a learning support of up to £750 for each person.

  New Deal (Disabled People)
  Mr. Soley
  To ask the Secretary of State for Education and Employment how many organisations for disabled people have received New Deal funding. [80890]

  Ms Hodge
  The information requested is not available in the form requested. However, under the New Deal for Disabled People, 22 of 24 Innovative Schemes involve organisations of or for disabled people. In addition, all the consortium contracted to deliver the second group of six Personal Adviser Service pilot areas also involve such organisations.

  Mr. Soley
  To ask the Secretary of State for Education and Employment how many consortiums led by disabled people received New Deal funding during the second tranche. [80891]

  Ms Hodge
  Under the New Deal for Disabled People, all six contracts awarded in the second tranche of the Personal Adviser Service and 13 of the 14 contracts awarded under the second tranche Innovative Schemes are two consortiums that include organisations of or for disabled people. Two Personal Adviser consortiums and seven Innovative Schemes are led by voluntary sector organisations.

  New Deal (Young People)
  Mr. Field
  To ask the Secretary of State for Education and Employment what is the average length of time spent on the Gateway of the New Deal for 18 to 25-year-olds by those(a) with no educational qualifications, (b) with Foundation Level qualifications, (c) with NVQ Level 1, (d) with NVQ Level 2, (e) with NVQ Level 3, (f) with NVQ Level 4, (g) with other qualifications and (h) who did not list any educational qualifications. [81108]

  Mr. Andrew Smith
  The information set out in the following table shows the average length of time spent on the New Deal Gateway by qualification level, for those young people who had left the Gateway by the end of January 1999.

  Highest qualification held

  Average length of time spent on Gateway (in days)

  NVQ/SVQ Level 4+ or equivalent

  87

  NVQ/SVQ Level 3 or equivalent

  92

  NVQ/SVQ Level 2 or equivalent

  91

  NVQ/SVQ Level 1 or equivalent

  95

  NVQ/SVQ Foundation Level or equivalent

  98

  Other

  92

  None

  100

  Those who did not list qualifications

  68

  Title

  Date of establishment

  Date of termination

  Expected date of termination where known

  Final report published

  Expected report date where known

  (a) Task forces

  Joint COSLA/Scottish Office Best Value Task Force1

  May 1997

  —

  Summer 2000

  —

  Summer 1999

  September 1999

  Prestwick Task Force

  June 1997

  December 1998

  —

  December 1998

  —

  Action Group on Standards in Scottish Schools

  July 1997

  —

  —

  —

  —

  Joint COSLA/Scottish Office Working Group on Council Tax Collection

  March 1998

  —

  September1999

  —

  July1999

  Task Force to Follow the Outcome of the Review of Protection Orders made under the Freshwater and Salmon Fisheries (Scotland) Act 1976

  June 1998

  —

  —

  —

  —

  Coronary Heart Disease Task Force

  July 1998

  —

  July 2000

  —

  July 2000

  Borders Working Party

  September 1998

  March 1999

  —

  March 1999

  —

  Gambling (Young People)
  Mr. Cox
  To ask the Secretary of State for Education and Employment what action his Department is taking to combat gambling by young people; and if he will make a statement. [80907]

  Mr. Charles Clarke
  Schools have an important role to play in helping to equip young people with the skills and knowledge they will require now and in later life. They are required to provide a curriculum which promotes the spiritual, moral, social, cultural, physical and mental development of pupils and to prepare pupils for the opportunities, responsibilities and experiences of adult life. Schools take these legal responsibilities concerning the curriculum very seriously. Many schools choose to meet them through programmes of personal, social and health education which can encompass a broad range of topics, including the dangers of gambling.

  Out-of-school Education
  Dr. Cable
  To ask the Secretary of State for Education and Employment if he has issued revised guidance on the education of children out of school, including pupil referral units, following his consultation. [81191]

  Mr. Charles Clarke
  The consultation on the draft `Social Inclusion: Pupil Support' guidance, which covers advice on education out of school including pupil referral units, ended on 31 March. We are now considering the responses and intend to issue the final version before the summer break.

SCOTLAND

  Task Forces
  Dr. Tony Wright
  To ask the Secretary of State for Scotland (1) if he will list for all task forces and policy reviews with external members established by his Department since May 1997(a) their dates of establishment, (b) those which have issued final reports and their dates of publication, (c) those which have been terminated and their dates of termination and (d) for those bodies still in existence, expected reporting and termination dates; [79281]

  (2) if he will list all those task forces and policy reviews with external members established by his Department since May 1997 which have set up (a) subgroups, (b) working parties and (c) other subsidiary committees. [79258]

  Mr. Dewar
  The information requested is provided in the following table.
  525

  Title

  Date of establishment

  Date of termination

  Expected date of termination where known

  Final report published

  Expected report date where known

  (b)Policy reviews

  Scottish Homes' Support for Owner Occupation

  June 1997

  —

  —

  —

  —

  Scottish Homes' Support for Social Rented Housing

  June 1997

  —

  —

  —

  —

  Review of the Scottish Water Industry

  June 1997

  —

  —

  —

  —

  Review of the Processing of Cases in the Children's Hearings System

  July 1997

  —

  —

  —

  —

  Review to Identify Areas of Scotland Appropriate for Designation as National Parks

  September 1997

  —

  —

  —

  —

  Review of Countryside Access Legislation in Scotland

  October 1997

  —

  —

  —

  —

  Review into the System of Land Ownership and Management in Scotland

  October 1997

  —

  —

  —

  —

  Scottish Interdepartmental Review of the Treatment of Vulnerable and Intimidated Witnesses

  October 1997

  October 1998

  —

  November 1998

  —

  A Review of Aspects of Gaelic Broadcasting

  December 1997

  June 1998

  —

  May 1998

  —

  Review of Community Disposals and the use of Custody for Women Offenders in Scotland

  December 1997

  May 1998

  —

  May 1998

  —

  Review of Rural Water and Sewerage Grant Scheme

  January 1998

  —

  —

  —

  Summer 1999

  National Review of Health Resource Allocation

  January 1998

  —

  June 1999

  —

  June 1999

  Review of SSSIs in Scotland

  February 1998

  —

  —

  —

  Summer 1999

  Review of Community Education

  February 1998

  —

  —

  —

  —

  Review of Public Health Legislation

  February 1998

  —

  —

  —

  —

  Review of EA and SEPA Environmental Legislation (with DETR)

  May 1998

  —

  Late 1999

  —

  End 1999

  Strategic Study of Organic Wastes to Land

  May 1998

  October 1998

  —

  October 1998

  —

  Review of the Law and Practice of Compulsory Purchase and Land Compensation (with DETR)

  June 1998

  —

  —

  —

  1999

  Review of Domestic Violence

  June 1998

  —

  —

  —

  —

  Review of Public Health Function

  Summer 1998

  —

  —

  —

  Summer 1998

  HIV Health Promotion Review Group1

  August 1998

  —

  —

  —

  —

  Spring 1999

  Learning Disability Review1

  October 1998

  —

  —

  —

  December 1999

  Committee on Review of Mental Health (Scotland) Act 1984

  December 1998

  —

  —

  —

  Summer 2000

  Lord MacLean's Committee on Serious Violent and Sexual Offenders

  January 1999

  —

  —

  —

  2000

  1One or more sub-groups have been set up

  From 1 July 1999, this will be a matter for the Scottish Parliament.

  Direct Labour Organisations
  Mr. Hood
  To ask the Secretary of State for Scotland if he will list by authority and service area the surpluses and deficits recorded in Scottish local authority direct labour or service organisations audited accounts for 1995–96. [81369]

  Mr. McLeish
  I have arranged for a detailed list, provided by the Accounts Commission for Scotland, of the audited surpluses and deficits achieved by direct labour and direct service organisations of Scottish local authorities in 1995–96 to be placed in the House of Commons Library.

  From 1 July 1999, this will be a matter for the Scottish Parliament.

  Genetically Modified Salmon
  Mr. Baker
  To ask the Secretary of State for Scotland (1) what estimate he has made of the number of genetically modified salmon presently being farmed; [81448]

  (2) how many genetically modified salmon he estimates have escaped from farms into the environment. [81447]

  Mr. Macdonald
  No genetically modified salmon are currently farmed in Scotland. A three-year land-based trial project was licensed in 1995, but this was terminated early. There were no escapes.

  As from 1 July 1999, this will be a matter for the Scottish Parliament.

HEALTH

  South-west Health Authorities (Funding)
  Sir Peter Emery
  To ask the Secretary of State for Health what changes have been made to the way money is allocated to health authorities and NHS trusts in Devon and Cornwall; and on what basis changes were calculated. [74431]

  Mr. Denham
  [holding answer 8 March 1999)A weighted capitation formula is used to calculate fair share targets of available resources.

  Three changes were made to the hospital and community health services formula for 1998–99:

  (a) the additional need weightings were applied to 100 per cent. of expenditure;

  (b) the number of staff market forces factor payzones was reduced from 61 to 51;

  (c) an adjustment was introduced to take the geographical cost variation of providing emergency ambulance services into account.

  These changes were carried out under the auspices of the Resource Allocation Group (RAG). RAG published their 1997 report in February 1998.

  From 1999–2000, health authorities received unified allocations covering:

  (a) hospital and community health services;

  (b) general practice infrastructure; and

  (c) prescribing.

  Three changes were made to the formula for 1999–2000:

  (a) the adjustment for age in the hospital and community health services component was updated;

  527

  (b) a new additional need adjustment for prescribing was introduced;

  (c) a monetary adjustment was introduced for the extra costs of interpretation, advocacy and translation services for ethnic minority populations.

  These changes were based on research conducted under the auspices of the Advisory Committee on Resource Allocation, the successor body to RAG. The committee will publish their 1998 annual report shortly.

  We do not make revenue allocations direct to National Health Service trusts. NHS trusts receive most of their income through agreements with health authorities and their primary care groups.

  Herbal Medicines
  Dr. Iddon
  To ask the Secretary of State for Health on how many occasions in the last 12 months the Medicines Control Agency has taken action to commence the process of removing from the market products which it accepts as safe but which it considers to be unlicensed herbal medicines requiring a product licence. [79486]

  Ms Jowell
  The Medicines Control Agency cannot accept that a herbal medicine is definitively safe unless this has been proven through the licensing process. The MCA is bound to ensure, in accordance with the law, the withdrawal of all unlicensed herbal medicines which are not exempt from licensing. In the past 12 months, except for the two occasions when immediate removal on safety grounds has been effected, compliance with the law has been achieved without the need for the MCA to enforce immediate removal of a herbal medicine from the market.

  Nurses (Training)
  Mr. Waterson
  To ask the Secretary of State for Health what funding his Department plans to make available (i) in East Sussex and (ii) nationally to support the training of nurses. [79489]

  Mr. Denham
  The Sussex Education Consortium, which covers East and west Sussex, plans to spend £16.5 million on the pre and post-registration education and training of nurses, midwives and health visitors in the 1999–2000 financial year. Consortia, nationally, plan to spend £513 million on nursing and midwifery training in 1999–2000.

  Viagra
  Dr. Cable
  To ask the Secretary of State for Health when he expects to make a statement on his policy proposals for the provision of Viagra by the NHS following the completion of his public consultation exercise. [80662]

  Mr. Denham
  The period of consultation ended on 25 March and work is now under way to collate the responses. We will make an announcement once we have had the opportunity to consider carefully all comments received during the consultation period.

  Cardiac Surgery (North Staffordshire)
  Mr. Gill
  To ask the Secretary of State for Health what is the(a) average waiting time and (b) number of patients on the waiting list for cardiac surgery at the North Staffordshire hospital. [80585]
  528
  Mr. Denham
  On 31 December 1998, there were 411 patients waiting for cardiothoracic surgery at North Staffordshire Hospital National Health Service Trust, and they had been waiting for an average of 5.95 months. All urgent patients are currently being treated within four months.

  Source:

  Korner—December 1998.

  Biggleswade and Steppingley Hospitals
  Mr. Sayeed
  To ask the Secretary of State for Health what is the projected expenditure in mid-Bedfordshire for 1998–99 on care for the elderly in Biggleswade and Steppingley hospitals; and what is the projected cost per head. [80478]

  Mr. Denham
  The information requested is not available centrally.

  Mr. Sayeed
  To ask the Secretary of State for Health (1) if he will make a statement on the retention and expansion of existing services and the development of new services, by the three relevant primary care groups, in relation to Biggleswade and Steppingley hospitals; [80457]

  (2) if he will provide a breakdown of costs in relation to the services currently provided at Biggleswade and Steppingley Hospitals; [80490]

  (3) what assessment he has made of the financial impact on (a) Bedford Hospital and (b) other local acute hospitals of the (i) maintenance and (ii) development of services at Biggleswade and Steppingley Hospitals; [80447]

  (4) what assessment he has made of the consultation process on the review of Biggleswade and Steppingley Hospitals; [80446]

  (5) if he will assess the views of (a) general practitioners, (b) consultants and (c) other healthcare professionals towards the retention and development of continuing care facilities at Biggleswade and Steppingley hospitals; [80475]

  (6) if he will conduct (a) an audit of current provision of care and (b) a health needs assessment in relation to the review of Biggleswade and Steppingley Hospitals;[80491]

  (7) what estimate he has made of the projected income which would result from the sale of the Biggleswade and Steppingley Hospital sites; [80489]

  (8) if he will make a statement on progress in the review of acute care in Bedfordshire and the extent to which it informs the review of intermediate care; [80474]

  (9) what assessment he has made of the Option 9 proposals for Biggleswade and Steppingley hospitals in relation to the Government's (a) medium and (b) longterm plans for developing the NHS; [80480]

  (10) what assessment he has made of the basis for Bedford Hospital NHS Trust's support for the withdrawal of services from Biggleswade and Steppingley Hospitals; [80483]

  (11) what assessment he has made of the prospects for using the Biggleswade and Steppingley hospital sites as part of the healthy living centre programme. [80461]
  529
  Mr. Denham
  It is the responsibility of health authorities and primary care groups to assess the health care needs of their population, to draw up strategies and commissioning plans and to secure a range of hospital and community health services to meet those needs.

  I understand that the health authority has conducted a consultation exercise into the development of intermediate care services. However, I understand that no proposals for change have yet been made. If proposals for significant change are made, and if the Community Health Council contests the health authority's proposals, following consultation, the matter would be referred to my right hon. Friend the Secretary of State for a decision. We would consider all the views expressed during the consultation prior to making any decision.

  Mr. Sayeed
  To ask the Secretary of State for Health for what reasons Bedfordshire Health Authority has employed a consultant in connection with the review of Biggleswade and Steppingley hospitals. [80459]

  Mr. Denham
  It is a matter for Bedfordshire Health Authority to decide whether or not it requires the use of consultancy services. I understand that consultancy services were used to carry out the third phase of the review process.

  Medical Negligence
  Jacqui Smith
  To ask the Secretary of State for Health how many medical negligence claims have (i) been brought and (ii) been successful against NHS practitioners in each of the last five years. [80648]

  Mr. Denham
  The information is not available in the format requested.

  Neurological Conditions
  Audrey Wise
  To ask the Secretary of State for Health what assessment he has made of the impact of the National Performance Framework on access to services for patients with neurological conditions. [80594]

  Mr. Denham
  A revised copy of the National Health Service Performance Assessment Framework document, reflecting comments received, was published on 8 April 1999. The associated high level performance indicator set is expected to be published later in the year alongside the Clinical Indicators. It is likely that a refined version of the "Discharge home within 56 days of emergency admission from home with a stroke" indicator will appear in both the amended set of Clinical Indicators and the high level performance indicators supporting the Performance Assessment Framework.

  The high level performance indicators will continue to develop over time to ensure they focus on the outcomes that matter most to the patients and the public.

  British Child Migrants
  Mr. Hinchliffe
  To ask the Secretary of State for Health when he expects the Support Fund for the Former British Child Migrants to become operational; how the fund will be administered; what conditions will apply to determine who will be eligible to receive funding; and when the central information index and website will become operational. [81074]
  530
  Mr. Hutton
  The Child Migrant Support Fund became operational from 1 April 1999. It is administered by International Social Service (ISS) on behalf of the Department. Applications to the Fund must be made through the relevant national ISS office, which will process the claims, but decisions on applications will be made by ISS United Kingdom.

  In order to receive assistance from the Fund, the applicant must be able to show that he/she is a former British child migrant who does not have the means to fund his/her own arrangements for a first-time reunion with a close family member (mother, father, parents' siblings, or their own brothers and sisters).

  The central information Index is expected to become operational in the autumn. The website has been operational since 1 March 1999.

  Hospital Meals
  Mr. Sayeed
  To ask the Secretary of State for Health if he will make a statement on his policy on charging patients for their meals(a) in National Health Service hospitals and (b) in publicly funded nursing homes. [81145]

  Mr. Denham
  National Health Service patients are not charged for their meals whilst in hospital. My right hon. Friend the Secretary of State announced on 16 July 1998 that there would be no new NHS patient charges in the lifetime of this Parliament, and this included payment for meals.

  Individuals placed by local authorities in residential care homes or nursing homes are expected to contribute to the costs of their care package, subject to a means test. This care package includes accommodation and meals.

  Multiple Sclerosis
  Jackie Ballard
  To ask the Secretary of State for Health what guidance he has issued to health authorities about the criteria for NHS prescriptions for the drug Aricept. [81168]

  Mr. Denham
  In April 1998, we sent health authorities guidance from the Standing Medical Advisory Committee on the use of donepezil (Aricept). Copies of the guidance are available in the Library.

  Sexual Health
  Dr. Tonge
  To ask the Secretary of State for Health when he plans to set up the working party on sexual health strategy. [81070]

  Ms Jowell
  [holding answer 19 April 1999]Preliminary consultations to develop a sexual and reproductive health framework are currently under way. An announcement on the composition of a small external reference group will be made shortly.

  NHS Investment (Pensioners)
  Mr. Jim Cunningham
  To ask the Secretary of State for Health in what ways the £21 billion of extra investment in the NHS will be targeted on improving healthcare provision among those of pensionable age. [80942]
  531
  Mr. Hutton
  The £21 billion extra investment in the National Health Service will mainly be distributed through general allocation. People aged 65 and over account for approximately 41 per cent. of total expenditure on hospital and community health services, although they make up 16 per cent. of the total population, and therefore will benefit significantly from this new investment.

  Eye Test Charges
  Mr. Jim Cunningham
  To ask the Secretary of State for Health what assessment he has made of the number of people who will benefit from the abolition of eye test charging for the over 60s. [80943]

  Mr. Denham
  We estimate that from 1 April 1999 some 6 million to 7 million more people aged 60 and over became eligible for free National Health Service sight tests.

  Private Finance Initiative
  Mr. Simon Hughes
  To ask the Secretary of State for Health, pursuant to his answer of 10 March 1999,Official Report, columns 298–99, on the Private Finance Initiative, if the contracts for the schemes which have reached financial closure contain any provision for monitoring as to whether they will be completed on time. [81367]

  Mr. Denham
  All the contracts for the major private finance initiative schemes which have reached financial close contain provisions which enable monitoring whether the scheme will be completed on time.

CABINET OFFICE

  Annual Reports
  Mr. Peter Bradley
  To ask the Minister for the Cabinet Office how many annual reports were produced by (a) Government departments, (b) executive agencies and (c) non-departmental public bodies, and at what total cost, in the last year for which figures are available. [80857]

  Mr. Kilfoyle
  Information on the number and cost of annual reports is not held centrally. However, as a general rule, each of the 19 principal government departments and 135 executive agencies produces its own annual report, as do the vast majority of over 300 executive NDPBs. Smaller departments and advisory NDPBs either produce their own annual report or include information on their annual activities in a joint report or in the report of a parent department. Copies of all annual reports are available to Members from the Libraries of the House.

  Modernising Government Logo
  Mr. Gibb
  To ask the Minister for the Cabinet Office which organisations were approached to submit a tender for the contract to produce the Modernising Government logo; and where the tender for the contract was advertised. [80880]

  Mr. Kilfoyle
  The procurement of the design of the Modernising Government logo was organised and managed by the Central Office of Information (COI) on behalf of the Cabinet Office. The contract was not advertised.
  532
  Three design houses with a good track record of design on behalf of Government were chosen and invited to submit tenders. The design houses were Interbrand Newell and Sorrell, Pentogram, and Minale Tattersfield and Partners.

  Minale Tattersfield and Partners was the successful bidder.

  Mr. Gibb
  To ask the Minister for the Cabinet Office if the Modernising Government logo was tested on the public; and how much this research cost. [80882]

  Mr. Kilfoyle
  It was not.

  Mr. Gibb
  To ask the Minister for the Cabinet Office what criteria were specified for the design of the Modernising Government logo. [80881]

  Mr. Kilfoyle
  The main criteria specified for the design of the Modernising Government logo were that it should remain fresh over the period of a change management programme lasting a number of years; be capable of application to a wide range of material such as literature, computer screens and stationery; be capable of complementing other logos and publication designs; and be upbeat, bold and distinctive.

  Mr. Gibb
  To ask the Minister for the Cabinet Office what was the cost of developing the Modernising Government logo. [80879]

  Mr. Kilfoyle
  The direct cost of developing the Modernising Government logo was £41,020.

LORD CHANCELLOR'S DEPARTMENT

  Legal Aid
  Mr. Garnier
  To ask the Minister of State, Lord Chancellor's Department if he will list which areas of expenditure in his Department in the non-criminal legal aid budget will be funded first when the criminal legal aid budget has been met; and if he will make a statement about how these areas have been determined. [R] [81120]

  Mr. Hoon
  It is an oversimplification to suggest that help through the Community Legal Service will be provided only after claims for criminal work. The Lord Chancellor has said that there will not be an overall budget for legal aid or a cash limit. In order to make the expenditure in each area transparent, the Lord Chancellor has made a commitment to inform Parliament immediately of any transfer of resources (other than a de minimis one) between the Criminal Defence Service and the Community Legal Service. The Lord Chancellor will direct national priorities for public funding taking account of the findings of need and the Government's intention to give priority to tackling social and economic exclusion. The White Paper "Modernising Justice" indicated that likely areas of priority would be social welfare cases; other cases of fundamental importance to the people affected (such as child protection, and protecting people from violence); and cases involving a wider public interest. The Access to Justice Bill places a duty on the Legal Services Commission to assess the need for legal services throughout the country and to

  533
  inform the Lord Chancellor of its findings, these findings will be used to direct resources so that identified priority areas receive funding.

  Mr. Garnier
  To ask the Minister of State, Lord Chancellor's Department what assumptions he has made about factors affecting the need for criminal legal aid with particular reference to(a) demographic trends, (b) economic trends, (c) social trends and (d) policy changes in arriving at the estimated expenditure on criminal legal aid for 1999-2000 and 2000–01; and if he will make a statement. [R] [81118]

  Mr. Hoon
  No explicit assumptions are made about demographic, economic or social trends. However, forecasts do take account of inflationary pressures and planned policy change effects. The assumptions underpinning the likely impact of policy change effects take account of price, volume and behavioural changes.

  Mr. Gamier
  To ask the Minister of State, Lord Chancellor's Department if he has set a level of funding for(a) civil legal aid and (b) advice and assistance below which he does not consider it viable to reduce them for (1) 1999–2000 and (2) 2000–01; and if he will make a statement. [R] [81119]

  Mr. Hoon
  No minimum levels of funding for civil legal aid and advice and assistance have been set. Neither I nor the Lord Chancellor believe that any Minister in a responsible Government would be willing to guarantee that a given level of spending on a particular function would be maintained, whatever financial pressures might fall unexpectedly on his or her Department.

  We are, however, determined that the Community Legal Service, which will encompass civil legal aid and advice and assistance, will be properly funded. The available resources will be committed to the Community Legal Service through the system of contracting, and will be allocated to meet priority need. In order to provide contractors with reassurance that funding will not be suddenly cut or contracts terminated, the Lord Chancellor has asked the Legal Aid Board to extend from six to twelve months the notice that will need to be given to vary or terminate a contract, except in cases of misbehaviour or breach.

  Solicitors (Limited Liability)
  Mr. Dismore
  To ask the Minister of State, Lord Chancellor's Department what plans he has to permit solicitors to practise as limited liability companies; and if he will make a statement.[R] [81097]

  Mr. Hoon
  Individual solicitors are already permitted to practise as limited liability companies although very few do. Limited Liability Partnerships are not at present permitted under English law. A Bill is currently being prepared by my right hon. Friend the Secretary of State for Trade and Industry to introduce Limited Liability Partnerships into Great Britain. It will be for the Law Society to decide whether solicitors will be able to take advantage of this new way of structuring their businesses.
  534

  Conditional Fees (Insurance)
  Sir Nicholas Lyell
  To ask the Minister of State, Lord Chancellor's Department, pursuant to his answer of 30 March 1999,Official Report, column 610, if he will publish such details of insurance products to support the use of conditional fees as are available to him.[81146]

  Mr. Hoon
  If the right hon. and learned Gentleman requires details of the products available, I suggest he approaches the providers of the insurance products. Those of which I am aware are:

  First Assist;

  Collegiate Insurance Brokers Ltd;

  Abbey Legal Protection;

  Amicus;

  Eastgate Assistance;

  Saturn Professional Risks Ltd;

  Litigation Protection Ltd; and

  Greystoke Legal Services.

  Queen's Counsel
  Mr. Dismore
  To ask the Minister of State, Lord Chancellor's Department if he will make public the names of all applicants for silk during the assessment process of their applications; and if he will make a statement. [81500]

  Mr. Hoon
  My noble and learned Friend the Lord Chancellor has no plans to publish the names of all applicants for Queen's Counsel at any stage of the silk process.

  Mr. Dismore
  To ask the Minister of State, Lord Chancellor's Department if he will introduce fixed-term appointments for Queen's Counsel; and if he will make a statement. [81501]

  Mr. Hoon
  My noble and learned Friend the Lord Chancellor has no plans to introduce fixed term appointments for Queen's Counsel.

  Convicted Murderers
  Mr. Andrew George
  To ask the Minister of State, Lord Chancellor's Department (1) how many cases there have been in the last 10 years in which convicted murderers who have themselves been victims of abuse by those they have murdered have(a) had their abusive experience taken into account as a mitigating circumstance and (b) not been given a custodial sentence; [80184]

  (2) how many female victims of alleged domestic abuse by their partners who have been prosecuted for murdering that partner have been (a) acquitted and (b) convicted within the last 10 years; and what range of custodial sentence they have been given. [80182]

  Mr. Boateng
  I have been asked to reply.

  The information requested is not available centrally and could be obtained only at disproportionate cost.

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

Lead Replacement Petrol
Lord Montagu of Beaulieu Lord Montagu of Beaulieu asked Her Majesty's Government:
When they will announce the British standard for additives to be used by oil companies in lead replacement petrol or as marketed by independent manufacturers; and whether the Government will require adequate testing before such products are sold.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, work is continuing on the British standard specifying recommended additives for lead replacement petrol. Agreement has largely been reached on the technical content but other aspects such as labelling are still under discussion. My discussions with the oil companies lead me to have every confidence that the industry will market fuels which meet the needs of motorists. Consumers will also be protected by the Consumer Protection Act which requires oil companies and fuel retailers to market fuels which are fit-for-purpose. We do not however plan to have a separate British standard for additives sold separately but welcome the testing of products which has been carried out by the Federation of British Historic Vehicle Clubs.
Lord Montagu of Beaulieu: My Lords, in thanking the Minister for that reply I declare an interest in older vehicles. Does the noble Lord agree that without some kind of benchmarking or British standard, several million drivers of older vehicles will be continually apprehensive, perhaps through ignorance, as to the effect on their vehicles of the lack of leaded petrol? Does the Minister agree that it behoves the Government to co-operate with the fuel companies to mount a national campaign of information so that drivers know what steps they can take to minimise any possible damage to their cars after 1st January next? With regard to the 0.5 per cent. of leaded petrol that will be allowed to be distributed, have the Government had any discussion with the fuel companies as to when, how and where this can be done?
Lord Whitty: My Lords, as to the availability of lead replacement fuel, we are confident that for the vast majority of cars the major oil companies and retailers will produce a petrol to the standard required in time. As I indicated, in technical terms the standard of performance is there. I and my colleague John Reid have had recent discussions with UKPIA and representatives
1014
of the major oil companies. At least two of the companies have announced their intention to provide this product. I believe that all of them, within the next few months, will have indicated the timescale of a gradual introduction from the autumn onwards of lead replacement petrol on petrol station forecourts. As to the 0.5 per cent. continued sale of leaded petrol, I am unable to give the noble Lord the precise details of the distribution. A number of options are being looked at that go beyond purely the racing field. We are continuing to work in that area.
Lord Monro of Langholm: My Lords, I am not sure that the average owner of an elderly motor car shares the Minister's confidence as to the availability of replacement petrol by the end of the year. Can the Minister go further and explain how the fuel companies will organise LRP? Will it contain additives, or will there be separate additives to unleaded petrol? Can he also provide more information about when the whole matter will be resolved? We seem to be hanging on week by week with no official announcement by the Government.
Lord Whitty: My Lords, I do not believe that what the noble Lord says is entirely accurate. In co-operation with the oil companies the Government produced some detailed information. Several million leaflets were produced to explain the situation. However, I recognise that there is still a lack of awareness out there and some apprehension on the part of many motorists. In conjunction with the oil companies we shall engage in further publicity. That will include labelling pumps on forecourts. In general, existing four-star leaded petrol will be replaced directly with lead replacement petrol in the months running up to 1st January. The operation will be relatively seamless.
Lord Steel of Aikwood: My Lords, several times the Minister referred to consultation with the oil companies. Does he recall that when this House last debated the subject it was also suggested that the DTI should co-ordinate with the motor manufacturers to try to persuade them to issue guidance on their older models concerning engine modifications or additives to be used? As far as I am aware, only Jaguar has done so. It would be interesting to know whether the Government have pursued that suggestion.
Lord Whitty: My Lords, there has been some consultation with the motor manufacturers and advice has been given. I repeat that for the vast majority of cars it will be a direct switch from four-star leaded petrol to lead replacement petrol and there will be no need for adjustment except in a limited number of cases where engines have been somewhat hammered in which case separate advice on additives may be appropriate. This type of petrol has already been used successfully in several European countries which have gone over to non-leaded petrol for general consumption.
Lord Geddes: My Lords, as regards the 0.5 per cent. to which my noble friend Lord Montagu referred, what

1015
instructions or guidance have the Government given to facilities to sell such leaded petrol? In particular, what safety precautions will be required for such sale?
Lord Whitty: My Lords, as I indicated in my first response we are still discussing the methods of distribution. Clearly, some commercial decisions will have to be taken by the oil companies. Such petrol will be available for racing, and a number of sites have been suggested, including airfields, car club locations and designated petrol stations. We need to ensure that such distribution system and the regulation of it complies with the directive and our derogation under it. However, further work is required and will be conducted in the coming months.
Lord Marsh: My Lords, following the last question, does the Minister agree that there is a real danger in particular with classic cars involving clubs and small numbers of people? The distances involved in finding sources could result in people storing petrol in domestic houses. It is a danger about which many people are concerned.
Lord Whitty: My Lords, that is precisely why we need to ensure that we have an adequate distribution system and that safety precautions are clearly known to potential continuing users of leaded petrol.

Mount Vernon Hospital: Plastic Surgery and Burns Unit
2.43 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
When the expert advisory group is expected to report to the Hillingdon Health Authority concerning the future of the plastic surgery and burns unit at Mount Vernon Hospital; and whether the Government expect to be consulted about the decision.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hayman): My Lords, the expert advisory group will provide its interim report to the Hillingdon Health Authority on 22nd April 1999, prior to making its final recommendations in May. Depending on the health authority's proposal arising from the recommendations of the expert group, further public consultation may be required. If the local community health council contests the health authority's proposal, the matter will be referred to health Ministers to determine.
Lord Peyton of Yeovil: My Lords, I am grateful to the Minister for that Answer. I should like to say how much I appreciate the courtesy and sympathy with which she received representations on this matter. I am most grateful to her.
1016
However, is the noble Baroness aware of the continuing anxiety caused by the very long time it has taken to reach a decision? I hope that she will bear in mind that this charity's income from charitable sources has been very much damaged in this period.
Baroness Hayman: Yes, my Lords, I certainly shall. I recognise the contribution that the Restoration of Appearance and Function Trust (RAFT) has made to services on the Mount Vernon site. I know that there is impatience to have some certainty here, but there is also impatience to achieve the right answer and to keep the team which has done such sterling work together. I hope that we shall have some clarity after the final report in May.
Lord Clement-Jones: My Lords, is the Minister aware of the considerable local concern about the lack of independence of the expert advisory group and the fact that it did not necessarily consider all the options in a proper fashion? Is the noble Baroness also aware that some 80,000 signatures have been raised in a petition to save Mount Vernon and its burns unit? Would she or her ministerial colleagues be prepared to meet representatives of the local community and to have their concerns expressed directly to her?
Baroness Hayman: My Lords, I am very aware of the concerns, as are my ministerial colleagues. They have been raised in another place and on other occasions by the noble Lord, Lord Peyton, in your Lordships' House.
The expert advisory group consists of 25 members including local clinicians, service users and lay representatives. Expert advice is provided externally by representatives from professional and research bodies including the Royal College of Paediatrics and Child Health, and the Royal Colleges of Surgeons, of Anaesthetists, and of Nursing, as well as the British Burn Association. The breadth of membership should give some confidence locally that all the issues are being properly addressed. It is because we need to review carefully and make the right decision that it has taken a long period of time.
As I said earlier, if the CHC challenges the final proposal by the health authority, health Ministers will have to determine on that issue.
Lord Tebbit: My Lords, is the Minister aware that there are two aspects to this problem? The first is the anxiety about the possibly excessive concentration of the burns service over such a large area of the south of England which will cause problems were, for any reason such as accident or infection, the one remaining unit which will serve this huge area to go out of service.
Secondly, is the noble Baroness aware of the progressive increase of concern among the team of specialists and researchers about where they will live, and where their children will go to school, if the service is broken up and if it is not possible for them to continue their work at Mount Vernon? That is resulting already

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in a progressive disintegration of the ability of the charity to provide funds for the work which has been done at Mount Vernon which is of such importance.
Baroness Hayman: Yes, my Lords, I recognise the issues that the noble Lord, Lord Tebbit, raises. There is a range of options as to the eventual location of the services, including Mount Vernon itself. Other options involve not necessarily concentrating services at an existing site. The review of national burns care, which is being undertaken by the British Burn Association, will help us to determine the right catchment area and access to those specialised services.
However, I recognise what the noble Lord says about the importance of keeping that team together wherever it is located. The further the distance that any potential move involves, the more difficult that may be. Together with issues about the right support services, the specialist imaging and the paediatric services, those factors are being taken into account by the advisory group.
Earl Howe: My Lords, is the Minister aware that alongside the review to which my noble friend has rightly drawn attention there are three other reviews into specialist services in north-west London? They relate respectively to cancer, cardiothoracic care and orthopaedics. Can the noble Baroness confirm that despite the close connection between all four of those clinical disciplines, the reviews are being conducted in complete isolation from one another? Does she agree that if that is true it is a ridiculous state of affairs?
Baroness Hayman: My Lords, one must balance having the right kind of specialist expertise in reviews of specialist services against taking an overall strategic view of major centres. One cannot look at, for example, cancer services without looking at Calman-Hine and the implications of its national implementation. It is the responsibility of the regional office to ensure that when exercises are run in parallel, there is proper integration of thinking so that the consequences of recommendations for other services are taken into account. It is difficult, but it is right provided that the co-ordination is correct. That must be the job of the regional office.

European Commission: Reform
2.50 p.m.
Lord Willoughby de Broke Lord Willoughby de Broke asked Her Majesty's Government:
What measures they intend to take to reform the European Commission "root and branch".
The Parliamentary Under-Secretary of State (Foreign and Commonwealth Office) Baroness Symons of Vernham Dean: My Lords, the Government have already shared specific reform ideas with our partners. We believe that the Commission should be
1018
guided by efficiency, transparency and accountability. Achieving this will require changes in financial control systems, personnel management and structures.
Heads of Government met Mr. Prodi, the European Council's nominee for Commission President, on 14th April to discuss Commission reform. They agreed to take forward the reform process at the European Council in Cologne on 3rd and 4th June on the basis of more detailed plans drawn up by Mr. Prodi.
Lord Willoughby de Broke: My Lords, I am most grateful to the Minister for that Answer. Can she confirm that under the terms of the Amsterdam Treaty the Government gave the President of the Commission absolute power of veto over nominations to the Commission? Bearing that in mind, and the fact that Mr. Prodi has a serious federalist agenda, does she believe that there is any chance of reforming the Commission by so much as a twig, let alone root and branch?
Baroness Symons of Vernham Dean: Yes, my Lords, I believe that there is a great chance of reforming the Commission. I am sure that the noble Lord will be pleased to know that some of the ideas put forward by Mr. Prodi are similar to those which I am sure your Lordships will approve and which the Government will be pursuing. It is true that the President and member states nominate commissioners by what has been described as "common accord". I am sure that there will be a good deal of accord in those nominations.
Lord Bruce of Doningtort: My Lords, is the Minister aware that in Brussels two years ago the member states passed a Convention on the Fight Against Corruption Involving Officials of the European Communities or Officials of the Member States of the European Union, a copy of which was placed in the Vote Office yesterday? Will she explain why this is not yet in force? Will she also bear in mind that the speech of my right honourable friend the Prime Minister referred not only to a reform of the Commission but also to a reform of its mandate and method of operation? What steps are being taken at our governmental level to ensure that that is proceeded with by the Council of Ministers or the European Council, whose meeting on 24th and 25th March in Berlin did little except congratulate the Commission on its past record?
Baroness Symons of Vernham Dean: My Lords, I believe that the meeting in Berlin did a little more than that. My noble friend raises some specific points. I must examine exactly what was placed in the Library yesterday, but I am sure that my noble friend will be pleased to know that on 15th March the ECOFIN Council agreed to the creation of a new European fraud prevention office which will replace UCLAF, the existing anti-fraud body which my noble friend has criticised in the past. The important point is that the new office will enjoy the broadest possible operating autonomy, including the power to initiate investigations,

1019
and will have full access to documents and officials. The Government have long advocated that course of action and are pleased to see it coming into force.
Baroness Williams of Crosby: My Lords, will the Minister confirm that the expert group made it plain that no charge of corruption or bribery lay against any commissioner? Will she also confirm that much of the management weakness that it found arose directly from requests from the European Council and the Council of Ministers, the effective meeting of which went beyond the capacity of the Commission's staff or its budget? Therefore, will she say how far a reform of the Commission can be extended to examining the interrelationship of the Union's institutions to make the load and the resources balance one with another?
Baroness Symons of Vernham Dean: My Lords, I can confirm that the noble Baroness, Lady Williams, is right that the Committee of Independent Experts did not complain about either corruption or fraud on the part of any of the commissioners. Other criticisms were made, but not about that.
The point the noble Baroness makes about the restructuring is important. Her Majesty's Government believe that the Commission will have to set in place management structures to deliver an effective and flexible service. That must be informed by accountability and transparency. We shall wish to see a wide review of the present structures of the directorates-general. We shall also wish to see mechanisms for adjusting to changing priorities and better organisation of the political direction provided by the College of Commissioners. We discussed a number of detailed points in the meeting with Mr. Prodi on 14th April, which I mentioned in my original Answer.
Lord Renton: My Lords—
Lord Clinton-Davis: My Lords, would my noble friend—
Lord Pearson of Rannoch: My Lords—
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, as always, I am in the hands of the House, but I believe that the noble Lord, Lord Clinton-Davis, should ask his question first.
Lord Clinton-Davis: My Lords, having regard to the extremely urgent matters affecting the European Union, not least Agenda 2000 and matters affecting unemployment, will my noble friend indicate when she hopes the new Commission will be in place? In doing so, will she bear in mind the fact that the Commission will remain a vitally important feature of the whole constellation of European institutions?
Baroness Symons of Vernham Dean: My Lords, the timetabling of the appointment of the new Commission depends on a number of factors during the course of this year. The European elections are to be held on 10th and
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13th June. Some time after that, in June or July, member states must agree with Mr. Prodi the nominations for the Commission. We expect the new Commission to be in office in September or October this year.
Lord Renton: My Lords, will the Government bear in mind that the harmonisation of laws of the 15 European Union countries, with 11 different languages and many different legal systems, has placed an impossible task on the Commission's lawyers? If the European Union were to be further enlarged, that task would become even more impossible. Therefore, will the Government make representations to abolish the duty to move towards harmonisation?
Baroness Symons of Vernham Dean: My Lords, I cannot undertake to make the representations for which the noble Lord pressed. I understand his point about the enormous volume of work which is occasioned by new members and the necessity of translation. I am afraid that there is little way round that, other than ensuring that the reforms we are examining, which will be discussed in Cologne, will continue. The process will be discussed throughout the year, the Committee of Independent Experts making further recommendations later in the year. I am sure that the points raised by the noble Lord will be of great interest in those discussions.
Lord Stoddart of Swindon: My Lords, does my noble friend agree that Mr. Prodi's address to the European Parliament accentuated and gave great prominence to the need for Europe to be integrated into a single state? Do Her Majesty's Government agree with that? Have they now become federalists, as they supported Mr. Prodi? If not, will they ensure that Mr. Prodi behaves as the head of a civil service and not as the head of a European country?
Baroness Symons of Vernham Dean: My Lords, I cannot agree with my noble friend's original premise that Mr. Prodi's speech was entirely that of a federalist. I am sure that Mr. Prodi's conduct in office will be entirely proper. However, the extent to which Mr. Prodi focuses on reform and on practical policies is striking and his analysis of the necessity for reform is close to ours. I believe that recently he has argued quite a lot for a decentralised European Union. He also talks a great deal about the role of the European Council and the European Parliament in guiding the Commission. I am sure that my noble friend will be pleased to hear that.
Baroness Rawlings: My Lords, will the Minister explain why the Government are opposed to the enhancement of the role of this Parliament in terms of giving another place the opportunity to approve the appointment of this country's European commissioners?
Baroness Symons of Vernham Dean: My Lords, I imagine that it was for the same reason as it was opposed by the party which the noble Baroness supports.

