Sitting of 26 April 1999

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral Answers to Questions
  HOME DEPARTMENT
  The Secretary of State was asked—
  HOME DEPARTMENT

    Crime and Disorder Act 1998
    Mr. Vernon Coaker: What assessment he has made of the extent to which magistrates are using the new powers contained in the Crime and Disorder Act 1998; and if he will make a statement. [80949]
    The Secretary of State for the Home Department (Mr. Jack Straw): The new orders contained in the Act—including the anti-social behaviour orders—have been widely welcomed as of great importance in helping the police and local authorities to reduce crime and disorder. I have kept in close touch with lay and stipendiary magistrates about the provisions of the Act.
    We are monitoring the use being made of all the new disposals. The first full set of statistics should become available this summer, but the experience in the pilot areas to date has been encouraging.
    Mr. Coaker: Will my right hon. Friend take the opportunity to congratulate Gedling borough council and
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    Nottinghamshire police on their work in implementing the 1998 Act? However, will he ensure that magistrates throughout the country implement with full force the new powers that they are given in the Act, so that we can start to tackle the anti-social behaviour in our communities that people so much want to be tackled? In that light, the anti-social behaviour orders contained within the Act are crucial and need to be implemented with full force.
    Mr. Straw: I pay tribute to the work of Gedling borough council and Nottinghamshire police—and to the leadership shown by my hon. Friend the Member for Gedling (Mr. Coaker), because I note from the reports that I have received, not least from the visit paid by my hon. Friend the Minister of State, what good work is going on there.
    To date, the evidence about the orders that are being piloted is encouraging. It shows, for example, that, in the pilot areas, over 2,000 police reprimands have been issued, as well as over 1,000 final warnings, 350 reparation orders, 213 action plan orders and 41 parenting orders. There is great expectation about the anti-social behaviour orders. They are fully backed by local authorities and the police. We expect some early applications to be made soon and there will be an equal expectation—which I very much hope will be fulfilled—that the courts will recognise the importance placed upon those orders.
    Sir Norman Fowler: May I say, on behalf of the Opposition, that we have all been appalled to hear the news of the murder of Jill Dando? I knew and admired her, and she did a vast amount to combat crime—that is unquestionable. It is an horrific murder and a terrible loss.
    Mr. Straw: I associate myself and the Government with the remarks of the right hon. Gentleman and the Opposition. Jill Dando was known to virtually everyone in this country, if not personally. She was at the height of her powers. She had done a huge amount, personally, in the fight against crime, not least by her role in "Crimewatch UK", which makes her death all the

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    more