National Minimum Wage
3.1 p m.
Lord Newby Lord Newby asked Her Majesty's Government:
What action they are taking to ensure that companies pay their workers the national minimum wage.
Lord McIntosh of Haringey: My Lords, the national minimum wage is 20 days young. It has the support of the vast majority of employers; a success story despite some reports of evasory tactics. It would be nothing short of astonishing if no attempts at evasion were reported. The Inland Revenue will deal with non-compliance by acting on complaints received and carrying out targeted visits to areas where underpayment is suspected.
Lord Newby: My Lords, I am grateful to the noble Lord for that Answer. Will the Government give us an assurance that the Inland Revenue minimum wage enforcement unit has adequate resources to deal, in a timely fashion, with the increasing number of complaints that it is likely to receive over the coming months?
Lord McIntosh of Haringey: My Lords, of course we shall ensure that the resources are available. I am not sure that I agree with the noble Lord that we can expect an increasing number of complaints. This is the time when complaints might be expected. Of the 25,000 calls to the helpline—1,500 a day—since the minimum wage was introduced, only about 200 have been specific complaints.
Lord Clark of Kempston: My Lords, can the Minister say whether the Government are fully convinced that there will be no increase in unemployment because of the introduction of the national minimum wage? If the Government are so confident, on what evidence are they so confident?
Lord McIntosh of Haringey: Yes, my Lords, we are still convinced, as we were at the beginning, on the basis of the very detailed inquiry made by the Low Pay Commission. Of course, evidence post hoc will be available only when the new earnings survey and the labour force survey start to produce results for the period after 1st April, which is three to six months away.
Earl Russell: My Lords, will the Minister agree that employers who fail to pay the minimum wage risk free-loading on the budget of the Department of Social Security? Therefore, will the Government attempt to use data-matching with social security records to detect those employers who fail to pay the minimum wage?
Lord McIntosh of Haringey: My Lords, employers who fail to pay the minimum wage not only encroach on the social security budget, but also break the law. That is our first position. Issues of transfer of data between the Inland Revenue and social security, as the noble Earl well knows, are extremely complicated.
Baroness Castle of Blackburn: Is the Minister aware that when I introduced the Equal Pay Act, which was passed in 1970. I was dogged by the same dire warnings
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that firms would be bankrupted and that without this massive inequality between men's and women's remuneration our economy could not survive? Would he agree that those dire warnings were as irrelevant then as the ones he receives today are now?
Lord McIntosh of Haringey: My Lords, I am very pleased to have my noble friend's support and very pleased to be reminded that in this country the kind of dire warnings that she received are likely to arise again and should be ignored as she ignored them. Of course, minimum wages laws have been in force in many countries for many years without the kind of dire effects that people seem to expect now.
Baroness Miller of Hendon: My Lords, in view of what the Minister has just said, will he agree that national minimum wage laws in other countries have always had exemptions, which the Government have declined to provide in this country?
Lord McIntosh of Haringey: No, my Lords, I do not think I can agree. I have inquired into it and the most difficult area of the minimum wage is piecework. I found that the French minimum wage law includes coverage of piecework, as does that of the United States, so I do not agree that ours is a more draconian minimum wage law than that of other countries.
Baroness Gardner of Parkes: My Lords, can the Minister tell us whether recourse will be through the industrial tribunals? If so, what steps are being taken to increase the number of people dealing with industrial tribunal cases? There has been a huge increase in the number of employment cases and there is a backlog at the moment.
Lord McIntosh of Haringey: My Lords, the noble Baroness is right in saying that such matters will be referred to industrial tribunals in the first instance. There is also the possibility of reference to the civil courts. Of the 200 specific complaints to which I referred and which have been followed up by the Inland Revenue, there have been only 10 refusals to comply with the law. I believe it. is premature to make arrangements now to increase the facilities of the industrial tribunals, although we are prepared to do so if necessary.

House of Lords Bill
3.7 p.m.
Baroness Jay of Paddington: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Baroness Jay of Paddington.)
Lord Strathclyde: My Lords, having given notice, I wish to delay the proceedings for just a few minutes.
As we are invited to begin the Committee stage on this momentous Bill, this may be a good time—perhaps the last time—to pause and ask ourselves on what course the Government have set us and where ultimately this House is headed. I have no intention of opposing this Motion and I hope that no one else will, but I believe that it is worth reflecting for a moment before the House resolves itself into Committee.
As I said at Second Reading, things can never be the same again. I do not say that out of anger, envy or regret; it is a simple fact. The Government have tugged at the strings that bind together our constitutional arrangements, and perhaps even our kingdom. The strings have been loosened, the boxes opened and the pieces are falling from their places and we cannot know what will happen at the end of the process.
I do not wish to take the time of the House on other aspects of the constitutional settlement. The fears of many noble Lords on those scores are well known. I refer only to the future of this House and of our Parliament.
I ask your Lordships: is it really too late to stay our hands at a time of such constitutional uncertainty? Is it too late to seek on the way forward some better consensus, for I believe consensus is possible? Is it too late to identify some shared vision, for surely a vision of a stronger, independent House is achievable, unless the executive is wholly determined to stamp its will on Parliament?
Total war on hereditary Peers is not the answer to an old constitutional problem; it is the creation of a new constitutional problem. As I said at Second Reading, you cannot destroy the hereditary peerage without exposing the life peerage and other elements of the House. No one in this House, as the report from my noble and learned friend Lord Mackay of Clashfern reminded us, should proceed without that reality firmly in mind.
My noble and learned friend's report changes the whole background against which this debate takes place. I do not say that to detain the House; I say it to remind us that the Bill is not the final answer, but the beginning of many a question. The Government have consistently evaded the answer to the straight question their actions posed. No one wants this Bill or pretends it is the answer. We do not. The public do not. The outside world does not. Even the Government do not believe that this is the answer; after all, they consistently and glibly remind us that this is a two-stage process.
I return to where I began. The world has changed. The House is changing and it can never be the same again. We accept that. The Government accept that. My noble and learned friend Lord Mackay of Clashfern has demonstrated it to be true. Is not there a better way forward? I ask the Leader of the House to step out of the backroom of party politics and on to the broad ground of constitutional reform. Reform in our Parliament should be cross-party reform; strategic reform; visionary reform. It should not be inspired by the negative motive
1024
of settling an old party score. Reform should be inspired by a clear vision to build a stronger, more independent House with no less power and much more authority.
So I ask the noble Baroness to withdraw her Motion and to suspend the consideration of this measure which is partial in every sense of the word. Let us wait for the debate on the Mackay commission to unfold. Let us wait for the findings of the Royal Commission. Then let us come together, as I believe we surely can, with a set of proposals built not on one party's manifesto but on genuine cross-party consensus; built not as a temporary provision, which this is, but for a Chamber that will last.
I give the noble Baroness this solemn assurance on behalf of my party. If she makes that effort she will have from us even now a constructive response and this House can be set on a secure basis for a lasting future. My door and my mind are open. Will the Leader of the House now say the same to this House?
Baroness Jay of Paddington: My Lords, I congratulate the noble Lord on another attempt to delay progress on this Bill, although in this instance I do not believe that his heart is in it. Equally, I could challenge him—although I shall not as he was gracious enough to say that he did not intend to press his concerns about this Motion—that much of what he had to say was, as he rightly pointed out, repetition of the points that he made (very effectively if I may say so) at Second Reading.
Perhaps it would be sensible for me simply to confirm, as I have done both at Second Reading and at every other stage when we have debated the subject matter that we are again considering in detail this afternoon, that the commitment the Government have made to this Bill is a manifesto commitment. Because the reform has always been said to be in two stages does not mean that one stage is insubstantial or in any way not to be supported and taken through as we intend.
The noble Lord will recall that this means that the normal conventions of this House, including the Salisbury convention, which his noble friend Lord Mackay of Ardbrecknish confirmed yet again in his wind-up speech at Second Reading, would be adhered to during the debates on this Bill, stand firm.
Perhaps I may say a word about the way in which we hope to proceed. I am grateful to the noble Lord, Lord Strathclyde, for emphasising "consensus". That is precisely the way in which we hope the business on this important Bill will be conducted. I believe that the usual channels have now agreed the first three days in Committee on this Bill. It would be the wish of the Government that this Bill could be considered in the appropriate detail and in the appropriate way, but not necessarily delaying your Lordships until an unreasonable hour. On those nights we would hope to finish at a reasonable time.
However, I point out to the whole House that it has not yet been made clear by the Official Opposition whether they have any indication of how many further days they want to take. We shall therefore have to wait and see how we progress. I must also point out that we attempted to achieve agreement through the usual channels for the amendment colloquially known as the

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"Weatherill amendment" to be taken as first business in Committee. Such an agreement would have benefited our discussions. It would have meant that we could have had the substantive discussion on the amendment. But that could not be agreed and therefore I hope that we shall proceed in the normal way with the normal understandings.
The noble Lord the Leader of the Opposition referred to the Mackay commission's report. It is of some interest to us all. It makes clear that there are a number of concepts and issues to be raised in considering the long-term reform of your Lordships' House and does not come out with any one firm proposition. There is therefore no other firm proposition on the table for us to discuss at this time. Let us hope that we can proceed by consensus to long-term discussion at the appropriate moment.
The noble Lord raised the question of the Mackay commission. I should perhaps say that I was immediately struck when I first read it that nowhere in that report is there any hint whatsoever that there should be any special role in the long-term reformed second Chamber for the hereditary peerage. Indeed, the commission's report—I am sure noble Lords have studied it—goes out of its way to say that the link between the peerage and membership of the second Chamber should be severed. I stress for the benefit of the whole House that if the Conservative commission accepted that the rights of the hereditary peerage are to be ended in your Lordships' House, that is important and should be considered when we look at amendments.
I draw your Lordships' attention also to what the right honourable gentleman Mr. Hague said on the publication of that report:
"The hereditary peerage and the right to sit in Parliament is going anyway under the Government's proposals and so we must deal with that situation".
It would be helpful if, in that spirit, the noble Lord would advise those members of his party who have tabled amendments which do not accept that understanding, which seems now to be the official position of the leader of his party and of the commission set up by the leader of his party, to withdraw them so that we can move quickly through the Marshalled List to the proposal of the noble Lord, Lord Weatherill That, I suggest, is the nub of the amendments that we shall consider.
As we have not yet been able to reach agreement on the timetabling and as I do not yet know whether the noble Lord, Lord Strathclyde, will be able or will wish to indicate to Members of his Back Benches that they might withdraw what I describe in the light of the Mackay commission as irrelevant amendments, I suggest that we now move to the substantive debate on the Government's proposals. We have every intention of pressing this Bill on to the statute book but, of course, wish to hear your Lordships' views on the details of the amendments proposed and suggest that we begin to do so.
3.15 p.m.
Earl Ferrers: My Lords, before the noble Baroness sits down, will she say why she should regard all amendments that do not refer to the Weatherill
1026
amendment as "irrelevant"? They are not irrelevant; they are extremely important.
Baroness Jay of Paddington: My Lords, the noble Earl misunderstood me. What I said was in the context of what was reported as being of great significance in changing the context of this Bill; that is, the report of the commission chaired by the noble and learned Lord, Lord Mackay of Clashfern. I suggested that those amendments which referred to the continuation of the hereditary peerage, which seems now not to be accepted by some official spokespersons for the Conservative Party and indeed by Mr. Hague, should perhaps be considered as irrelevant.
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 1:
Before Clause 1, insert the following new clause—

House of Lords Bill

  REFERENDUM
  (".—(1) Sections 1 to 3 and 4(3) and (4) of this Act shall not come into force until the people of the United Kingdom have approved their coming into force before the implementation of any of the recommendations of the Royal Commission on the reform and composition of the House of Lords, in a referendum conducted in accordance with the recommendations of the Committee on Standards in Public Life set out in chapter 12 of Cm 4057–I.
  (2) The referendum referred to in subsection (1) shall not he held until the recommendations of the Royal Commission have been reported on by a joint committee of both Houses of Parliament.")
  The noble Lord said: In moving Amendment No. 1, I shall speak also to Amendment No. 2, which is accepted with much gratitude, and Amendment No. 111 to Clause 4 which is consequential. I much regret having to move these amendments at all. It would have been preferable if the noble Baroness the Leader of the House had been able to accept the very constructive suggestion of my noble friend Lord Strathclyde.
  The spirit of these referendum amendments all but evaporated some time ago in "No day named" until it materialised as a reasoned amendment to the "Take note" Motion on the White Paper. It was withdrawn then to avoid unrepresentative division and pre-emption of my own Front Bench. This was at the request of my own party and a body of opinion on the Cross-Benches, Since then, until today, it has hovered around in limbo.
  The constitutional commission, to which both noble Lords have referred, does not bite upon the referendum amendments at all; nor does it, bite upon the transitional House amendment, which I think is Amendment No. 31, because the constitutional commission did not quite consider the question as to whether a transitional House should be set up. But, for the purposes of the report, and quite reasonably the Committee may think, the commission on the options for reform made the hypothetical assumption that a transitional House would have been set up by the time those options materialised. It was on that assumption that the commission concluded that independent members in a reformed

  1027
  chamber can only be to the disadvantage of the political parties. Well, if so, then so be it, but as yet the House of Lords retains its indigenous ethos and independence; it retains its guardianship function of the constitution when the nation is substantially divided against the Government, as indeed is the case on this Bill.
  On the reasoned amendment, the House of Lords concluded that the Government introduced the Bill for party political advantage. None of the six noble Lords whose names appear in support of these amendments is so motivated. The three members on these Benches do not speak for their party; the three members on the Cross Benches have no party for which to speak. We are moved by a tenable belief in a common purpose as a matter of principle. This is—and I say this to the noble Baroness with respect—no ploy, no filibuster to delay, no wrecking amendment contrary to the conventions of the House of Lords. Due notice has been given to the Government of the intention to take the opinion of the House, subject to when we may conclude, if so advised. I am unable to give any assessment. I have been asked by the noble Baroness the Leader of the House, but as we have done no lobbying we do not know what measure of support we have nor who will speak.
  These amendments, in accordance with the wishes of the people, would delay commencement of the Act until its substance had been approved by the people on a referendum fairly conducted to be held before enactment of any recommendations of the Royal Commission. The purpose is to assert the will of the people; to enjoin due governance under the Queen in Parliament; and, albeit against the odds, to seek the support of this House for some accommodation. To this end, must we not look to the people and accept their judgment as the ultimate arbiter of our differences? If so, hence the referendum.
  Legitimacy derives from the will of two-thirds of the people, as expressed in the opinion polls, who wish to retain the composition of the House of Lords only until the substance of proposed reform is known, a point which was not taken on board a moment ago, if I may say so with respect, when the noble Baroness the Leader of the House was replying to my noble friend Lord Strathclyde. Hence delay until the substance of the Act is approved after the Royal Commission has reported. The people do not want to put to sea in a sieve with any proverbial owl or pussycat. They rejected the stale manifesto commitment reflected in the Title and Clause 1 of the Bill. The Bill as it stands is but a work of supererogation taught by arrogance of constitutional impiety, only 2 per cent. of the people having any recollection whatever that the manifesto proposed reform of the House of Lords.
  In substance, these referendum amendments have already commended themselves to your Lordships' House on the reasoned amendment, notwithstanding the anathema pronounced upon them and on all other amendments: save the deal (as now presented by Weatherill Amendment No. 31) which the Government were then minded to accept, notwithstanding the threats of dire consequences made in the speech of the noble Baroness the Leader of the House on the Motion to take
  1028
  note of the White Paper and by the noble and learned Lord the Lord Chancellor in his celebrated speech on Second Reading.
  May I say, in the irenic spirit to the noble Baroness the Leader of the House, that neither that anathema nor those threats were entirely well conceived, for it was no part of the deal between my noble friend Lord Cranborne, whom I see in his place, and her right honourable friend the Prime Minister, as no doubt the right honourable gentleman would confirm, that in anticipatory deprivation of parliamentary entitlement the deal should be used to hammer the House of Lords into submission to pass this Bill by consensus. It was never part of that deal.
  I speak to these amendments but as an untrainable apprentice to my noble friend Lord Cranborne, who laid the foundation stone long, long ago. My noble friend has always maintained that stage 1 without stage 2 is wrong, and he said so again on Second Reading. His concept of a referendum on constitutional matters, in context with the guardianship function of the House of Lords, was perfected—I do not know whether any Members of the Committee have seen it yet—in Clause 3 of his Parliamentary Government Bill, a masterpiece of draftsmanship. It is a concept which expressly acknowledged that only the broad assent of the people can confer the authority to legislate,
  "on any provision substantially affecting the constitution",
  a concept invoked indeed by the present Government in Chapter 2 of their White Paper:
  "Parliament is where the will of [the] people is expressed … Parliament is the core of political accountability".
  They say also that,
  "Parliament must rest on the will of the people".
  In the context of the referendums on devolution,
  "the people have made known what they want."
  The resolution of the House of Lords on the reasoned amendment in fact endorsed the commonsense approach of the people. It was carried against the Government with some Liberal Democrat and Cross-Bench support by 192 to 126 votes at very nearly three o'clock in the morning. That is a substantial majority of one-third, especially at that hour. It carried the concept that,
  "the Bill radically alters the historic composition of the House of Lords for party political advantage",
  and had been introduced without prior consultation and consensus as to the role or composition of a successor House.
  It is the selfsame situation which arises to be addressed on these amendments. The hereditary element on that occasion which supported the Government was one Duke, a terce of Earls, a sprinkling of Viscounts and a wee clutch of Barons. It is evidently appropriate that some assurance should be given, for it is respectfully suggested that perhaps the last, if not the most noble, act of selfless service which the hereditary Peers could render to the body politic is to seek to safeguard the wishes of the people and to support these amendments.
  As to the assurances, the arguments in support of these amendments, which I put forward, are in no way inconsistent with the speeches made by such noble Lords which I have read. These amendments cannot and do not pre-empt the work of the Royal Commission as to the composition of the successor House. They cannot and do not entrench or seek to entrench the extant successory entitlement to membership of your Lordships' House. Again, with respect, I draw the attention of the noble Baroness the Leader of the House to that assurance.
  If these amendments were to be carried into the Bill, there would be no substantial division between the Government and the people on this constitutional question, such as is now the case. But as such is the case, is it not the acknowledged function of your Lordships' House to seek to provide some measure of constitutional protection and safeguard and to consider whether it is appropriate to delay the legislation from taking effect as proposed by the amendments?
  The Weatherill amendment, Amendment No. 31, has no legitimacy derived from the people and ignores the current state of public opinion. But, if qualified, as it would be, by the referendum amendments, it could assume an aura of legitimacy in conformity with the very concept expressed in Clause 3 of the Bill of my noble friend Lord Cranborne. It would avoid pre-emption of the work of the Royal Commission and inhibit fulfilment of the "Quintine" prophecy heralded by paragraph 7.26 of the White Paper.
  To accommodate the Weatherill amendment, No. 31, the mould of the Title must be cracked. That is done by the Title Amendment No. 152 which seeks to substitute "restrict" membership for "end" membership. As the noble and learned Lord the Lord Chancellor appreciated, that would open the door to a series of other amendments to restrict. The noble and learned Lord expressed the Government's attitude to such amendments on a previous occasion.
  This has nothing whatever to do with the referendum amendments, which are entirely free standing. The question of choice—I wish to stress this—that your Lordships have between any form of transitional House amendment and these referendum amendments simply does not and cannot arise save unless (and there is one proviso) it is the settled preconception, come Hades or high water, to support and safeguard the hope of a tentative offer by the Government to accept Amendment No. 31 and only if no other amendments are to be carried into the Bill.
  On Second Reading, my noble friend Lord Strathclyde truly said about an amendment referring to the deal (the arrangement made and reflected in Amendment No. 31) that it falls short of making a bad Bill better.
  At all events, there are many serious problems in relation to Amendment No. 31 as it stands which will have to he sorted out by a series of amendments at various stages of the Bill. Those gremlins may well be laid to rest to the satisfaction of your Lordships' House, or not. I have had a word with my noble friend Lord Cranborne on that matter, as on other matters. It may take much time and more than one stage to sort that out.
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  There is no reason whatever, on that account, to wait until many other problems have been sorted out at subsequent stages, or not sorted out, to delay a vote on this Bill.
  No assurance of safe conduct of passage in another place may be given for any amendment carried by your Lordships. The Motion as tabled in another place and the Official Report of the proceedings on the Bill in another place preclude any such assurance. If the referendum amendments were rejected, the extant hereditary entitlement would soon be severed under Clause 4. If the proposal of the Constitutional Commission at paragraphs 61 to 64 were to be accepted by the Royal Commission this is what would happen: the senate would be instituted at the first meeting of Parliament after the election; all life Peers would lose their right to sit; the House of Lords would disappear at the dissolution of that Parliament; and up to two-thirds of the transitional House would be transferred to the senate. Is that the sort of scheme which commends itself to your Lordships? Is it not preferable to delay implementation of the Act until the recommendations of the Royal Commission have been known and the people have been offered an opportunity to express their opinion of the substance of the Act on a referendum, perhaps to be held in the spring?
  If judgment were to be sacrificed to wishful conjecture, to the dictates or the convenience of this Government or to the opinion of the hour, the people would be betrayed. If that is done in due course by another place, so be it: but surely not by your Lordships' House. I beg to move.
  3.30 p.m.
  Lord Gray Lord Gray moved, as an amendment to Amendment No. 1, Amendment No. 2:
  Line 3, leave out ("the people of") and insert ("a majority of the parliamentary electorate in")
  The noble Lord said: I fully support my noble friend's contention that there should be a referendum. My amendment seeks only to suggest that it may be advantageous to make the drafting more specific and perhaps avoid the criticism of technical imperfection.
  Citing, as my amendment does, the parliamentary electorate reminds us that it is not the executive, nor yet Parliament, but the electorate which must be the final arbiter when it comes to constitutional change. Noble Lords may take it amiss that my drafting excludes them from the referendum poll. No doubt they will tell me. In any case, words can be altered. However, until we have the proposed referendum Bill enfranchisement formulae will have to be made on an ad hoc basis.
  There is no question that this Bill is of fundamental constitutional import. It alters the structure, character and balance of Parliament. It will significantly affect the balance between the executive and the legislature. It is the case that this Bill has that effect, no matter what comes later. Generally speaking, while I am not an enthusiast for referendums, I hold that they are entirely appropriate when it comes to constitutional issues. To hold a referendum will be to follow precedent, and only

  1031
  through a referendum campaign can we properly inform the electorate of the Bill's immediate consequences. It would be infinitely preferable to hold a referendum which embraces both the provisions of this Bill and whatever scheme of final reform Parliament may yet endorse.
  However, since the noble Baroness the Leader of the House was not prepared to listen to my noble friend Lord Strathclyde, and unless the Government yet see the sense of withdrawing their intention to enact this Bill as a free-standing measure, that will not be possible.
  In hoping that the Government may yet agree that the proposed referendum should be held, I was encouraged by the words of the noble Lord, Lord McIntosh of Haringey—who, sadly, is no longer in his place—in replying to my noble friend Lord Waddington on 17th March,
  "I simply do not accept that the ideal of democracy is to have a Parliament where the only direct chance of participation by the electorate is, once every four or five years, a vote on all issues combined together in the way which suits the political parties. Without saying that they should become a substitute in any way for parliamentary government, referendums as they have been used in the past few years, particularly in a constitutional sense, have been a valuable addition to, not a subtraction from, democracy".—[Official Report, 17/3/99; col. 792.]
  Surely this proposal for a referendum fits the case. I beg to move.
  3.45 p.m.
  Lord Waddington: I want to explain in simple terms why I am attracted to this amendment. The Government's whole case is that this is a two-stage process and that stage one, which will create, without the Weatherill amendment, a wholly nominated House, will not be with us long because it will be followed by long-term, second-stage reform. Every Member of this place knows perfectly well that it is not as simple as that. Those of us who have said often that there might not be a second stage pray history in aid. We all know perfectly well as politicians how enormously difficult it will be to get a second-stage Bill through the other place. As the noble Lord, Lord Callaghan, well remembers, the difficulty was experienced in 1968.
  I took the trouble to read the Second Reading debate in another place. Government supporters were all over the place. Hardly two of them agreed on what was the best solution in terms of a second stage Bill. We read in the papers that today, for all that has been said from the Conservative Benches, there does not appear to be much support on the Labour Benches for the idea of an elected second Chamber.
  So the Government have to face up to the fact that in this current Bill we may be looking at a Bill bringing about a permanent change in the constitution of this place. We have to ask ourselves whether that would be a happy outcome for our country. I do not believe that it would be for one moment. I have often talked about the inadequacies of this Bill. I do not see how anyone in his right mind could contemplate a wholly nominated House without there being written into the Bill all kinds of safeguards against the abuse of power. I do not see
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  how anyone in his right mind can say that our liberties would be secure if there was a second Chamber composed entirely of nominated Peers and the Prime Minister of the day still had in his hands the power to appoint as many Peers as he wished, of whichever party political complexion he wished.
  So I am attracted by this amendment because I look at it as a way of avoiding the worst possible outcome. That would be the passage of this Bill without safeguards; the failure, as a result of opposition in the other place, to approve a second-stage Bill; and our being left with a wholly nominated Chamber with power still in the hands of the Prime Minister of the day to manipulate its composition. This amendment would prevent that enormity because, as I understand it, the public would be asked whether they were prepared to put up with the permanent solution of a wholly nominated Chamber. I do not believe for one moment that the public would subscribe to that as being a reasonable way of addressing our present problems. I have confidence that the people would reject that out of hand and would force the Government to bring forward a second-stage Bill which genuinely brought about lasting and sensible reform of this place.
  Without any safeguards at all this Bill is an enormity. If the Government had come to this place with a worked-out scheme and a Bill which provided for the abolition of the hereditary peerage, but which at the same time provided for the kind of safeguards which I mentioned in a speech the other day, taking entirely out of the hands of the Prime Minister the power to nominate people for peerages; and if there had been another safeguard in the Bill providing for a referendum in case of rejection by the second Chamber of a Bill which radically altered our constitutional safeguards I would not be making, with some passion, this speech today. But the Government have not tried to meet those points. All they have done is to throw before this House a Bill which will take away many of the safeguards against abuse which exist in this country at the present time.
  No one can tell me that a wholly nominated House without a hereditary peerage would not be more easily manipulated than a House in which there is a large number of hereditary Peers. No one really believes that for a moment. Once the hereditary Peers have been removed and only a limited number of life Peers remain, with one party having a marginal advantage over the other, it would be very easy to create enough Peers not only to make sure that one can pass any legislation that one wishes but also to enable this House to vote for a Bill which extended the life of a parliament. That is the very safeguard which the legislators in 1911 recognised had to be left in the hands of the second Chamber.
  I earnestly ask the Government to address these problems. I do not say that this is the only way in which those problems can be addressed, but I refuse to believe that we do not have the public on our side when we say that we cannot leave this as merely a simple exercise to get rid of the hereditary peerage and then leave it to the government of the day to decide on the composition of this place. That is the effect of this Bill.
  Lord Chalfont: I rise briefly to express my support for Amendment No. 1, as proposed by the noble Lord, Lord Campbell of Alloway. I think I can be mercifully brief because I have, before now, made my views known: I do not agree in any way with this Bill. Indeed, I do not believe it to be necessary. I believe that this House works perfectly well as it is. However, all those arguments are long past and gone. We can see what the Government have in mind and that they have a very good chance of bringing it about.
  However, there is one thing that I believe we ought to do. As other noble Lords have said, we ought to find out whether the people of this country really want this change. We start off, as the noble Baroness the Leader of the House said earlier, with the fact that this is a manifesto commitment by the Labour Party which won the election for which that manifesto was published. I do not think that anyone contests that at all; nor do people contest the fact that a manifesto commitment has a very special resonance and status in Parliament and in your Lordships' House. But I do not believe that anyone sitting on that Front Bench, or on any of the Benches behind it, really believes that a great number of people who voted for the Labour Party in the last election did so because it was going to abolish the right of hereditary Peers to sit and vote in the House of Lords. I believe that we should find out whether that is what people want.
  I have already said that there is no need for the Bill. In fact, I would go further than that and follow other noble Lords in saying that this is a dangerous Bill unless the Government are prepared to say, before they bring the legislation into effect, what will take the place of the present House of Lords when the hereditary Peers have been removed. Is it to be a nominated House? I should have thought that that would be the worst possible solution. Is it to be a mixture of nomination, appointment and election? Alternatively, as has already been suggested in many quarters, is it to be a fully elected House? We do not know the answer. I therefore join other noble Lords in saying that without that knowledge this simple Bill is a mistake—and a dangerous mistake.
  We apparently thought it necessary to seek the opinion of the people about the governance of London. We thought it necessary to have a referendum about an assembly in Wales. We also thought it necessary to have a referendum about a parliament in Scotland. I would not argue with any of those decisions. But if those constitutional changes were considered important enough to ask the people of this country to support them, why on earth are we not prepared to ask them for support for the abolition of the hereditary peerage in this House? There is long constitutional history behind it; it is fundamental change to the constitution which leaves Wales, Scotland and London looking like trivialities in the political debate and argument of the day.
  If carried, this amendment would have no impact on any other amendment. There has been a great deal of talk today about the Weatherill amendment; indeed, there have been criticisms and adumbrations of it. All I can say is that if this amendment were carried, it would have no impact upon that amendment at all. Anyone who believes that it would can be reassured in
  1034
  that respect. The referendum would not have any impact at all on the proposal to create a transitional House, nor would it have any effect as regards pre-empting the Royal Commission.
  I turn now to my final point. If there is to be a Royal Commission and perhaps a Joint Committee of both Houses to decide upon and recommend the eventual shape, size, composition and powers of this House, would it not be best to wait for that to come forward before engaging upon this half-baked and totally controversial measure? I believe that the Government have already begun to realise that this is not the way to go about changing 1,000 years of history. I very much hope that noble Lords will support this amendment.
  Lord Elton: My noble friend Lord Strathclyde drew from the noble Baroness the Leader of the House a response which made it clear that there is no prospect of delaying implementation of the Bill until the findings of the Royal Commission have been published. I believe that that would be most helpful. I see that the noble Baroness looks startled, but my noble friend asked whether it would not be more sensible to await the findings of all the advisory bodies. I understood the noble Baroness to decline that offer—she certainly declined it on Second Reading—and that has frequently been signalled in advance.
  Therefore, when replying to the debate, I hope that the noble Baroness or the noble Lord, Lord Williams of Mostyn, will be kind enough to separate the reasons for the resistance which I anticipate they will voice. I make that request because subsection (2) of the amendment of my noble friend Lord Campbell of Alloway would have the effect of delaying the implementation of the Bill until the Royal Commission has reported. At Second Reading, the noble and learned Lord the Lord Chancellor made it clear that that was something which the Government would not accept under any circumstances.
  I think that my noble friend should consider whether he is wise to couple the two requirements in his amendment; namely, that there should be a seeking of the opinion of the majority of the electorate and that this should be sought only after the Royal Commission has reported. The Government are committed to a two-stage Bill. We all regret that fact and think that it is wrong, but we have to accept their position and majority in the other place. It seems to me that my noble friend could usefully reflect between now and the end of the debate on whether in fact his amendment would have a much stronger claim to acceptance by the Government. and whether the Government would have much less ground in the view of the public, your Lordships and indeed those in another place, on which to resist a referendum for this change to the constitution, after having accepted referendums for so many arguably lesser changes to the constitution. If my noble friend were to remove that excuse for such resistance, I believe that his amendment would be a good deal stronger.
  Baroness Gould of Potternewton: I rise to make a brief intervention in opposition to these amendments. I have two basic, if technical, reasons for doing so.

  1035
  I shall try to stick strictly to the consequences of the amendments. I have listened with some care to the arguments expressed for holding a referendum, which might have had some legitimacy if the Government did not have a mandate for this Bill. Reform of the House of Lords was clearly set out as a two-stage reform in the manifesto upon which, I must stress, the Labour Party won the general election. Although frequently scoffed at in this House, manifesto commitments do have legitimacy—or why did we need the Salisbury Convention?
  Similarly, there is no legitimacy in the view that there is no public support for the Bill. Indeed, 80 per cent of people in a MORI poll taken last October supported the removal of the hereditaries. With the greatest respect to those noble Lords who have spoken to the amendments, I have to say that I find it hard to believe that the latter have been tabled as a serious wish to consult people, or that the movers have had a sudden conversion to support the principle of referendums. I rather believe that the amendments have been tabled as a means of delaying the passage of the Bill. If we look at an outline of the timetable for implementation if the amendments were to be carried, that becomes even more evident. It is not just a question of waiting for the Royal Commission. I give way to the noble Lord.
  Lord Campbell of Alloway: I am much obliged to the noble Baroness. Will she accept the assurance that I have already given that, whatever else we have done, none of us—that is, of the six of us—has tabled these amendments to delay the Bill? I give my word upon that. Will the noble Baroness accept it, or not?
  Baroness Gould of Potternewton: Obviously I have to accept the noble Lord's words, but I think the consequences would belie that. I shall quickly go through the timetable that would be needed. First, we must await the findings of the Royal Commission and then we must debate them. We must await the findings of the Joint Committee of both Houses and then debate them. We must introduce a referendum Bill for the consideration of both Houses. We must then hold the referendum. I reckon that if we do that in under two years, or perhaps three years, we shall have done extremely well. There is clear evidence that the Bill will be delayed.
  That brings me to my second and possibly more fundamental objection to this amendment. Amendment No. 1 spells out that the referendum should be conducted,
  "in accordance with the recommendations of the Committee on Standards in Public Life set out in chapter 12",
  of its report on the funding of political parties. Acceptable and worthy as those recommendations may be they have not yet been approved by Parliament. Surely it is not the intention of the noble Lords proposing these amendments to deny Parliament that right or to prejudge Parliament's attitude to the Neill report.
  1036
  I am sure that many noble Lords will have strong views on the recommendations in that report, not least on the question that should be put. The recommendations not only spell out the way that referendums should be conducted but they also cross reference with other aspects of the Neill report; they cannot be isolated, not least the establishment of an election commission. The recommendations of the Neill committee on the conduct of referendums are based on the establishment of such a commission. The role of the commission is to oversee the conduct of the referendum and to sanction all the financial arrangements. For instance, page 13 of the report, Recommendation 85, states,
  "The Election Commission should decide which organisations, if any, should be in receipt of core funding".
  Recommendation 86 states,
  "a Campaign Organisation in receipt of core funding should be required to submit audited accounts to the Election Commission".
  Therefore acceptance of these amendments might imply that this House is determining not only how referendums should be conducted but also the establishment of an election commission. Although I am personally in favour of such a proposal, it requires proper and considered debate by both Houses of Parliament.
  Lord Mackay of Ardbrecknish: I am grateful to the noble Baroness for giving way. Is she aware that there is a Private Member's Bill high in the Private Members' List in the other place which would bring into law all the matters which she and I have discussed arising from both the Neill committee and the Nolan committee, and that Bill could be enacted by the summer if she would only urge her colleagues in government to give it support? It is about to go into Committee; it is a perfectly good Bill, perfectly properly and well written. I gather that there is no objection to it in principle or in drafting. All it requires is the Government's support and the Bill could be enacted by the summer.
  Baroness Gould of Potternewton: With the greatest respect, that is not what this amendment asks for. This amendment asks for the recommendations of the Neill committee to be the basis on which the referendum should be conducted. We do not know the outcome of the Bill that is going through. As it proceeds through the House many amendments may be made to it. The noble Lord cannot use that as an argument. As I say, I personally support the proposal for the establishment of an election commission—which I think is important—but it must receive proper and considered debate by both Houses of Parliament. The whole report of the Neill committee has to be seen as a package. That is why the Government will bring forward their draft Bill before too long. Therefore it appears to me that while these amendments may appear straightforward and simple they have far-reaching consequences beyond this Bill. For that, if for no other reason, the amendments should be rejected.
  4 p.m.
  Viscount Cranborne: Before I address the speech of the noble Baroness who has just spoken, I wish to comment on the speech of my noble friend Lord Campbell of Alloway who, with his usual eloquence,

  1037
  supported this interesting amendment. He suggested by implication that I had confirmed my interpretation of the amount of resistance that I would promise the Government—when I was in a position to do so, which I no longer am—in your Lordships' House to this Bill. I hope I may offer some help to the Government—whom I am always anxious to help, as a number of your Lordships have criticised me for doing already—but also to your Lordships' House if I attempt to give my interpretation of the understanding that was reached in that regard between the noble and learned Lord, his right honourable friend and myself.
  My clear understanding of the somewhat joky—dare I say—final exchange between the Prime Minister and myself. which I well recall, was that I looked forward to causing at least as much trouble during the current Session of Parliament for the Government in your Lordships' House as we had in the previous Session. By that I meant—I think I got what I can regard only as a positive response—perfectly clearly that I regarded the obligation of your Lordships' House to examine with care all the legislative proposals put before your Lordships, and within the established conventions of your Lordships' House for your Lordships to perform their perceived constitutional duty to scrutinise legislation and indeed to make suggestions and amendments for another place which another place in due course could reject or accept.
  Certainly I hope that Amendment No. 31, or a version of it, will meet with the Committee's approval. I shall certainly do my best to persuade the Committee of its virtues. As I explained on the previous occasion I addressed myself to this matter in your Lordships' House, I certainly could not undertake to predict, or indeed to deliver, your Lordships' opinion; it is for all of us to try to persuade a majority of your Lordships during the course of our debates. But nonetheless I am absolutely certain that it would be wise for the Committee—if I may be so bold as to venture some advice, which is perhaps unwise of me—to consider the remarkably fine record, since the election, that your Lordships have established for criticising the Government's legislation. I may venture also to suggest that your Lordships' reputation has never stood higher because of the judgment that your Lordships have exercised during the course of your Lordships' legislative performance during the past nearly two years.
  I turn to the amendment of my noble friend Lord Campbell of Alloway. Like my noble friend Lord Waddington, I am greatly attracted by this amendment, not least because of the charming puff that my noble friend gave to the Bill that I have introduced into your Lordships' House, which among many other modest and sensible measures suggests that your Lordships' House might in due course be given the duty to determine what constituted a constitutional measure of legislation and, having so decided, to tell the Government that they had an obligation under those circumstances to submit that measure to a referendum for approval or otherwise. For that reason alone I am attracted to my noble friend's proposal.
  1038
  I am also attracted to the reasons of my noble friend Lord Waddington for supporting my noble friend because he gave passionate expression to the view that I have often expressed—as has every single one of your Lordships so far—about our preferred route which has been encapsulated in the not particularly cosy mantra: no stage one without stage two. I associate myself enthusiastically, not for the first time, with everything that my noble friend Lord Waddington said about the Government's approach to this legislation. In fact I stand, like someone else not so long ago, astonished at my own moderation, and indeed at his, in support of that. I shall not weary the Committee with repetition of something which my noble friend was much better able to express than I.
  However, I have to say both to my noble friend Lord Campbell of Alloway and indeed to my noble friend Lord Waddington that I find myself in something of a difficulty about supporting the amendment of my noble friend Lord Campbell. The reason is very clear to me in the case of the inducement trailed by my noble friend Lord Campbell. The inducement was that he was merely bringing about a little earlier one of the admirable provisions of my Parliamentary Government Bill. I am grateful to him for that and for the additional publicity. Unfortunately, if I may say so with the greatest respect to my noble friend, my Parliamentary Government Bill is not yet law. Therefore the provisions which he and I both think so admirable in that Bill are not yet on the statute book, although, of course, I have every confidence that the noble and learned Lord the Lord Chancellor will nod it through and encourage his honourable and right honourable friends in another place to do the same in very short order—thereby setting an extremely good example for your Lordships' House. But as the Bill is not yet on the statute book, it is with the greatest reluctance that I cannot find myself persuaded by my noble friend's argument, however much I should like to be.
  My noble friend Lord Waddington is right about no stage one without stage two. All of us have repeated ad nauseam our criticism of the Government's approach to reform of your Lordships' House. I never thought I would find myself saying that I was getting bored even with the sound of my own voice in repeating these arguments. For the first time in my life, I have at least some sympathisers among noble Lords opposite when I make that observation. Tempted as I am by the prospect of supporting my noble friend's amendment, it is in direct contravention of what has come to be known as the Salisbury convention. My noble friend Lord Campbell of Alloway was perfectly correct when he said that the amendment would in no way impede the provisions of the Bill. But it would impede the implementation of the provisions of the Bill, not only for a few weeks but probably for some months or even some years.
  I yield to no one in my support for such a delightful prospect, but I would strongly advise your Lordships against supporting on the first day of Committee stage debate an amendment the effect of which would be to wreck the Bill. That would very clearly set out a pattern for the remainder of our debates, which might make it

  1039
  increasingly difficult for your Lordships if this pattern were taken up and did not play as well with the outside public as some of your Lordships might like to think it would. That would make it more difficult for us to amend the Bill in other ways, something which I think is equally desirable and perhaps more practicable for another place to consider in due course.
  Your Lordships may think my caution is too pusillanimous—and characteristically so—but I urge your Lordships at least to take a rain check before voting in favour of my noble friend's amendment and to think for a little while. Perhaps my noble friend will be inclined to bring back his amendment on Report after we have gained a little of the flavour of the debates we are about to undertake. Then we may be in a position to set my noble friend's admirable proposals in context, not as a matter of principle but as a matter of practicality in terms of the way in which your Lordships consider the Bill in the coming weeks and months.
  Lord Acton: Before my noble kinsman sits down, can he say whether in his opinion the amendment, whether it is introduced and voted on now or at Report stage, does or does not attract the Salisbury convention?
  Viscount Cranborne: I am grateful to my noble kinsman. It always distresses me to see one of my kinsmen sitting on the Benches opposite. I hope that his peripatetic habits will one day propel him back to his proper place. While I defer, of course, to the judgment of your Lordships with greater experience in these matters, since the essence of the Bill before the Committee at the moment is tiny, any provision which appreciably delays, and delays probably for a very long time, the implementation of the substance of the Bill goes against my understanding of the Salisbury convention.
  The Earl of Dudley: Can the noble Viscount tell us whether his grandfather, when he declared the Salisbury convention, took cognisance of the fact that a Labour manifesto not only needs to be published but also widely read?
  Viscount Cranborne: My memory of my grandfather, whose ghost I suspect will stalk our debates perhaps even more than usual, is that he did not. Even in those days manifestos were not widely read documents. I am encouraged in my opinion by a whispered aside from my noble friend Lord Carrington, who confirms my view.
  4.15 p.m.
  Lord Marsh: Not for the first time, I find myself agreeing to a considerable extent with the noble Viscount, Lord Cranborne. I have a complete understanding of the problems which one has within families.
  This is the first time I have spoken on this subject in the House but, like many of your Lordships, I have sat through many hours of debate here during which we have had some hundreds of speeches. For me, it was sad
  1040
  because I found myself sliding into an ocean of loneliness, which is unusual for me. Speaker after speaker from the hereditary Peers on the Opposition Benches expressed with fervour and enthusiasm their support for radical change in the House. Not only had they pursued that line for years—it was not a short-term thing—but in some cases for generations. I have missed out because I think the House does a very good job. It is at least as good as very many second Chambers, despite its somewhat eccentric composition. Given that eccentricity, it is better than some.
  Paradoxically, the hereditary element has produced by random selection a cross-section of people wider than that of the life Peers, and both groups are more representative than the House of Commons. Some of my best friends are hereditary Peers. I keep it quiet outside this House! There are some who have vast wealth, as do some of the life Peers; and some are people of no wealth, like many of the life Peers. They are drawn from a wide range of different occupations. So I am not a great enthusiast for radical change in this Chamber. But it is too late; the opportunities have been missed.
  I was, and still am, puzzled about the enthusiasm for reform yet the failure to obtain it. The Conservative Party has been in control of this country for 33 of the past 50 years, in two periods of office: 13 years in one stretch and 20 years in the other. Therefore, one wonders why they did not do something about the matter. The Labour Party, to my regret, right from its inception has found the existence of hereditary legislators totally unacceptable. But if anyone in this Chamber had not noticed that, along came the much maligned manifesto.
  What does the manifesto say? Like most noble Lords, I always read the manifestos, then leave the country and have a holiday until the election is over. There is a view that these matters are terribly complicated and we could not be expected to understand the complexities of election manifestos. Therefore, perhaps I may remind noble Lords of what it said. It stated:
  "The House of Lords must be reformed. As an initial, self-contained reform, not dependent on further reform in the future, the right of hereditary peers to sit and vote in the House of Lords will be ended by statute. This will be the first stage in a process of reform to make the House of Lords more democratic and representative … A committee of both Houses of Parliament will be appointed to undertake a wide-ranging review of possible further change and then to bring forward proposals for reform".
  I am bragging, but I understood it immediately. It is pretty clear.
  But then they said: "It caught us by surprise". I was puzzled. I had heard that view expressed previously, but I remember having a considerable argument with the noble Lord, Lord Richard, long before the election on the Labour Party's intentions. Then I remembered that four of my noble friends, the noble Earl, Lord Carnarvon, the noble Viscount, Lord Tenby, the noble Lord, Lord Selsdon, and the late Lord Bancroft, at the beginning of 1995—five years ago—produced a paper entitled The Second Chamber: some remarks on reforming the House of Lords. They already knew what the Labour Party's policy would probably be. The document, written in 1995 by four Back-Benchers on the Cross-Benches, stated:

  1041
  "It was our understanding that the Labour Party intended, if elected at the forthcoming General Election, immediately to abolish the right of the hereditary peers to sit in the House of Lords. We also understood that they would institute formal consultations—perhaps by means of a Speaker's Conference or Royal Commission—towards a more comprehensive reform of the Lords".
  The document went on to deal with the proposal to abolish the right of Peers by succession to sit in the House of Lords:
  "We turn now to consider proposals to reform the House. To recapitulate our understanding of what the Labour Party propose, they intend to reform the Lords immediately on being returned to power. They envisage a short Bill to abolish the right of hereditary Peers to sit in the House, to be introduced in the first session of the new Parliament".
  I apologise for this, but it was public knowledge, and this is evidence. It went on to refer to the effect of the proposal for a short Bill:
  "The Labour Party's approach in effect splits the present debate on reform of the Lords into two parts. The relatively narrow question of the abolition of the right of the hereditary peers to sit in the House must be considered at once".
  The document continued:
  "The parliamentary history of comprehensive reform of the Lords is not happy. Limited reforms, by way of short Bills, have proved far more successful".
  I assure noble Lords that none of those people was, or ever has been, a member of the Labour Party.
  "The shorter a constitutional Bill is, the better. A short Bill to deprive the hereditary peers of their seats would therefore seem a practical proposition, and there can be little doubt that, given a sufficient majority for it in the House of Commons, it would pass Parliament, even if in the last resort it was passed under the Parliament Acts, in the second session".
  I should state where I managed to obtain the document. My source was the Printed Paper Office. If the Conservative Party did not know in 1995 what everyone else knew, there really ought to be a shake-up in its research department. We know perfectly well that it was well known.
  That decision has been taken. I have gone through life being disappointed: political parties do not agree with the things that I think are right. The objective now that we are presented with a clean sheet must be to seek to produce the most effective Chamber that we can. The opportunity is available to start afresh. There is no reason why some hereditary Peers will not reappear in this Chamber as life Peers or whatever. They can stand for Parliament or whatever. People can still continue, with this Chamber, seeking the best solution that we can provide.
  To speak at this time of holding a referendum is a constitutional abomination. I oppose it on two grounds. First, in terms of practicality, what question will be posed? Who will put the question? How many months are we going to spend trying to explain to the public the problems that we have with delegated legislation and such matters? The suggestion is totally impractical.
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  I pass quickly over the cost. We do not have many national referendums. I believe that the first, and last, was the 1975 referendum on membership of the European Economic Community—
  Lady Saltoun of Abernethy: What about Wales and Scotland?
  Lord Marsh: No, with the greatest respect, "national" means in this context Great Britain. The referendum in 1975 cost £11.417,000. I do not think that cost should be the deciding factor in this argument, but noble Lords can amuse themselves working out what it would cost today, 24 years later.
  I turn finally to my key point. In this, I am totally with the noble Viscount, Lord Cranborne. The Salisbury convention is the only way in which this Chamber works with the House of Commons. It is wrong, and always would be, for a second Chamber, particularly an unelected one—even if it were elected it would be a subsidiary chamber—to seek to impose its views on a matter on which the government of the day had been elected.
  The manifesto is crystal clear beyond argument and the Bill fits without any deviation whatsoever. When I think of the number of things that this Government have done for which they had no manifesto whatsoever—in terms of student fees, syphoning £5 billion a year from pension funds with the ACT tax charges, and a host of other matters. On this master the manifesto is clear beyond doubt. Not only will the Government get their way at the end of the day; they are entitled to get their way. To seek to say at this stage that basically all the last election obtained was a raffle ticket to enter a referendum is, in my view, a gross distortion and total irresponsibility.
  Lady Saltoun of Abernethy: I enjoyed that delightful Second Reading speech of my noble friend Lord Marsh enormously. I am only sorry that he did not list the other commitments the Government made in their manifesto. It is nonsense for the Government to pretend, as they do, that because the Bill formed part of their manifesto commitment, the people of this country elected them to kick the hereditary Peers out of this House. There were many other promises in the manifesto, most of which will have been of much more cogent importance to the majority of voters.
  Therefore, the Government cannot pretend that they have a mandate from the people of this country to do what they are doing. This is a major constitutional change on a par with devolution for Scotland and Wales, on a par with going into the European Community and on a par with potentially giving up sterling for the euro.
  If we can have a referendum to decide those matters, why can we not have a referendum for this vitally important constitutional reform? Is it because of the expense? If the Government could find the money for the devolution referendums, and if they propose to do so for the currency referendum which we have been promised, why can they not find money for this? Is it because they are frightened that the result might not be

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  to their liking? I believe that it is. Then it would be difficult for them to go against the expressed will of the people.
  The purpose of the amendment standing in the names of the noble Lord, Lord Gray, and myself is to clarify the composition of the electorate in the proposed referendum. The promised legislation on the conduct of referenda has not, to my knowledge, yet been passed through Parliament. The Committee will remember that we cannot vote in a parliamentary election, so we could have no input into the result.
  For those reasons, I shall support the amendment of the noble Lord, Lord Campbell of Alloway. I do not think, any more than he does, that this is a wrecking amendment. Even if it were—which it is not—I am not entirely persuaded that in a vital constitutional matter of this kind the Salisbury convention should obtain.
  4.30 p.m.
  Lord Richard: Many years ago, before I started agreeing with the noble Viscount, Lord Cranborne, in the days when he was in the Labour Party, I used to find myself occasionally agreeing with the noble Lord, Lord Marsh. For 30 years I have not agreed with much that he said, but this afternoon I thought he got it absolutely right. In my limited political experience, I can think of no measure that has been more clearly telegraphed in a manifesto and put before the country at a general election than this one.
  Let us think about it. How does a political party get a mandate for a proposal which it wishes to make, indeed a proposal that it has been making at every general election since 1911? How does it get the mandate? It does what I am sure most of the Committee would think sensible. It puts it in the manifesto and the manifesto is then put to the country. The country then votes either for or against the party. The issue is whether what the Labour Party intended was presented to the country and whether the country was therefore clear about that, if the country wished to be clear about it.
  The terms are absolutely crystal clear. This measure was put before the country as a free-standing measure, to be introduced irrespective of further measures of reform. Whatever one may think about further measures of reform— and no doubt we will discuss that in due course—the fact is that this was presented as the first issue to be dealt with, the first stage of a reform process—those were the words used—and the country elected us with a massive majority. In those circumstances, how noble Lords opposite can argue that we do not have the mandate and we do not have the authority to proceed in this way is beyond me.
  The noble Lord, Lord Marsh, made some passing references to the fact that the Conservative Party had been in office in this country for rather a long time. The reforming zeal which is now emanating from those Benches did not exactly reveal itself for most of those years. I have to say to the party opposite that if a decade ago they had come up with a more moderate—in their terms—measure for the reform of your Lordships'
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  House, no doubt by now it would have been in place for a decade and therefore the position might be entirely different. But they did not.
  However the noble Lord, Lord Campbell of Alloway, seeks to wrap it up—and of course I accept his words, he is a man of honour—the effect of what he proposes is to delay the implementation of a measure for which we have a clear mandate from the British people. Not only that, I have problems with the practicalities of the amendment. As I understand it, the referendum he proposes in Amendment No. 1 is a referendum on whether the House should be reformed in two stages. In other words, it is whether we should be able to implement the first stage before we implement the second stage. That presages a second referendum, does it not? The Royal Commission would report, there would be proposals for the second stage reform—again presaged in the Labour Party's manifesto—at the next election and the noble Lord would say that there had to be a second referendum on the second stage. So he would have two referendums: one to decide whether the first stage should be implemented before the second stage is implemented, and another one on the implementation of the second stage.
  With great respect, that is constitutional nonsense. My party has a clear mandate for what it wants to do and I hope the Committee will back it.
  Lord Crickhowell: I much enjoyed the speech of the noble Lord, Lord Marsh. I wished that when I was at Cambridge many years ago he had been my history lecturer. That is partly because the lectures would have been enjoyable, but partly because he could have been one of those lecturers whose talks I could have decided not to listen to on the grounds that the advice he gave was unsound. I shall explain why I believe it was unsound.
  It seems to me that one of the principles of an unwritten constitution is that it is dependent upon the retention of a balance of institutions. That is the only defence that we have against an over-mighty executive. In my view, it cannot be right that so fundamental a safeguard can be overturned simply on the basis that a party has achieved a majority, however substantial, in one general election. There I entirely agree with what the noble Lord, Lord Chalfont, said in an earlier debate that we had on the subject.
  Like others in this House, I have had the fun of drafting manifestos. I would not belittle the importance of a manifesto, but I do not believe that when we are confronted with the removal of fundamental constitutional safeguards a reference in a manifesto is sufficient authority, particularly when the consideration of that item in the manifesto is acknowledged probably to have had only a minimal impact upon the result.
  We have precedents before us. The principle of holding a referendum is not new. Referendums were held in 1975 and 1979, both concerned with fundamental constitutional change.
  "What we seek is a broadly based consensus for change".
  Those are the words of the noble Lord, Lord Sewel, speaking at the introduction of the referendum Bill that

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  was brought in to deal with the constitutional changes in Scotland and Wales. He went on a little later on that day, 17th June 1997, to say:
  "Popular consent will add legitimacy to our proposals—in a sense it is the way to build the settlement into the system—to give it roots".—[Official Report, 17/6/97; col. 1113.]
  I believe there is a perfectly valid case for a referendum to support constitutional change and I do not accept the argument, however lively its presentation may have been, of the noble Lord, Lord Marsh. Fortunately, the procedures of this House enable us to consider a proposition put to this House at various stages. Certainly a number of points have been made about my noble friend's amendment which may lead him to think that it would be better to bring it forward, having considered the points, at a later stage. I am not necessarily pressing for a vote today, but I have to say that if he were to press his amendment today I would support him.
  I can understand the loyalty that my noble friend sitting beside me has for his grandfather's principles. I understand, too, the importance of the conventions of this House, but whatever commitments might have been given by the leaders of my party I am bound to say I have never felt wholly committed to a principle when it applies to a fundamental constitutional change which removes the safeguards upon which we rely. Although we may not have a chance to vote on this particular amendment in this particular form today, I do not think it should inhibit us from pressing—
  Lord Goodhart: I am most grateful to the noble Lord, Lord Crickhowell, for giving way. I just wonder whether he is putting forward the proposition that a permanent Conservative majority in this House is a vital constitutional safeguard.
  Lord Crickhowell: I am not suggesting anything of the kind, and the noble Lord really ought to do better than that. What we are being asked to do by having stage one without stage two is to go blindly down a path without an endgame—and we are learning in a particularly unpleasant war at the moment that not to have an endgame when you start to execute a policy is a particularly stupid and dangerous thing to do. Here we have, on a vital constitutional matter, a government going to the country without the faintest idea of what their endgame is going to be, without any proposition to give to the country, without the faintest idea of how these matters are going to be handled in the future, and dependent entirely upon the recommendations that are to come to us from the Royal Commission.
  It is for that reason, and because constitutional safeguards are being removed without our having the smallest idea of what is to be put in their place, that I believe we are perfectly entitled to seek a delay and to ask for a referendum. I cannot believe that it is right to go through with a measure of this kind, removing fundamental safeguards, without the will of the country, firmly and clearly expressed in a referendum.
  Noble Lords: Hear, hear!
  4.45 p.m.
  Viscount Mountgarret: I feel that too much attention is being given to the question of the manifesto and what was contained therein. It is irrelevant that the proposal happened to be in the manifesto. It need not be blindly followed. Let me give an example. Flexibility in all things is essential. A good general leading his troops into battle has a plan, and he decides to go straight forward to his objective. However, halfway there he finds there is some very good reason for changing his plan and going another way.
  I believe that is exactly the position in this case. We all believe, as the noble Lord, Lord Strathclyde, said, that reform of your Lordships' House is desirable: it is necessary. I do not think there is very much argument about that; but, really, to have to rush at it in such a way without giving any detailed thought—as has emerged in later debates and many speeches—seems to me to be a fundamental mistake.
  The amendment of the noble Lord, Lord Campbell, merely follows a line which has already been set out by my noble friend Lady Saltoun. Namely, there was a manifesto commitment by the Labour Party that devolution would be on the table for Scotland and Wales. And what happened? There were referendums on that proposal. What is sauce For the goose is sauce for the gander. If the Labour Party wishes to change the entire constitution of this country then it is only logical that we should be entitled to ask the people of this country if that is what they wish. It needs to he a positive question, and not tied up with commitments on health, education, pay or what you will—in which I believe the people of this country are far more interested than they are in the constitution of your Lordships' Chamber.
  Another question occurs to me, and other Members of your Lordships' Chamber will be able to correct me if I am wrong. I wonder whether Parliament has the power unilaterally to change the constitution of the country without receiving the positive support of the people. Parliament is there by the will of the people. Parliament has been invested with the power of upholding the laws and the conventions which lead to the understood and unwritten constitution of this country. If Parliament wishes to make a fundamental change to our constitution it seems to me that Parliament should be obliged, to be on the safe side, to go back to the people of the country and say, "This is what we suggest; we think it is in your interests but we would like to be sure."
  I may be quite wrong, but that seems to me to be not unreasonable. For that reason I ask whether there really has to be a mad, lemming-like rush to get stage one through. It ought to be considered not only by the Royal Commission, but the people of the country ought to be asked first. For this reason, I support wholeheartedly the amendment put forward by the noble Lord, Lord Campbell of Alloway, and others. I hope very much indeed that, despite the powerful speech of my noble

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  friend Lord Marsh, which I found very impressive and difficult to refute, your Lordships might feel that this amendment should be agreed to.
  Lord Goodhart: My Lords, as I am the first speaker in the debate from these Benches at this Committee stage, I would like to argue against the mass—now some 275—of amendments as a whole. I can do that in one sentence, which is that we want the Bill, the whole Bill and nothing but the Bill.
  We will need to be convinced of the need for any amendments to this Bill, and that goes for the Weatherill amendment also. We are certainly not convinced of the need for this amendment. It calls for a referendum. The use of referendums in the United Kingdom is novel, but it now seems to be accepted that advisory referendums may and sometimes should be held on major constitutional changes or those with constitutional implications—
  Viscount Cranborne: I am most grateful to the noble Lord for giving way, particularly so early in his remarks. By whom is it accepted that advisory referendums should be held, if he means by that pre-legislative ones?
  Lord Goodhart: Pre-legislative referendums have been held recently in Scotland and Wales. There is not complete agreement, but a considerable consensus, among constitutional experts that that is an appropriate and sometimes desirable course to take. As the noble Lord, Lord Marsh, pointed out, the first and only United Kingdom-wide referendum was that held in 1975 on whether the UK should stay within the European Community. Since then there have been other referendums in Northern Ireland, Scotland, Wales and London. We may have nationwide referendums on joining the euro or changes in the voting system for the House of Commons. All of those issues, except that relating to London, were very important ones with major constitutional implications.
  But what is the proposed referendum here about? As I read it, the intention is that if the Government wish to bring the Bill into force before stage two they can do so only by a referendum. That referendum cannot be held until the Royal Commission has reported and the Joint Committee has reported on the report of the Royal Commission. Plainly, that is not a referendum on the simple question whether hereditary Peers should be removed from your Lordships' House. It is arguable whether a referendum on that issue would be justified. It is not an argument with which I agree because I believe that the position is quite clear. In effect we had two referendums on the issue in the January and December elections of 1910. The principle that hereditary Peers should leave your Lordships' House was decided in 1910 and has never been reversed by any party in this country since then.
  My party and the government party have always wished to reform your Lordships' House by ending the rights of hereditary Peers. The Conservative Party has not, and does not now, say that hereditary Peers should remain permanently in your Lordships' House. Your
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  Lordships' House voted in principle in 1968 for the removal of the voting rights of hereditary Peers. For these reasons, and also because there is a manifesto commitment—which is as clear as any manifesto commitment has ever been—I believe that a referendum on that issue would not be appropriate. But at least if the issue was whether hereditary Peers should remain here permanently it would be an important and arguable one giving rise to a clear and simple question.
  What, however, is the purpose of the referendum proposed by Amendment No. 1? The question will be whether hereditary Peers are to leave immediately after the referendum or hang on for a year or two until stage two is implemented. That, frankly, is not a major constitutional issue, and your Lordships delude yourselves if you think that the public shares your enthusiasm for that point. It will be extremely difficult to explain to the public what it is all about. Do your Lordships expect major public interest in this question? If so, I am bound to say that you will be disappointed.
  Lord Campbell of Alloway: I am becoming rather confused and am trying to follow the argument. I know that it is my fault. The noble Lord talks about "my party". He uses "we", then "I" and returns to "we". Is he speaking for the Liberal Democrat Party? Is the Committee to hear what I call free-range contributions to the debate that we have heard from the Labour Party and other quarters of the House; or is the noble Lord just speaking for his party?
  Lord Goodhart: The answer that the noble Lord might have concluded from the position from which I address the Committee is that I speak for the Liberal Democrat Party.
  Lord Waddington: Perhaps the noble Lord will give way again. Is he saying that it is the policy of the Liberal Democrat Party to see created a wholly nominated House, with nominations solely in the hands of the Prime Minister of the day? If that is the view of the Liberal Party, it surely was not the view of that party in 1910 and 1911.
  Lord Goodhart: I point out that in 1910 there were no life Peers. The position today is that we do not support a wholly nominated Chamber, but we are anxious that the matter should proceed in the two stages that have been made out and in which our party concurred in the Cook-Maclennan agreement before the previous election.
  Reference has been made to opinion polls that show a majority in favour of retaining the hereditary Peers until stage two. That may or may not be so, but frankly I believe that the whole matter ranks extremely low in issues of public concern. I believe that the public neither expects nor wants a referendum on this question. Just imagine a "yes or no" campaign in this referendum. What would the referendum broadcasts be like? I believe that the whole question would raise apathy to new heights and there would be a wholly minimal turnout. Why delay the referendum until the report of the Joint Committee? Why not hold it now? The

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  conclusion I reach—it may not be the intention, but it is surely the effect—is that there would be no time to hold a referendum before the next general election.
  Amendment No. 2 in the name of the noble Lord, Lord Gray, makes matters even worse because it would require approval by a majority of the parliamentary electorate. In the referendum of 1975, which dealt with a very high profile issue, there was a 64 per cent turnout. Just over two-thirds of those who voted in that referendum voted yes, but even so that amounted to only about 43 per cent of the electorate. The chances of getting more than 50 per cent to vote in favour of the proposition in a referendum of this kind are negligible.
  In reply to the observations of the noble Lord, Lord Waddington, and others, we do not believe that the retention of hereditary Peers makes a proper stage two any more likely. It has always suited the Conservative Party to preserve the status quo. After this Bill becomes law that will no longer be the case. In the unlikely event of the Government not committing themselves to stage two by the time of the next election, the Conservatives will he able to put forward proposals for a new second Chamber and gain support for doing so.
  I believe that this is a wholly inappropriate question for a referendum. It is in practice a wrecking amendment, even more so when it delays the operation of the Bill for some two years. I add my voice to others—I refer in particular to the very powerful speeches of the noble Viscount, Lord Cranborne, and the noble Lord, Lord Marsh—and urge your Lordships not to agree to this amendment.
  Lord Strathclyde: It may be worth while if I make a short speech on behalf of these Benches at this stage of the debate before it goes on very much longer. I begin by making one or two comments on what some noble Lords have already said. In doing so I welcome the noble Lord, Lord Marsh, to the debate. He told us that this was the first time that he had taken part in the debates on reform of the House of Lords. He accused the Conservative Party of being surprised by the development that had taken place and by the fact that the Government intended to remove the right of hereditary Peers to sit and vote in this House. I am not in the least surprised, and nor should he be. It was while we were still in government that we held a two-day debate in this House on the future of the House of Lords in which the noble Lord, Lord Richard, then Leader of the Opposition, made clear the position of noble Lords opposite—or at least as clear as it was then, which was not much clearer than it is now in terms of the longer-terns position. However, I recognise that he himself has, in modern parlance, moved on from the position then taken.
  Lord Richard: Will the noble Lord confirm that on behalf of the Labour Party I made it perfectly clear at that stage that we would have stage one in which the rights of hereditary Peers would be abolished, and stage two would take place after consultation?
  5 p.m.
  Lord Strathclyde: I am delighted to confirm that that was my understanding then, as it is now. The point I seek to make is that the noble Lord has come forward with his own ideas for longer-term reform. I welcome that as part of the general debate that needs to he had about the long-term future of this House. But the amendment raises a number of questions which the Government need to answer. In his speech, the noble Lord, Lord Richard, said that what the Government intended for this House was widely known by the country. That may or may not be true; I do not know. But there were a number of other issues which were also widely known by the country, not least the whole situation on devolution.
  The point is that the issue of the House of Lords seems to be the only matter on which the Government are not prepared to entertain a referendum. Since 1997 we have had referendums on Scotland, Wales and Northern Ireland. It is proposed—I think in this Parliament—that there be a referendum on proportional representation; and at some stage in the future on the European single currency. I need to ask the Government this one immediate question. They will have considered it. When they were writing their manifesto they made a decision. The decision was to include a referendum on some important constitutional issues and not others. I wish to know the answer to this question; the House has a right to know it. What is so fundamentally different between those issues and the issue of Parliament itself? What reason did the Government have for not including the issue of the House in the referendums? As a party, we are not intrinsically keen on referendums, but the Government are. We have seen the evidence of that several times over the course of the past few months.
  However, there is another reason why the Government are more committed to this. Recently, they published a White Paper, Modernising Parliament. In it they boasted of the importance of referendums. They say:
  "People across the country have made clear what they want. Referendums and subsequent developments in Scotland, Wales and Northern Ireland have shown a clear appetite for change, and a determination to achieve it…The people of London have made clear how they want to be governed … All these developments will reconnect people with power in Britain … Parliament is not exempt from this process of reform, nor should it be".
  Yet the Government have made a decision that Parliament should be left out of this process of referendums.
  All I wish to know—it is a relatively simple question—is this. What are the Government afraid of? Is it that they think hereditary Peers are so popular they might lose? I cannot believe that that is their reason; but it might be. If the amendment were carried, what justification would they have for reversing this in the House of Commons?
  A short while ago there was a question from my noble friend Lord Cranborne to the noble Lord, Lord Goodhart. Is it the Government's position that they prefer pre-legislative referendums rather than post-legislative referendums? I believe that the constitutional rule should

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  be that the people are asked after Parliament has been asked. It is part of the locks that have withstood the test of time, although that was broken by the pre-legislative referendums in the case of Scotland, Wales, and London.
  I am not sure why the Government are in such a flap over this issue unless they are nervous of the proposition which is outlined in the amendment proposed by my noble friend Lord Campbell of Alloway: that the Committee on Standards in Public Life should govern the referendum. If that is the case—if the Government decide to change their mind and have an amendment—it cannot be beyond the wit of Government or Parliament to pass a short referendum Bill, or to attach one to this Bill, if they so wish. I suspect that they do not wish it. Almost exactly two years ago we passed a referendum Bill in a little under two months. The noble Lord, Lord Sewel, was running his referendum Bill. It was a good deal more contentious. It had a good deal less cross-party support, and yet it happened.
  I also wish to quote the Government on subsection (2) of the amendment, about the joint committee of both Houses of Parliament. Are the Government still committed to this? I do not say that they will necessarily have made up their mind, but it would be useful to know whether they have considered the matter. Have they any idea how long they will give a joint committee of both Houses to take a view after the Royal Commission has reported; or on the balance of membership between both Houses? Do they envisage that the House of Commons should have a preponderance of Members or that there should be an even balance between the House of Lords and another place?
  I should like also to know the answer to this question. I can see why the Government hide behind the important fig-leaf of the manifesto. But let us accept it as that; it is a fig-leaf. But are they opposed to a referendum as a matter of principle on the long term future of the second Chamber? Have they considered the proposition that obtaining the consent of a wider electorate by a specific question in the referendum may be worthwhile after Parliament has passed a second stage Bill; or, if they are so wedded to the idea of pre-legislative referendums, that whatever the Royal Commission comes up with should be put before the people of this country in a referendum?
  The noble Lord, Lord Goodhart, may be right that no one is particularly interested in this issue. Is that what the Liberal Democrat Party is about: to maintain the position that the people of this country are not interested in the make-up of Parliament? I should have thought that this may be an opportunity to make people more interested in Parliament and its operations. That is one good reason for having this debate.
  When the Government reply, I hope that they will be able to tell us the answer to two specific questions. First, what was the reasoning behind there not being a commitment to a referendum on this question when referendums were conceded on so many other issues?
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  Secondly, can they tell the House whether they ever envisage a referendum on the long-term future of this House?
  Baroness Jay of Paddington: My Lords, I am grateful to the noble Lord, Lord Strathclyde, for putting those two points. From around the House we have had a thorough and extensive debate. I would almost describe it as at times ingenious. While I am somewhat tempted to follow some noble Lords who have raised what could be described as Second Reading points, or discussion on future amendments, I shall not do so. But I must make one point. However ingenious one is, I do not understand how one can wrap discussion about this potential second stage of reform in the terms of this amendment. However, whenever and whatever one asked the people of this country hypothetically to vote upon in a referendum on the Bill, I cannot understand how it would illuminate the next stage of reform. That seems to be the issue concerning most noble Lords offering their views on the amendment today.
  Whether or not we should seek a second stage referendum—if one can call it that—which the noble Lord, Lord Strathclyde, raised is, as I said in reply to his remarks on the Business Motion today, a matter we would hope to proceed with by consent once the Royal Commission and the joint committee of both Houses (which we have no intention of abandoning) have reported. Let us hope that that consensus on the next stage of reform, of which we all speak with such enthusiasm, will come to pass and will enable us to undertake the long term constitutional issues which we need to do when considering a second Chamber fit for the 21st century with reasonable consensus between all those who are part of that discussion.
  The arguments today have been thorough and in some instances subtle. I fear that those who have been subtle may find my response rather simple. Indeed, it is straightforward. But it is no less robust because of that. I say to the noble Lord, Lord Strathclyde, that the Government do not feel in a flap.
  The general view of the supporters of the amendment seems to be—to encapsulate it in so far as it was described in specific terms—that the people have not made known what they want and should be given the opportunity to do so. I realise that I risk wearying some of your Lordships who have heard the manifesto undertaking, I must repeat it once again. The noble Lord, Lord Marsh, who is not longer in his place, has already done so. It states:
  "The House of Lords must be reformed. As an initial self-contained reform, not dependent on further reform in the future, the right of hereditary peers to sit and vote in the House of Lords will he ended by statute. This will be the first stage in a process of reform to make the House of Lords more democratic and representative".
  That is the unequivocal commitment which, as the noble Viscount, Lord Cranborne, stated, is rightly subject to the Salisbury convention. In spite of those noble Lords who suggested that at this stage we should rewrite the parliamentary constitutional undertakings about

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  manifesto commitments, I do not think that many believe that that is an appropriate argument.
  The people have spoken precisely on this issue. As I said at Second Reading, to suggest that the British people did not understand, or were not aware, of the commitment is both insulting and dangerous. To those who say that no one ever reads the manifestos, that they are in the small print of people's understanding, it is with delight that I say that during the last general election campaign the Labour Party's manifesto was on the best-seller list of the Sunday Times for many weeks. To say that it was not understood is to be extremely insulting to the electorate which gave this Government an overwhelming mandate. As the noble Lord, Lord Marsh, made clear, there have been many opportunities, not least those suggested by the Cross-Benchers in your Lordships' discussions during the past few years, to preview the proposals which the Labour Party intended to make when it was elected, as it was in 1997.
  I believe that we should look at the argument from another angle. I wonder how Members would react if there were, for example, a manifesto commitment which they believed to he a protection of constitutional privilege. There may be one; I stand to be informed. But if there were and the Government decided that they would not fulfil it because they did not believe that the public understood the fine print, there would be a great deal of concern. People would say, "You were elected on this programme. Why do you not fulfil it?". I believe that there would be uproar from the constitutionalists in your Lordships' House, and rightly so.
  Again on the prominence of the manifesto, other noble Lords have suggested that few people voted Labour solely on the basis of the commitment to remove hereditary Peers. We do not know that one way or the other, but if it were to be true we cannot cherry pick over each party's manifesto. I gently ask those who make that argument how many people voted Conservative in 1987 solely on the basis of the proposals to introduce the poll tax?
  A number of noble Lords, including the noble Lord, Lord Campbell of Alloway, whose views I enormously respect, have quoted the evidence of an opinion poll to suggest that people are against the reform. Perhaps I may respectfully quote something to him:
  "to rely on opinion polls and say to another place that we represent the will of the people and they, the political representatives in the elected Chamber, do not, evinces more than a hint of hubris".
  That was the noble Lord, Lord Campbell of Alloway, on 14th July 1993, at col. 275 of the Official Report, when he was speaking against an amendment to the Maastricht Bill to introduce a referendum. If I did not believe and understand the noble Lord's extreme sagacity and great honesty, I could say to him that of course we all change our minds. In my view, the amendment before us today is not so much a change of mind about the principle of referendums, which he so forcefully argued against in the context of the Maastricht Bill, but more about a policy which he does not particularly like.
  5.15 p.m.
  Lord Campbell of Alloway: I am grateful to the noble Baroness for giving way. It was very shrewd of her to find that quotation. I congratulate her. However, it is not a very fair quotation.
  Noble Lords: Oh!
  Lord Campbell of Alloway: I believe that many noble Lords who are making a lot of unusual noise would not have been aware that for a very long time similar amendments in my name have been in the "no date named" and before this House on the reasoned amendment. What I may have said in the past was when I was probably less foolish than I am today. But we certainly can change our minds and there is no doubt that on this issue, for a long period of time, I have not changed it. My point that it is not a meretricious job to suit this debate; it is a good fun arguing point and I give it to the noble Baroness—as such.
  Baroness Jay of Paddington: I would never accuse the noble Lord of being meretricious and I acknowledge, as I did before he rose, that people do change their minds. I simply sought to illustrate the point that issues of constitutional importance arise. I am sure that those noble Lords who in 1993 took part in the extensive debate on the European Communities (Amendment) Bill, otherwise known as the Maastricht Bill, would have been extremely pleased to have the support of the noble Lord, Lord Campbell of Alloway, in not wishing to promote any amendment to establish a referendum on that Bill.
  That brings me to the point raised by the noble Lord, Lord Strathclyde, about whether the Government were cherry picking on introducing referendums. I draw his attention once again to that well known document, the manifesto. The Government believe that the manifesto should herald where the people should be consulted on a specific point. That is precisely what we did. The noble Lord drew attention, for example, to devolution for Scotland and Wales and to an elected mayor and an assembly for London. The position on introducing referendums before those Bills became law was explicit in the manifesto, and that is the position which the Labour Party has always taken.
  Let us take the example of Scottish devolution. The policy of the Labour Party has always been that it should be dependent on the agreement of the population and that was clearly set out in the manifesto. It was on points of such detail that the White Paper and the subsequent Bill were introduced.
  Lord Mackay of Ardbrecknish: I thank the noble Baroness for giving way. She said that the position of the Labour Party was always that Scotland was to have a referendum. Would she care to remind the Committee exactly on which date the Prime Minister decided to

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  change the position of the Labour Party and opt for a referendum? If she does not, I will come back and tell her.
  Baroness Jay of Paddington: I should be only too happy to have the noble Lord give us the calendar date, but I suspect that it will not help the discussion on whether it is right to preview issues on which one wants to hold a referendum in the manifesto. That is precisely what we did in relation to Bills on Scotland, Wales and the London government. They were raised as arguments against the position of not always having a referendum on constitutional matters.
  I turn to an issue which, interestingly, has not been raised today. The incorporation of the EC treaty on human rights into our law was very thoroughly debated. It was discussed in great detail in your Lordships' House last year because it was of enormous constitutional importance. As my noble friend Lord Williams of Mostyn said in his winding-up speech on Second Reading of this Bill, it was of the greatest possible significance to the constitution of this country. I have checked and can say that at no stage during the passage of that Bill was there a request for a referendum. That was taken as an issue which could legitimately be decided on the basis of the debates in this House and another place and on the basis of the manifesto commitment.
  Why was that done? It was done because the Government did not believe that anybody who had voted for them and had understood their wish to fulfil our treaty obligations, which at that stage were many years old in relation to the human rights convention in Europe, could possibly challenge them in a referendum. It is exactly the same argument that convinces us that a referendum on the Bill, which is the first stage of the reform of the House of Lords, is unnecessary.
  Perhaps I can point out that the relevant passage in the manifesto, which has been quoted twice this afternoon and on several earlier occasions, is longer than the main clause of this Bill. It is hard to imagine how a referendum question could possibly be more simple than that.
  That brings me to some practical questions raised by noble Lords on what would happen if the amendment were accepted and the practicalities of the referendum that may then be forthcoming. Questions arise as to how such a referendum can be conducted and what sort of questions would be put. The noble Lord, Lord Waddington, slightly tendentiously, said that the electorate would be asked, "Would you put up with a nominated chamber for ever?" That would not be the relevant question, nor would it be the relevant question in the context of the Bill.
  Several noble Lords raised the question of whether the referendum would act as the guarantee of the second stage. The noble Lord, Lord Chalfont, suggested that that was one way of establishing that the second stage would occur. As I said earlier, I do not want to be drawn into discussions on later amendments. From the Government's perspective, Amendment No. 31, as it
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  now stands, is precisely the guarantee of that. When we reach that amendment I am sure that the arguments will be made in that context.
  I understand entirely the bona fides and integrity of the noble Lord, Lord Campbell of Alloway, in not seeking to delay the passage of the Bill, but I must repeat to him what was said by my noble friend Lord Richard and my noble friend Lady Gould: that if Amendment No. 1 were to be carried, the effect would be to delay the implementation of the Bill, on which we have a clear, unequivocal manifesto commitment. The manifesto commitment did not have in brackets "to be delayed until after the Royal Commission has reported", nor did it say that it should depend on the outcome of a referendum. It was to be carried out in view of the overwhelming support shown through the popular election of this Government for their manifesto which, I repeat, includes this commitment.
  For all those reasons I ask the noble Lord, Lord Campbell of Alloway, not to press the amendment but to take a rain check, as the noble Viscount, Lord Cranborne, rather sensibly suggested. If the noble Lord does press it, I hope that your Lordships will not support it.
  Lord Coleraine: I challenge what the Leader of the House has said about the manifesto and the mandate. I believe that the Committee will be grateful to the noble Baroness, Lady Gould of Potternewton, for introducing this matter into our debate.
  We are a representative democracy, notwithstanding the intentions of some members of the Labour Party to change that. We have a representative House in the other place. It is for the representative House to decide whether something in the manifesto is given legal effect. It is for this House, as the advisory House, to recommend that the other House reconsiders. This has nothing to do with any form of mandate. The mandate arises in connection with the Salisbury convention and the noble Baroness, Lady Gould, asked why we need the Salisbury convention. The answer is simple. It was the quid pro quo by the hereditary peerage for the continuation of, theoretically, a completely unjustifiable arrangement. Once that arrangement is taken away, and legislation is introduced to take it away, the Salisbury convention becomes like the Cheshire cat with perhaps just the grin remaining. The convention has no fundamental validity now.
  Earl Ferrers: Perhaps I may be permitted to make one observation. I see the noble and learned Lord the Lord Chancellor shaking his head. Perhaps he just has St. Vitus's dance. I have found this debate fascinating. Rather like the conviction of a metronome, I have gone backwards and forwards according to the views of the last person who has spoken, even though I have attached my name to Amendment No. 98, a referendum amendment tabled by my noble friend Lord Lamont of Lerwick.
  I hate referenda and I always have done. Incidentally, I believe that the word is "referenda" and not "referendums" as it is Latin. I hate them because they divide Parliament and divide the loyalty of the people.

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  People are sent to Parliament to do a job. One person said the other day, "Why have referenda? We vote for people to sit in Parliament, we pay them a lot of money and then they turn round and ask us what to do".
  The Labour Party let this particular rabbit out of the hutch way back in 1975. Now we are lumbered with the prospect of referenda. There is a perfectly sound argument on this occasion for having one. My noble friend Lord Crickhowell said that the constitution depends upon having stable parliamentary institutions. This Bill removes those safeguards on which people rely. It is a pretty fundamental removal. I believe that is a perfectly sound case for having a referendum.
  The noble Lord, Lord Marsh, said that to hold a referendum would be an abomination. That is a pretty strong word. We have had lots of abominations. We have had the abomination over the European Community, over Maastricht, over Wales, over Scotland and possibly over the European currency. However, the noble Lord asked, "How on earth can we explain the problem to the people of the country?" If it is so complicated, that is a very good reason for having a referendum. One could put a simple question, "Do you approve of screwing up the second Chamber, yes or no?" Maybe the answer would be clear.
  The wording of a referendum is always difficult. I have the greatest respect for my noble friend Lord Cranborne, whose advice I always value and admire. I am not sure whether this goes against the Salisbury convention. The Salisbury convention allows the Bill, for which the Government have a mandate, to go through. We would simply be adding an amendment for the other place to consider. That is not delaying the Bill at all. The Bill may be delayed if another place were to say no, and it came back to us and we said, yes, and it went backwards and forwards. We would be giving the other place an option to consider. I do not believe that that contravenes the Salisbury convention.
  There are sound arguments on both sides. I hope that my noble friend Lord Campbell of Alloway will consider it prudent not to press this amendment today but to think about it. Perhaps I may suggest that the Government should think about it too. It is not all that easy. Now the noble Lord, Lord Williams of Mostyn, shakes his head in disagreement. Perhaps he has St. Vitus's dance too. I hope it does not mean that he has a closed mind. He always says he has an open mind and I hope he has an open mind on this occasion too.
  Lord Nunburnholme: I am reminded of Matthew Prior, who said,
  "Be to [their] faults a little blind…
  And clap your padlock—on [their] mind".
  That might be a little difficult in both instances. Good laws evolve from common sense; likewise constitutions. The proposed reform is a forced, unnatural act which is bad for one simple reason. The executive will have total control over Parliament, which means the death of democracy. The pre-supposition that the pre-eminence of the House of Commons should be preserved is not sacrosanct. The United States manages government perfectly well, though nothing is ever perfect.
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  The first Chamber should always be discouraged from displaying an adversarial manner except when driven to it, and then its powers should be awesome against individuals, Cabinet Ministers and even the Prime Minister. The use of impeachment should be reintroduced in extreme cases. I rest.
  5.30 p.m.
  Lord Campbell of Alloway: It will not be too long before I rest too. We have had a good debate and a good-hearted debate on a serious and emotive problem and I appreciate the spirit in which this matter has been discussed.
  The Deputy Chairman of Committees (Lord Strabolgi): Perhaps I can interrupt the noble Lord. The Committee is now considering Amendment No. 2 and that must be disposed of before we return to Amendment No. 1 because it is an amendment to Amendment No. 1. Unless the noble Lord, Lord Campbell of Alloway, has other things to say on Amendment No. 2, I ask the noble Lord, Lord Gray, to deal with his amendment.
  Lord Gray: I do not need to say very much. My noble friend Lord Campbell of Alloway indicated that he is prepared to accept my amendment. If it persuaded the noble Lord, Lord Goodhart, and his party to accept the main amendment, I might have withdrawn it. Instead, I commend it to the Committee.
  On Question, Amendment No. 2, as an amendment to Amendment No. 1, agreed to.
  Lord Campbell of Alloway: I apologise to the Deputy Chairman; I wanted to take my rest too soon. I am grateful to the House for accepting Amendment No. 2 as consequential.
  I thank all Members of the Committee for the spirit in which this matter has been discussed. With respect to the views that have been expressed, I do not believe that if Amendment No. 1 were to be carried it would be contrary to the Salisbury convention. I am not prepared to accept a view to the contrary because this situation has never arisen before and I therefore cannot accept that advice.
  This is a Cross-Bench and Back-Bench Conservative amendment and we therefore had to have a majority view as to whether we would divide the Chamber tonight or take the advice of my noble friend Lord Cranborne to take a rain check and come back on another day. By a majority we have decided to take that advice. I often take the advice of my noble friend Lord Cranborne, often when I do not agree with it—I do not agree with it tonight—and am still content to do so, largely because he is supported by my noble friends Lord Ferrers and Lord Crickhowell. In those circumstances one begins to wonder whether one can do other than once again thank the Committee for the spirit in which this debate took place and beg leave to withdraw the amendment.
  Amendment No. 1, by leave, withdrawn.
  Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 3:
  Before Clause 1, insert the following new clause—

  PURPOSE OF ACT
  (". The purpose of this Act is to create a more legitimate and more democratic House of Lords.")
  The noble and learned Lord said: In moving this amendment, with the leave of the Committee I shall speak also to Amendment No. 4 and Amendment No. 5 in the name of the noble Lord, Lord Northbourne, with which my amendments are grouped.
  Amendments Nos. 3 and 4 raise the issue of whether it would be desirable to have a purpose clause on the face of the Bill. These amendments seek to probe the Government's general attitude to such a suggestion and to the specific purposes incorporated in the amendments tabled in my name and that of my noble friends.
  The desirability of Bills containing purpose clauses is a topic which arises from time to time as individual Bills undertake their legislative passage through your Lordships' Chamber. Indeed, the whole topic was the subject of an Unstarred Question asked by my noble friend Lord Renton which led to a short debate taking place in your Lordships' Chamber back in January of last year.
  As many Members of the Committee will be aware, purpose clauses, or statements of purpose or principle as they are sometimes referred to, were the subject of a recommendation of the Committee on the Preparation of Legislation chaired by my noble friend Lord Renton many years ago. Recommendation 15 of that report was in the following terms:
  "Statements of purpose:

  (a) should be used when they are the most convenient method of clarifying the scope and the effect of legislation;

  (b) when so used, should be contained in clauses and not in preambles".

  It is important to note that when considering this topic and making a recommendation about it, the members of the Renton committee were concerned not only with the scope of the legislation but also with its effect. It may be said by the Government in response that the scope of this Bill is limited. No doubt it could be said that all that this Bill does is to end the membership of the House of Lords,
  "by virtue of a hereditary peerage"—
  Clause 1—and, furthermore, enact certain other minor provisions consequential on that change. I readily concede that on one view the scope of the Bill could be accurately described in such narrow terms. But when the possible effects of this Bill are considered, it is an entirely different matter. The potential effects of the Bill are far more difficult to identify and define. Whatever the difficulty in doing so, the need to do so is of paramount importance. It is not merely what this Bill states that is of significance. The topics it does not deal with are of almost equal importance. It is because of that that it can confidently be said that if there was ever a Bill where the effects of the proposed legislation are uncertain, this is such a Bill.
  On any objective view of the situation, independent observers have every reason to be concerned as to what the ultimate effects of the Bill will be. That is why the questions arise sharply, first, whether there is a need for a purpose clause and, if so, what they should contain.
  There are a number of possible reasons why there is concern about what the potential effects of the Bill may turn out to be. First, the Bill is being presented to Parliament as the first stage, but not the only stage, of a major reform of your Lordships' House. It is presented in paragraph 20, Chapter 2 of the White Paper as a first step in the process of reform,
  "But it is far from the only reform necessary".
  On that basis, it brings about a change in our constitutional arrangements which is not designed to be permanent, however long it may last. Secondly, there are different schools of thought as to how long we will have to wait for stage two to come along.
  The Bill's enactment will bring into being a transitional House which is to be of unknown duration. The transitional House is referred to in such terms in the White Paper in not a little detail in Chapter 6, but finds no mention whatsoever in the provisions of the Bill itself. No one can say for how long the transitional House will exist, because, while the Bill's parliamentary passage is taking place in tandem with the work of the Royal Commission, which has been set a very tight timetable, no similar timetable has been identified, let alone accepted, by the Government as to when the stage 2 proposals will come forward in the form of a Bill which will effectively bring the transitional House to an end.
  A third reason is that the White Paper acknowledges that the transitional House will have a different complexion in addition to a different composition. The White Paper is right to do so, even though there remains a measure of uncertainty as to whether or not the Bill will include a Weatherill amendment, in whatever form such an amendment may take. However, having highlighted the fact that the House will have a different complexion, the White Paper fails to address the consequences of that different complexion. Somewhat naively, it limits its discussion of the functions of the transitional House to a very bald statement that those functions will continue to be to question Ministers and to give its consent to, and where appropriate to revise, legislation. There is no other discussion of what the powers and functions of the House should be and, most important of all, how they might be exercised.
  I doubt whether any Members of the Committee believe that if hereditary Peers are no longer to take part in our deliberations the House of Lords will function as it does at present. In the light of the reasons that the Government themselves have put forward for ending the rights of hereditary Peers to sit and vote in the House, is it not perfectly possible that the transitional House will feel that it is much more democratic and more legitimate than the House as presently constituted? If Members of the transitional House were to think in such terms, would they not be justified in doing so, because, if they did, that would accord with various statements made by Government Ministers in support of the Bill?
  I refer in particular to what the noble and learned Lord the Lord Chancellor said on Second Reading. When referring to hereditary Peers who might remain in the House in the event of the incorporation of the Weatherill amendment, he said that such hereditary Peers would have a greater authority, because they would be elected by the whole of the hereditary peerage within their party. The Leader of the House, the noble Baroness, Lady Jay, said, when we were debating reform of the House of Lords, back in October last year:
  "any change which produces a fairer balance … must make this House more democratic."
  A little later she said,
  "I have no hesitation in asserting that the transitional Chamber will be more legitimate than that we have today."—[Official Report; 14/10/98: cols. 923 and 925.]
  I suggest that, armed with such support from such strong quarters, members of a transitional House may well feel that they have more democratic right, more democratic legitimacy, than is sometimes accorded to Members of the House of Lords at present.
  Against that background, when another place approved the Bill without any amendment to its terms, was that what its Members intended should be among the consequences of the Bill becoming law? Is it suggested that when the Bill passed through another place that place accepted that at least some Members of the House of Lords would be entitled to consider that they had a greater authority than they enjoy now? If a transitional House accepts that such a view may be held in the future, does not that raise very sharply the question of whether the Bill should leave the House of Lords without clarification as to whether it would be right to do so?
  There is a further reason for suggesting that a purpose clause would be valuable. Many hold the view that over many years the hereditary Peers have formed one of the more important independent elements of the House of Lords, if not, indeed, the most significant element. That element has to be removed in furtherance of the manifesto commitment about which we have heard so much. When that happens, is it possible that those Members who remain in the transitional House will seek to compensate for the removal of that important independent element? If they do, and if they seek to flex their parliamentary muscles in doing so, how is another place likely to react? Again, that is a matter that should be clarified to guard against the risk, spoken to so fully by my noble friend Lord Waddington, this afternoon, that a purely nominated House might be subject to ultimate control by the executive of the day.
  A final reason for suggesting uncertainty requiring to be clarified is to be found in Chapter 7 of the White Paper, which discusses what the stage two House might look like, how it might be composed and what powers and functions it might have. In that chapter there is a theme which has found some support among a number of Members of the House of Lords—that although the House might have an increased legitimacy, that might be accompanied by a reduction in its powers. I do not seek to pre-empt the outcome of that debate, because it is likely to be a long and stimulating one, which will not be resolved until after the Royal Commission has
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  reported and the Joint Committee of both Houses has met and considered what form stage two reform might take. But if there were to be any suggestion that a transitional House might have reduced powers, and that came to be accepted over the next year or two, or possibly longer, that would inevitably have consequences for how the debate about the stage two House would fall to be resolved.
  For those reasons it is important that this issue be addressed, and now. Accordingly, these amendments have been tabled in the hope that the Government will indicate whether they think it would be valuable to have a purpose clause in the Bill, and, more important, in order to give the Government an opportunity to indicate where they stand on a number of the issues on which Amendments Nos. 3 and 4 focus.
  Do the Government accept that the transitional House will be more legitimate and democratic than the House as presently constituted? Do they accept that the composition of the transitional House will increase the independence of Parliament, and in particular the independence of this House from the Government of the day? Do they accept that the transitional House will enjoy an enhanced ability to scrutinise legislation and to hold the executive to account?
  In the hope that these questions will be answered, I beg to move.
  5.45 p.m.
  The Earl of Onslow: I am delighted to see the noble Baroness, Lady Jay, back on the Front Bench, wearing imperial purple, which will thrill all our hearts.
  The Bill before us is quite extraordinary in that the Government have in effect agreed to a wrecking amendment. By that I mean that the Bill has been completely changed by the Weatherill amendment. I welcome this, because the original Bill was a bad Bill. The Weatherill amendment has made it a very considerably better Bill.
  Everything that I shall say during the Committee stage will, I hope, ensure that any influence that I have is exercised so that the Bill will be a much better Bill, so that if peradventure—or "Events, dear boy" as Harold Macmillan used to say—it is possible or probable that there is no stage two then when stage one goes through the House of Lords it results in a Bill and a House of Lords which can do their job and stand the test of time. It is well known to the Committee that I have always been a reformer and have wanted reform. I shall not go anywhere near any ditch for the hereditary Peerage. We have passed our sell-by date. I want to make that absolutely clear yet again. I shall probably have to make that point again and again, otherwise I shall be accused of feathering my own nest.
  Another interesting aspect of the Bill is that the powers which your Lordships have are considerable. But when we have been reformed, even under stage one, those powers will be used much more legitimately. I say "hoorah" to that because I see nothing wrong in the House of Commons saying that it will invoke the Parliament Act. That is what it is there for. If the House of Commons does not agree with us digging in our toes

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  when we are reformed, so be it. It will be said, "We do not agree with the Lords and we are prepared to stand up in public and justify our use of the Parliament Act". The Commons will not be able to use the excuse that it is all those Earls, Marquises and Dukes of ancient lineage coming out of the woodwork because they will not be in the woodwork. Most of the active Peers will still be here. That is the glory of what my noble friend Lord Cranborne has done: he has kept the majority of the hereditary active Peers here, or probably 60 per cent. of them. That is a marvellous deal and that is why I describe it as a wrecking amendment. Any government who are prepared to accept a wrecking amendment to their own Bill must surely be congratulated on the wisdom and foresight of their behaviour. I mean that with a slight sense of irony but, equally, totally genuinely.
  Let us say that, peradventure, stage one passes and, probably even less likely, there is a Tory government at the next election. Good God, a Tory government will have trouble with this House compared with the position in the past. I suggest that that is good. That is why we need a purpose clause: to make clear what we want from the House of Lords. I suggest that it should not be a democratically-elected House because that would impose seriously upon the will of the House of Commons. It should be a House of influence; a House of the powerful; and a House of the great and the good.
  The reason for that is that we shall have legitimacy but not democratic power. The House of Commons is the chamber of the commonality. It is the Chamber of geographical regions. It is from there that it draws its power, and long may that be so. That has been the case in our constitution since the Middle Ages. This House is the Chamber of the influential.
  I want a purpose clause. I do not know whether this is the right one. In my small way, I shall try to make sure that any amendment in my name makes the appointment to this House more transparent and more open to criticism and that it represents, where it can, real power and influence so that it has legitimacy. Stage one may last for many years. I do not in any way accuse the Government Front Bench of being anything other than completely sincere in wanting a stage two, but "events, dear boy, events", intervene. Therefore it is essential that stage one can stand alone and it is perfectly all right for the House, under stage one, to continue for the next 25 years. That is why it is essential to have a purpose clause.
  I hope that the Government will accept that. They may not agree with the wording of this amendment, but I ask them to accept the need for a purpose clause which sets out what we want from the House of Lords. That is what I want.
  The Earl of Longford: I oppose this amendment. I am a strong supporter of democratic principles applied to the House of Commons. I suppose that everybody here is a democrat in that sense. Churchill said that democracy is not a very good system but anything else is much worse. Therefore, for the House of Commons, let us accept that democracy reigns supreme.
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  The last speech seemed a bit dubious about democracy. I do not know which side the noble Earl was on in relation to democracy. But in my opinion, democracy does not apply to a place like this. If the Bill goes through and the hereditary Peers are no longer with us, what shall we have? We shall have a group of highly qualified persons—bishops, judges, leading ex-government officials, former Cabinet Ministers and many high-minded, well-qualified persons who have not been elected. It would be an appalling tragedy were we to have an elected Chamber. What should we have here then? We should have the dregs of politics—people who could not get into the European Parliament. That is the last thing we want.
  We want a highly-qualified, high-minded House. We have that to some extent now. I support the Bill. Do not let us talk about democracy any more in that connection, please.
  Lord Northbourne: I rise to speak to Amendment No. 5 which is grouped with this amendment. In doing so, I assure the Committee that, with typical Cross-Bench independence, I did not consult the Opposition; nor do I intend my amendment in any way to be in opposition to the Government. I hope that it may be helpful.
  Also, I have no pride of authorship and if the Government prefer the opposition amendment or if they would prefer to take away and consider the idea of a purpose or object clause to reword it, I should be more than happy with that.
  I was greatly impressed when I listened to and read the enormous number of speeches which have been made over the past four days on this subject. It seemed to me that two clear themes emerged: first, the vast majority of speakers from all sides of the House agreed that the days of the hereditary Peerage were, alas, over. But I was impressed by the selflessness with which so many hereditary Peers expressed that view, which is obviously to the detriment of their own personal enjoyment of serving with your Lordships.
  I do not know whether the Government are trying to get the Bill through by consensus or whether, in the end, they want to be seen to be carrying a flaming sword against the anathema of the hereditary Peerage. But if they want consensus, it seems to me that those speeches indicate that they are pushing at an open door; that a consensus is within their grasp if they are prepared to make concessions. Indeed, by implying that there will be a concession in relation to the Weatherill amendment, they have gone a long way down that road. I believe that some sort of object or purpose clause would help in that regard.
  I shall tell the Committee why that is so. The second common theme which I noticed in so many of those speeches was a genuine concern—and in most cases I believe it was not just a delaying tactic but a genuine concern—about what comes after the hereditaries. Will the House be as good and in the best interests of Parliament and the people? It is interesting that in those speeches more than half the speakers were concerned

  1065
  about the reality of the Government's commitment to retaining this Chamber as an effective revising Chamber and as a check on the executive.
  They fear that the Government's ultimate objective is to have a rubber stamp. I confess that I share that fear. I hasten to say that that is not because I impugn for a moment the integrity and sincerity of Ministers on the Front Bench. But in the end, when push comes to shove, will the Government be able to deliver? When phase two is on the table, will the Prime Minister and his Cabinet want and accept a solution which retains and enhances the powers of this House? Will they not feel that such a Chamber may inhibit their ability to do all the good things that they plan for this country. I know, in the field of families and children, that wonderful things are being done. Will they not be tempted, at the last moment, to prefer a rubber stamp?
  The second critical question is whether, even if it can be got through the Cabinet, it can be got through another place. As I see it, the purpose of an object clause is to place on the face of the Bill some of the commitments which have been made verbally to this House. I suggest that an object clause could go some way to calm the very reasonable fears and anxieties, particularly of noble Lords opposite and those on the Cross-Benches, which have been expressed in those speeches.
  I believe that an object clause does not conflict with the Weatherill agreement. I also believe that in any business it is good practice to have an object clause. When that clause goes back to the other place I believe that it will help to clarify their views and thinking. Finally, I believe that an object clause will help the Government to get this Bill through by consensus, if that is what they want to do.
  6 p.m.
  Baroness Carnegy of Lour: I support Amendments Nos. 3, 4 or 5. They seem to do roughly the same thing. I did not speak on Second Reading partly because there were so many speakers and I was not quite sure whether I could stand the pace until three o'clock in the morning. To that extent I apologise to the House for not having taken part.
  I hope that the Government will take very seriously the notion that there should be a purpose clause in this Bill of all Bills because there can be no justification whatsoever for doing anything to this House if it does not make it more legitimate and democratic and if it does not increase its independence and ability to scrutinise legislation and to hold the executive to account. That must be the purpose of a Bill such as this. If the Bill is not about that, I hope that it is not simply about the vindictive act of removing hereditary Peers because the Government believe that the Left-wing of their party does not like hereditary Peers. I do not believe that that is what they are trying to do; they are trying to improve this House. If the Government are doing that they must accept a purpose clause of this kind. This is a serious and important amendment. I hope that we shall not hear the Government say that they do
  1066
  not want a purpose clause of this kind because if they do they will be admitting something which I hope is not true.
  Lord Bruce of Donington: I would like to deal briefly with Amendment No. 4. It seeks to insert, before the commencement of the Bill, what the noble Lord described as an "objects clause". The amendment states,
  "The purpose of this Act is to increase the independence of Parliament and to enhance its ability to scrutinise legislation and to hold the executive to account".
  I read the Bill as doing nothing of the kind. Its purpose is to abolish the hereditary peerage. The Bill seems to me to do that adequately. I have been in the party for a long time—namely, for the past 65 years—and since that time the objective of getting rid of the hereditary peers has always been on the cards. The Bill is quite simple and I do not see the need to argue with it.
  There is another reason on which I am bound to address the Committee and it is intimately linked with the question of independence, which this Bill does not affect. I sincerely hope that your Lordships' House will give this Bill a speedy passage and that it will reach the statute book with the minimum of delay. But it should not be done with any illusion that it is enhancing the independence of Parliament.
  We shall spend hours and hours discussing this Bill and while doing so the independence of the English Parliament is disappearing week by week. To me the language of priorities is the religion of socialism, which is how I came into the party to begin with. As regards the independence of Parliament this Bill has no relevance at all. It has no relevance to the real priorities that need to be addressed in our country. Every week at least two pieces of European legislation go through Parliament without scrutiny by the scrutiny committees in either House; without even the Government reading them or the Prime Minister knowing about them. Such legislation goes through week after week.
  Parliamentary reform in its broadest sense is dealt with in the Government's very good memorandum on the subject. I sincerely hope that we proceed with sufficient speed, particularly with modernising the regulations and the scrutiny machinery, with the bureaucracy being required to inform people of the truth instead of trying to pull the wool over their eyes. If that is done quickly it may well be worth while.
  I am well aware that Members of the Committee know my views on this subject. I have had the indulgence of the House for a long time, particularly that of my own Front Bench. But I say to them that all this constitutional paraphernalia on which we are now engaged, and on which I believe we shall be engaged for weeks, raises very little relevant to the real needs of our country in terms of the relief of poverty and the gross inequalities of income and status. I hope that that will be borne in mind at some time or other.
  I support the Bill and I wish it Godspeed. I hope that it will enable us to attend to the nation's real concerns and problems when it is passed.
  Lord Simon of Glaisdale: Not for the first time I find myself very much in agreement with the noble

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  Earl, Lord Onslow, as to what we need in the form of a second Chamber and the spirit in which we should frame amendments. But I doubt whether too much importance is being placed on a purpose clause. On the Government Front Bench there is the noble and learned Lord the Lord Advocate and on the opposite Bench his predecessor. There is also the noble Lord, Lord Williams of Mostyn, a former chairman of the Bar Council. My conception is that the only objective and service of a purpose clause is as an aid to interpretation, and that only arises if there is ambiguity in the Bill and the ultimate statute. As the Bill stands, I cannot descry any ambiguity. No doubt some of the proposed amendments might introduce some, but I hope that we shall have ironed out any possible misunderstandings by the time this Bill leaves your Lordships' House.
  There are three purpose clauses—if the Committee believes that we need one—before us. I prefer Amendment No. 4. Amendment No. 3 uses the word "democratic" which has been very loosely canvassed during discussions on this issue. "Democratic" has been taken to be virtually equivalent to "elected". We hear about the democratic Chamber meaning that it is the elected Chamber. But democracy goes far beyond that. A society is democratic in so far as that the mass of the people can influence the decisions which affect them. Representative government is only one. A far more important one is to vouchsafe the decision actually to the people themselves. Whatever else one might think of Thatcherism, at least that was done under the previous government.
  My other objection is to the word "legitimate". Again, it seems to be considered that the only legitimacy is that conferred by election. But a constitution or part of a constitution is legitimate in so far as it serves a valid constitutional purpose. I confess that I find the hereditary principle perfectly easy to accept within that conception. It has served this country admirably for many years and I strongly agree with what I believe was implied by the noble Earl, Lord Onslow; namely, that an hereditary element is an independent element. What we should be seeking throughout the proceedings on the Bill is a strong and independent second Chamber where the first is always bound to a great extent to be subservient to the executive.
  When I entered the other place nearly half a century ago, the three rising stars on the Benches opposite were the son of Mr. Arthur Greenwood, Viscount Stansgate (Commander Wedgwood Benn, just previously) and the son of Mr. Alderman Jenkins. That does—does it not?—say something for heredity. It would be idle to pretend that political ability is genetically transmitted, but I think that it is well established now that intelligence and intellect are genetically transmitted. What happens is that certain people grow up in an atmosphere of political culture.
  When I was in the other place, I was a member of the One Nation Group. By far the most commanding intellect there was Mr. Enoch Powell, but his was not the best political judgment. Indeed, the best political judgment was made by a member of the group who belonged to a wide-ranging political family who
  1068
  automatically, almost instinctively, arrived at a wise political decision. I hope that it will not be embarrassing if I mention that we should not close our eyes to the fact that two of the most distinguished Members of your Lordships' House, two Members who have contributed as much as anyone, are sons of the House of Cecil and the House of Russell.
  If we are to have a purpose clause—and I somewhat doubt whether it would have any real value—I hope that noble Lords will adopt Amendment No. 4 which expresses the aspiration which we should have in these deliberations.
  Lord Haskel: From the speeches that we have already heard, it appears to me that if we do agree to a purpose clause it will just open the floodgates and there will be an unstoppable flow of purposes. After all, up until now, my noble friend has suggested that the purpose clause should contain references to socialism; the noble Earl, Lord Onslow, suggested that we should refer to independence; and the noble Lord, Lord Northbourne, suggested that the purpose clause should refer to democracy. If we accept some sort of purpose clause, it seems to me that we will never agree on what it should be. I feel that the Bill itself is absolutely clear in that respect and does not require such a clause. Therefore, I do not support the amendment.
  6.15 p.m.
  The Earl of Caithness: I am a firm supporter of a strong second Chamber. Whatever may be the complexion of a second Chamber, it must be able to defeat the government of the day in another place in order to ask them to think again. I agree with much of what my noble friend Lord Onslow said about a revised Chamber: it may well cause a Conservative government more trouble. Goodness knows, this House caused me enough trouble in the 1980s and early 1990s. Indeed, if it had caused me any more trouble, it might have shortened my life considerably more than it did.
  It is for that reason that I think a purpose clause is necessary. Having read the excellent report of my noble and learned friend Lord Mackay of Clashfern, it seems to me that he has set out some very cogent reasons why a purpose clause is necessary for a revised second Chamber. It is also important because the revised Chamber that we are discussing will last for a considerable length of time. Although remarks have been made about it by the noble Lord, Lord Richard, when speaking to the first amendment, there is no doubting the fact that there has never been a problem in this Chamber with reforming this House; indeed, the problems have always occurred in the other place. I believe that the Government will be pleasantly surprised by the attitude of hereditary Peers when we come to discuss reform. Any trouble with phase two reform will not be here but in another place, as has always been the case. For that reason, this Bill must be as perfect as possible because I can see it lasting many years into the future. That is why, to my mind, a purpose clause is essential.

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  Of the three purpose clauses now before us—and there is of course a fourth one, as set out in Amendment No. 9—I prefer the one suggested in Amendment No. 4. I was surprised by what the noble Lord, Lord Bruce of Donington, said. I have agreed with him so much in the past and I am sure I will do so in the future. I should have thought that he would have liked Amendment No. 4. I say that because in the future I foresee this House scrutinising European legislation much more thoroughly than it has been able to do in the past. I give way to the noble Lord.
  Lord Bruce of Donington: I thank the noble Earl for allowing me to intervene. If he reads the amendment carefully, he will see that it refers to "Parliament" and not specifically to the House of Lords.
  The Earl of Caithness: Indeed, the noble Lord is right. I prefer Amendment No. 4, and was dealing with the independence point because I wish to stress the fact that this House should be more independent and should be able to take a more independent view on Europe. However, that will depend very much on how its composition is made up in the future. I believe that that will he the key amendment on which we will need to spend some time in the days to come. However much we would like to have a strong and independent second Chamber, we shall not get one unless we ensure that we get the composition right. For that reason, I believe it most important for us to have a purpose clause of some sort.
  Lord Bach: When the noble and learned Lord, Lord Mackay of Drumadoon, moved what he described as a probing amendment, I did not feel that his heart was really in it. If ever a Bill did not require a purpose clause, it seems to me that it is this short, unambiguous and straightforward Bill. Moreover, if one is looking for its purpose, it is clearly set out in the Long Title. Perhaps Members of the Committee will forgive me if I remind them that the Long Title refers to the fact that this is a Bill:
  "To end membership of the House of Lords by virtue of a hereditary peerage; to make related provision about disqualifications for voting at elections to, and for membership of, the House of Commons; and for connected purposes".
  I give way to the noble Earl.
  The Earl of Onslow: Surely this particular plan has been kyboshed by the Weatherill amendment; indeed, there will be 92 of us jumping up and down. We will be doing so as hereditaries and for no other reason, except that we will be elected and you will not!
  Lord Bach: I look forward to the discussion of Amendment No. 31 just as much as the noble Earl. However, we are not discussing that today. We are discussing this amendment early in this Committee stage. It seems to me that it would be quite wrong to have a purpose clause for so straightforward a Bill as this. I am delighted that there is support for my view from someone as distinguished as the noble and learned Lord, Lord Simon of Glaisdale. He, if anyone, should know which Bills require purpose clauses and which do
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  not. As a probing amendment I think it has value. However, if it were to be taken really seriously, I believe it would damage the Bill a great deal.
  Lord Northbourne: Before the noble Lord sits down, does he not agree that the Government's manifesto stated that this would be the first stage in a process of reform to make the House of Lords more democratic and representative? If it is the first stage in a process of reform, it is part of that process of reform. Therefore the word "democratic" is perfectly legitimately used in all these amendments, if I may say so.
  Lord Bach: I am grateful for that intervention. I believe that the important words are "first stage". This is a distinct first stage in the long overdue reform of this Chamber. It would be quite wrong therefore to confuse it with the second stage which, of course, will come later and I hope quite soon. I hope that I stick by the convention in saying that in my opinion it would be wrong to make a simple, short Bill such as this have a purpose clause. Where on earth would it end? I believe that would be a mistake.
  Lord Crickhowell: I understand why the noble Lord who has just spoken does not particularly like this probing clause as it exposes the total vacuum at the heart of this short and simple Bill. As so often, the noble and learned Lord, Lord Simon of Glaisdale, gave us a powerful reason why we should perhaps not have a clause of this kind written into the Bill. However, my noble and learned friend who moved the amendment moved it as a probing amendment. As a probing amendment it has already proved extremely valuable. A little earlier we heard from one of the great independent figures in either Chamber; namely, the noble Lord, Lord Bruce of Donington, who added to his desire that the Bill should proceed speedily on its way, the hope that other things might then happen. However, the trouble is that we have absolutely no evidence that something will happen which will put a sensible constitutional settlement on the table.
  Clearly the Government cannot object to a statement that this Bill is designed to create a more legitimate Chamber because they have repeatedly given that as a reason for introducing this simple Bill. One would like to think that they perhaps favoured a more democratic Chamber. However, it has already been pointed out that this will certainly not be in the interim a more democratic Chamber. Some of us who sit in this Chamber have at least on frequent occasions fought and won elections and served in government. But even we are here because we have been nominated. There are others I see in this Chamber who have frequently fought elections but never won them. However, they have also come to this Chamber because they have been nominated. There are others, who are perhaps more worthy than any of us, whose breadth of experience, contribution to public life, wisdom and skill have led them to be appointed to this Chamber. However, I believe that none can claim to be here as representatives of an

  1071
  enhanced democracy, although I take the point that was made about the nature of democracy. It is hard to see that we are particularly legitimate on those grounds alone.
  As for the suggestion that we should increase the independence of Parliament and enhance its ability to scrutinise legislation, that, I believe, is one of the key objectives that we should have, as I said during the Second Reading debate. The trouble is I am not sure that the Government like independence and I am pretty certain that they do not much care for the close scrutiny of their legislation. We have seen that time and time again.
  There are those who argue that the best solution would be a wholly elected Chamber. I profoundly disagree with that assertion because I fear that we would finish up with a mirror image of the present House of Commons, with all its shortcomings, and a Chamber which would be far from independent and would lack the breadth of wisdom, skill, knowledge and experience that is the great strength of this Chamber at the present time.
  I think the best solution will probably be a Chamber that contains a part elected element but a considerable number of others who come here because of their breadth of skill, wisdom and experience. However, that is for debate on a later occasion. That is the problem that we confront throughout our debates on this Bill. We have a phase one that leaves us in a vacuum and with no idea of what is to come in phase two for the good reason that the Government do not have the smallest idea of what is to come in phase two and are desperately hoping that the Royal Commission will come up with some solution that they will find acceptable and which will be widely accepted by others.
  It seems to me that in moving this amendment my noble and learned friend has done a great service because he has exposed the extraordinary futility of this piece of legislation. Indeed there would be some case for pressing at least one of these amendments because it would then enable us to move a succession of amendments to make this interim Bill a workable Bill, a Bill with a purpose and a Bill which would be of service to the nation rather than leaving us with a Chamber—which we may be left with for a long time—which would be a considerably weaker and less effective Chamber than the one we have at present. I hope that my noble and learned friend will not entirely drop the idea of pressing this amendment, if not today then on some other occasion. For the moment I, for one, am extremely grateful that he has moved it and exposed the futility of the Government's solution.
  6.30 p.m.
  Viscount Cranborne: Not for the first time I am delighted to follow my noble friend Lord Crickhowell because I too find myself extremely grateful to my noble and learned friend Lord Mackay of Drumadoon for his splendid idea of moving a probing amendment. Like my noble friend Lord Crickhowell, I believe that the whole Committee may have found, like me, that the past 50 minutes or so have not been exactly a waste of time; they have been extremely revealing.
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  Of course I am grateful to my noble and learned friend for putting down his probing amendment. However, I find myself in somewhat greater difficulty as to whether I can necessarily agree with at least the terms of Amendment No. 3. Like the noble and learned Lord, Lord Simon of Glaisdale, I find myself slightly more able to support Amendment No. 4. Before I state the reasons for that, when the Minister replies I hope that he might care to consider two matters. The first is the following. Even if he rejects the need for a purpose amendment—for some obscure reason I believe he may feel inclined to do that—I hope he may feel able to follow an example which is very much deprecated by parliamentary draftsmen in the modern age; namely, of considering a preamble.
  During a previous debate this afternoon my noble friend Lord Campbell of Alloway was kind enough to give a puff to a Private Member's Bill I introduced into your Lordships' House. At the risk of wearying the Committee even further on that admirable piece of legislation I draw attention to the fact that it has a rather old fashioned preamble. I venture to suggest that the merits of the preamble are that it enables the framers of a Bill to set the legislative provisions of the Bill concerned within a wider context.
  If I have gathered one thing from the debate today, it is that a number of your Lordships find it difficult to discuss the narrow terms of the Bill without reference to the much broader context of the Government's wider misguided constitutional reforms but in particular what we hope will be the probability of a stage two. It may well be difficult for us within the context of this narrow Bill to refer in a purpose clause to stage two, but it may perhaps be possible to meet the point made so eloquently by a number of your Lordships by thinking in terms of a preamble. In my experience, preambles are rather fun to compose, if only because they enable one to make all kinds of tendentious remarks without getting into trouble with the parliamentary draftsman.
  The second point that I should like the Minister to address is on a hypothetical plane. As a number of noble Lords opposite have already pointed out, the Bill in its present form does not include Amendment No. 31. I hope and believe that by the time it leaves your Lordships' House the Bill will include Amendment No. 31, but, as I keep saying, that is for your Lordships to decide. However, I hope that the Minister will be able to reassure me that the Long Title of the Bill, which begins with the words,
  "End membership of the House of Lords by virtue of a hereditary peerage",
  is broadly enough drawn to accommodate Amendment No. 31. If that is so, I shall be greatly reassured. It will mean that the nightmare I remember from my days as a business manager, when something one wanted to do was not permitted by the Long Title of the Bill, will not be facing the Government, who I know from experience are entirely honourable in their intentions to abide by the agreement contained in the Weatherill amendment.
  I turn, I hope reasonably briefly, to the substance of the amendments. My noble and learned friend Lord Mackay of Drumadoon told us that he was talking in terms of a probing amendment only. But it must be right

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  for your Lordships to view even a probing amendment with something more serious than a purely cavalier approach. We must look at the terms of the amendments as drafted. We have not yet—as I am sure the noble Lord, Lord Bruce of Donington, would have reminded us were he still in his place—adopted the rather more cavalier and Napoleonic habits of legislation to be found on the other side of the Channel.
  In Amendment No. 3 it is suggested by my noble and learned friend that the purpose of this Act should be to create a more legitimate and more democratic House of Lords. Again, not for the first time I find myself fully in agreement with the reservations expressed by the noble and learned Lord, Lord Simon of Glaisdale. It is at least possible to argue—I put it no higher than that—that it might be desirable for there to be a democratic element in a future upper House. Indeed, I can see myself arguing for at least a partially democratic element in a reformed upper House if by "democratic element" one means at least some of the Members of your Lordships' House or its successor being elected by universal franchise.
  My quarrel—I use the word perhaps rather bravely with my noble and learned friend on the Opposition Front Bench—is that nowhere in the Bill as presently drafted—and that is how we must look at it—can I see anything remotely democratic about its provisions. I can therefore only suppose that, with his usual extraordinary perspicacity, my noble and learned friend is trying merely to make the Bill at least consistent with the record of the Government, who, in my observation, have managed with an extraordinary degree of consistency to declare that they were doing one thing and proceeded to introduce provisions in their legislation and their foreign policy action to bring about exactly the opposite. For that reason I can sympathise with my noble and learned friend Lord Mackay of Drumadoon when he introduces the word "democratic" because it would at least be consistent with the Government's previous record, although I fear that for your Lordships to introduce that degree of consistency would not be serving the purposes of your Lordships' House as a proper revising Chamber.
  Equally, I am not entirely clear why a nominated Chamber, even one at least partially nominated by the kind of commission that the Prime Minister has trailed before us for Cross-Bench Peers, is necessarily any more legitimate than a hereditary Chamber. During the course of previous debates I have often ventured to suggest to your Lordships that one could argue that it was rather less legitimate for the purely pragmatic reason that at least people like my noble friend Lord Strathclyde owe their positions here to someone who is dead rather than someone who is still alive. Unless one believes particularly in ghosts, someone who is dead would be unlikely to twist my noble friend's arm in the same way.
  That brings me to the question of independence. If I were to introduce yet another smidgen of criticism into what my noble and learned friend has brought forward in Amendment No. 4 and venture extremely nervously to disagree just a little with the noble and learned Lord, Lord Simon of Glaisdale, it would be over the assumption implicit in Amendment No. 4 that a
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  nominated Chamber would necessarily be more independent. I remember being taken to task by no less a person than the noble Lord, Lord Richard, in a previous incarnation for suggesting, or being thought to suggest, that life Peers were any less independent than hereditary Peers. I would be the last to suggest that any Member of your Lordships' House who is a life Peer is in any way less independent. In fact, there is plenty of evidence to show that life Peers have at least as many independent and free spirits among their number as the hereditary Peers.
  Perhaps your Lordships will allow me a brief trip down memory lane. When I had the great honour and privilege of being the Leader of your Lordships' House I remember that an inordinate number of people out there seemed to believe that I had some say in who was to become a Peer. I need hardly add that I never in any way attempted to disabuse them of that illusion. That would have been unwise for a highly ambitious politician like myself. I am sure that those of your Lordships who have also enjoyed the privilege of being thought to be in a similar position would have found the same. In spite of being warned that that would happen, I was astonished at the virulence with which the very great, good and respected people who wished to become Peers made it clear that that was the best way in which they could continue to serve the best interests of the country. They did not usually enjoy queueing outside the Leader's room; it was perhaps a little too public. But I have to tell your Lordships that in the Privy Council Office they queued. Not only did they queue; they made it clear that it would be an absolute outrage if they were not made Peers.
  Noble Lords may think this unworthy, but I must confess that, when confronted with such a person. male or female, great captains of industry, leaders of thought and opinion from every part of the political spectrum, so I thought, inevitably one's tongue found itself creeping somehow uncontrollably towards one's cheek. One found oneself saying, "Sir (or madam), if you were to sit on the Cross-Benches, which undoubtedly in your position you might feel you had to, how could we rely on your vote?". And, mirabile dictu, almost without exception these people used to say, "Ah, of course, I have always been a Conservative". And they would say, "You know that, don't you?".
  Noble Lords will recognise that I knew nothing of the kind. I was astonished at the extraordinary "brass neck" that so many of them displayed, when I knew perfectly well, as they did, that they had never been anything of the kind. I would then say, "But then, if you were to become a Peer, how could I know that we could rely on your vote, particularly if you found yourself sitting on the Cross-Benches?". Not all, but a surprising number, said to me, "Would you like it in writing?".
  I shall not distress your Lordships by continuing this descent into anecdotage. I hope and believe that not one of those people received a peerage—not because I had any say in the matter, but because those who did have a say had a great deal of judgment. I am absolutely certain that the same rigour has been applied by the present Government, although I must confess that there are

  1075
  some mauvaises langues who have implied differently. I hope and believe that that happy situation will continue to obtain.
  However, Prime Ministers are subject to great temptation, particularly when confronted with the possibility of being able to pack their own Benches, and indeed some of the Cross-Benches, with compliant Peers. In an entirely nominated House, there will be a standing temptation to any future Prime Minister to ask a person to make a commitment before he or she becomes a Member of this House, rather than afterwards. It is a sensible principle that all legislation should be framed in such a way as to catch the possibility of dishonourable, as well as honourable, Prime Ministers succumbing to temptation.
  Lord Graham of Edmonton: Will the noble Viscount give way? I wonder whether he was in the House when the noble Lord, Lord Archer, read out to the House a letter he received from the then Prime Minister, Mr. John Major, in which he asked as a condition upon which he would recommend the noble Lord for this place that he would agree to vote in support of the Tory Government in every way.
  Viscount Cranborne: My Lords, I do not remember that episode. I am most grateful to the noble Lord for saying that he would send me a copy. I am sure that I can find the reference in Hansard as well, but I am, as always, grateful to the noble Lord. He has always endeavoured to save me trouble. If the implication, which I reject, is as I think it is from the noble Lord, that would go towards supporting my case rather than the reverse.
  I have detained your Lordships far too long and I am grateful for your indulgence. I hope that my noble and learned friend will take this point from my remarks about independence. In spite of the remarks of the noble and learned Lord, Lord Simon of Glaisdale, my experience tells me that there is a danger that an entirely nominated House would not necessarily increase the independence of this House.
  6.45 p.m.
  Lord Simon of Glaisdale: I am grateful to the noble Viscount for giving way. Does it not depend on who makes the nomination? The noble Viscount was right in replying to the noble Lord sitting in front of me that his argument supported the noble Viscount's case. But that is because the nomination is by the Prime Minister. That is the mischief.
  Viscount Cranborne: I wholly accept what the noble and learned Lord has said. The point I wish to make is that my noble and learned friend Lord Mackay of Drumadoon is showing his usual faith in human nature by including the word "independence" in this amendment—a faith which, I am relieved to find, has survived prolonged exposure to the Scottish courts.
  The amendments that we are considering are extremely useful as probing amendments. However, I should find it difficult, for reasons I have attempted to
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  explain, to support them. In view of my admittedly rather feeble powers of analysis, I am not sure that the way in which they are framed bears any relationship to what the Bill will bring about.
  I suggest to the Minister that it would be extremely helpful were he to think in terms of including a preamble, although of course it may not be possible under the rules of the House to do so. I hope it may be possible for the noble Lord to give some reassurance on the matter I raised in relation to the Long Title.
  The Minister of State, Home Office (Lord Williams of Mostyn): It is always a great pleasure to listen to Second Reading speeches, particularly in Committee! The noble Viscount has made a number of important contributions. I want to be as helpful as I can. His particular question concerned his trouble about whether the Weatherill amendment might slot into the Long Title. I think the answer to the noble Viscount's question is to be found in Amendment No. 152 in the names of the noble Lords, Lord Weatherill and Lord Marsh, the noble Earl, Lord Carnarvon, and the noble Viscount, Lord Tenby.
  Noble Lords will be grateful to the noble Viscount for the scrupulous and conscientious way in which he dealt with the difficult question put to him by my noble friend Lord Acton. His reply was no less than we should have expected, but it was refreshing to hear him answer so plainly and boldly.
  The noble and learned Lord, Lord Mackay of Drumadoon, spoke of the purpose of a purpose clause. He described it in two ways, citing the noble Lord, Lord Renton, and his former committee. The noble and learned Lord said that one would have a purpose clause which was most convenient to deal with scope and effect. He also said of the recommendation of the noble Lord, Lord Renton, that if there were to be anything akin to a purpose clause, it ought to be in a purpose clause, not a preamble. The Committee is thoroughly familiar with it; there was a preamble to the Act of 1911 which, so far as I am aware, had no particular utility in the intervening 89 years.
  Viscount Cranborne: I am grateful to the Minister for giving way. Does he mean what he has just said? I seem to remember the noble Lord, Lord Richard, and many others quoting that preamble ad nauseam as a justification for "unfinished business".
  Lord Williams of Mostyn: Of course they quoted it ad nauseam, but that does not derogate from the proposition which I put that they needed to quote it in 1997, 1998 and 1999 precisely because of what I said. It had no practical legislative utility of any kind. As always, the noble Viscount kindly reinforces the point I was making.
  The noble Lord, Lord Crickhowell, said, very unkindly I thought, that many persons here had never stood for elective office. That is unfair. The noble and learned Lord the Lord Advocate stood for election as dean of the Faculty of Advocates in Edinburgh and I myself stood—both of us being successful—as chairman of the Bar in this country. Both of us

  1077
  enjoyed—if that is quite the word I was looking for—electorates distinguished by two central characteristics: barking egomania and rat-like cunning! I can say that in this private gathering. If we survived that, I believe we are reasonably entitled to say that we had a democratic mandate from the brothers and sisters.
  The noble Viscount also spoke of his glee—maybe his mischievous glee—in penning a preamble. I understand that, and it is not unlike penning a valentine and despatching it anonymously. He asked questions hypothetically—he rightly described them as that—about Amendment No. 31. It would be for the convenience of the Committee, as the Chief Whip always tells me, if we discussed Amendment No. 31 in its proper, due place. It is an extremely important amendment. I repeat what the Leader of the House said. It was our wish and it might have been better to have had the Weatherill amendment and its related consequences right at the beginning of our debates in Committee. That is what we suggested. Other noble Lords took a different view. It is their continuing prerogative, but I believe that we might have done the House a better service if we had followed her advice.
  Lord Strathclyde: I am grateful to the Minister for giving way. On that point, does he agree that it might have been better if the amendments had been agreed in the House of Commons and if the House of Commons had been able to have a proper debate on those matters before they came to this House?
  Lord Williams of Mostyn: Despite my manifold responsibilities, the conduct of business in the House of Commons is not one. I understand that the noble Lord, Lord Strathclyde, has to make the occasional partisan political point because there is little else of substance that we are entitled to look forward to. The fact is that it was a perfectly sensible proposition; it was not done for any particular partisan advantage and I repeat that it would have done a service to the conduct of this debate. It may even be that the noble Earl, Lord Onslow, would agree with me on that.
  The Earl of Onslow: I do.
  Lord Williams of Mostyn: I think it is time I sat down. There is no purpose at all in having any of these variants of this clause, for the reason which the noble and learned Lord, Lord Mackay of Drumadoon, exposed: namely, it is useful and most convenient when dealing with scope and effect. No one—and I pray in aid the noble and learned Lord, Lord Simon of Glaisdale—could be under any sensible misapprehension about the purpose, scope and effect of the Bill. In fact, the Explanatory Notes make it plainer than anything that,
  "The Bill's main purpose is to end membership of the House of Lords by virtue of a hereditary peerage".
  I do not think that a purpose clause will improve on that.
  The noble and learned Lord, Lord Mackay of Drumadoon, asked me four questions. The first was: did I, on behalf of the Government and not trespassing on my own personal views, think it valuable to have a
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  purpose clause at all. My view is that it is not and that coincides with the Government's approach, fortunately. He then asked three questions which I will answer together. We believe that the House which will result from the passage of the Bill will be more democratic. more legitimate, no less independent and better equipped to do its proper job of scrutinising legislation and holding the executive to account. I repudiate the proposition that life Peers are any less independent, stubborn, mulish, offensive to Whips and downright disagreeable than hereditary Peers. It is not true if one looks at the list. Indeed, in moving my head round the assembled panorama, even of those opposite me, were I deeply unkind I could point to one or two of my noble friends who have been extremely independent and have continued to be so, whatever apparent blandishments might have been offered to them before they came here.
  The Earl of Onslow: Will the noble Lord give way? I quite accept all he says about mulishness and the rest, but I do not understand how it is in any way more democratic. Will he please explain that one point?
  Lord Williams of Mostyn: Yes. If one comes here by nomination—in my case by the nomination of Mr. Major to Her Majesty—it is always necessary to bear in mind recent as well as early history. If one comes on that basis of nomination, one is nominated by someone who himself has an electoral mandate. That: is a good deal more democratic, I suggest, than someone who is here by virtue of a former place offering centuries ago. That is my answer and I believe it to be a proper one.
  A number of Members of the Committee inquired about whether the Government would contemplate a purpose clause at all. One might have a short purpose clause. It might be to restrict the queues of importunates outside the Privy Council office. But that is a tender mercy to the noble Viscount, Lord Cranborne.
  We have had a wide-ranging debate on a narrow focus. Many of the contributions have little, if any, connection with the point. The noble Lord put it as a probing amendment. I have answered his probes.
  Lord Northbourne: Before the noble Lord sits down and rather than having to move my amendment in order to speak again, perhaps I may say this. I do not believe he answered any of the points I made. I hope he will read the Official Report because I believe that a purpose or object clause could be extremely helpful for those of us who are concerned about the future of your Lordships' House.
  Lord Williams of Mostyn: With great respect, I have dealt with that. I said that it has no sensible place within the context of a Bill as limited as this. When we come to the discussion on Amendment No. 31, the Weatherill and other related amendments, the points made by the noble Lord, Lord Northbourne, will be dealt with. But they are not dealt with by a purpose clause for reasons abundantly stated by the noble and learned Lord, Lord Simon of Glaisdale. That is why I referred to him by way of a general citation. They have no proper utility in

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  this Bill. For example, the Life Peerages Bill had no purpose clause. If I introduce a Bill to bring back capital punishment, it does not need a purpose clause because it speaks for itself.
  7 p.m.
  Lord Mackay of Ardbrecknish: My experience of the noble Lord, Lord Williams of Mostyn, on the various Bills in which we have taken part is that he either gives a long, full and most interesting answer or he goes for brevity. This evening he has gone for brevity. I do not think it has improved his argument in any way. He might have done better trying to address some of the many points which Members of the Committee have put.
  In his interesting speech, my noble friend Lord Cranborne talked about the possibility of having a preamble to the Bill. That seemed to be dismissed on the grounds that there was a preamble to the 1911 Bill and nothing much happened. Some Members of the Committee may think that a good reason for having a preamble to this Bill. It may be for others to argue that.
  My noble friend was taken up to a slight extent by the noble Lord, Lord Williams of Mostyn, when he discussed the legitimacy of the various Members of your Lordships' House. If I had thought about it, I would have realised that it was true; I discovered that the noble Lord, Lord Williams, and I share one thing in common. We were both nominated by Mr. John Major while he was Prime Minister. I am not sure whether that makes us both John's cronies, but certainly it tells your Lordships how we both got here.
  I was discussing this matter with my noble friend Lord Strathclyde. I asked him whether he was more or less legitimate than I was, as his peerage resulted from the appointment of his grandfather by Winston Churchill, who was the elected Prime Minister at the time. I find that a very difficult question to answer. I know that neither my noble friend's grandfather nor I gave large sums of money to our political parties. I was sent here—I can say this without batting an eyelid, although I think that probably the noble Lord, Lord Williams of Mostyn, may not be quite in this category—by Mr. John Major, not because I was a crony but because I was a friend of his, and I like to think that he thought I might play some modest part in the proceedings of your Lordships' House. Some of your Lordships may sometimes regret that Mr. John Major ever sent me here, but others of your Lordships may appreciate it. I am not sure how we shall end up this evening, or indeed after many evenings discussing this Bill on that particular note.
  I do not believe that it helps our argument to discuss which of us is more democratic or more legitimate. I myself take the view that it is a pretty close run thing. I also take the view, so far as concerns the Salisbury convention, that this is not an issue which impinges only on hereditary Peers. However, if that is the way the Government wish the argument to proceed, that is fine: they will live to regret it.
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  That concerns me when I discuss amendments to government legislation, because I believe that my position is certainly a good deal more legitimate than that of the other place. At least I am not in the category of those who have never stood for elected office. I am not sure whether the Bar Council counts, but I had better be terribly careful because its members are very influential, very important and much richer than I am and can certainly afford to sue me if I were to say anything out of place. I know I am safe in here but—you never know—they might find a way around that. However, I will allow the Bar Council as a serious body from which to receive an electoral mandate. I notice also that the noble and learned Lord, Lord Hardie, was the elected Dean of the Faculty of Advocates. I accept that being elected the Dean of the Faculty in Scotland is a great deal more important than being elected chairman of the Bar Council south of the Border!
  Other noble Lords have not been elected to anything, and perhaps they have not even tried: that is probably wise of them, if I may say so. Other noble Lords have tried, tried, tried and failed. I have tried, succeeded, tried and failed, and so I have a semi-democratic legitimacy; or, occasionally in my life I have had democratic legitimacy. However, I do not think it takes us very far to argue that, and I will return to the question of democratic legitimacy later.
  The noble Lord, Lord Bach, intervened. I am not sure whether the noble Lord has been elected to anything, or has even tried to be, and so I do not know which category he comes into. He said that he did not want a purpose clause because he wondered where on earth would it all end. That is exactly the point we are putting to the Government: where on earth is it going to end? My noble friend Lord Crickhowell said that the Government have not the smallest idea of what they want in stage two. My noble friend Lord Caithness, quite rightly, said that this stage may last for quite a long time and therefore a purpose clause is essential.
  I am very cautious about crossing swords with the noble and learned Lord, Lord Simon of Glaisdale. We have debated a number of issues on previous occasions and I am always pretty careful to try, if I possibly can, either to agree with him or to take away what he has had to say and think about it. However, I think that I will disagree with him because the noble and learned Lord said that a purpose clause would be of any value only if there was any possibility that there might be some ambiguity in a piece of legislation. There is huge ambiguity in this piece of legislation, in that the Government do not know what to do next. They keep bringing forward this half of the Bill, and they have no idea where they are going to go with the next half of the Bill.
  That in itself is a good argument either for a preamble or for a purpose clause. The noble Lord, Lord Haskel, seemed to be following his Central Office brief pretty well and so I am sure he is right and a purpose clause is not necessary because we could not agree about what it would contain. I think that we would be able to agree about what it would contain, and I shall suggest about

  1081
  five permutations that we could agree on. I am sure that we could agree on three out of the five without any trouble at all.
  The noble Lord, Lord Northbourne, in his attempt at a purpose clause, reminded us that there was a modern obsession with purpose clauses and object clauses. In the Foreign Office, after the election, I think they were called "mission statements". I am not entirely sure whether they remember their mission statements these days, but it is not a had phrase. Let us have a mission statement for this Bill, a preamble or a purpose clause.
  The noble Lord, Lord Bruce of Donington, mentioned the important points in relation to purpose clauses. The three proposals here underline the role not merely of this House, as the noble Lord, Lord Bruce of Donington, mentioned, but of Parliament. There are a number of key words in the three different versions in front of your Lordships: "more legitimate", "more democratic", "increase the independence of Parliament", "enhance its ability to scrutinise legislation"; and then we have "democratic legitimacy" again and "more effective scrutiny".
  Those are the key words, and I say again to the noble Lord, Lord Haskel, that we should be able to agree on them. Do we not all agree on the importance of improving the scrutiny of legislation? The noble Lord, Lord Bruce of Donington, mentioned in particular European legislation. I could add to that all forms of secondary legislation. I do not think that we deal with secondary legislation at all well. I do not think that we scrutinise it properly. We accept it, as does the other place, in whole or in part and we have a convention that we will not vote against it, although the noble Earl, Lord Russell, has tried to find ways around that by cleverly devising systems which, while not actually opposing it, qualify secondary legislation. The other place votes, but again it votes on the whole and not on individual parts.
  We will deal with a piece of secondary legislation on Thursday night which. in my view, requires a tiny amendment, but there is no procedure to make any amendment. We either have to accept it in full, as has the other place, or reject it in full. I think that is a mistake. I am referring to the rules and regulations relating to the European Parliamentary Elections Bill. There is no provision for a recount, or at least the provision for a recount arises prior to anybody actually deciding that there will be a need for a recount. When we discussed this point in relation to Scotland and Wales, even the Government agreed that there was a serious problem here. But because we are unable to make a small amendment we are left with either accepting or rejecting the regulations as a whole. That is an impossible position. Therefore, the question of the scrutiny of legislation, and in particular secondary legislation, is very important.
  I have suggested that those were key words, and some of your Lordships may well wonder where they came from. I cannot speak for the amendment of the noble Lord, Lord Northbourne. but in the case of the amendments in my name and the names of my noble friends I can tell your Lordships exactly where we found some of those words. We took some of them from the
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  "Holy Grail", the manifesto. I always carry my copy with me because I know it is going to be quoted to me and so I want to be sure that noble Lord; on the Government side know their manifesto properly; that they have learnt it off by heart and are word perfect. But perhaps I may help them with regard to a modern House of Lords by pointing out that the manifesto says that this Bill will be the first stage in a process of reform to make the House of Lords more democratic and more representative. So I think we have every entitlement to say that the word "democratic" has good credentials.
  I challenge any of the Government's supporters to get up and say that the word "democratic" does not have good credentials as far as concerns the Bill. If they do they will be in some trouble, albeit disobeying the holy writ of the manifesto. That 'was one of the sources. The other words emerged from the debate on the White Paper without a Division. Therefore, everybody, in your Lordships' House agreed with the words:
  "urges Her Majesty's Government in carrying forward the proposals in the White Paper to set as its objectives an increase in the independence of Parliament and an enhancement of its ability to scrutinise legislation and hold the executive to account".
  I believe that the words used in our two amendments and those adopted by the noble Lord, Lord Northbourne, have perfectly good and legitimate parentage and are worthy of being considered as either the preamble or purpose clause of the Bill.
  Viscount Cranborne: I am grateful to my friend for giving away. In spite of what he has just said, does he believe that the Bill which followed the insertion of any such clause would carry out the purposes that he has so clearly enunciated?
  Lord Mackay of Ardbrecknish: I shall come to that in a moment. I do not necessarily believe that the Bill as it stands, or even as it will be amended, presumably, by the Weatherill amendment—which should have been done in the other place and not here—obeys some of the phrases that I have used. Frankly, unless we in this place and Members of another place take certain steps to change the way in which we deal with this matter, no reform of this House will necessarily increase the scrutiny of legislation.
  Lord Peston: Perhaps I may put one question just for enlightenment. For 10 years I sat on the Opposition Front Bench. When did the noble Lord and his noble friends decide that they were in favour of a democratic House of Lords? I did not see the slightest glimmer of it in my 10 years of slog on the Opposition. Front Bench. When did they undergo this conversion and decide that democracy in this House really mattered to them? I do not want the exact day but I would not mind being told the month or year.
  7.15 p.m.
  Lord Mackay of Ardbrecknish: I am quite surprised by the noble Lord's intervention. I took the word "democracy" straight from the manifesto. Equally,

  1083
  perhaps I can ask the noble Lord when the Labour Party will start to bring forward proposals for a democratic House.
  Lord Peston: We on this side have no difficulty. My noble friend on the Front Bench emphasised that we favoured a democratic House of Lords. He was concerned merely with the purpose clause. I sit here bewildered as to when the noble Lord who has moved the amendment decided that he believed in democracy for this House. Why was he content to sit on these Benches as a Minister and let me and my noble friends slog our guts out in the House of Lords as it was without ever saying that he was deeply embarrassed and wished that the place was more democratic?
  Lord Mackay of Ardbrecknish: I am trying to work out how to phrase my response gently. I am aware that the noble Lord becomes impatient. I remember a previous occasion when he became impatient. I have not yet reached the "democratic" bit. In the project to reform your Lordships' House I would not have started from here. But, as the noble Lord is aware, my noble and learned friend Lord Mackay of Clashfern has produced a report in which two options are given. Those are two options more than the party opposite has proposed—unless the noble Lord, Lord Peston, who is a free thinker, has his own solution to the reform of your Lordships' House.
  Like my noble friend Lord Crickhowell, I have doubts about this House being wholly democratic, because that will bring it into major conflict with the House of Commons. I believe that last time I spoke on this issue I said—perhaps because I am an old lag from the House of Commons—that the other place should be the primary Chamber. I have absolutely no doubt that a fully elected second Chamber, however qualified or tied down, would challenge the primacy of the House of Commons. That is one matter to which we must give very serious thought as we consider what kind of Chamber and what democratic input it should have to ensure that there is enough to introduce some democracy but not enough to challenge the primacy of the other place.
  I welcome this debate. We should not be having a debate on this Bill but on the whole package and where we are going. I am aware that in 1998 the Prime Minister said—the noble Lord, Lord Peston, did not echo the remark but was certainly on the same train—that the House of Lords was a democratic monstrosity. The Labour Party manifesto indicates that it wants the House to be more democratic and representative. Amazingly, the noble Baroness the Leader of the House said:
  "Legislating to stop hereditary Peers being Members of Parliament removes a profoundly undemocratic element".—[Official Report, 14/10/98; col. 922.]
  After Weatherill it will leave 92 of my noble friends—to which I do not object—and all the life Peers. I am not entirely sure how much more democratic we are. However, I have already discussed that and do not want to go over it again.
  As to the proposition that we should not insert a purpose clause or preamble and use any of the words suggested in our amendments or in the amendment of the
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  noble Lord, North Northbourne, I point out that without any division we agreed to words being added to the take note Motion on the White Paper. I repeat those words:
  "urges Her Majesty's Government in carrying forward the proposals in the White Paper to set as its objectives an increase in the independence of Parliament and an enhancement of its ability to scrutinise legislation and hold the executive to account".
  There is absolutely no reason why the Government should oppose a purpose clause or preamble along the lines indicated in the three amendments before your Lordships.
  The noble Baroness the Leader of the House told your Lordships:
  "overall, the Government accept the broad sentiments of [the amendment of the noble Lord, Lord Cobbold]. Indeed …the first page of the White Paper emphasises that Parliament is the central element of Britain's democracy, and that for Parliament to carry out its purpose it must act with authority and integrity. That principle is the basis for our proposals for reform of this Chamber; to improve the effectiveness and balance of the House so that it can play a full and proper role in Parliament, a role which necessarily includes a significant scrutiny of legislation and of the executive".—[Official Report, 22/2/99; col. 847.]
  The noble Lord, Lord Carter, who was given the job of summing up that evening, said at col. 1086:
  "The Government entirely share the view that it is essential that Parliament should be properly equipped to scrutinise legislation and to hold the executive to account".
  Your Lordships who have read the purpose clauses now before them will see the same words. The noble Lord, Lord Carter, went on to say:
  "That is precisely why we wish to reform the composition of this House".
  He continued at col. 1087:
  "My noble friend the Leader of the House has made clear that the Government agree with the first part of it"—
  not the part relating to the power—
  "Who can be against an increase in the independence of Parliament and an enhancement of its ability to scrutinise legislation and hold the Executive to account?"
  The only person who appears to be against it is the noble Lord, Lord Williams of Mostyn, who does not want these words added to the Bill.
  We are disappointed that we have not had a more positive contribution from the Government, but we have heard enough to know that a purpose clause or preamble can be created that will meet some of the objections that we have heard. Perhaps we shall return to this issue under one or other guise at a later stage. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 4 and 5 not moved.]
  Lord Carter: I think that this would be a convenient moment to break for dinner. In moving that the House do now resume, I suggest that we do not return to Committee before 8.20 p.m.
  Moved accordingly, and, on Question, Motion agreed to.
  House resumed.

India and Pakistan
7.20 p.m.
Lord Ahmed Lord Ahmed rose to ask Her Majesty's Government whether they will promote fresh international initiatives to alleviate the current state of tension between India and Pakistan.
The noble Lord said: My Lords, I am most grateful to noble Lords who will contribute to this debate at a time when a nuclear arms race has erupted in South Asia.
Your Lordships will be aware that on 11th April India tested its long range ballistic missile Agni II, followed by Pakistan with the Gauri II, and Iran, too, announced the successful testing of its surface-to-air missile Sayad I. This last round of missile testing has proved that these countries now possess weapons capable of carrying nuclear warheads and weapons of mass destruction.
Since the independence of India and Pakistan both countries have been at war at least three times. At times of peace there continue to be skirmishes on the border and line of control. Tensions have steadily risen since the election of the BJP Government, rising to peak in May 1998 when the Indian Government, as a result of their actions on 11th and 13th May, started a cycle of nuclear testing.
Many of us were jubilant to see Prime Minister Nawaz Sharif initiate the recent talks with India which led to the Lahore Declaration and the bus service between Lahore and Delhi. Although the summit did not resolve major issues of conflict between the two countries, it was a confidence building measure that set a framework for future relations and a process to resolve the longstanding dispute between the two countries.
It is well known that the single most contentious issue between India and Pakistan is that of Kashmir and the right of self-determination of the Kashmiri people. Let me begin by addressing the concern that this is a bilateral issue and thus should not be debated in your Lordships' House. I say that this is an international issue. The reason I say that is, first, that the views of the international community, as expressed in the United Nations resolutions of 1948 and 1949, giving the people of Kashmir the right of self-determination through a free, fair and impartial plebiscite remain unimplemented and on statute.
Secondly, it is well documented in the reports of Amnesty International, Physicians for Human Rights and Asia Watch that there are widespread abuses of human rights in Indian-held Kashmir. Surely abuses of human rights are an international matter.
Thirdly, dozens of promises made by the Indian Prime Minister, Jawaharlal Nehru, have never been delivered. I quote:
"We have given our pledge to the people of Kashmir, and subsequently to the United Nations, we stood by it and we stand by it today. Let the people of Kashmir decide".
That statement was made to the Indian Parliament on 12th February 1951. In another statement to the Indian Parliament on 26th June 1952, he said:
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"If, after a proper plebiscite the people of Kashmiri said 'we do not want to be with India', we are committed to accept that. We will accept it though it might pain us. We will not send any army against them. We will accept that, however hurt we might feel about it, we will change the constitution if necessary".
There are over 600,000 Indian soldiers in Jammu and Kashmir, almost a ratio of 3 to 1 of the population. It is the densest and largest military occupied territory on earth. If Kashmir was an integral part of India, then why do the Indian Government need a huge number of army and special forces? India is not at war with any of its neighbours. Why do the Indian Army special units need nine interrogation units in Sirinagar alone? Why do the Indian Government not allow the International Red Cross, Amnesty International and others to investigate the abuses of human rights. Anyone caught investigating or reporting the true events in the valley becomes a victim of torture and abuse.
Many journalists have been victims of torture, humiliation and death during their interrogation for reporting the actual events in Sirinagar. Zafar Meraj, a journalist, has been paralysed due to the torture by the security forces. Basharat Abbasi was beaten and tortured to death. To this date his executioners have not been tried for the crime they committed against humanity: and there are hundreds of others who have disappeared from the face of this earth.
Amnesty International published a 71-page report last month of disappearances of Kashmiri civilians and abuses of human rights by the security forces. The situation is very serious and is not reported in the mainstream media here. Even many British parliamentarians, including myself, have not been given a visa to visit Indian-occupied Kashmir.
Since 1989 over 65,000 people have been killed in Indian-occupied Kashmir. Thousands of women have been raped, including children. Schools, hospitals and shops have been destroyed. One can successfully argue that the International War Tribunal should investigate the atrocities committed against the innocent people of Kashmir.
I have recently visited Azad Kashmir and Pakistan and visited refugee camps and displaced persons' camps. I understand that last year the United Nations line of control monitoring group recorded 4,551 violations of the line of control by the Indian Army. Over 60,500 rounds of ammunition, including rockets, mortar and artillery, were fired. One hundred and one civilians were reported killed in Azad Kashmir and 265 wounded and over 50,000 people living near the line of control were displaced due to firing. I am sure they were firing from the Pakistani side too, but this is not confirmed by the UN observers as the Indian Government do not allow them to observe the line of control.
It is 50 years since the United Nations resolutions and 27 years since the Simla agreement. India and Pakistan cannot resolve the Kashmiri issue bilaterally. I believe that only third party involvement could ever find a long-term settlement on the issue of Kashmir and bring peace and prosperity to the region. Britain has a special

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friendship with India and Pakistan and, I believe, a moral and legal responsibility to resolve the issue of Kashmir.
Historians like Professor Alistair Lamb claim that the accession of Kashmir with India is not legal and that is perhaps why no one has ever seen to date any documents of accession. Therefore it remains Britain's responsibility to play a major role in bringing the dispute to an end by working with the Indian, Pakistan and Kashmiri leadership for an amicable solution which is acceptable to the Moslem, Hindu and Buddhist communities of Jammu and Kashmir.
In her reply, will the Minister confirm that the United Nations resolutions on Kashmir are valid? Will she encourage the Indian and Pakistani Governments to reduce the number of troops on the line of control and return all Indian soldiers from the streets of Jammu and Kashmir? Will my noble friend consider the following: to ask the Government of India, first, to allow the international human rights organisations to investigate the abuse of human rights and allow access to the prisons and interrogation centres; secondly, to allow access to journalists and free reporting; thirdly, to repeal and withdraw all laws imposed during the past decade and to release all detainees held under those laws; fourthly, to open a ceasefire line and to allow free access to families separated for decades; fifthly, to allow the Kashmiri leadership to visit both sides of the line of control so that there could be a meaningful dialogue; sixthly, to allow trade between the two parts through recognised routes; and, finally, to recognise that the Kashmiris are the main party and that any bilateral decision or suggestion will be subject to the final approval of the people of Kashmir?
7.30 p.m.
Viscount Brentford: My Lords, I congratulate the noble Lord, Lord Ahmed, on introducing the Question, particularly on his excellent timing immediately following the missile launches. I, too, look forward to hearing what the Minister has to say about British and international action on Kashmir and the proposals which exist. Are the Government not only encouraging discussions between the Indian and Pakistani governments but also offering to facilitate such discussions in any way acceptable to those two independent and powerful nations?
I wish to mention several other issues which cause problems between the two countries. First, the electoral system in Pakistan keeps Hindus and Christians out of mainstream elections. Four Hindu MPs and four Christian MPs are elected by those respective minorities. Therefore, MPs in the mainstream need pay no attention to these minorities because they are not elected by them. Many locals in Pakistan call that a form of apartheid. Have the Government discussed the electoral system with the Pakistani government and, if so, what reaction are they receiving?
Secondly, I turn to the blasphemy law, which many people describe as ambiguous. No one has been executed under that law, but the fundamentalists take it
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into their own hands and persecute the minorities. In both countries there is persecution of the minorities by fundamentalists. I should be grateful if the noble Baroness could inform the House what progress is being made on the two calls issued by the EU to the Government of Pakistan, as mentioned by her in the Official Report on 13th April at col. WA 118. She referred to calls made to the Governments of India and Pakistan both on the protection of religious minorities in their respective countries and the countries' blasphemy laws.
The tension which exists between the two countries causes grave difficulties for humanitarian cross-border travel, even for ex-patriates who are working in border areas between India and Pakistan. The tension makes it almost impossible for nationals of one country to cross into another. That tension needs resolving and it is most important that the Government take every step to do so. I hope that the noble Baroness will provide encouragement on that issue.
7.33 p.m.
Lord Avebury: My Lords, one would like to see the United Kingdom taking initiatives such as those suggested by the noble Lord to reduce tension between India and Pakistan and to procure a solution of the outstanding problems between them, in particular the major issue of the constitutional future of the State of Jammu and Kashmir.
However, to be realistic, one must look to those solutions through the bilateral negotiations which are specified in the Simla agreement and reconfirmed in the Lahore Declaration. There have been offers of help and occasionally Pakistan has suggested third-party involvement. Recent candidates included SAARC and President Mandela. However, New Delhi has always rejected foreign intervention, mediation or even facilitation.
Therefore, if we are to take any initiatives, they ought not to be focused on the substantive issues, but on the creation of more favourable conditions for a productive dialogue between the two states, and in the case of Jammu and Kashmir on the promotion of democracy and human rights so that the people themselves can freely express their views on their own political future.
That means, first and foremost, an end to the violence in Jammu and the valley. The noble Lord mentioned the report from Amnesty International, which states that the official death toll has been 20,000 since 1990, and perhaps another 350 to 400 die in custody each year. But the evidence also shows that many killings are now being perpetrated by foreigners. Political dialogue cannot thrive in the climate of fear and uncertainly which still exists.
If the Kashmiris are to express a view on the negotiations about their constitutional status, as the noble Lord rightly suggests, mechanisms must be created to allow them to communicate. An essential preliminary would be to open up the line of control, under close supervision, to ensure that all those crossing the line do so for peaceful purposes.

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The noble Lord, Lord Ahmed, also mentioned the exchanges of fire across the line of control by Indian and Pakistani forces which killed no fewer than 240 people in 1998. Each side claims that the other initiates the shelling, and the 45 military observers of UNMOGIP throw no light on the matter. As the noble Lord pointed out, its reports are not made public. They are placed in a secret filing cabinet at UN headquarters in New York.
In January, I proposed to the Indian and Pakistan Governments and the UN Secretary-General that these reports should be made public and that the Secretary-General instructs UNMOGIP to comment in each case on who initiates each round of firing. It would be able to do that irrespective of which side of the line of control they stand observing. That could act as a strong disincentive to the aggressor, whoever that may be, and it could even stop this pointless military activity altogether, saving 200 lives a year and making a huge difference to the lives of people in the Neelum Valley and Kargil.
7.36 p.m.
Lord Paul: My Lords, I am grateful to my friend Lord Ahmed for introducing this Question. Since a news item appeared in one of this morning's ethnic newspapers, I have been flooded with advice, but I wish to see the matter in a completely different perspective.
I was born in India and received part of my education in what is now Pakistan. I have emotional and economic ties in the region, where I am a frequent visitor, and have also had the benefit of talking to the policy-makers for many years. I therefore have strong feelings about the aspirations of the people there.
Anyone who has been fortunate enough to know both countries will acknowledge that India and Pakistan are mature societies capable of sustaining democratic systems of government. Both nations are profoundly protective of their sovereignty and proud of their ability to conduct what they believe are independent foreign policies. It behoves us to recognise and appreciate these sensitivities.
We have seen the good will generated by the Indian Prime Minister's recent journey to Lahore, and the very warm and cordial response of the Pakistan Prime Minister. I have had the benefit of meeting the Indian Prime Minister since that visit and he was very hopeful that a solution acceptable to both countries would be found. I shall also quote the Prime Minister of Pakistan, Mr. Nawaz Sharif, who in a recent statement said:
"When Vajpayee visited Lahore he was very clear that he wanted to solve all the issues, including Kashmir. He was sincere".
It is useful to remember that sometimes external involvements and interventions, even those made with the best of intentions by the best of friends, can aggravate local sensitivities. India and Pakistan know well that Britain's good offices are available whenever requested.
Goodwill is not often sustained by unsolicited involvement in the affairs of friendly states. The fact is that unsolicited help is most unwelcome anywhere. In my view, the best and most welcome contribution that
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Britain can make in the sub-continent is to continue to support and encourage democracy. It serves the interests of the region and our national interest as well. We should continue those successful and welcome bilateral efforts and concentrate our focus on them. The goals that we seek—peace and prosperity in South Asia—are more likely to evolve through that approach than any other.
I want to raise one further issue. The Asian community in Britain is vibrant, dynamic and law-abiding, but unwanted involvement, which is seen as interference in the matters of the sub-continent, very often raises passions that divide the community, which we must avoid.
7.40 p.m.
Lord Rea: My Lords, I was one of the lucky few to accompany my noble friend Lord Ahmed on his recent visit to his country of birth. It was a vivid experience and I would like to record my thanks to our hosts, the Pakistani and Azad Kashmiri Governments. Although we were given their views of the conflict, we heard enough from other sources to learn that neither side can claim to be wholly innocent or wholly to blame for the continuing low-grade conflict, with its ever-present risk of escalation now even to a nuclear level.
That threat loomed over our discussions and our journey, which took us through spectacular scenery visiting refugee camps near Muzaffarabad and the village of Chokoti on the line of control. The refugees, of whom there are 14,000, are not recognised as such by the UNHCR, which gives no assistance to Pakistan, Can my noble friend say whether the Government can find a way of overcoming that difficulty?
My overall impression was of a beautiful country but one whose development is still very backward. We were shown ambitious plans for its development in education, agriculture, infrastructure and tourism, for instance, but investment for such matters is not forthcoming because of the unstable military and political situation. The infant mortality rate is still far too high, at 99 per 1,000. Access to healthcare is difficult because some dwellings are remote, up steep mountain pathways. A vast programme of road-building and agricultural investment is needed.
However, both India and Pakistan are devoting high proportions of their resources to military expenditure, largely because of the Kashmir conflict. I suggest that the opening of the Delhi to Lahore bus route and the Lahore Declaration made by the Indian and Pakistani Prime Ministers, and referred to by my noble friend Lord Avebury, has let in a chink of light. Talks to be held as a result will not exclude Kashmir. Let us hope that those discussions start with small things to build confidence, as my noble friend Lord Avebury suggested. They could include better observance of the ceasefire along the line of control and an end to the move of militants across the line of control, together with—this is very important—a full return to the rule of law in Jammu and Kashmir, especially in the valley. That would be a proper response to the damning Amnesty International report recently published on disappearances in Jammu and Kashmir.

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In turn, I suggest that those measures may lead to the opening up of another bus route, from Srinagar in the valley of Kashmir to Muzaffarabad in Azad Kashmir. That would symbolise the beginning of free movement and trade between Indian and Pakistani-occupied Kashmir. Those would be small beginnings, but small beginnings may lead to more substantial changes such as the mutual withdrawal of troops from Kashmir asked for by my noble friend. Perhaps I am an optimist, but it could be done.
7.43 p.m.
The Earl of Sandwich: My Lords, this is a critical time for India and Pakistan and we should celebrate the successful talks which were held recently between the two Prime Ministers. I was warned when I joined this House that the issue of Kashmir almost stifles the debate on India and I hope to avoid that. We do not want to return to 1947. As one who has friends among the vast Moslem minority in India, I would do anything to enable them to live in a state free from the communal violence which occurred recently when the BJP and Shiv Sena first came to power.
It is politically important to the acting Prime Minister that he shows statesmanship at a time when the missiles are being test-fired and there is at least an appearance of an agreement on Kashmir on the horizon. All these events may be eclipsed by the new political stalemate.
We cannot be nostalgic for India's non-aligned, anti-nuclear stance under Nehru, which has long given way to a potentially stronger, more technologically advanced country desperate for international respect, foreign investment and nuclear club membership. In spite of what has been said, today India needs some defence. She appears even more vulnerable than ever to aggression along her northern border.
The big five nuclear "great ghosts", or Panch Mahabhoot as they are known in India, see things quite differently. Japan and the United States are irritated. Our own Government find it hard to reconcile the India of long-range missiles with the nation of 1 billion mostly very poor people for whom we have budgeted a 50 per cent increase to £130 million in aid in the latest public expenditure plans up to 2002.
As one who has experienced India's poverty, I find the arms race in India and in Pakistan both expensive and alarming. I hope that the Indian Government, having swallowed their nuclear pride, will soon swiftly return to their stated basic aims of raising living standards, reforming the economy and restoring relations with Pakistan.
One thing that seems to be agreed is that the two Prime Ministers have developed a mutual respect which goes a lot further than a frontier bus service. The Lahore Declaration demonstrated a willingness to talk on both sides which had not been present for many years. They certainly do not need Tony Blair to help them, as was suggested before Easter in another place by Tom Cox, the Member of Parliament for Tooting. I am sure that the Minister will confirm that since our own bilateral relations with India have not always been easy, we
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would do well to support the status quo and the present trend of careful negotiations behind the scenes. We will not necessarily get the same from a return of the Congress government.
7.46 p.m.
Baroness Uddin: My Lords, I thank my noble friend Lord Ahmed for instigating this timely debate, in which I take part with great trepidation. As a British parliamentarian I am always mindful of the need for—and I only support—a considered role in international conflict resolution, especially given our relationship within the historical context.
Recent peaceful resolutions of conflict have come about only when both sides have sat down together. One does not need to look further than Northern Ireland, South Africa, Israel and Palestine. Mindful of the details given by my noble friend Lord Ahmed, I hope that the Minister will examine, through the appropriate channels, the allegations regarding the plight of the refugees and in particular the torture and alleged rape of women and children.
Whatever we do in regard to this conflict, I hope that we remember our imperial past. Any role must be restricted to that of a facilitator, but that must be on the basis that both parties ask the British Government for that intervention.
7.47 p.m.
Lord Ponsonby of Shulbrede: My Lords, I too shall make an extremely brief intervention in this important debate. I want to thank my noble friend for raising this debate. I know that the subject is extremely important to him and that he has done a great amount of work in his short time in this House in raising the issue on the Floor of the House and in the Corridors.
We have heard that India and Pakistan have been at war three times since they gained independence and we have heard that Kashmir is the single most contentious issue between those two countries. I thank my noble friend for sending me the Amnesty International report about disappearances in Jammu and Kashmir.
It appears that the real substance of the debate is how much we can help India and Pakistan resolve their differences bilaterally and whether we can help provide a forum in which they can reach that accommodation. On listening to the debate so far, I agree with my noble friend Lord Paul that it is an extremely sensitive issue. Nevertheless, that does not absolve us of the responsibility of doing whatever we can to help.
I thought it might be helpful for me to make a comment slightly off the beat of other noble Lords. As many noble Lords will be aware, I have a connection with the Council of Europe. It is not too fanciful to point out that both Azerbaijan and Russia, which are members of the Council of Europe, are far closer geographically speaking than they are to this country.
It is worth pointing out too that the whole ethos of the Council of Europe is precisely geared to reconciling the problems between minority groups and democratically elected governments. The very foundation and the most profound beliefs of that institution involve trying to

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recognise the dilemma that exists between those problems and the European Convention on Human Rights, which last year we incorporated into British law. Considering the practical implications of adopting the European Convention on Human Rights in this country and other member states of the Council of Europe may be of some assistance in trying to find solutions to help the Indian and Pakistan Governments.
7.50 p.m.
Lord Dholakia: My Lords, I welcome this debate. There is a danger that debates of this nature could become one-sided, but I am delighted at the number of contributions that noble Lords have made on this subject. I also welcome Her Majesty's Government's repeated assurances that it is primarily for India and Pakistan to reach a solution over Kashmir and to resolve the tension between the two countries.
Following the meeting in September between the prime ministers of India and Pakistan in New York, there has been steady progress in improving relations between the two countries. I welcome that. We ought not to destabilise that process by outside intervention. The two Prime Ministers decided that their Foreign Secretaries could meet to have a composite dialogue on all outstanding matters, including Kashmir. This is an ongoing process, with the next round of meetings in May and June in Delhi and Islamabad. That is certainly a welcome sign.
There have been a lot of further developments since the meetings of the Prime Ministers. There have been trade agreements between India and Pakistan. The Indian Prime Minister undertook a historic visit to Pakistan on a bus journey. All of us would welcome that, especially those of us who travel on Indian or Pakistan buses and who realise how difficult those journeys can be. The Lahore Declaration, a landmark for peace and security between the two nations, was signed in February 1999. That included the taking of immediate steps to reduce the risk of accidental or unauthorised use of nuclear weapons.
The two Prime Ministers also decided to raise the level of periodic interaction at foreign minister level. A number of initiatives emerged from that. Interaction at parliamentary level picked up. An India-Pakistan Chamber of Commerce has now been set up. The visa regime between the two countries has also been relaxed and people are now able to travel. Prisoners from both countries have been released following the meeting of the two Prime Ministers. In spite of the bilateral agreement on pre-notification of flights not yet having been signed, both India and Pakistan informed each other in advance of the recent missile tests.
That is a clear and progressive path of improvement in relations between India and Pakistan. There is a shared desire by the leadership of both countries to resolve all outstanding issues through the process of bilateral dialogue which is already in place. It is also heartening to note that, following the recent developments in India in which the ruling party lost a vote of confidence in parliament, the Pakistan Government announced their intention to continue their
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dialogue with India whichever party comes to power. That is a sign of mature leadership and that is what we should be supporting.
Under those circumstances, all well-meaning friends in the international community of nations should wish India and Pakistan the best in their current endeavour and should refrain from any act or suggestion which may only serve to derail the two countries from their chosen path of enhancing peace and security for both. We must influence the confidence-building measures aimed at improving the security environment and refrain from intervention and interference in other nations' internal affairs.
It is right that we should stress our commitment to human rights—wherever, whenever and by whomsoever they are abused. It is unfortunate that we only have one-sided quotations on that subject. Let me read what the Amnesty International report said: "In 1997, Amnesty International documented how such groups have, over the years, harassed, Intimidated, tortured and killed civilians. Failing to distinguish between military and civilian targets, their targets have included civilian men, women and children, journalists and members of the Hindu minority".
We are dealing with the world's largest democracy in India and a stable democratic government in Pakistan. This morning I picked up a report from Reuters from Muzaffarabad which quotes a well-known militant outfit indicating that recent bilateral relations have had an adverse effect on militancy. That is good and that is what we should encourage. We need a language of restraint. We should work towards removing sanctions against both countries. Selective use of one-sided information can only damage this process and may also damage good community relations in this country.
7.54 p.m.
Lord Clarke of Hampstead: My Lords, like other noble Lords, I am grateful to my noble friend Lord Ahmed for providing the opportunity for this House to give consideration to the important Question he poses.
There is indeed an urgent need for a fresh initiative from the international community. In the past few weeks we have seen the competition between India and Pakistan grow as the testing of nuclear weapon carriers has taken place. The thought of what might happen if the state of tension between the two countries is not ended is terrifying, not just for the good people of both those nations, but for the whole region and possibly the world.
As my noble friend Lord Ahmed said, central to the difficulties that stand in the way of better relations between India and Pakistan is the unresolved issue of Kashmir. Later this year we shall mark the 51st anniversary of the Security Council resolution that provided for the holding of a plebiscite after demilitarisation and the establishment of a plebiscite administration. The fact that no plebiscite has taken place is well known to your Lordships' House. Many efforts have been made over a long period of tune to draw attention to the need for the United Nations resolution to be implemented.

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The tension between Pakistan and India that my noble friend Lord Ahmed described will remain until the principle of self-determination for the people of Kashmir is resolved. In these few moments this evening it is not possible to record the many false starts and hopes that the people of Kashmir have lived through over the past half century. The time is right for a fresh initiative. Any new initiative should come from the United Nations. Though we bear a historic responsibility for our part in the events of the 1947–48 period, we should be seeking an international initiative to bring this too-long conflict to an end.
Surely we have seen enough in recent times in other parts of the world to realise that unresolved disputes can lead to dreadful consequences. There have been wars, United Nations debates, pledges—some going back to those made by Lord Mountbatten and Nehru in 1947; pledges that clearly indicated an acceptance of the principle that the people of Kashmir must have the right to decide their own future by the recognised democratic method of plebiscite or referendum. That principle of self-determination must be pursued by the United Nations.
Like other noble Lords, I was privileged to go with my noble friend Lord Ahmed to Pakistan and Kashmir. Time does not allow me to go into the detail that I should like to record this evening and report to the House. We visited a camp that I should like to describe. It was late afternoon, exactly two weeks ago today. I sat in a place where I could hear the joyous sound of children laughing and playing as children do all over the world. Even though it was late in the afternoon, it was very hot. The smell of wood fires burning and birds singing brought back happy memories to me of childhood camping.
It was the sight of a small child looking out of a hut that quickly brought me back to reality; a little face expressing the sadness of where we were. We were sitting in one of the 20 refugee camps in Kashmir which currently house over 14,000 people—people who thought they were lucky with their lot. Unfortunately time does not allow me to go into the detail. Others have referred to the 65,000 people killed and 27,000 wounded. I could go on to talk of the 7,000 who have been sexually incapacitated through torture and the 7,000 children between the ages of seven and 10 who have been raped. Those and many other stories we heard are the result of the unresolved conflict that is Kashmir today.
Perhaps I may spend a few moments explaining that the reason I am speaking this evening is that the representative of the refugees concluded his presentation to us of the plight of his people with a request that those who visited should remember that in his and other camps were mothers, fathers and children who looked to the international community to give a voice to their plight. He said if there is a pain in one hand, there is a pain in the whole body. The Question posed by my noble friend Lord Ahmed this evening provides us with the opportunity to fulfil that request.
Baroness Ramsay of Cartvale: My Lords, I am sorry, I must remind your Lordships that we are acutely short of time in this debate. Noble Lords must try to keep inside their time limit.
8 p.m.
Lord Evans of Watford: My Lords, much of my prepared speech has already been covered by other noble Lords. I shall not, therefore, detain the House with unnecessary repetition. I also had the privilege of visiting Azad Kashmir a few weeks ago. On my visit I was impressed, I was shocked and I was deeply moved.
I was impressed by the dignity and friendliness of the people. They are very pro-British and look to us to help them. After all, we were very much involved in the root causes of the dispute, when a mainly Moslem state was handed to a Hindu democracy. We certainly, therefore, have to bear our share of the responsibility.
I was shocked to see the absolute poverty and the very sad conditions in the refugee camps. As a grandfather of three young children, I was deeply moved to see the state of their poor children. I wonder what future they can look forward to, and this, of course, is partly up to us. I have the feeling that things will get worse before they get better, but I hope that time will prove me wrong.
The recent testing of intermediate ballistic missiles capable of delivering nuclear warheads is obviously a major cause for concern, not just for India and Pakistan but for the whole world. It seems to me that we are facing the real threat of a nuclear holocaust, and I call upon the Government to put the greatest pressure possible on both India and Pakistan to meet to resolve their differences peaceably.
I was also very encouraged to read the Prime Minister's words last week, talking about Kosovo, when he said:
"This is a conflict we are fighting not for territory but for values, for a new internationalism where the brutal repression of whole ethnic groups will no longer be tolerated".
What is right in the Balkans must surely be right in south Asia. Ethnic cleansing is now going on in Kashmir—killings, torture, arson, expulsion and gang rapes of women. Apart from the appalling acts of rape and the far worse acts of gang rape, the poor women concerned, once violated, have no chance of marriage. It is a terrible situation.
I support the Kashmiri people's right of self-determination in accordance with the United Nations resolution and I hope that they are successful in their negotiations. That said, in reality I believe the United States Government have the greatest chance of persuading India and Pakistan to resolve their differences. I urge Her Majesty's Government to do all that they can to help.
8.2 p.m.
The Earl of Dartmouth: My Lords, we should base ourselves on the proposition that there can be no good relations between India and Pakistan until and unless there is a fair and equitable solution to the problems of Kashmir. The Government and the Foreign Secretary have stated many, many times their commitment to a moral and ethical foreign policy. I therefore urge the Minister that the Foreign Office and the Government should make forthwith a strong and effective commitment to an equitable solution for Kashmir, which, unlike Kosovo, is an area where Britain has both a moral responsibility and strong historic links.
8.3 p.m.
Baroness Williams of Crosby: My Lords, I fully understand what the noble Lord, Lord Ahmed, and his noble friends Lord Clarke and Lord Evans have pointed to—that is, their great concern about the continuing war in Kashmir, which when the spring comes tends to become worse as the snows melt from the Himalayas and it becomes easier to continue warfare.
I also recognise that there is a good deal in what they say about some of the human rights violations. But, as the noble Lord, Lord Paul, and others have said, it is also important to recognise that the accusations are made both ways and that there is some reason to believe that there has been support by the Pakistani intelligence services for the training of guerrillas who subsequently infiltrate into the Indian part of Kashmir, with some considerable suffering and victimisation of Hindu civilians.
I would not wish to make some Solomon-like judgment in a situation with which we are all too familiar—that is, Northern. Ireland and now Kosovo—a situation of mutual hatreds, of historical vicious circles and of the great difficulty of trying to reach a mutual agreement.
It is of course true that the testing of weapons by both Pakistan and India has made the dangers of a mistake over Kashmir much more serious than they would otherwise have been. But, like many who have spoken, I take great comfort from the coming together at last of the Prime Ministers of Pakistan and of India. The fact that they have been able to meet, that they issued the Lahore Declaration, that they have established a bus line between them, that India has now entered into a contract for natural gas supplies from Pakistan, that there is now a discussion about other ways in which to ease their relations and, as my noble friend Lord Avebury pointed out, the very important fact that each gave advance notice to the other of a missile test are all signs of growing maturity and growing tolerance between the two nations.
My personal view is that it would not be helpful for Britain to try to intervene and suggest that it should be an arbiter. Some will remember the early visit by the Foreign Secretary to India, where just such an approach was strongly repudiated. I doubt whether repeating it would be much more successful.
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I believe that as a country we should give every possible support to the establishment of better bilateral relations. We should indicate our willingness to help in any way we can the economic recovery of Kashmir, We should do our very best to encourage both countries to sign the nuclear test covenants, which would assist us in de-escalating the tension that exists today. Here I refer particularly to the comprehensive nuclear test ban. I notice that only today Prime Minister Prirnakov of Russia has strongly advocated to Pakistan and India that they should sign the nuclear test ban treaty. I believe that that is the way in which we should help and encourage them both. I do not believe that our intervention in the bilateral talks now well established would be helpful to either country or in the end to the cause of peace in Kashmir.
8.6 p.m.
Baroness Rawlings: My Lords, I must congratulate the noble Lord, Lord Ahmed, on initiating this important debate—important and timely for several reasons, not least as the two countries in question cover one-fifth of the world's population, with approximately 1.5 billion people.
I fully support the wise words of the noble Baroness, Lady Williams. The Indian and Pakistani nuclear tests in 1998 are one of the defining events of what is still called the post-Cold-War era. The weakening of the non-proliferation regime, the humiliation of America's vast intelligence gathering machinery, the intensification of geopolitical rivalry in Asia and the risk of destabilising, copycat effects from the Middle East to the northern Pacific are all major consequences, either actual or potential, of India and Pakistan's nuclear "outing".
What can we do to establish a stable nuclear deterrent relationship between India and Pakistan, with particular emphasis on the role which the outside world can play in producing the least malign outcome in this respect? The issue is of major importance, as an unstable nuclear relationship could lead to a catastrophic nuclear conflict.
In the short time available I will confine my few words to India and Pakistan and not go into the future nuclear relationship of India and China. This is a deliberate choice. In a negative sense, this choice does not imply that China's nuclear policy has no bearing on India's policies; indeed, one of the major impediments to a stable deterrent relationship between India and Pakistan is involved here. To alleviate the current state of tension, we need to assess their future nuclear relationship.
India and Pakistan are not nuclear newcomers. In 1974 New Delhi detonated a nuclear fission device nearly the size of the Hiroshima bomb. This was the product of distinguished research in nuclear affairs by India since the 1940s, to which China's nuclear blast of 1964 gave a major impetus.
As a young parliamentarian in 1964, Vajpayee, India's Prime Minister, claimed that,
"The answer to an atom bomb is an atom bomb, nothing else".
India's first Prime Minister, Nehru, stated in 1946, before independence:
"I hope Indian scientists will use the atomic force for constructive purposes … But if India is threatened, she will inevitably, try to

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defend herself by all means at her disposal". As for Pakistan, its excursions into the nuclear realm appear to have begun in earnest immediately after its defeat in the war with India in 1970–71 and to have accelerated strongly following India's 1974 test.
As far back as 1967, Ali Bhutto, Pakistan's future Prime Minister, wrote:
"If Pakistan restricts … her nuclear programme, it would … enable India to blackmail Pakistan with her nuclear technology".
The simmering conflict in Kashmir cannot be forgotten. It is to some degree reassuring that a major inadvertent escalation has not occurred. The first and not least important step that we should recognise is that solutions must be found by India and Pakistan themselves. Hectoring and lecturing, particularly from the established nuclear-weapon states, will be counter-productive, as they are all well equipped intellectually to understand the challenges. Overt pressure to renounce their capability would backfire. Sanctions will not lead either country to abandon its capability and would have a disproportionate effect on the poor.
I seek assurances from the Minister this evening that Her Majesty's Government will look at positive measures whereby we could play a part in diffusing the tension in Kashmir and, on the economic front, I urge them not to support sanctions and not to veto World Bank or IMF credits.
8.10 p.m.
Baroness Symons of Vernham Dean: My Lords, I, too, thank my noble friend Lord Ahmed for raising this subject. It is of great interest to many people in the United Kingdom and, as we have seen this evening, it raises a number of passionately held views.
Links between the United Kingdom and India and Pakistan are deep-rooted and long-standing. They are embedded in the fabric of British society today, through trade and development and through the close personal ties which nearly 2 million Britons have with the sub-continent. As my noble friend Lord Paul said, they have very strong views about the bilateral relationship between India and Pakistan.
The origins of the tensions between India and Pakistan can be traced back to the time of independence in 1947. There have been three wars between India and Pakistan—in 1948, 1965 and 1971—all of which, to a greater or lesser extent, have been about Kashmir.
In 1947, Kashmir was a princely state. It was up to such states to determine whether they should accede to India or Pakistan. By the time of the British withdrawal, the Maharajah of Kashmir had yet to make his decision. Faced with an uprising in his western territories, he acceded to India, an action which has remained controversial to this day. Indian forces were sent to assist him, but fighting soon widened into a more general war between India and Pakistan. The United Nations arranged a ceasefire, dividing the state along what is approximately the current line of control. I wish to return to the points made about that by the noble Lord, Lord Avebury, in a few moments. Subsequently, Jammu and Kashmir was provided with an exceptional degree of autonomy under Article 370 of the constitution.
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However, in 1989 violent unrest broke out in Indian-controlled Kashmir. Large numbers of Indian security forces were sent to restore order. The local government was removed. Human rights abuses occurred. The state remained under central rule until the Indian Government held state elections in 1996 and a national conference government, under Farooq Abdullah, took power. However, militancy still continues in the state.
Against that history of conflict and tension, as the noble Baroness, Lady Williams of Crosby, said, we have welcomed the resumption of talks last year between India and Pakistan on the issues between them, including Kashmir. The talks in Lahore between the Prime Ministers, Sharif and Vajpayee, were significant, as my noble friend Lord Paul pointed out. That was the first time that an Indian Prime Minister had visited Pakistan in ten years, travelling on the inaugural bus service from Delhi to Lahore.
The launching of the bus service is one of the welcome confidence-building measures that has been seen in recent months, as was the Test cricket series held in India in February.
There are measures that we have welcomed, and they should not be overlooked. They may seem relatively trivial but they are important in those confidence-building measures. Any measure which creates that confidence and warmth between India and Pakistan can only be of benefit to both countries and the region as a whole, as my noble friend Lord Ponsonby pointed out.
Hence, we have welcomed the Indian and Pakistani Foreign Ministers' joint statement issued last month reiterating the importance of the Lahore Declaration and agreeing to build upon it, through meetings of experts, for implementation of the declaration.
My noble friend Lord Ahmed raised specific points about family visits, promoting meaningful dialogue and trade. We welcome any action by India and Pakistan which eases the contacts between their peoples. The Prime Ministers, at Lahore, agreed that the two sides would hold consultations with a view to liberalising the visa and travel regimes and reaffirmed their commitment to the South Asian Association for Regional Co-operation as a means of accelerating growth, social progress and cultural development—all very important points.
We hope that the next Indian government will take forward the bilateral dialogue and that further talks on topics discussed last November will indeed be held, as was declared in the joint statement. As my noble friend Lord Clarke of Hampstead said, good relations between India and Pakistan are important not only for themselves but for regional stability. As the noble Lord, Lord Dholakia, said, we hope that both countries can maintain the recent dialogue and build on the meeting in Lahore in relation to a number of different bilateral issues.
Of course, Kashmir is one of the longest-running disputes in the world. There is still no resolution after 50 years. The continuing conflict between militants and the Indian security forces affects individual, ordinary Kashmiris. Many have died and many have been forced

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to leave their homes. There has been serious violence and human rights violations. Sadly, those continue today.
We remain deeply concerned about the situation there. We condemn acts of terrorism and abuses of human rights that bring suffering to the people. We also call for an end to all external support for any violence in Kashmir. My right honourable friend Derek Fatchett raised human rights issues with the Indian Home Minister, Mr L. K. Advani, in November last year and urged in particular an improvement in the human rights situation in Kashmir. The Indian authorities can be in no doubt about our commitment to human rights. We shall also continue to impress upon them the importance of bringing wrongdoers to justice and the benefits of greater transparency in investigating abuses.
Against that background, we have welcomed the steps taken by the Indian Government in recent years to address human rights concerns. One step forward was the establishment of a national human rights commission in 1993. We have welcomed also the decision by many states, including Jammu and Kashmir, to form their own human rights commissions, another very important point.
I assure my noble friend Lord Ahmed that we shall also continue to urge the Indian authorities to allow more visits by international human rights groups, including Amnesty International and the United Nations rapporteurs to India. Officials from our High Commission in Delhi visit Kashmir regularly and returned just last week from their most recent visit.
Regarding a further point raised by my noble friend, it is, we believe, for India to determine its own legislation in the face of continuing violence from militant groups. We welcome the decision by the Indian authorities to allow the International Committee of the Red Cross to visit prisons in Jammu and Kashmir, another very important point, as I hope your Lordships will agree.
We have long urged both countries to find a just and lasting solution, acceptable to the population of Kashmir on both sides of the line of control, and we shall continue to do so. As my noble friend mentioned, any solution, if it is to last, must involve and reflect the view of the people living in Kashrnir.
The noble Lord, Lord Avebury, raised important points about the line of control. I understand that the noble Lord has put ideas on demilitarising the line of control to the UN Secretary-General. We support the aim of making the line of control safer for ordinary people and hope that, through the bilateral process under way in India and Pakistan, some progress will be made in that regard.
The noble Viscount, Lord Brentford, also raised the question of attacks on religious minorities. I hope that the noble Viscount will be reassured by the fact that we have made clear to both India and Pakistan that we are concerned about the recent attacks on religious minorities. India has high world standing for its respect for religious diversity. We trust that the actions announced by the Indian Government will bring the
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attackers to justice and prevent further attacks. The Foreign Secretary and Mr. Fatchett have both raised the issue at a very high level with their interlocutors.
The Pakistani constitution protects the rights of religious minorities, but reports of persecution by groups of individuals persist. In February my right honourable friend Mr. Fatchett urged the Minister of Law in Pakistan to ensure that the laws protecting minorities would be fully implemented.
A number of your Lordships have raised questions about missile testing, notably my noble friend Lord Ahmed and the noble Baroness, Lady Rawlings. We regret that India and Pakistan have chosen to conduct missile tests. We continue to believe that developing nuclear weapons and missiles systems is not in the interests of India or Pakistan. We urge both India and Pakistan to adhere unconditionally to the relevant non-proliferation regimes and not to deploy nuclear weapons or delivery systems. I agree with a great deal of what the noble Baroness, Lady Williams of Crosby, said on these points. We need the two countries to continue to build trust and confidence. To do that they have to tackle the root causes of the tension that lies between them.
The noble Earl, Lord Sandwich, and my noble friend Lord Evans of Watford dwelt largely on the issues concerning poverty and aid. We have substantial development assistance programmes for poverty reduction in both India and Pakistan. In India we are spending about £100 million this year supporting programmes in education, health, water, sanitation, energy, urban poverty and rural development. In Pakistan we are spending about £20 million this year, directed primarily at improving basic social services such as education, health, reproductive health, water supplies and sanitation. Much of this aid effort will be aimed at women and girls.
From the diversity of contributions that we have had in your Lordships' House this evening we can see that there are no magic solutions to the issues which divide India and Pakistan. We applaud the personal commitments made by the Indian and Pakistani Prime Ministers to intensify efforts to resolve bilateral issues, including the difficult issue of Kashmir. It is important that both countries work to capitalise on Lahore and to make substantive progress on the issues between them. As my noble friend Lord Paul so wisely pointed out, after all, they are mature democracies. I assure the noble Viscount, Lord Brentford, that the governments of both countries are well aware that we remain willing to help, but any offer of help, whether from the United Kingdom or others, must be acceptable to both countries if it is to have any chance of success. In that respect I agree very strongly with the point put forward by my noble friend Lady Uddin in a short but very telling address to your Lordships.
We wish India and Pakistan success in their search for solutions to this and other bilateral issues. We hope that they can build on the meeting in Lahore and that they will maintain the momentum to reach a just and lasting solution.

House of Lords Bill
8.23 p.m.
House again in Committee.
Lord Trefgarne Lord Trefgarne moved Amendment No. 6:
Before Clause 1, insert the following new clause—

LIFE PEERAGES FOR DISQUALIFIED PEERS
(" .—(1) A peerage under the Life Peerages Act 1958 may be conferred on a person notwithstanding that he is disqualified under section 1 from attending, sitting or voting in the House of Lords, and, accordingly, section 1(4) of that Act shall not apply in relation to any such person.
(2) Where a peerage is conferred under the Life Peerages Act 1958 on a person who is disqualified under section 1, that person—

(a) shall be entitled to receive a writ of summons in the title (or the most senior title) by virtue of which he is also disqualified, and

(b) shall sit not as a new Peer but in right of that title.")

The noble Lord said: This new clause is designed to be helpful and constructive. I hope that the Government will receive it in that sense. As the Committee will be aware, this Bill provides in Clause 1 that,
"No-one shall be a member of the House of Lords by virtue of a hereditary peerage".
In my view the Government have quite rightly taken the view that certain noble Lords—in particular, those who have been described as hereditary Peers of the first creation—are here on the basis of their own merits and therefore ought to be allowed to continue in the new House. In those circumstances I understand that the Prime Minister has written to nine noble Lords who are hereditary Peers of the first creation saying that they will be made life Peers and thus able to continue in the subsequently reformed House. They will be made life Peers under the terms of the Life Peerages Act 1958.
But it would seem that the Government have overlooked Section 1(4) of that Act, which I shall take the liberty of quoting to the Committee. It says,
"Nothing in this section"—
there are only two sections in that Act—
"shall enable any person to receive a writ of summons to attend the House of Lords, or to sit and vote in that House, at any time when disqualified therefor by law".
All hereditary Peers are to be disqualified from sitting in this House by law exactly as the Life Peerages Act 1958 describes. Therefore, it seems to me beyond doubt that the award of life peerages to noble Lords who are presently hereditary Peers in this House and about to be excluded, is not in accordance with the law.
It may well be that a number of noble Lords will receive their life peerages before the House of Lords Bill becomes an Act, if it does. Apparently, it is not intended to go beyond that. It seems to me beyond peradventure that after the House of Lords Bill becomes an Act it will not be possible to confer a life peerage on any former hereditary Peer. We will not be former hereditary Peers in the strict sense. We shall still be hereditary Peers, but we shall no longer have the right to sit or vote in this House. That prohibition is precisely described in the Life Peerages Act 1958 in the way that I have already stated. I am certain that that is not the
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Government's intention. It cannot be their intention that all 700 or so of us who will be leaving this House, if the Bill becomes an Act in due course, will never again be entitled to be considered for the award of a life peerage. But I believe that that is the effect of the 1958 Act taken in conjunction with the Bill that we are now considering. It is for that reason that I move this amendment. I beg to move.
The Earl of Northesk: I support my noble friend Lord Trefgarne. I begin by stating that our intention here is to be entirely helpful to the Government. In commentary about the Weatherill amendment, much has been made, for example, of the proposition that Peers of first creation should be made life Peers. I make no judgment as to the merits or otherwise of so doing. However, the reality, as my noble friend has explained, is that Section 1(4) of the Life Peerages Act, on strict interpretation, disabuses the Government from being able to deliver that proposition.
On the enactment of this Bill, as drafted, we must suppose that all hereditary Peers will be disqualified from membership of this House—an inelegant and inaccurate phrase in its own terms, but I shall leave that—by force of statute. That being so, within the terms of the relevant section of the Life Peerages Act, I simply repeat the point made by my noble friend. No hereditary Peer, let alone just Peers of first creation and whatever their individual merits, will be allowed,
"to receive a writ of summons to attend the House of Lords, or to sit and vote in that House".
Of course, I accept that the party on the Benches opposite has long argued that the right of the hereditary Peers to attend this House is wrong in principle. But I had never thought that the intent of that principle stretched as far as saying "never, ever again". I repeat that on a strict interpretation that would be the effect of the Bill without this amendment.
In that context I add a further thought about which I am not entirely certain. It seems to me that a statutory bar on a particular class of person attending a House of Parliament may just fall foul of the European Convention on Human Rights. We can be certain that the noble Baroness the Lord Privy Seal made a statement on the face of the Bill in all honesty. But, in all seriousness, I wonder what happens in a set of circumstances where the veracity of such statements can be called into question as a result of proper parliamentary scrutiny.
I conclude by saying that this really is a matter that needs to be addressed. As far as I am aware, neither I nor my noble friend Lord Trefgarne is particularly wedded to our solution of the problem. However, we can optimistically hope that the Government will be persuaded to give the issue their due attention.
8.30 p.m.
Lord Mackay of Ardbrecknish: I believe that my noble friends have raised two interesting points. If I understand them correctly, I think that both require the Government's attention. It would be fair to say that one of those points is not hugely serious, but the other

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could be. The first is the question of life peerages conferred on people who are hereditary Peers and therefore are currently earls, marquesses or even dukes and whether or not they would be summoned here as life Peers but be able to use the title to which they are entitled under their hereditary peerage, although not at the stage we are discussing as Members of your Lordships' House.
I can give no better example of an hereditary Peer who is very active in the House than the noble Earl, Lord Russell. I am sorry that he is not present in the Chamber this evening; but, nevertheless, I shall pay tribute to him. I presume that the Liberal Democrat Party has some sense and that it will ensure that the noble Earl continues to play a part in this Chamber. I would find it extremely difficult if I had to teach myself not to collar him in the corridor and had to collar another noble Lord. Indeed, we ought to be clear about what we will have to do. It may not be the most serious point in the Bill, but it is one that is well worth clarifying.
A more important point is the one raised by my noble friends; that it may be impossible to give the noble Earl a life peerage because, by the way that the Bill is written, he may well be disqualified from being a Member of your Lordships' House. I say that because he will remain the holder of an hereditary peerage. I give way to the noble Earl.
The Earl of Longford: I am sure that I have misunderstood the noble Lord. However, speaking as someone who was given an hereditary peerage years ago and who has now been offered and accepted a life peerage, I do not get the point. To be quite honest, I think that it is all nonsense.
Lord Mackay of Ardbrecknish: I hope to persuade the noble Earl that it is not nonsense and that it is an important point. The noble Earl has been offered a life peerage now; he is not currently disqualified because the Bill has not yet been enacted. As I understand the amendment of my noble friend Lord Trefgarne, we are actually talking about something that will happen on the far side of the Bill when it does become an Act. I am happy to hear that the noble Earl will remain with us, but he is not going to be disqualified before he accepts his life peerage. That is the point. On the other hand, after the Bill becomes an Act, hereditary Peers will be disqualified from sitting in the House. The probe is whether they will be able to sit here as life Peers. It is a reasonable probe and I hope that the Government will be able to clarify the position under the law. I also hope that they will carefully consider the question of style.
Viscount Cranborne: I agree with my noble friend Lord Mackay of Ardbrecknish that the Committee ought to be grateful to my noble friend Lord Trefgarne. It would be extremely helpful if the Government could confirm the suspicion held by my noble friend that it may be difficult to award a life peerage after the abolition of an hereditary Peer's right to sit in this House. Presumably the Government will be able to confirm to the Committee whether that is so: either they
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will accept this amendment of my noble friend, or a version of it, or they will confirm that it is technically possible for an hereditary Peer to hold a life peerage simultaneously with an hereditary peerage. I imagine that that would indicate that any hereditary Peer who was offered a life peerage would have to be made a life Peer before the Bill becomes law.
I look forward to hearing what the Government have to say on this, admittedly, detailed matter. But, after all, we are in Committee and such details are what Committee stages are mostly about. I say that bearing in mind what has been said on a number of occasions this afternoon and this evening by Members on the Government Front Bench about Second Reading speeches at this stage.
I turn now to what perhaps may be the rather more frivolous part of my noble friend's amendment; namely, subsection (2). This is possibly a matter of convenience to which my noble friend has addressed himself. In my own case, one of the attractions of accepting a Writ of Acceleration, rather than the life peerage that I was originally offered, was partly the enjoyment that I was afforded by taking part in a rather arcane practice. That, of course, is a self-indulgence which no other Member of your Lordships' House has ever succumbed to but which I am afraid I did. However, it was also something which I believe had a practical, if rather personal, purpose.
The Committee will appreciate that, if I had taken a life peerage, I would, on my father's death, have had to endure a change of name on top of the number that I had already endured. The thought of changing my name a third time on top of the number of times that I would have to do it in any event made me think that the arcane device of a Writ of Acceleration was very attractive. In that way, I could at least call myself Cranborne for a number of years until my father died, which, thank goodness, is some time ahead yet.
For the same reason, I suspect that any hereditary Peers who are fortunate enough to be offered a life peerage would, for reasons of convenience and for their own purposes—as well as for purposes of recognition among those who have political—
The Earl of Longford: Can the noble Viscount repeat what he just said?
Viscount Cranborne: I apologise to the noble Earl. Perhaps I was not as clear as I should have been in making my point.
However, it occurred to me that it would have been a convenience for anyone who is used to using one name not to have to change it yet again, especially if, like me, one is getting increasingly advanced in years and has become attached to the name one ends up with. Indeed, ambitious politicians may prefer their public to know them by one name rather than the public having to get used to knowing them by another.
The Earl of Longford: The whole thing about titles is pretty phoney. I am called "The Earl of Longford" but I am not entitled to sit here as such. It is an Irish

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title like that of the noble Earl, Lord Lucan, and that of the noble Earl, Lord Listowel. I repeat: it is all phoney. I cannot understand what all this bother is about.
Viscount Cranborne: The noble Earl makes my point for me even better than I could. I am not making some legalistic point. I am trying to persuade the Committee that this is a practical, if rather selfish, matter. Whether one sits as "Lord Cranborne" or as "Lord Hatfield of Newtown" matters not a bit to me. However, I find it tiresome to have to change one's name more than is absolutely necessary. Purely for convenience for the very small number of noble Lords who are affected by this, it would be helpful to have reassurance along the lines suggested by my noble friends. As the noble Earl clearly implies, this is not a matter of huge importance but it is one which, nevertheless, is perhaps more appropriate for the Committee stage than Second Reading.
The Earl of Northesk: Perhaps I may attempt to clarify the point a little by reading out the text of Section 1(4) of the Life Peerages Act 1958, which I am sure the Government Front Bench has readily to hand. The section says:
"Nothing in this section shall enable any person to receive a writ of summons to attend the House of Lords, or to sit and vote in that House, at any time when disqualified therefor by law".
The fundamental point here is not that an hereditary Peer could not become a life Peer; indeed, that is not at issue. What is at issue is that the force of statute of the Bill we are considering will disqualify hereditary Peers by statute; therefore they could not be in receipt of a Writ of Summons to attend the House of Lords. That is the fundamental point.
Lord Desai: When I heard the noble Viscount, Lord Cranborne, speak, I recalled my schooldays. One of the great difficulties of reading British history is that the names keep on changing. Someone was known as Wood, then became Irwin, and then became Halifax. I thought they changed names to make people forget what they had done, as it were. One could have several careers in that way!
I may be getting this all wrong but I presume that the Bill states that no one is entitled through a hereditary peerage to attend this Chamber. However, retaining that title, the same person could under another title attend as a life Peer. The Bill does not prevent that, as far as I can see. The noble Viscount, Lord Cranborne, may not be able to attend this Chamber as a hereditary Peer, but if he was to be called by some other excellent term—perhaps we should call him Lord Hatfield—he could attend under that name. The same person can have different persona as far as the law is concerned. That has always been the case. I do not know what the fuss is about. Obviously when the noble Viscount becomes Lord Hatfield he may want to be known as Lord Cranborne, and I am sure we shall indulge him in that.
Viscount Cranborne: As usual, I did not make myself clear. All I was suggesting is that I have no
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objection to sitting as one thing and being called another. All I seek—as my noble friend seeks in the proposed new subsection (2) of his amendment, as I understand it—is that this would be permitted as a matter of convenience. I wholly agree with my noble friend Lord Northesk that the more important part of this technical amendment is contained in the proposed new subsection (1).
Lord Ponsonby of Shulbrede: My noble friend has just given me a look.
Noble Lords: Oh!
Lord Ponsonby of Shulbrede: I intended to be helpful and also to commit political suicide at the same time by saying that I think I can shed some light on this matter. As regards the point made by the noble Lord, Lord Trefgarne, I hope that my noble friend on the Front Bench will be able to reassure him with regard to that point. As regards the point made by the noble Viscount, Lord Cranborne, on the proposed new subsection (2)(b) of the amendment, my understanding has always been that Peers simply use their senior title. In the case of any hereditary Peer who subsequently receives a life peerage, that life peerage would be junior and therefore he would continue to sit in this Chamber under his hereditary title.
Lord Mayhew of Twysden: In the hope that I too may attract a look from the noble Baroness I venture the opinion that my noble friend Lord Trefgarne was absolutely justified in claiming that he was putting forward this amendment in order to assist the Government and indeed the whole Committee. By way of brief preface I must say that I feel, not for the first time, much sympathy for the noble Earl, Lord Longford. However, if I may say so, it is all right for him because he has his life peerage. However, those who are concerned about the point of this amendment worry about what will happen when someone who is currently a hereditary Peer and who loses that by virtue of this Bill—if it is enacted—is subsequently sought to be made (if I may use that horrible syntax) a life Peer. My noble friend's point is that that proposal will be caught by Section 1(4) of the 1958 Act, which states,
"Nothing … shall enable any person … to attend the House of Lords … at any time when disqualified therefor by law".
Let us suppose that the noble Earl, Lord Longford, had to wait a little for his life peerage until such time as this Bill is enacted, he would then be disqualified by law. Therefore under the terms of the 1958 Act he would be unable to be made a life Peer.
In case the noble Lord, Lord Williams of Mostyn, were to say that no one will be disqualified, one needs reassurance in the light of the terms of Clause 2 of the present Bill, which speaks of disqualification. Clause 2 states:
"The holder of a hereditary peerage shall not be disqualified by virtue of that peerage for—

(a) voting at elections … or being elected as, a member of that House".

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Therefore disqualification is a concept which is known to this Bill. I think therefore that my noble friend has a real point here. No doubt it can be put right if it is found to be a good point. It is proper to raise it in Committee.
I share the sadness of the noble Earl, Lord Longford, at having lost his hereditary right to sit in this Chamber by virtue of an Irish peerage. I myself have a family—
The Earl of Longford: I am afraid the noble and learned Lord has the whole thing completely wrong. I am not here because of an Irish peerage; I am on the same footing as Lord Lucan.
Lord Mayhew of Twysden: I was trying to make that point indistinctly; namely, that the noble Earl was rather sad that Earls of Longford are no longer entitled to sit qua Earls of Longford.
The Earl of Longford: They never have been!
Lord Mayhew of Twysden: Irish Peers were once entitled to sit in the House of Lords. At any rate, if they were not, they should have been. As someone who is connected to the ancient Irish barony of Fermoy, I have an interest, which I declare. It was said of one of my forebears,
"The noble Lord Fermoy
He is a beautiful boy
'Twas said in his youth
He tried to tell truth
He failed and now he don't try".
Baroness Strange: There is not really much confusion here. I started life as Drummond; I got married and became Evans. We moved into the family house and became Drummond again, and then I became Strange. The only confusion is when my husband and I share a hotel room together under different names!
8.45 p.m.
Baroness Jay of Paddington: I am grateful to the noble Baroness for that contribution and to all noble Lords who have spoken on the subject of the supposed looks that I have cast. I shall attempt to study my notes with religious intensity. I hope I shall be able to explain to the noble Lord and the noble Earl that although I realise their amendment is designed to be helpful and constructive, I think that probably the first part is unnecessary. I believe I can convince them that the remaining part is also probably unnecessary, if not unworkable. If I do so without using too many double negatives, I hope noble Lords will understand, because they are right in saying that the matter depends on issues of disqualification.
There is nothing in this Bill which removes the right of hereditary Peers to be Members of the House of Lords. From being uniquely qualified for membership, they will not become uniquely disqualified. The Bill of course removes the right to be a Member by virtue of the hereditary peerage. Membership by virtue of any other legitimate route remains perfectly possible. Indeed we have always made it clear that we intended this to be the effect of this Bill. Before the noble Lord,
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Lord Weatherill, and the noble Viscount suggested various ways in which a number of hereditary Peers might remain in the Chamber, the Government had always made it clear informally—before we reached the point of discussing the details of the Bill—that we expected that some of those who would now be legitimate candidates, and would fall under the so-called Weatherill amendment, were likely to be offered life peerages, as noble Lords have said. We have been given some examples of that.
We have already offered life peerages to hereditary Peers of first creation. As has been pointed out, they are under the net, in the sense that they have already been offered those life peerages. We would not have done that if the effect of the Bill was to make it impossible. I assure the Committee that we were aware of Section 1(4) of the Life Peerages Act, to which the noble Earl rightly drew attention. That section is about ensuring that the normal rules of disqualifications for membership of the Chamber apply to life Peers. If, for example, a Peer were to be disqualified from receiving a Writ of Summons as a hereditary Peer either because he was a minor or because he was bankrupt, he would not be able to circumvent the disqualification by becoming a life Peer.
The present Bill is not about disqualifications from the House; it is about ending one of the routes of membership to the House. The disqualifications remain untouched by the Bill. It will still be possible to be debarred from the House for bankruptcy; it will still be impossible to confer peerages on aliens or on minors. In that respect, the new clause tabled by the noble Lord might be defective in the sense that it might actually oust the existing provisions of Section 1(4) in respect of hereditary Peers so that in future a bankrupt hereditary Peer could take his seat in the House of Lords by virtue of receiving a life Peerage. I am sure that that is not the intention of the noble Lords concerned, but that might be the consequence of the clause. I am sure the noble Lords do not wish to see legislation achieve an effect they do not intend.
As to the second part of the amendment of the noble Lord, Lord Trefgarne, the noble Earl, Lord Longford—he is not rising to make an additional point—has made some of the points about the confusion which may arise when Peers sit under different titles. But the proposed new clause says that in effect someone who is disqualified from attending, sitting or voting in the House by virtue of the hereditary Peerage can, none the less, attend and so forth as an hereditary Peer if he also possesses some other route of qualification. That seems to me to be a fairly illogical position to have reached and probably one in which the constructive and helpful aims of the noble Lords might be regarded with some scepticism because they might lead to the introduction of more hereditary Peers by that route. Whether or not that is what was intended, I suspect that could possibly be an outcome.
Someone who is given a life Peerage in order to enable him to sit in the House of Lords should sit as a life Peer. An hereditary Peerage will not in the future confer a right to sit in the House and so it appears slightly odd to suggest that it might do. When a person

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who achieves a life Peerage comes to the House, there is, as several noble Lords have said, no problem at all about what he should be called. We have already had our attention drawn to the 45 Members of the House who are known by Irish titles but who sit by means of a UK barony or some other UK title which is actually junior to the title by which they are known. We have already heard the noble Earl, Lord Longford, describe precisely his situation in that respect.
I think I can help the Committee a little further. The noble Lord, Lord Aldington—I am glad to see him in his place—has kindly given me permission to quote the correspondence between Ministers and Garter in respect of his position, which has led to some general discussion about how noble Lords in this position would be treated. Perhaps it would be helpful to the Committee if I read from the guidance which has been given.
"The advice we have received from Garter King of Arms is that any new peerage cannot have the same nomen dignitatis as an existing peerage. This means"—
and of course in the case of the noble Lord, Lord Aldington, he is a Peer of first creation—
"that any peer of a first creation accepting a life peerage must have a new title. In Lord Aldington's case this could be achieved by adding a geographical description to his name. However, even if Lord Aldington has to slightly change his title to receive a Writ of Summons, his hereditary title will remain the senior title and it is by that title he would be known in the Lords".
But that is not by virtue of his hereditary Peerage. I hope that is clear. I think that the attempt which is not perhaps in Amendment No. 6—I may be suspiciously reading more into it than is there—to suggest that Peers who returned as life Peers would be regarded as sitting by right of their senior hereditary Peerage rather than using that name and sitting by right of their new life Peerage would be unacceptable to the Government. Frankly, that would fail adequately to break the link between the right of birth and the right to a seat in the legislature, which is precisely what the Bill is intended to achieve. I hope that that explanation is helpful to the Committee.
Lord Trefgarne: I am grateful to the noble Baroness. Let me say at once that there was no intention that the amendment should provide some secret route for hereditary Peers back into the House after the Bill becomes an Act, if that is what happens. I was, and remain, genuinely concerned that the provisions of the Life Peerages Act 1958 to which I referred will create difficulties for the creation of new life peerages for those who formerly sat in the House by virtue of their hereditary peerages. Nonetheless, I will study very carefully what the noble Baroness has said. I beg leave to withdraw the amendment. I may return to the matter again at another stage.
Amendment, by leave, withdrawn.
Baroness Jay of Paddington: I hope that the Committee will forgive me if I intervene at this point. I am not doing so as Minister responsible for the Bill but as Leader of your Lordships' House. Amendment No. 7 and Amendment No. 8 with which it is grouped and which have been tabled in the name of the noble
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Lord, Lord Trefgarne, and the noble Earl, Lord Northesk, have been printed on the revised Marshalled List. But I am advised by the authorities of the House that in their present form the amendments are irrelevant to the subject matter of the Bill.
As the House knows well, order in your Lordships' House is in the hands of the House as a whole but we look to the Clerks to give advice and to the Leader of the House to give guidance on matters of order. The Companion to the Standing Orders makes that clear in the case of the relevance of amendments, and the working group recently chaired by my noble friend Lady Hilton of Eggardon, on which Peers from all parties and all parts of the House were represented and which reported unanimously to the Procedure Committee earlier this year, stressed on a parallel case that Lords should take the advice of Clerks in such matters. It is a consequence of our procedures that the House has collective responsibility for observing these procedures and that all Members of your Lordships' House therefore need to co-operate to see that procedures are observed.
It is in that spirit that I would seek to persuade the noble Lord, Lord Trefgarne, and the noble Earl, Lord Northesk, not to move Amendment No. 7 or Amendment No. 8 in their present form today. I know that the noble Lord, Lord Trefgarne, has received notice from the Clerk of the Parliaments in the usual way that he was writing to me with this advice and I have of course given the noble Lord notice of my intention to raise the matter at this time.
Lord Strathclyde: I am grateful to the Leader of the House for raising this issue. This is the first time that I have heard of an amendment being tabled and the Leader of the House having to make the kind of statement that she has just made. From that point of view, it is an interesting event and relatively unique.
The House will, I hope, appreciate that, as Leader of the Opposition, and following the good guidance of my predecessor, on matters of the House I shall seek to support the noble Baroness. I do so again this evening unreservedly. But it is worth exploring the issue just for a moment and I hope that we shall be able to hear from my noble friend Lord Trefgarne. I understand that he has an entitlement to bring this issue to the House and he ultimately has the right to ask the House to have a view. I am not suggesting, incidentally, that he should do so on this matter.
I too have received a letter from the Clerk of the Parliaments raising the issue outlined by the noble Baroness. I understand that the problem that has arisen on the drafting of my noble friend's amendment is a relatively minor one. I should like to know whether it would be in order for my noble friend to put forward a manuscript amendment to deal with a relatively minor issue which arises only because my noble friend, perhaps deliberately or not—I do not know because I have not spoken to him in detail about these issues—has excluded the right of retired Law Lords to sit in the House. It may be that that was the purport of my noble friend's amendment. But if it is not, I think I am right in saying that he could move a manuscript amendment.

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He may choose to do so or he may not. But my main purpose in intervening is to say that we accept the guidance of the Leader of the House and we accept that she has been advised by the Clerk of the Parliaments in accordance with his duties.
Baroness Jay of Paddington: Before the noble Lord, Lord Trefgarne, rises to speak, I, too, am advised that if a simple manuscript amendment is tabled, which I understand could then put the amendment back into its original form on the Marshalled List, that would be in order.
9 p.m.
Lord Trefgarne: I am obliged to the noble Baroness and to my noble friend. Let me say at once that I am minded to accept the advice of the noble Baroness and not to proceed with these amendments, certainly not in their present form on the Marshalled List.
As my noble friend said, the purpose and the deliberate effect of my amendment as tabled was to exclude the right of retired Law Lords from the so-called club facilities of this place, which are to be denied to all the hereditary Peers, who are to lose their rights to come to this House.
I was told that the Bill dealt only with hereditary Peers, not with life Peers, but Law Lords are in effect life Peers and that my amendment was therefore out of order. I found that advice more mystifying than usual because in Amendment No. 78, which we shall discuss later in the course of this Committee stage, life Peers are expressly covered. The amendment stands in the name of the noble Lord, Lord Archer. Therefore, I remain deeply mystified as to why my amendment was not allowed.
That said, that remains the advice of the Clerks. I accept the noble Baroness's request and shall not move these amendments. However, I reserve the right to return to the matter at the next stage.
[Amendments Nos. 7 and 8 not moved.]
Lord Strathclyde Lord Strathclyde moved Amendment No. 9:
Before Clause 1, insert the following new clause—

PURPOSE OF ACT (No. 3)
(" .The purpose of this Act is only to alter the composition of the House of Lords and to extend the right to stand for election and vote for membership of the House of Commons, and therefore nothing herein shall be used to justify a reduction of the powers of the House of Lords, which are necessary to the effective discharge of its responsibilities.")
The noble Lord said: We have reached this moment rather sooner than I had anticipated. That just goes to show how difficult it is to predict the progress of this Bill, and indeed many others.
This new clause is another purpose clause. However, I do not wish to go over the same ground as we covered prior to the dinner break regarding the difference between a purpose clause and a preamble, or indeed the nature of such a clause and the desirability of including one in the Bill. That is a debate to which we shall return at another stage. We shall certainly work hard to find the right kind of purpose clause. We believe it
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appropriate that there should be one. We very much hope that it might be possible to convince the Government that that is right. I should also make it clear that I have no intention of pressing this amendment to a Division.
The main purpose of this clause is to probe the Government's thinking on the powers of the House of Lords. As I have said many times, while the composition of the House is important, what is even more important are the roles, functions and powers of this House, and in particular what will happen in the future to the powers of this House either in the interim stage or in the longer term.
On 23rd February, in a two-day debate that we held on the White Paper that had been published by the Government, an amendment to the Motion was carried by this House, by which the House urged Her Majesty's Government,
"in carrying forward the proposals in the White Paper to set as their objectives an increase in the independence of Parliament and an enhancement of its ability to scrutinise legislation and hold the Executive to account; and therefore specifically calls on the Royal Commission to reject the proposition in paragraph 7.26 of the White Paper that the available powers of this House might be significantly reduced".—[Official Report, 23/2/99; col. 955]
I am sure the House will remember the occasion well. Although a Division was called, the party of Government decided, for reasons best known to themselves, not to vote. They abstained in person and, as my noble friend Lord Mackay of Ardbrecknish said in reply to an earlier debate, on the whole accepted the premise behind the Motion that was passed. I was glad to hear that.
The effect of the Bill as drafted is, deliberately I presume, however regrettable that presumption might be, to exclude those hereditary Peers now in the House from having any say in the future powers or functions of the House. I regret that. I do not believe it is the right way to go about altering the nature of a sovereign Parliament. Also, I do not believe that the present House, with all its wisdom and experience over many years, should be denied an opportunity at least to have a view about future powers.
This amendment seeks not only to give the present House an opportunity to debate the issue now, and for the Government to give us an idea of what they believe the future powers of the interim and long-term House will be; it also gives us an opportunity to "mark the card" of the future House as well as pointing the Government in a certain direction.
The present powers are essential to the workings of the House. It does not use all of them very often. But sometimes, as on clear-cut issues, it does. One such issue arose recently in relation to the closed list. Then the House of Lords uses its powers. Even then, rightly, the Commons can override it. But when it does, the world sees and hears the windows being kicked out by the executive. I make no complaint about that. One of the purposes of this Chamber is to seek to embarrass the Government when it thinks they are doing something wrong.
We do not want to slide towards a situation whereby the executive—whatever executive—can capture effective, if not absolute, control of the House and reduce the powers of the Chamber and therefore the independence of the Back-Benchers. This amendment, albeit a declaratory one, puts a modest barrier in the way.
What will be the Government's view? They will say, "Why worry?", and, "Look at our manifesto". The manifesto states that,
"The legislative powers of the House of Lords will remain unaltered".
That offers good assurance. But again, I wish to probe slightly what that means. With this Government we have learnt, and it is a good thing to learn, that we need to look at the small print, as with so many other matters. It would therefore be helpful if the Government would inform the Committee as to whether that commitment refers to the interim House only, which is what the context of the manifesto implies, or whether it means for all time. If the Minister who is to reply does not have his copy of the manifesto, it does not matter. If he does not wish to answer in the context of the manifesto, I am happy. However, it would be good to have a view as to what the Government believe the long-term future is.
From time to time we have heard how careful the drafting of that section of the manifesto was; so careful that only a few hours ago the noble Lord, Lord Williams of Mostyn, said that no purpose clause was necessary. He may be right, but we shall continue to probe it at future stages.
It would be helpful if he or the Minister replying could answer the following questions. Does it mean, for example, that the powers over secondary legislation would remain unaltered? I suppose it could. Does it mean that the powers currently enjoyed by this House to delay legislation would remain, or would they be curtailed? Alternatively, does it mean that things would remain exactly the same? I take it from the quote in the manifesto that it might, but it does not entirely say so. Perhaps the noble Lord will confirm that. There is still room for suspicion because the Government have given conflicting signals on the powers of the House in the past.
One of the problems about the debate is whether the Bill is a stand-alone Bill or part of a two-stage process. It strikes me that there is a tension between the two objectives. There may not be that tension, in which case I hope the Government will explain why not. I am trying to find out what are the Government's objectives in all this. That will help us to do our job and scrutinise the legislation.
The noble Lord, Lord Richard, when Leader of the House, argued for a restriction on the power to reject legislation. If he did not do so as Leader of the House, I know that he has done so since. I wish to know what thoughts the Government have on that extremely important issue.
Following on from that, the terms of reference for the Royal Commission appear to leave out consideration of powers. I am glad to say that that has not been changed, although it has been clarified by the noble Baroness the Leader of the House. She laid out the position in our debate on the White Paper. Powers which according to the manifesto were to be unaltered were now to be looked at or, in the words of the Leader of the House,
"The terms of reference … must legitimately include looking at powers, especially in relation to the legislative function".—[Official Report, 22/2/99; col. 846.]
Again there is a tension between what the Royal Commission's clarified terms of reference are and the words of the manifesto that the powers remained unaltered. I wonder where we are on that.
That leads to the now infamous paragraph in the White Paper, Chapter 7, paragraph 26, which says that:
"A better approach might be to reduce the theoretically available powers".
The House has examined this in detail in the past and I do not wish to do so again. However, paragraph 7.26 suggests that for the future the Government would like to look at the powers, the ability to delay legislation approved by the House of Commons; arrangements to introduce the Parliament Act for Bills which start in this House; and also what they call "special" procedures where the second Chamber wishes to insist on amendments which have been considered and rejected by another place.
There is also the suggestion of formal conciliation arrangements between the two Houses; and, finally, the powers that I have already mentioned over secondary legislation. I cannot help but believe that there is something afoot. There may not be, but at this stage of proceedings on the Bill there is an opportunity for the Committee legitimately to probe what is going on, what is at the back of the Government's mind. That will lead us, I hope, to being able to frame suitable amendments at successive stages so that we can help and guide not just the Government but perhaps a future House as to what the powers should be. I hope that I have clarified the purpose behind the amendment. I beg to move.
The Earl of Caithness: Amendment No. 97 in my name and that of my noble friend Lord Stanley of Alderley has been grouped with this amendment. I wish to make clear that the note at the top of the grouping list reads:
"Although every effort is made to secure agreement to these groupings".
No effort was made to secure agreement to this grouping. Neither my noble friend Lord Stanley nor I were approached in any way. We reserve the right to take the amendment individually at a later stage, should we so desire. It might be for the convenience—
Lord Carter: I understood that all the groupings up to this group, with Amendments Nos. 9 and 97, were actually agreed and so I have to apologise to the noble Earl. We were assured that up to Nos. 9 and 97 they were all agreed.
The Earl of Caithness: I am most grateful to the noble Lord the Chief Whip. I can assure him that no one

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has contacted me or my noble friend Lord Stanley on this matter. Therefore I think it might help the House if I talk to the amendment and to Amendment No. 97, but reserve the right to come back to it at a later stage should I feel it necessary to do so.
I think it is important that we spell out clearly the powers of this House. I would go one stage further than my noble friend Lord Strathclyde, because I should like to introduce an amendment at a later stage, spelling out those powers. The reason I would like to do so is very simple. What is happening is not a gradual evolution of the House like the Life Peerages Act; it is a major, sudden change in the composition of this House. We are fortunate in the powers and the functions that we have at the moment, and I think it is important for a successor Chamber to have those spelt out for it.
After all, we know who will comprise the membership of the second Chamber in its initial stages; but we do not know what is going to happen after that. We have absolutely no control over the Prime Minister or the appointments committee. There could be a sudden influx of 100 or 200 new Peers who know nothing about the powers and functions of this House, and at that time there will be no hereditary Peers to guide them in such matters.
The second point of the amendment put forward by my noble friend Lord Stanley and myself is to help the Government. The noble and learned Lord the Lord Chancellor said at an earlier stage that he wished to fulfil the manifesto in full. The simple amendment in our name does exactly that. As my noble friend Lord Strathclyde has just said, the Labour Party manifesto contains the single sentence:
"The legislative powers of the House of Lords will remain unaltered".
I think it would be helpful to the Government to fulfil their manifesto in full and to have this on the face of the Bill.
At Second Reading I talked a little bit about the composition of the House and the inbuilt Labour majority of regular attendees. I will come back to that at a later stage. That in itself makes it necessary to spell out the powers, because the powers that we do have, as your Lordships will know full well, can be very inconvenient and very embarrassing to any government.
Let me just spell out some of them. First, we have the revising function. That is an important function because any of your Lordships, from whatever part of the House you come, can table and move amendments. No control is exercised by the party whips over what one can do or over the time one can do it: one can do it at any hour the House is sitting. I think that that is an important freedom of this House. It is not like the other place; and these differences are to be treasured and protected.
There is also the power to initiate legislation. That again can be done by the Government or by individuals, as my noble friend Lord Cranborne said earlier. He has put a Bill before your Lordships' House, and I believe that is an equally important right that should continue into a successor Chamber, and should be spelt out on the face of the Bill. Of course, although one has the power to initiate legislation, one should also bear in
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mind that another place has the ultimate veto over whatever legislation we introduce here, and so that is the appropriate check to our particular bower to introduce legislation.
There is the contentious, but very important, power to reject a Bill presented by another place at Second Reading. That is an incredibly important power to be taken forward into a successor Chamber. It might be embarrassing for the government of the day, but I believe that the Parliament Act should be enforced more often because if this second Chamber, which I believe should be a stronger Chamber than we have at the moment, is to pull its weight, it must be able to reject a Bill at Second Reading, make the Government think again and, if necessary, bring it forward under the Parliament Act and justify that to the country.
I move on to the important powers that we have with regard to secondary legislation. Here I should like to try to strengthen the powers of our successor Chamber. We talked earlier this afternoon about our inability to question matters involving secondary legislation and to alter them. I believe that a second House should he able to do that. We should be able to look at the detail, amend it and send it back to another place. When it comes to scrutiny, the successor Chamber must never lose the right to make the Government answer to this Chamber, whatever may be its composition. That only stops short of the House having the power to enforce a change of government.
It is important that these powers are well known. It would be better if they were placed on the face of the Bill in the appropriate form so that the successor Chamber would know what it could do. I believe that if we move to a reformed second Chamber it should be able to use the powers a great deal more often and effectively than we have been able to. My noble friend Lord Cranborne observed—I believe that the noble Lord, Lord Richard, also said it—that on many occasions one of the weaknesses of this House was that it was not able to use the powers available to it. Surely, if we are to carry out this revision, albeit with a long stage one, it should be clear to the successor Chamber what its powers are and that it can use them however embarrassing and inconvenient that may be to the government of the day.
Lord Richard: I have listened to the words of the noble Lord, Lord Strathclyde, and the noble Earl, Lord Caithness, in speaking to this amendment and, having done my best, I am unable to follow them. If there was any provision in the Bill which dealt with the powers of this House, no doubt the amendment would be relevant and apposite and it would be worth while the House debating it. There is nothing in the Bill about the powers of the House. There is no suggestion in the Bill that the powers of the House should be reduced.
What we have on the other side of the Chamber at the moment is an attempt to pre-empt either the deliberations of the Royal Commission or perhaps even the legislation that may have to be introduced after the Royal Commission has reported and its report has been

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considered. This is so wide of the issue before the Committee this evening that, frankly, it is somewhat strange.
I fully understand what the noble Lord, Lord Strathclyde, seeks to do. He wants a statement from the Government now which will enable him the better, as he sees it, to conduct the political battle that may be joined when the Royal Commission comes to stage two. That is a perfectly legitimate tactic on his part, but the Committee should recognise it for what it is. There is not a scrap of merit in the argument. It is good old political evasion on the part of the noble Lord, with no merit in it at all. If the Bill said anything about powers then it would be relevant. But, in the absence of the Bill saying anything about powers, if this measure is passed and the House is reformed, what will be the powers of the House? They will be precisely the same in future after the Bill has been passed as they are now. With great respect, I believe that the Opposition should be a little more precise as to what they seek to do.
Lord Elton: If the noble Lord can be persuaded to raise his eyes a little further down the road than the next year or two, I believe he will see matters in a different light. That is the light in which I and my noble friends see the current debate about the powers of the House. I tried to express something to that effect in the debate on Second Reading. Hereditary Members of your Lordships' House see themselves as the rearguard, or final trustees, of a mechanism that is designed to protect the electorate of this country from the excesses of an over-powerful executive.
Lord Avebury: What gives the noble Lord the right to speak for the whole of the hereditary Peers in this House?
Lord Elton: Those who disagree with me, such as the noble Lord, will tell me so, but to satisfy the noble Lord, Lord Avebury, I rephrase my remarks. I believe that I am in company with many when I see my functions and theirs as protecting the electorate from the excesses of an over-powerful executive of any party. I speak approximately two years after the arrival of noble Lords on the Front Bench opposite. I remember how I felt two years after I arrived there, secure and confident in the belief that the country would always be conducted on familiar lines properly arranged by my friends who saw things as I did. The only thought that I leave in the minds of the noble Lord, Lord Richard, and the noble Baroness, Lady Jay, is that the day will come when this House May be required to protect the electorate from the excesses of a party other than their own. It is in order to ensure that this House does not fall below the level of authority that enables it to check an executive in that way that my noble friends, I believe, are tabling these amendments. In abandoning our trusteeship, we want to be sure that that security remains.
Lord Richard: The noble Lord interrupted what I was saying. I shall continue. The noble Lord,
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Lord Elton, will forgive me if I do not follow him down the somewhat bizarre path that the hereditary peerage in this House is the basic guarantor of the liberties of the British electorate. That seems an astonishing proposition, which I would have great difficulty in following.
The noble Lord asks me to raise my eyes and look a little beyond. With great respect to the noble Lord, that is a criticism which is ill directed. I have tried to raise my eyes; and I have tried to consider what is likely to happen in a few years' time. I hope that the noble Lord—here comes the commercial!—will have the opportunity to consider my views when he purchases the modest piece of literature now on the bookstands.
The important point is this. The Bill is nothing to do with the powers of the House. The Bill is about the abolition of the right of hereditary Peers to sit and vote in this House. The issue of its powers will no doubt concern this House in great detail, and with considerable passion in months to come. But the Opposition cannot today pre-empt the possible legislation that the Government might wish to introduce after the Royal Commission has reported. With great respect, that is not on.
Lord Skelmersdale: Powers are an issue. I accept what the noble Lord, Lord Richard, says, with all his authority, on the subject of powers not being a part of the Bill. But with powers go rights and obligations. As we all know, they are circumscribed in this House by the Salisbury-Addison rules or conventions (call them what one will). If the result of the Bill is—as it could well be—that the powers that exist, mostly by statute but also to an extent by Standing Orders, are no longer to be circumscribed by the Salisbury-Addison rules, it is a legitimate subject for discussion.
Lord Richard: An amendment could be tabled dealing with the Salisbury-Addison rules. That is not the amendment we are considering at present, which has nothing to do with the Salisbury-Addison convention. That is a convention between the two sides which the House has adopted. The amendment deals with the rules and powers of the House. There is nothing in the Bill about that. There is nothing in the Bill about Salisbury and Addison, with respect.
Lord Burnham: In the past few moments the noble Lord, Lord Richard, has said several times that the Bill has nothing to do with the powers of the House. Does the noble Lord accept that he would make these Benches a great deal happier if the Bill had something to do with the powers of the House?
Lord Richard: First, it is not my function to make the Benches opposite feel happy. Indeed, I have spent most of my political life attempting to do precisely the opposite. Secondly, once we start talking about the

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powers of an eventual Chamber after the second stage, this Bill will take a great deal of time in consideration. That may be precisely what the Opposition want.
The Earl of Caithness: My amendment has nothing to do with the powers of the successor to the successor chamber. It relates purely to the powers of the successor chamber.
The Earl of Onslow: What I love about the noble Lord, Lord Richard, is that he moved a Motion of no confidence in the previous government. It was a lovely thing to do, and it had nothing to do with powers. Having said that, I am afraid to say that I slightly agree with him. This Bill is not concerned with the powers of the successor chamber, but it is undoubtedly true that as a result of the passage of this Bill this House will automatically become more powerful.
It will become more powerful because the noble and imperial Lady Jay will not be able to say, "Ah, those silly ass hereditary Peers like the noble Earl, Lord Onslow, we do not have to listen to their argument. Should by any chance there ever be a Conservative government again, they will not be able to haul in vast hordes of marquesses and dukes of ancient lineage who only normally come here to vote against poll tax amendments".
Therefore, the House will become much more powerful, which is excellent. It is a good idea and I welcome it. But it is also worth putting on record that it is extremely easy in this House to bring the process of government to a halt. Every time the Chairman of Committees or the Lord Chancellor puts a question, one has only to say, "Not Content" to call a Division. It is not even necessary to appoint Tellers, and Fabius Maximus Cunctator is made to look like Linford Christie, he goes so fast. Therefore, we must accept that the Bill will make the House of Lords more powerful. With great respect to my noble friends Lord Strathclyde and Lord Caithness, I recommend that. I hate to agree with the noble Lord. Lord Richard, but on this occasion I do.
9.30 p.m.
Lord Mayhew of Twysden: I know that the Government and all noble Lords wish to get on, but I believe that my noble friends are justified in suspecting what, for want of a better phrase, I might call "unfinished business" in the Bill. It cannot be irrelevant to our debates that that thought should find expression in the amendment, otherwise it would have been ruled out of order and the authorities of the House would have declared it irrelevant.
Therefore, in opposing the amendment, it is not sufficient to say that there is nothing in the Bill about powers. No doubt it is regarded as relevant because of the words in the Long Title,
"and for connected purposes".
Whatever the reason, the amendment has not been held by the authorities to be irrelevant.
When one is dealing with the objection that we cannot debate what shall be the powers of this House once the Bill is enacted, it is easy to overlook the fact that the
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amendment provides only that nothing in the Bill shall be used to justify a reduction in the powers. It does not deal with the question of what the future powers will be, only that nothing in the Bill shall be used to justify a reduction. No doubt the wording can be improved and put into more obscure language, as the lawyers like, but that is the purpose. Therefore, the matter is so easily resolved. All that is necessary is for the Front Bench opposite to say, "We shall not use anything in the Bill to justify a reduction of the powers. That does not prejudice us against whatever we do by separate means later". Everyone would be happy and we would all get on.
Lord Stanley of Alderley: Inevitably in a Bill of this kind there will be some reminiscing. I am delighted to welcome back to the Back Benches my noble friend Lord Caithness. We last moved amendments together in 1981, when, unfortunately, he was so misguided as to join the Front Bench. He could not continue to harry his own Front Bench, which we did even though from the, opposite side hereditary Peers are not supposed to harry their Conservative Front Bench. We are told that that is the case.
My noble and learned friend Lord Mackay in his report suggested that the powers of your Lordships' interim Chamber should be the same as they are today. My problem relates back to what was said by the noble Lord, Lord Williams, when on the previous amendment he was questioned by my noble friend Lord Mack ay on what the Labour Party manifesto did or did not say about this matter.
Perhaps I may deal first with the noble Lord, Lord Richard. I hope to make him happier about the amendment being outside the Bill. I often did so in the past, much to the irritation of my Front Bench. Members of the Committee will remember that the manifesto, stated that the House should be able to revise and improve legislation and,
"be more democratic and representative".
I find it difficult to understand how it can do both. For powers to revise and improve a different sort of person will be needed, and not necessarily the kind of person who will be needed to make the Chamber more democratic. I find that difficult to comprehend. Perhaps the noble Lord, Lord Richard, can tell me how that can be done. He has obviously read his manifesto.
On balance, I should prefer the House to be, in some form or another, more democratically elected. I do not defend my position as a hereditary Peer. I never have done and neither did my grandfather in 1911. My noble and learned friend Lord Mackay of Clashfern made some useful and interesting points on that. If we follow the line of thought in the manifesto that the House should be more democratic, its powers must necessarily increase, as my noble friend Lord Onslow said. History reminds us that any democratically elected body always wants, and indeed gets, more powers. Therefore, it is

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important to have the Government's and your Lordships' views on future powers for the interim and the future House.
Viscount Montgomery of Alamein: When my noble friend Lord Caithness was in Government I was rarely in agreement with him. I used to cause him a great deal of trouble. Therefore, in a remarkable turn of events, I find myself entirely in support of what he has said. My noble friend was trying to inject something into the Bill that should be there. Subsequently, he was attacked by the noble Lord, Lord Richard.
I have frequently been castigated by the noble Lord, Lord Richard, who is extremely adept at doing so. He is a powerful and an effective operator and it is easy to be squashed by him. I think that my noble friend Lord Caithness does well to stand up to him. He should not worry about being squashed by the Government on this occasion because, ultimately, it is important to achieve the correct Bill.
Lord Elton: I apologise for having interrupted the noble Lord, Lord Richard. Each of the noble Lord's paragraphs has such an air of finality that I expect each to be the last.
I have a simple point about powers which I did not make, although I should have thought it was fairly obvious. If the hereditary peerage is removed from this House, it will be a relatively simple and not lengthy business for a prime minister to appoint a working majority in this House in favour of the executive. At that time the House will lose all power to check the executive. It is for that reason that amendments have been tabled to put that power of patronage of the prime minister into commission.
As the Bill stands, it would need merely 35 or 40 new Peers of the colour of the politics opposite to give effective control to the executive. I am sure that, if we were in power, the Benches opposite would resent that as much as we would.
Lord Marlesford: Perhaps I may intervene briefly. It is clear to me that the powers of this House stem from statute, from convention and from Standing Order. The way in which the conventions and Standing Orders are written and followed is very much a function of the composition of the House. This Bill changes the composition of the House. Therefore, it seems to me to follow that that could considerably change the powers of the House. Partly for the reasons given by my noble friend Lord Onslow, if I were the Government I should probably like something that states that this Bill does not change the powers, because, with the departure of the majority of hereditary Peers, there would be some danger of powers being increased rather considerably.
Lord Williams of Mostyn: We traversed this ground a little earlier this evening. It is not a case of being squashed by my noble friend Lord Richard of Ammanford; it is a case of listening to his analysis. It is precise; devastating and overwhelming. No argument has been addressed to dispute his analysis.
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Perhaps I may cover one or two points. The noble Lord, Lord Elton, in assuming finality in the speech of the noble Lord, Lord Richard—finality is not a concept with which I associate Committee in this Chamber—said that he was troubled about there being a working majority in favour of the executive. Oh dear! How long has it been that there has been a working majority in favour of the executive? Thirteen defeats per Session under the Tories, 49 since the last election.
I always listen to what is said with varying degrees of incredulity. That one will not run. With great respect to the noble Lord, Lord Elton—I always listen with particular care to what he says, as he knows, and always try to respond to it either in debate or by letter—I take his point that he and others of a similar view, though not of a unanimous view (pace the noble Lord, Lord Avebury), regard themselves as having a duty. I do not disrespect or disregard that.
I simply say to the noble Earl, Lord Onslow, that when Fabius Maximus had discharged his required duties to the state, he retired to his farm. The noble Earl and I have the same recollection of O-level history. I am just underlining the fact that I listen to what the noble Earl says; he did retire, and rightly so.
None of the questions raised in relation to these amendments has the slightest connection to the Bill. The Bill is quite short; it is quite plain. I go back to what the noble and learned Lord, Lord Simon of Glaisdale, said. We occasionally need a purpose clause if it might be required for interpretative purposes if there is ambiguity. One can peruse this Bill with any sort of microscope or eyeglass. There is no ambiguity in it. The fact that it contains no ambiguity may be what causes heartache and concern. Heartache and concern there may be, but ambiguity there is not.
There is nothing in the Bill that affects the powers of this House. Whether or not those powers may be deployed in a different way in the future is an entirely different question. All Members of the Committee know it to be commonplace that we have notional powers which we rarely exercise. The figures that I gave indicate that the rareness of the exercise sometimes may be coincident with the colour of the present incumbent government.
It is idle to ask what we are going to do about stage two. We are now discussing a Bill that deals with stage one. Many Members of the Committee will feel that that is disagreeable. It may be. That is what the manifesto said and that is what we are delivering. We were chided earlier by the noble Viscount, Lord Cranborne, for saying one thing and doing the opposite. No one can say that about this Bill. It is in the manifesto and it is transposed almost literally into the Bill.
Lord Stanley of Alderley: The Minister says it is disagreeable for us to consider what the future holds. Is it not also slightly irresponsible?
Lord Williams of Mostyn: It is not irresponsible to consider in its appropriate place at the appropriate time what the future may be. I simply contend that this is not the time or the place. At the moment an attempt is being

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made to introduce a device which has nothing to do with the purpose of this Bill. The plain purpose of this Bill is to stop hereditary Peers sitting in this House by—I quote myself since, as the noble Earl, Lord Ferrers, said, no one else will—the capricious donation of birth. That is what we intend to do. There is nothing in law which increases or delimits the powers of the House of Lords. That being so, my noble friend Lord Richard is absolutely right: these amendments are nothing to the point; they are of interest in a different connection, in a different context, it may be in different forums. It may be that when we come to the debate on stage two they will be pertinent. At present they are not.
My only surprise is that other things have not been included such as "Wouldn't it be a good idea to have a purpose clause that supported Mom and apple pie?". These amendments are in the same category. They are expressions of desire, of hope, of ambition for the future. They are not unworthy for that reason. But they are not appropriate for the reason that I have set out and for the reasons that were set out with absolute authority by the noble and learned Lord. Lord Simon of Glaisdale, earlier.
There is nothing in the Bill that touches on our powers. Therefore, these amendments are properly described as not relevant. That is not to say that I do not recognise and do not sympathise with the point very moderately put by the noble Lord, Lord Elton, on this occasion and earlier, and I recognise the feeling with which the noble Earl, Lord Caithness, addresses these matters.
But—I say this as politely as I may—this is not the occasion to try to alter the Bill. I recognise what has been said. I recognise that the speakers believe in the virtue and validity of what they have said. There may be value in what they have said, but that is the occasion for further debate. It is not the occasion at the moment. The amendments have nothing to do with the Bill at all.
9.45 p.m.
The Earl of Caithness: I listened with interest to what the noble Lord, Lord Williams of Mostyn, said. He mentioned the number of Divisions. I know that the noble Lord is not ungenerous, and he will of course recall that on many occasions, as is worth stating for the record, amendments were accepted when we were in government. I certainly accepted an awful lot of amendments in the name of the noble Lord, Lord McIntosh of Haringey, in particular, with whom I debated on numerous Bills. Not only did I accept them, but when they were redrafted by the Government I put them back down on the Marshalled List, with his agreement, in his name. Therefore, I hope that the noble Lord will be generous in accepting that there is another dimension—not only the defeats that the Conservative Party suffered but the number of amendments that we accepted that never went to a Division.
Secondly, I should like to ask the noble Lord why, given what he said, the manifesto says,
"The legislative powers of the House of Lords will remain unaltered",
when referring to phase one.
Lord Williams of Mostyn: Because, first, that is what we intended to bring about, and, secondly, that is what we have brought about: in the Bill.
Lord Strathclyde: I am rather disappointed and surprised by the attitude that the noble Lord. Lord Williams of Mostyn, has taken. He has a great deal of experience in the House of Lords, both in Opposition and as a Minister. He normally conducts himself with great skill, but he has not addressed himself to practically a single point that I made.
The main point that he makes is as follows. I hope I paraphrase him correctly and, if not, no doubt he will wish to put me right. He is saying that the powers are not in the Bill and therefore we should not he discussing powers. I have just been reminded of a point by my noble friend Lord Mackay of Ardbrecknish, who, when he was Minister spoke at considerable length on the Pensions Bill, which will be remembered by many Members of the Committee. The Pensions Bill, not surprisingly, was to do with pensions. One of the matters that it was not to do with was war pensions. I do not remember noble Lords opposite twisting and agonising about whether they should vote on the question of war pensions. I do not believe that the question was raised at all. There was a vote on war pensions. The Government lost and they accepted that position. There is no way that my noble friend would have used the, I am sorry to say, rather pathetic argument of the noble Lord, Lord Williams of Mostyn. The noble Lord is going to put me right now.
Lord Williams of Mostyn: This is a one clause Bill. The noble Lord, Lord Strathclyde, will be able to remind me how many clauses were in the Pensions Bill.
Lord Strathclyde: I am not sure what that has got to do with the argument used earlier by the noble Lord. He has introduced an interesting constitutional device: if a Bill does not include a matter which the Government do not wish to discuss, that matter may not be discussed. My noble friend said from a sedentary position that he would have loved to have been able to use that particular argument.
When I held the position currently held by the noble Lord, Lord Carter, there would have been a huge amount of ammunition in my rather humble armoury. The party then in opposition would not have won anything.
Lord Williams of Mostyn: Was there any amendment to the Pensions Bill in the form of a purpose clause?
Lord Strathclyde: It was a failure on behalf of the Opposition not to think of such a thing. It is a credit to my noble and learned friend Lord Mackay of Drumadoon, who has introduced that whole question.
I do not wish to quarrel with the noble and learned Lord, Lord Simon of Glaisdale, who suggested that there is not much ambiguity in this Bill. But I wish to test this with the noble Lord, Lord Williams of Mostyn, because

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it is my view that, while there may not be much ambiguity, there is certainly a great deal of uncertainty for the future.
We are looking at a Bill which will create an interim House. That interim House will wish to find the new boundaries of its powers and to decide whether or not to use them. I echo the remarks of my noble friend Lord Marlesford, who said that the important point about the powers of this House is that they come from convention, statute and Standing Orders. No doubt the conventions and the Standing Orders will be the path by which the interim House will wish to discover the boundaries of its powers.
The noble Lord, Lord Richard, may have thought that I was making a political point, but I believe that it is a far more important point of principle for Parliament to know what is the Government's view about those powers. The Government have made two statements: one in the manifesto and one in the debate on the White Paper, which was mentioned by the noble Baroness. It is a very simple question. I merely want to know which statement applies: the one in the manifesto or the one in the White Paper. There must have been a discussion in government about the powers of the interim House.
One has only to look at the example that we presently have before us. Election campaigns are ongoing in Scotland and Wales. Parties standing in those elections wish to increase the powers of the parliament and assembly. The Government have explained in some detail in this Chamber and in another place why they do not wish to extend those powers. They have made their position abundantly clear. But they have failed to do so in relation to the future of this House.
Indeed, the noble Lord, Lord Richard, says that we have no right. But it is legitimate to ask the question and it is right for the Government to give an answer about how they envisage the Chamber that this Bill creates. This Bill is not just about the removal of hereditary Peers. It creates a new House of Lords. I am not asking questions about what will happen in the long term. I am not trying to generate a debate on the report of my noble and learned friend Lord Mackay of Clashfern. I am asking what is the Government's intention, once this Bill is passed, on the powers of the interim House.
The noble Lord, Lord Richard, has remarked upon his book, Unfinished Business. We have some more unfinished business here. The question is not the scope of the Bill but its effects.
I am extremely disappointed by the reaction of the noble Lord, Lord Williams of Mostyn. I would like to give him another opportunity to reply to me, but if he cannot do so I am honour bound to try to bring forward a similar amendment at a subsequent stage so that we can get the answer that this House deserves as regards what is in the Government's mind. On the basis of what I have said and the commitment I gave earlier on, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Clanwilliam: It may be for the convenience of the Committee if I refer now to some of
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my amendments. Amendments Nos. 18, 26, 64 and 153 have been inappropriately grouped. I have asked for them to be regrouped. Therefore, I suggest that I speak to those amendments later.
Lord Selsdon moved Lord Selsdon moved Amendment No. 10:
Before Clause 1, insert the following new clause—

COMPOSITION OF THE HOUSE OF LORDS
(" .—(1) Except as provided by subsection (2) below, the holder by succession of a hereditary peerage of England, Scotland, Great Britain or the United Kingdom, shall not in right of that peerage receive a writ of summons to attend the House of Lords in any Parliament summoned after the commencement of this Act.
(2) Subsection (1) shall not affect the right to receive writs of summons to attend the House of Lords of any holder by succession of a hereditary peerage who had received such a writ in right of that peerage at any time before the date of commencement of this Act.
(3) Any holder of a hereditary peerage or peer of first creation to whom subsection (2) of this section applies, may by notice in writing to the Lord Chancellor within one year after the commencement of this act, disclaim his membership of the House of Lords; and thereupon subsection (2) shall cease to apply to him and any writ of summons to attend that House previously issued to him shall cease to have effect.
(4) In any Parliament summoned after the commencement of this Act, the temporal members of the House of Lords shall compose members possessing full voting rights (in this Act referred to as voting peers) and other members; the voting peers shall consist of peers of first creation and not less than one hundred hereditary peers nominated by the holders by succession of hereditary peerages whether in the peerage of England, Scotland, Great Britain or the United Kingdom.
(5) A peer who is not a voting peer shall not be qualified to vote—

(a) on any question to be determined by the House (including any committee of the whole House); or

(b) as a member of any committee for the consideration of any Bill or Measure or of any instrument or draft instrument.

(6) Nothing in this section affects the right of any peer to move any motion or to take part, otherwise than by vote, in any proceedings of the House or any committee of the House.
(7) In this section—
"peer of first creation" includes a peer upon whom a life peerage has been conferred under any enactment; and
"vote" means give voice upon question put or take part in a division.")
The noble Lord said: It is extraordinarily confusing for me because I am not quite sure what all this is about. It is a fairly simple Bill about what need not necessarily be a confused subject. I go back to the words of the noble and learned Lord the Lord Chancellor, who quoted Churchill and said that he was the one who had set in motion the desire to reform. In my 36 years in this House I have been longing for the day of reform.
Churchill always read his speeches, which is something I was told one should never do. When he was getting on a bit and at a Conservative Party conference, he read the first page and then turned it over. It did not fall over properly and he began to read the same page again. Everyone said, "The old man has lost his marbles". But halfway down he said, "You know, I seem to have heard that somewhere before and it was rather good, wasn't it? It was worth repeating".
As I said, some people in my early days told me that I should always speak without a note and should have all my speeches stuffed in different pockets. But in order

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to gain his ideas Churchill would drink champagne in the morning and cognac in the afternoon and he would have the courage to carry out his ideas. I believe that noble Lords opposite are lacking both in champagne and cognac.
I am in an embarrassing position. I could not work out why I should move an amendment. I want to make it clear that I have not discussed my amendment with anybody on any Front Bench. Except for the Public Bill Office, I am probably one of the few who really understands it. As my text I take Command Paper 37/99. I was born in 1937 and it is now 1999. A White Paper then cost 3s. 6d. When I came to your Lordships' House we had no allowances. Then the cost rose to something like £4 14s 6d, which to the gentlemen of this world was called four guineas. When we came here I thought that the four guineas meant that one counted out how many hours the House sat and one proportioned one's claim against that.
The amendment I have put down today is stage two of the reform of the House of Lords. Many noble Lords opposite should be grateful for the fact that stage one was the introduction of life Peers in 1958. Stage two was the Labour Party proposals—I do not know whether we call it the Labour Party, but the proposals of the party represented by noble Lords opposite—was to reform the House in 1968.
My amendment is effectively the Bill of 1968 with a few little jigs in it. It says in the first subsection that hereditary Peers shall not have the right to sit after the time has expired. It also says in subsection (3) that people shall have the right to resign. It states that Peers will be divided into voting and non-voting Peers. I have added a little bit which says that hereditary Peers shall have the right to nominate 100 people because I could not think of how 96 or 97 worked out.
I was only 25 when I came to the House. I now have to read something which comes from the Command Paper, paragraph 25. It says:
"Two main principles emerge from the examination of these suggestions. The first is that if a reformed House is to have the influence which an effective Second Chamber requires, it must possess a degree of genuine independence".
When this White Paper came before the House, we gave it a majority of 195 and it received something like 160 in another place. However, the other place, about which I shall speak no more in derogatory terms, did not have the courage to implement the proposals, which were soundly based and which could possibly have been amended. None of us hereditary Peers has ever accepted that we have a God-given right to be here. The only problem is: who do we report to? We certainly do not report to a prime minister.
The noble Lord, Lord Williams of Mostyn, who is having a conversation on the Front Bench—something which would never have been done in my day—had the nerve to point out that he was one of the first generation. In a nice charming way he said that he was appointed by a prime minister who is no longer in office. Therefore. he is second generation; and, in my book, he may well be deemed to be hereditary. Nevertheless,
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I have a great regard for him as an advocate, as I do not have the ability to repeat the words and the terminology that he uses.
I feel quite passionately about this. The second stage of reform in my lifetime was aborted by a government which did not have the courage to try to push it through in another place. In my view, that was the second stage and, therefore, we should now have reached the third stage. I believe that 30 years is a long period of time. I had my first involvement in all of this because I really wanted to be an independent. I did not like the idea of being told what to do; but, if you do not have the courage to know what you should do, you sort of sit quietly and feel that it is better to be on the Back-Benches. I have always preferred to be up here looking down on the masses rather than looking up at them.
My worry is that the 1968 Bill was fair and constructive. It provided that hereditary Peers would stay for life. It did not say that anyone would be nominated, but it said that Peers would be non-voting. However, that did not mean they could not participate in debates or could not give of their knowledge. To my way of thinking, this particular Government are saying, "We are worried about the votes. We want the votes, not an independent House. We want to have a balance'". But who decides that balance? I do not know the answer.
However, I have another worry. As I said on Second Reading, I later became a director of a group within a research company. I took over from a really great man who did a lot of work for the Social Science Research Council and the Labour Party, Mark Abrahams. After the aborted 1968 Bill, we undertook a free study for the Labour Party to look into reform of the House of Lords. We consulted 320 Peers, both hereditary and otherwise. I kept much of the information of the research company. I did so because intellectual property belongs to the people who pay for it. We paid for it ourselves. I re-analysed the data with knitting needles and with Hollerith cards over part of last weekend. I sat and went through all the PDVN material that I could find about this House and came to a number of quite interesting conclusions.
The first conclusion was that the party opposite want to get rid of hereditary Peers for a political reason: they do not want to have an inbuilt majority of other people. They forget that some of us can have independent views and that some of us do not kow-tow to Whips or to political bodies. Indeed, some of us stay away when we feel that a vote is embarrassing and does not accord with our political feelings.
The insults that have started to emerge, when this House has normally been a friendly and co-operative place in my lifetime, have really put my [tackles up. Indeed, insults began to be directed towards us. Let us look around the Chamber. Do people realise that the families of some noble Lords have been here for 20 or 30 generations? All of them have served this place well or badly, but they have served it. It should also be realised that of those who are here today many have been here for over 50 years, others for over 30 years,

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and some have only been here for a few years. It is not the length the service that necessarily counts; it is the commitment to what one believes in and to whom one reports, if anyone. According to my Letters Patent and according to consultations that I have had, I believe that I report to Her Majesty the Queen, and that I do willingly. However, I do not report to the House; nor, I believe, do other people here. We have a courtesy and duty to each other.
What I have done—it has amused me—is to study this previous information 30 years on. I regret that the reform has not taken place in those 30 years.
The Earl of Longford: I am sorry to interrupt the noble Lord, but is he aware that that was an initiative of a Labour government?
Lord Selsdon: The noble Earl will know that I said that. I worked for a Labour government and later I became part of the economic team assisting George Brown when he was in the DEA. The noble Earl will know that my uncle was Stafford Cripps, who had a large amount to do with the Labour Party. I am being non-partisan in this matter. As I said in my Second Reading speech, I would willingly speak from those Benches opposite, where Peers are often bankrupt of ideas and of proposals for a constructive future.
I should like to see a reform of this Chamber. However, if I were an intelligent thinker, I would ask why people want to get rid of the remarkable wealth of knowledge, experience and relationships that exist not only nationally but worldwide. I refer again to the little document, Towards a Peerless Future. I thought that I might distribute that document to people. It is interesting to note that, if one is a civil servant or a Member of the Government, one "deposits" something in the Library. However, if one is a private person, one does a private placement. You "place" a document in the Library.
The document contains a matter of some interest. I agree on the matter of the voting rights, although I still believe that the Weatherill amendment has certain things to commend it. However, it is wrong to get rid of the hereditaries unless you know what you are getting rid of. Over the past weekend I considered 501 life Peers and Peers of first creation, as they seem to be lumped together. I went through all their backgrounds.
It is interesting to note that in general life Peers have a wider range of interests than Conservative Peers, but much less experience. I have studied those backgrounds and knowledge to try to work out what we could keep and what we could lose. I shall not go into the great grandeur of the past, but I believe that that has some validity. I do not refer to my family, as I am only the third generation to sit in this Chamber. I have only been here for 5 per cent. of the total Parliament. Peers may have inherited their fathers' seats or those of relatives who died in the war. They have served this nation and they deserve to be treated in a better way than is proposed.
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In the note that I shall circulate, noble Lords will find some interesting comments about age. We know full well that, had there been no new life Peers appointed in the past 30 years, there would be only 20 life Peers sitting in this Chamber today and, by my calculation, there would be only 170 hereditary Peers. Death takes its toll and the Chamber would have reformed itself already. I do not think that age is an acceptable criterion for judging the contribution that an upper Chamber can make. The Committee will know that on average 50 per cent. of life Peers are over 70. However, the younger element believe there should be no retirement age. Like me, they appreciate the words of great men from whom I have learnt so much. The average age of those in this Chamber has risen and risen. If stage two of the 1968 reform is deferred to now, 30 years later, let us hope that if there is to be a stage three, it is not deferred for a further 30 years.
As my noble friend Lord Strathclyde pointed out earlier, we would all willingly co-operate to ensure that the right kind of reform is carried out. Those of us who are hereditary Peers know our place. We know that we have no right to be here. We may have tried to earn that right and we may say that we have done our duty. Some of us try to do that, but this is a difficult time. I should hate to see a mistake made that cannot be corrected. I do not believe in trying to argue that a life Peer is better than someone else. We all have diverse and extraordinary experiences. The problem is that the other place, the executive, the Government, or whatever we may call it, has denied us the right to reform ourselves and to improve the contribution that we can make to society. I should like to see that contribution improved whether or not I am here.
The purpose of my amendment—it is not a cunning amendment—is simply to say to noble Lords opposite, "You nearly got it right in 1968; now you have got it wrong. Have a look back; 30 years in 700 years of history is nothing. If only you could think again. But you need the will and support of the House and the relationships of the Members of the House that stretch worldwide. You could have it on a plate if you did the right thing". I beg to move.
Lord Randall of St. Budeaux: I wish to speak to Amendments Nos. 14, 29 and 109 standing in my name on the Marshalled List. Briefly, the amendments are concerned with the way in which the hereditary Peers should leave the House of Lords, in a manner that does not weaken the House of Lords. Amendment No. 109 is a complementary amendment to introduce a weighted voting system that ensures that there is a fair and balanced voting arrangement between the government party and all the other parties during the period in which the hereditary Peers will be leaving the House of Lords.
So far, the debate on stage one has been very confusing. That is due mainly to the fact that there is not a strategy on how we should approach the issue. In arriving at my proposals, I have attempted to produce a stage one strategy and then to determine what solution best meets that strategy. I believe that that approach leads to a good degree of objectivity.

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Perhaps I may start by listing what I think should be some of the key elements of our reform strategy for stage one. First, the hereditary principle is not sustainable and must therefore go. That is now a widely-held view in the House and is also a government manifesto commitment. Secondly, the passage of the Bill must not weaken the House by rapidly depleting the number of Peers at a time when the House of Commons, certainly from my 15 years of experience there, is weak and is failing in many ways to bring the executive to account, which is the key purpose of the parliamentary system. To weaken the House during a period of reform is nothing short of absurd. I cannot see the case for rapidly ridding the House of a large number of Members. I do not know what the case for that is. Certainly, it could undermine the Government's constitutional reform programme, which has been successful so far.
Thirdly, neither the Government nor the rest of your Lordships' House should take an absolutist or rigid approach regarding the speed at which the hereditary Peers leave the House of Lords. We should all recognise that there are conflicts of interest between the executive and the Labour Party and the House of Lords—that is inevitable—but neither side should take a steamroller approach. Instead, we should go for consensus. That means accepting that there are conflicting interests, but there must be compromise on both sides. Fourthly, I do not believe that it is sensible for one party to have a large overall majority in this House. That must be dealt with immediately in this Bill.
Fifthly, we must minimise the risks of reform by avoiding a Big Bang approach. As I said at Second Reading. the House of Lords is about people, not buildings. If we suddenly deplete the number of people in this House very substantially, I defy anyone in this Chamber to tell us exactly what the consequences would be. It is not a question of hereditary Peers. If it were life Peers who had to go, I should treat the matter in exactly the same way. I do not distinguish between hereditary and life Peers.
My sixth point is that the Government, in formulating policy, should not treat our hereditary colleagues as if the Government were a bad Victorian employer. As I also said at Second Reading, I believe that a number of our colleagues who are hereditaries are hurting as a result of the way they have been treated so far. That is not in my view what the Labour Party stands for.
My seventh point is that the solution to reform must be simple. Complexity does not help at all. There are two parts to my proposals. The reason I put them forward in that way is that I believe them to be simple.
My eighth and final point is that we should also, during this stage, improve the democratic legitimacy of the House by having a voting system that reflects the proportion of seats held by the government party to those held by other parties in the House of Commons. That would diminish the large Conservative majority and would help the Government to get its business through. However, there is a win-win solution in this, and I believe that everyone can benefit.
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I now turn to the two amendments that are central to my suggestions. My proposal in Amendment No. 29 is that this House would initially remain as it is now in terms of membership, but on death an hereditary Peer would not be succeeded by his heir. The information produced for me last year by the Library indicates that, with that policy, there would be an enormously rapid decline in the number of hereditary Peers. After the first Parliament the reduction would be 20 per cent.; after the second Parliament 35 per cent.; and after the third Parliament 51 per cent. That amounts to a reduction of just under 400 hereditary Peers over the period.
The reason for that rapid decline is that the graph resembles, as mathematicians will be aware, an exponential curve. I understand that it is against the rules of the House for me to attempt to draw pictures in the air. That approach would remove hereditary Peers in a way that I believe meets the strategic needs of the House and the Government. I shall place a copy of the letter, dated 13th March 1998, in the Library, in the event that any noble Lords wish to see the detail to which I have referred.
I now turn to Amendment No. 109. This is the second part of my proposal. It introduces into the House of Lords a weighted vote system to ensure that the total number of votes eligible to be cast by Members of the House belonging to the government party in proportion to the number of votes eligible to be cast by all other Members of the House reflects the number of seats held by the party or parties of government in the House of Commons in proportion to the number of seats held by the parties in that House. I am sorry that that is so complicated, but it has to be said that the concept is simple, it is proportional.
What does all that mean? It means that initially all Peers would have a vote. It is quite possible that on a particular voting occasion the Peers on the Government's side might have, for example, 1.3 votes to reflect the effect of the general election in the House of Commons. The Government would get their business immediately and the House of Lords would be spared removing large numbers of Peers in one go.
It is easy to scoff at such matters. I do not mind it. However, I believe that, as trustees of the House, we ought to think what is in the interests of the House. Although politically it may not be acceptable to some people, I believe that to go about it in a rash way could be damaging. I believe that it is my duty to say what I think is right in terms of ensuring that the interests of the House are preserved.
Lord Monson: Perhaps I may say what a pleasure it is to follow the noble Lord, Lord Randall. His comments are thoughtful, sensitive and, above all, constructive. His proposals will be worth studying in detail.
It is a pity that such an enormous portmanteau of semi-related constitutional amendments, son-e of considerable complexity, are being taken so late in the evening. It is a pity, too, that the grouping is a trifle eccentric, if I may say so. My Amendment No. 23 and possibly other amendments in the grouping make no sense at all without the paving Amendment No. 16 in

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the names of the noble Earl, Lord Ferrers, and myself. But for some reason it stands on its own further down the list where it, too, makes no sense in isolation.
The purpose of Amendment No. 23 is to meet all the legitimate grievances of the Labour Party, whether that party be in government or in opposition, concerning the present composition of the House. I stress the word "legitimate" as distinct from the doctrinaire grievances.
Labour has long complained—and I have long sympathised with its complaints—that it is too often defeated by the in-built Conservative majority (with a capital "C") and on other occasions by the rather larger in-built conservative majority (with a lower case "c"). Although the defeats, when Labour is in government, are nearly always reversed speedily enough in the other place, nevertheless they are an irritant to Labour. No one enjoys being irritated time and time again.
This amendment would therefore bar most hereditaries, or all hereditaries, depending on the progress of Amendment No. 31, from voting on government Bills but not from voting on Private Members' Bills, which are not, I submit, a legitimate concern of the Government; nor would it bar them from speaking at any stage of any Bill.
In its effects, the amendment falls, on the one hand, more or less mid-way between Amendment No. 27 in the names of the noble Earl, Lord Longford, and my noble friend Lord Moran and the closely related Amendment No. 60 in the name of the noble Lord, Lord Coleraine—neither of which would permit hereditaries to vote on anything at all—and, on the other hand, some of the amendments in the names of the noble Lords, Lord Selsdon, Lord Randall and Lord Pearson of Rannoch, which would appear to give hereditaries restrictive but still fairly extensive voting powers at the cost of greater complexity.
I believe that this amendment is both moderate and workable and I invite the Committee to consider it. May I also, en passant, commend the modest amendment of the noble Lord, Lord Marlesford, Amendment No. 30, which seems not only extremely reasonable but almost unchallengeable from the point of view of principle.
Lord Crickhowell: The speech made by the noble Lord, Lord Randall of St. Budeaux, was brave and helpful. He complained about the confusing way in which these matters have been handled. He then proceeded to give the most effective response possible to the way in which the noble Lord, Lord Williams of Mostyn, had chosen to treat us. The noble Lord, Lord Williams, had decided that the best way of dealing with the Bill was to say that, because they had decided to make it a simple Bill, no one should be allowed to debate anything that might improve it. No alteration could be made; no suggestion could be put forward or, if it was, it would be casually dismissed without argument.
This evening we have two attempts by my noble friend Lord Selsdon and the noble Lord, Lord Randall, to try to make sense of a thoroughly bad and negative Bill and to try to build into it the kind of transitional arrangements which are the proper way in which
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to move towards substantial constitutional change. I thought that the noble Lord, Lord Randall, produced some compelling arguments for not weakening the House. He produced equally compelling arguments for not rushing ahead to an unknown destination, a subject which we discussed earlier. I thought that he was right to express doubts about the consequences which so many of us have addressed in earlier speeches. We will certainly remember the phrase that he introduced about treating colleagues "like a bad Victorian employer". That is all I want to say about those particular speeches on that amendment, except that I think they deserve the most careful consideration.
However, there is another cause of confusion and I should like to take this opportunity to complain about the way in which all these amendments have been grouped. I know the situation has been made somewhat better because a number of noble friends have chosen to withdraw their amendments at this time, as is their right, and to bring them forward and debate them separately. I believe that my noble friend Lord Marlesford proposes to do that and I was glad to have the intervention right at the start from my noble friend Lord Clanwilliam. Also, I do not think that the noble Lord, Lord Pearson, intends to move his amendment.
However, it is extraordinarily unhelpful to come to the House and expect us to absorb and bring together our thoughts about a set of wholly unrelated and unconnected amendments. We have been dealing with subjects far removed from one another. My noble friend Lord Selsdon was dealing with Peers' voting rights and with Peers who are without voting rights. We were to have a set of proposals from my noble friend Lord Clanwilliam about members of a wide variety of elected bodies having the right, after a given period, to receive a writ of summons. We have had the—
Lord McIntosh of Haringey: If the noble Lord will allow me, as has already been said from this Front Bench, it is open to any noble Lord to ungroup any amendment from the grouping which has been suggested. We try to achieve agreement on groupings. If we fail, there should be no problem. There is no reason to take up the time of the Committee to complain about groupings.
Lord Crickhowell: I think there is every reason to take up the time of the Committee at this point, because it may mean that we will have a less disastrously unsatisfactory grouping of amendments presented to us at later stages of this Bill. I think one is entitled to protest about the grouping of a whole series of amendments which have no connection at all with each other and which cannot be intelligently and sensibly debated together. It is not helpful to the Committee. I hope that it will not occur on another occasion, and I say to the noble Lord that if he wants to speed up the proceedings on the Bill this is not the way to do it. That is all I intend to say. I was about to finish and if the noble Lord wants to delay the Committee further, of course I will give way. However, I have made the point

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that I wanted to make. I think that this has been unhelpful and I hope that a real effort will be made on future occasions to get a more sensible grouping.
Lord Henley: Perhaps I can assist the House on this occasion. We have a number of groupings under Amendment No. 10. I and other colleagues tried to advise the noble Lord the Chief Whip and others that it would be better if they were ungrouped. That was not accepted and we now have them there. I remind the Committee and my noble friend of the words at the top of the groupings list
"Although every effort is made to secure agreement to these groupings, they remain informal and not binding. It is therefore open to any Peer to speak to an amendment in its place in the Marshalled List".
I therefore encourage any of my noble friends to speak on this matter if they so wish.
10.30 p.m.
Lord McIntosh of Haringey: I am grateful to the Opposition Chief Whip. That was all that I tried to say. I hope that his wise words will be taken into account by his colleagues.
Lord Crickhowell: I am grateful to the noble Lord for his remarks. The simple point is that when we come to the House prepared to speak we do not have the slightest idea which amendments will be separated in this way. Therefore, for the remainder of the Committee stage it is an extraordinary inconvenience that should not arise.
Earl Ferrers: I have a great deal of sympathy for my noble friend. When I saw all of these amendments grouped together, some of which were punctuated by my own, I became lost, but I was a good boy and went along to ask if I could de-couple my amendments. I de-coupled the whole lot so effectively that I de-coupled two that should not have been and they had to be coupled again. It is impossible to decide how one's own amendments relate to all the other complicated amendments that have been tabled. The answer is to take the Captain of the Yeomen of the Guard at his word and unhook all of the amendments that we do not want to be grouped in this way. That is a lot simpler and will make the debate a great deal easier.
I enjoyed the speech of the noble Lord, Lord Randall of St. Budeaux. He said that hereditary Peers must go. I thought that that remark was fairly rich. Someone who has been in the House for perhaps 12 months decides that everyone else who has been there for years must clear out. I admired him for his fortitude in recognising a good thing. It is funny how a lot of noble Lords on the other side of the House long to come here and as soon as they arrive they seek to kick out everyone else in a most delightful way. My noble friend Lord Selsdon said that hereditary Peers knew their place and when to go. Maybe he knows his place and when to go. All I can say is that I know when to go, and it is not now.
I just hope that your Lordships, particularly the Government Front Bench, who, I know, admire the noble Lord, Lord Randall, will take cognisance of his
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advice and do things slowly. It is a great mistake to upheave the constitution and at a stroke, to use a famous phrase adopted by one of the predecessors of the noble Lord, Lord Williams, remove 700 people from Parliament. Whether or not they attend does not matter, but that is what will happen. It is pretty stringent stuff.
I find it hard to agree with Amendment No. 109 in the name of the noble Lord, Lord Randall, which provides that the proportion of government seals in the House of Lords must reflect that in the House of Commons. For example, what happens if one has the misfortune to have a monster Labour majority in the House of Commons and a very small Conservative minority, as happens now? One creates a whole lot of extra Labour Peers in this House. Noble Lords shake their heads. Perhaps they will desist because it puts me off. If I have got it wrong they can explain why. At the next election five years later there is a monster Conservative majority and a 'very small Labour minority and one has to create a whole lot of new Conservative Peers. Therefore, it grows like Topsy. I see that the noble Lord, Lord Randall, is becoming very anxious. Obviously, I have got it wrong. If he wishes to interrupt then, as the noble Lord, Lord Williams of Mostyn, said to me courteously the other day, I shall be quite happy to give way to him.
Lord Randall of St. Budeaux: I am very grateful to the noble Earl for giving way. It has the opposite effect. The weighted voting system that I have mentioned does not require any change or flood of new life Peers to create a balance. The system, which is incredibly simple, does it all for you.
Earl Ferrers: It must be a simple system if I cannot understand it. The noble Lord said, I think, that people had 1.3 votes. I find that very complicated. It is a matter that requires a great deal of studying.
While I am not accusing the noble Lord. Lord Williams of Mostyn, of talking to his noble friend, perhaps he would be kind enough to address his mind to this problem. We want to know where we are going in the reform of your Lordships' House. If we knew where we were going, we might be able to say, "We shall go along with it", with perhaps some criticism of the proposal. But the real criticism is that we not know what is happening. That is what everyone wants to know; and that is what the country wants to know too.
You cannot just upheave a second Chamber of Parliament and say, "Here we are. We shall not tell you what will happen because we don't know", It is deeply irresponsible.
Lady Saltoun of Abernethy: The noble Lord, Lord Randall of St. Budeaux, has spoken to a number of amendments. One concerns a voting system which, so far as I can make out, would make this House virtually a carbon copy of another place. I wonder whether it is worth having this House if that is so.
Another of his amendments proposed, I think, voting and speaking Peers, if I have not got him wrong That is the same as some of the proposals for reform of this House in the 1960s. If I am not mistaken, I think that

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the noble Lord, Lord Selsdon, wanted speaking Peers and voting Peers. It is a nice idea but I am not sure that I should be prepared to come here if I did not have a vote. I think that it would be a waste of time.
I very much appreciate Amendment No. 29 tabled by the noble Lord, Lord Randall of St. Budeaux, proposing that those of us here now should retain our seats for life. I believe that the noble Lord, Lord Renton, has suggested that in the past. That is a suggestion that I would go along with, particularly as I have always loved being here and should like to feel that I could stay here until the great Reaper culled me.
The Earl of Longford: I followed with great respect and some puzzlement the noble Earl, Lord Ferrers. In all the years when he was a Minister and I sought to oppose him he slapped me down with unfailing precision. He was the most formidable opponent I have ever come across. Now the noble Lord, Lord Williams of Mostyn, former chairman of a borough council, is much tougher, more astute and wily. He is not so easily intimidated, so I suppose he will put up some sort of show.
I was under the impression that the noble Earl, Lord Ferrers, was going to propose an amendment similar to the one I propose; namely, that life Peers should speak but not vote. I did not hear him suggest it. He seemed concerned with wider matters.
Be that as it may, I now propose the scheme referred to by the noble Lord, Lord Selsdon: the 1968 scheme. It was the brainchild of the Clerk Assistant at the Table, the late Henry Burrows, my old golf partner. I have mentioned before how he irritated me on occasions, but he was a wonderful friend. Henry Burrows invented the two-writ plan under which hereditary Peers would speak but not vote. The scheme was simple and was approved by the Labour Government. I hope that no one will say that I am a Labour heretic, because for once I am absolutely in line with traditional Labour policy. This is Labour doctrine and for more than two years it has been accepted by the Labour Government with enthusiasm. It was the doctrine of the Labour Cabinet, led by Harold Wilson, the noble Lord, Lord Callaghan, being perhaps its most distinguished member. It was Labour Party doctrine in the good old days, and it still is.
The scheme was accepted by the Conservatives and by the Liberal Democrats, most of whom were in the Labour Cabinet at that time. The noble Lord, Lord Jenkins, certainly was. Some of our strongest members then shifted their allegiance and perhaps they will shift it back. They are mobile people. At any rate, the scheme was accepted by everyone, but was ultimately sabotaged by a strange cross-party combination in another place. At that time, I had resigned from the Cabinet on an educational matter. If I had not done so on that issue, I suppose I should have done so on this one. If the scheme were adopted now, it would not interfere with the Bill. The Bill could go forward and the scheme could be tacked on; it would be a supplement.
I agree with what was said so well by the noble Lord, Lord Randall, and I, too, pay tribute to the work of the hereditary Peers. I should be a coward, a traitor, if after
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50 years I did not do so. I refer not to the distant past but to today, when the hereditary Peers are a most valuable element. Anyone who does not know that does not know much about this place.
What is to be done? With the help of the Chief Whip, I stayed up until three o'clock in the morning. I was provided with a couch and stayed up five hours after my usual bedtime in order to vote for the Second Reading. I showed my obsequious loyalty on that occasion. Nevertheless, something has to happen. We must ensure that the values of the old Chamber—not the old historic Chamber but today's Chamber—is carried on into the new one. My proposal represents a clear way of doing so.
Lord Campbell of Alloway: I wish briefly to support the spirit of everything the noble Earl has said. I find it most moving, entirely constructive and wholly right. It is the only occasion in 20 years that I have been able to agree with anything that the noble Earl has said. However, on this occasion I mean everything that I say. He speaks from the heart and there is sense behind his proposal. There is no logical reason why all the problems of three-line whips, Peers from the hedgerows and one thing and another should not dissolve if there is no vote. We need their integrity, experience and independence. I support the noble Earl with all my heart.
Lord Moran: I speak briefly in support of Amendment No. 27, spoken to by the noble Earl, Lord Longford, to which I have put my name. During our debate on 23rd February, I said that I was unhappy about the Weatherill amendment because I believe that those who negotiated that agreement with the Government got a very poor deal. It would have been much better if they had argued and obtained a solution on the lines of the noble Earl's amendment. After all, that was the arrangement agreed between the parties in 1968, when it was supported by your Lordships on a vote of 251 to 58.
I realise that the proposal has been put forward in the other place and rejected, but it seems to me that it is the best solution. I am afraid that I part company with the noble Lady, Lady Saltoun of Abernethy on this. I consider that it is much more important to be able to speak in this House and to express one's views than it is to take part in votes.
Perhaps I may consider the matter of conservation, in which I take a great deal of interest. Two noble Earls, Lord Selborne and Lord Cranbrook, both have great authority in the field of conservation, and it is valuable to the House to be able to hear their views—much more valuable than them being Conservative Peers who may occasionally vote in the lobbies. Sadly, we may lose that contribution.
To allow hereditary Peers to speak and to take part in Committee work, which a great many do, would be useful. I believe that to deprive them of the vote would be reasonable and would meet many of the objections of the Labour Party to the enormous Conservative majority. I strongly support the amendment of the noble Earl, Lord Longford.
10.45 p.m.
Lady Saltoun of Abernethy: Before the noble Lord sits down, would he really be happy to move an amendment and not to be able to vote for it?
Lord Moran: I think so, yes. As I say, I think that that should apply to the vote in this Chamber across the board.
Lord Sawyer: I too thought that the contribution of the noble Lord, Lord Randall of St. Budeaux, was sensibly and carefully argued. However, to a large extent, it was mistaken and misplaced.
I do not intend to take up time with a detailed rebuttal of the nine points made by the noble Lord, Lord Randall. On one or two of his points, I find it hard to understand how Members of the Committee can see this as a complicated Bill. It seems to me to be a simple proposition for a self-contained reform to end the rights of hereditary Peers. I do not think it is a revolutionary concept. I have campaigned for this all my life. It is not something that I have come to the House of Lords to do, although, those who sat on the Labour Benches before me would have liked to vote on this legislation. This measure has been the Labour Party's aim since its birth 100 years ago, so it is not new. Therefore, I believe it is difficult for the Committee to argue that we are acting like a Victorian employer. We have given 100 years' notice of the improvement and change that we intend to make.
Basically, it is about equality and fairness. Perhaps those hereditary Peers who feel injured by this measure should reflect on the outside world. People in the wider society do not expect to advance themselves, to get a job or to make their way in society on the basis of the merits of their father, their grandfather or their great grandfather. They expect to be able to do that on the merits of their own achievements. If that is the case in wider society. is it not right that those who act as legislators or politicians should proceed on the same basis? Fundamentally, I believe that that is extremely simple and I think it is on that simple basis that this Bill should proceed.
On the new voting system, I believe this is probably the wrong place to introduce that. There may be merit in arguing that case with the Royal Commission, which will look at the rules of the reformed House. That will be the proper place to put forward that case.
I do not accept the argument advanced by my noble friend Lord Randall that the depletion of hereditary Peers would weaken the ability of your Lordships' Chamber to conduct its business effectively. I cannot accept that almost 500 life Peers, with all their experience and knowledge, do not have the ability to master the intricacies of the legislation in your Lordships' Chamber. That argument does not run.
Finally, the most important argument advanced by my noble friend concerned Amendment No. 29 and involved extending the length of time that hereditary Peers could sit in your Lordships' Chamber. I say this to my noble friend. He, along with myself, were good party men. We fought elections on manifestos.
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Manifestos are important. If this Chamber continually denigrates the role of manifestos then we will damage the political process. We will damage the confidence of the electorate in the party system.
We all fight elections on manifestos and we know that none of them are read line by line by the voters. But we also know that the newspapers run our manifestos, as do television programmes. Lines and clauses are explored by commentators, and people understand the general spirit of intent of the manifestos. Therefore, it is important that, if the next election and elections thereafter are to be fought on the basis of manifestos, we do not do them any more damage in this debate.
My noble friend Lord Randall fought election after election in Hull on the basis of manifestos. He made promises to the voters and said he would deliver to the voters on the basis of manifestos. That was quite right. This manifesto makes it clear that the Labour Party, if elected, would move quickly and speedily to remove hereditary Peers from the House of Lords. Therefore the proposal put forward by my noble friend is against the spirit of intent of that manifesto.
"I do not know how long it would take", says my noble friend—three Parliaments, and 51 per cent. of hereditary Peers would still remain. That would not be acceptable. It would not be within the spirit of the Government's intentions or the Labour Party's manifesto. It is quite clear that we were elected on the basis of taking this step now, and take it now we must.
Lord Randall of St. Budeaux: Before my noble friend sits down, I should like to point out that when I stated in my speech what I felt were the strategic points on which any proposal should be based, I said that I supported the manifesto; and that part of the reason for putting forward the weighted voting system with the skew proposed was to meet some of the wording of that manifesto.
I make it absolutely clear that I regard the manifesto as inviolate.
Lord Sawyer: If that is the case then it is important that my noble friend supports the Government. The Government's proposals are based directly on the party's manifesto and his proposals would negate that.
Lord Mackay of Ardbrecknish: I wonder whether I could intervene at this stage and try to be helpful with respect to the current position. If I am right in my reckoning, three other Members of the Committee still have amendments to be spoken to in this long group—a group which my noble friend Lord Henley and myself felt ought to be disentangled. Unfortunately (I do not blame anybody) they were not disentangled, and that is a great pity.
We are now getting into a confused situation where a number of topics on the same general subject—it can hardly be otherwise given the scope and the nature of the Bill—are addressed from different points of view. The amendment of my noble friend Lord Selsdon is the principal amendment in this group. He made his usual excellent speech. Then we have the interesting but

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different amendment of the noble Lord, Lord Randall. I suspect that I am put forward by my noble friend Lord Strathclyde whenever the mathematics become complicated because, as some Members of the Committee will remember, it makes the d'Hondt formula seem remarkably simple. The noble Earl, Lord Longford, spoke to his amendment. In the same group we still have the amendment of my noble friend Lord Coleraine.
Lord Coleraine: I am grateful to my noble friend for giving way. I should like him to know that, following representations from the Front Bench, I shall be disentangling my own amendment from this group.
Lord Mackay of Ardbrecknish: That is the point I am coming to. My noble friend Lord Pearson of Rannoch has an amendment in this group, too, which is quite different in degree. That may well be untangled as well. I am supposed to be replying to the debate, but I do not know whose amendments are still in and whose amendments are out.
What I intend to do is as follows, and if it does not suit the Committee I reserve the right to come back later. I shall reply to the amendment of my noble friend Lord Selsdon. It will then be up to the Committee to decide how it wants to proceed, and up to the noble and learned Lord, Lord Falconer of Thoroton, who is to reply, to decide how many of these amendments are still in play and how many he replies to.
As I recall, having had occasions like this when I sat on the Government Front Bench, immediately after Amendment No. 10, if my noble friend decides to withdraw his amendment, we shall, unless the Committee adjourns for the evening, go on to Amendment No. 11. We shall then come back to Amendment No. 14 in its order and can resume the debate on that amendment, and so on. That is the principle on which I shall proceed. Therefore, I shall discuss only the amendment of my noble friend Lord Selsdon.
My noble friend made his usual excellent speech, impressively without notes. Perhaps we should consider another amendment providing that any hereditary noble Lord who speaks eloquently and without notes ought to be given a free right of passage into the new House, because it is an excellent example, which I tried to emulate when I was on the Back Benches. When I became a Minister I was told that as every word became gospel I had to read it all carefully and not ad lib; the Box became very nervy if I ad-libbed too often. It is a serious point that my noble friend is an example to us all in his ability to make a speech without notes.
My noble friend has returned to the 1968 Bill which, as a number of Members of the Committee who were here at the time have continued to remind us, was accepted by the House of Lords but rejected by the House of Commons because of the issue of a competing power source, a point I mentioned earlier in the day. My noble friend has suggested that following that Bill is the correct way to proceed. In other words, all the existing
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hereditary Peers remain but when they pass on, their heirs do not succeed them to the seat in the House of Lords. There is a great deal of wisdom in that.
My noble friend adds that at the stage of this Bill's being passed any hereditary Peer who wishes to do so can resign his seat. He may wish to make it clear that he does not wish to take part any more or that he has not taken part in the past and wants, so to speak, to clear the numbers. He may also wish to compete for a seat in the House of Commons, although that is a rather risky route.
The Earl of Longford: The noble Lord is aware, is he not, that under those proposals hereditary Peers, though they could come and speak, would not be able to vote?
Lord Mackay of Ardbrecknish: I was about to come on to the fourth subsection in my noble friend's new clause, because that tries to address the problem, which I understand and have never pretended that I do not understand, of the Labour Party's irritation about what it sees as the Conservatives' in-built majority.
My noble friend Lord Strathclyde mentioned the Pensions Bill and some issues which were brought in which were never there to begin with and were never intended to be there. If I had tried to complain on the same basis as the Government are now complaining with regard to this Bill I would have been laughed out of court as well as thumped quite conclusively in the Division Lobbies, as indeed I was. I make no complaint. It is a tribute to the noble Baroness, Lady Hollis of Heigham, that she succeeded in these matters. I had better not go too far in case any Members of the Committee think I enjoyed being thumped by the noble Baroness, as I was on a number of occasions, figuratively, of course.
My noble friend's amendment deals with that problem by saying that 100 hereditary Peers nominated by the others should be allowed to have full voting rights. That is not terribly dissimilar to the Weatherill amendment, which we shall come to later. It is a very interesting and ingenious amendment. It is a pity in many ways that in 1968 the other place did not accept it.
It may well be that its time has passed. Occasionally I catch the mid-morning plane to Glasgow. When I arrive there, it is a beautiful morning. I arrive by lunch time but I realise that if I had only got up earlier, I could have had the whole morning there. But, of course, one cannot put back the clock on a Bill any more than one can do so in relation to the plane that one catches.
Therefore, I accept that the time may have passed in relation to this matter, which is a pity. But if the Government were ever to have second thoughts on how to proceed on this issue, my noble friend's amendment offers a very good way forward, for which there is considerable precedent. Although I cannot speak for all Members of the Committee, I believe that his proposal would merit the same warm endorsement today as it received in 1968.
I speak only to my noble friend's amendment. I hope that what I have suggested may be the best way forward in dealing with this over-large group of amendments.
11 p.m.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): Left in this group are Amendments Nos. 10, 14, 23, 27, 29, 52 and 109, all of which have been spoken to. I intend to reply to those amendments.
Lord Rowallan: I have not yet spoken to my amendment.
Lord Falconer of Thoroton: The amendments which have been degrouped, which have not been spoken to and to which I do not intend to reply are Amendments Nos. 18, 26, 30, 61, 64 and 153. We have received indications that some amendments should be degrouped and the noble Earl, Lord Clanwilliam, was kind enough to indicate at the beginning of the debate that he did not wish to speak to his amendment. It is wrong that I should deal with those amendments. It is right that I should reply to the amendments which have been spoken to. I shall not, as the noble Lord, Lord Mackay of Ardbrecknish, has done, merely treat the matter as an? la carte menu from which he selects those to which he wishes to reply.
It has been an interesting debate marked by two factors. First, the speech of my noble friend Lord Randall of St. Budeaux was extremely good and he is entitled to a full and detailed reply. Underlying his speech were all the issues raised in the debate, including the extent to which the hereditary peerage should be protected in some way in relation to the successor House to this House.
The second striking aspect of the debate was the ability of the noble Earl, Lord Ferrers, to prevent the Committee from hurtling into an unpleasant debate about procedure. He restored a good mood to the Committee merely by the quality of his speech, on which I congratulate him.
Perhaps I may deal first with the speech of my noble friend Lord Randall. It set out the principles. He identified seven principles to underlie the basis of his speech. First, he said that the hereditary principle is not sustainable and he said that that is the widely-held view of this House. With respect to him, I agree.
Secondly, he said that the Bill and the effect of its changes should not weaken the House. With respect, I agree with that. The effects of the Bill as we propose it will leave 500 life Peers. It will take away the in-built Conservative majority. It will have the effect of providing a more legitimate House, which I believe will be stronger rather than weaker than the one which currently exists.
Thirdly, he said that we should not take up an absolutist position in relation to speed. His proposal means that after three Parliaments, 50 per cent. of hereditary Peers will no longer be entitled to sit or vote in this Chamber. On our calculations, it would take 60 years to get rid of or to remove the hereditary Peers from this House. I appreciate that it is a distressing topic for hereditary Peers. I agree that normally, an absolutist position should not be adopted.
Lord Coleraine: I am grateful to the noble and learned Lord for giving way. But he is missing the point that any amendments which have been spoken to today are time limited for the period of the interim House.
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Most of us who have spoken accept that it is an entirely new ball-game when the second stage is reached. It is not relevant to discuss what may happen when the last hereditary Peer dies in 60 years' time.
Lord Falconer of Thoroton: That is not the way in which my noble friend expressed the matter. He pointed out that three parliaments would have to go by before we got rid of 50 per cent. of hereditary Peers. I apologise for using the expression "get rid of". There is a rather crude aspect to this. Perhaps I should use the word "vaporised", which was the word used by the noble Earl, Lord Ferrers. It does not seem to me sensible to approach the matter in that way.
Fourthly, he said that there should be no large overall majority for one party in this House. We agree and our proposals affect that. Fifthly, he said that to minimise the risk of reform we should resist the big bang. With respect, the effect of our proposals leaves 500 of the existing Members of this House in place. That does not sound like a big bang to me.
He said that, sixthly, hereditary Peers should not be treated badly. I agree, but there is an underlying principle in relation to this Bill, which is that the age of the hereditary legislator has gone. That necessarily involves depriving them of the right to legislate on the basis of who their parents were. That does not involve treating the hereditaries badly. That should be done with respect and sensitivity. However, if that is the underlying principle and what we are going to give effect to, then the consequence is that they should be removed in the most sensible way possible.
The noble Lord's seventh proposition was that the solution must be simple. The noble Earl, Lord Longford, described his most impressive opponent as the noble Earl, Lord Ferrers, but he could not understand the proposal that the noble Lord, Lord Randall, was putting forward. I understand that its effect is that there will be weighted voting rights as regards hereditary Peers. I understand that Members of the government party would have, under the present arrangements and on the basis of the present majority, something in the region of 4.49 votes per Peer. That does not sound simple or sensible. It does not sound as though it would appeal to the public at large.
Going through the seven points that underlie the noble Lord's speech, I believe that each one can be demonstrated either to be wrong or flawed or reflected in the Bill which we propose.
Lord Mackay of Ardbrecknish: I am surprised that the noble and learned Lord does not see any good sense in 4.49 votes. I would have thought that a member of the Labour Party would have been quite at home with a block vote.
Lord Falconer of Thoroton: We prefer the idea of one man one vote rather than one man and 4.49 votes.
Having dealt with the principle, I shall now deal with the particular amendments which have been advanced. The amendment of the noble Lord, Lord Selsdon, touches on many of the most important issues that have

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been raised in the earlier debates. He attempts to compress an entire alternative Bill into one single clause. I do not believe that it is clear what, if anything, of the Government's Bill would be left if his amendment were to be accepted.
What must be clear to the whole House as a result of this debate is that this amendment undermines the very foundation of the Government's Bill and therefore it is not acceptable to them. We prefer our own Bill which, as the noble Lord will understand, has as its fundamental proposition that the age of the hereditary legislator has gone. There are many different elements to the amendment, all of which have been debated in quite some detail. I do not intend to address each individual point in the same level of detail, but I want firmly to rebut the underlying principle that governs all the provisions of the amendment that the hereditary peerage should continue to be a basis for membership of the House of Lords.
I recognise that the noble Lord's new clause imposes significant restrictions on the rights of the majority of hereditary Peers and that it prevents membership from being passed down from father to son. Nonetheless, at the heart of it is the conferment of continuing membership for all existing hereditary Peers.
The Earl of Longford: Perhaps I may interrupt the noble and learned Lord. I do not know whether he is going to refer to me before he sits down. But can he explain why the Labour Party in the 1960s was ready to accept the principle that I have suggested to the Committee tonight, supported by other speakers, that hereditary Peers should speak and not vote? Why does the noble and learned Lord not feel that it is even worth mentioning now?
Lord Falconer of Thoroton: I am sorry, but I was going to come to that. The House is well aware that the Government have said, in a spirit of compromise and consensus, that they are prepared to row back from the basic policy in relation to hereditary Peers to the limited extent proposed under the amendment tabled by the noble Lord, Lord Weatherill, and others. That will be debated later in this Committee.
If the Weatherill amendment were accepted, it would mean that nearly 90 per cent of hereditary Peers would go now and 10 per cent in stage 2. It was explained at some length on Second Reading why the Government were minded to accept that proposal, thereby splitting the delivery of our manifesto pledge into two distinct stages. I do not believe that there would be much point in repeating what was said in relation to the Second Reading debate.
It is true that the Weatherill amendment envisages the selection of a limited number of representative hereditary Peers. The noble Lord, Lord Selsdon, suggests electing 100 among their number to retain full voting rights. The noble Lord's proposal would also allow the remaining 650 hereditary Peers the option of staying on for life and retaining their sitting rights. I
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repeat: that is simply not compatible with the Government's fundamental purpose in relation to the Bill.
I do not propose to deal at any length with the detailed provisions of the noble Lord's amendment beyond making the two following points. First, I am sure that Members of the Committee are aware that a similar amendment was proposed by the Government in 1968. Indeed, that is the point made by the noble Earl, Lord Longford. Under those proposals, there were two qualifications for holding a voting writ; namely, being a created Peer and having attended at least one-third of the sittings of the previous Session. Therefore, there was already the difference that only created Peers could even begin to qualify for a voting writ. That is not the case with the noble Lord's amendment.
Secondly, there are other flaws in the amendment. Under the 1968 proposals, a voting writ, once lost, could not be recovered in the same Parliament. The proposed new clause does not contain any such safeguards to ensure that those who qualify under it continue to give proper service to the House; nor does it contain any allowance for legitimate absence during the qualifying Session. The other problem with the clause is that it would make continued membership of the House dependent upon something which happened in the past but which, at the time, carried no such implication.
It is worth making the following point in addition to those points. There was a genuine case in 1968 for retaining the services of the hereditary peerage, both for the sake of continuity and to preserve sufficient numbers to carry out the business of the House. Now there are no longer those grounds, or any others, for maintaining the hereditary presence in that way. So there are very considerable differences between 1968 and the present position.
As for the proposal to introduce a system of voluntary retirement set out in the amendment of the noble Lord, Lord Selsdon, that may well be a consideration for the Royal Commission when drawing up proposals for the longer term. However, we are not proposing any changes of that kind in the transitional phase. I give way to the noble Lord.
Lord Molyneaux of Killead: I am most grateful to the noble and learned Lord. I can understand the Government's intention and determination to achieve a balance by means of this Bill, but can we take it that the House of Lords will not be unbalanced by the creation of new life Peers in the interval between this legislation and the implementation of the Royal Commission?
Lord Falconer of Thoroton: It has been made absolutely clear that the creation of life Peers after the passage of the Bill will not be used to lead to an unbalanced House. Indeed, we have made it absolutely clear that we take the view that no single party should have a majority in this House. That is unlike the present position, where, unquestionably, it is unbalanced. We have said throughout that that will not be the position after the passage of the Bill.

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I hope that I have dealt adequately with the amendment of the noble Lord, Lord Selsdon. I believe that I have also dealt with the amendments of the noble Lord, Lord Randall of St. Budeaux, in some detail in my response. So far as concerns the suggestion put forward by the noble Lord, Lord Monson, I should say that his amendment, like most others in the group, has failed to grasp the reality of the Government's position. We object to the fact that the hereditary peerage means that the Conservative Party has a built-in majority over our party in this House, regardless of which party is in government. However, that is not the sole ground of our objection. We object, on principle, to the idea that heredity alone is a sufficient basis for membership in any form of a legislature. So, again, the noble Lord's proposal would fall foul of the basic proposition that underlies this legislation.
We do not say that all hereditary Peers are bad or incompetent legislators; indeed, we have made that absolutely clear. We have always said that we expected some of them to be invited to remain in the House on the basis of their own achievements. We have now said that we are content to see those Peers identified by the mechanism proposed by the noble Lord, Lord Weatherill, but that does not undermine the basic principle of our stance.
Our manifesto commitment—I am sorry to have to draw attention to it again—was to end the right of hereditary Peers to sit and vote. If we had meant that we intended to end only the dual right, and that allowing either one of them to remain would be a fulfilment of the manifesto, we should have said so. If we had thought that allowing hereditary Peers to sit but not vote was adequate, that is what our manifesto would have committed us to. Once again, I am afraid that I must urge the Committee not to accept this amendment, which is incompatible with the principle of the Bill.
I believe I have dealt with the amendment of the noble Earl, Lord Longford. As I have indicated, I know it is the same as the one proposed in 1968. However, time has moved on. In 1968 the life peerages had existed only for 10 years. Even taking into account the presence of a much larger number of hereditary Peers of first creation. there was then a real question of whether the Chamber could cope if all the expertise of the existing hereditary Peers was removed in one go. The then government were prepared to phase them out by allowing the existing Members to sit and speak but not to vote. In 1999, however, things are very different. We have had life Peers for over 40 years. There is an enormous number of experienced life Peers in this Chamber. They are more than capable of sustaining the work of this Chamber and they bring sufficient accumulated wisdom of the world, both inside and outside the Chamber, to ensure that our debates continue to be as well informed and effective as they have always been.
As I have already said to my noble friend Lord Randall and to the noble Lord, Lord Monson, these proposals do not fulfil our manifesto commitment. They do not even come sufficiently close to it to be acceptable. Again therefore I must urge the Committee not to support them.
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I think that that deals with all the amendments that have been spoken to in this debate. I urge Members of the Committee either not to move or to withdraw their amendments.
11.15 p.m.
The Earl of Caithness: The noble and learned Lord has talked in global terms about the number of life Peers. However, does he not agree with me that the number of those life Peers does not give a true reflection of the number of life Peers who attend and work in the Chamber? The number of life Peers who attend on a regular basis—that is over 50 per cent. of the time—is under 300. If you take away the hereditaries—we cannot now consider the Weatherill amendment; we are considering the Bill as it is—there will be a 100 per cent. increase in the workload of life Peers.
Lord Falconer of Thoroton: I do not know the precise figures with regard to the number of people who attend and work regularly as life Peers, but, even if it is 300, that would still make us one of the biggest second Chambers in the world. A figure of 500 would make us the biggest second Chamber in the world. I am completely confident that there are enough people who devote themselves to this Chamber as life Peers to make it work effectively.
Viscount Mountgarret: At this late hour I do not wish to detain the Committee long, but it concerns rue greatly that every time we come to the argument about this Bill the Labour Party spends its time referring to the manifesto and what it has undertaken to do in the manifesto. If someone is prepared to use the same argument time and time again to try to justify his cause, one has to call into question whether the cause is justified. I say that because the Labour Party is indeed carrying out its manifesto commitment. I do not think that anyone disagrees with that. I do not think that we should disagree with that. It is not a case of what one is doing, but of how one is doing it. That is what causes many people in this Committee grave concern.
Earlier today the noble Earl, Lord Ferrers, said that he felt like a metronome going this way and that way. There are 13 amendments grouped with the amendment of the noble Lord, Lord Selsdon, and I too feel like a metronome going tick, tock. I do not know what we are actually discussing. As the noble Earl, Lord Ferrers, said, you do not just because you do not have time to debate the matter properly tear up and kick out 700 people and try to lump them together.
One amendment refers to actions taken by a Minister of the Crown. I believe that is Amendment No 23. Amendment No. 25, in the name of the noble Lord, Lord Renton of Mount Harry, refers to almost the same thing with regard to a Minister of the Crown.. However, that has not been grouped. So I do not know whether or not we are grouping these amendments. It would surely be better to deal with each point as it comes up so that it can be given careful and due consideration, which is the very thing that the Royal Commission was set up to do. We are here trying to do the very thing that the Royal Commission has been set up to do. We just cannot do it in the space of a few days' debate. It is wrong.

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Perhaps I may refer briefly to the amendment of the noble Lord, Lord Randall. I am much taken with it. It has much merit and much thought behind it. I am only surprised that the noble Earl, Lord Longford, did not put his name to the amendment. It reminds me of the position of the Irish Peers. Being an Irish Peer myself, I want to make this point. Twenty-four Peers of Ireland were allowed to represent the Peerage of Ireland in your Lordships' House until 1922. When the arrangement with Ireland came to an end, the need for having representative Peers of Ireland was extinguished. Yet those Peers who had been elected were permitted to remain on for the rest of their lives. It was only a few years ago—I cannot remember how many—that the last representative Peer of Ireland died. He was not replaced and so none is left. There are some hybrids like me who are fortunate enough to have an English Peerage.
I believe that the proposal made by the noble Lord, Lord Randall, is perfectly fair and right. The writ of summons received by hereditary Peers—the noble Lord, Lord Norrie, had something to say on this point—ought not to be superseded—I am not saying it cannot be—by whim, feeling, emotion, envy or jealousy. That should not be done. It is wrong. We should extinguish ourselves gradually over a period of time.
I do not believe the noble and learned Lord when he says that this will take 60 years. With the greatest respect to many noble Lords present, I find it difficult to believe that many of us will be sitting here in 60 years' time. Therefore, the time taken to extinguish antiquities such as myself and perhaps other noble Lords—I do not wish to be rude to them—will be very much less. I hope that in our debates we will remember that we are going to help the Labour Party—I am going to help the Labour Party—get through its manifesto commitment to reform and perhaps even abolish the hereditary Peers, but not in the hurried, unacceptable and offensive way in which it seems to be doing it. That is the nub of the problem.
Earl Ferrers: Perhaps I may make one point. I had a certain rebuke from the noble Earl, Lord Longford. However, that does not worry me because I always received rebukes from the noble Earl when I was in the Home Office. He said that, although the present incumbent is more astute than I am—I quite agree—he
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is more wily, too. I agree with that. The noble Earl said that he was surprised that I did not refer to noble Lords being able to speak but not vote. I did not do so for the very good reason that, being what one might in general terms call a wise virgin, I uncoupled my amendments which refer to that in order to bring them forward later. I just hope that the noble and learned Lord the Minister will be able to think of different arguments when he comes to my amendments, which I am sure he will find very acceptable.
Lord Selsdon: Noble Lords will have noticed that I have come down to earth. I have come down to the same level as my noble friend Lord Ferrers, who had the nerve to suggest that, while I knew my place, I knew when to go. I have no intention of going, and I do not wish to go. But I am confused. It was not my intention that my simple amendment based on a Labour Party treatise should be linked together with a whole range of other matters that I did not fully understand.
The noble and learned Lord opposite in his "Epistle to the Trojans", which he read so magnificently, led me to believe that he was not sure where he stood; that he was skating on some form of thin ice. I had rather hoped that the noble Lord, Lord Randall, who spoke after me at Second Reading, would have the Floor to himself. He is a good and honourable man whose thoughts are sound and sincere.
From this place nearer to earth, I must say that I am still confused, but at a lower level. Therefore, with that sense of confusion, I suggest that I might be allowed to return to this issue at a suitable later date. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hunt of Kings Heath: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Imperial College Bill
Brought from the Commons; read a first time, and referred to the Examiners.
House adjourned at twenty-six minutes past eleven o'clock.

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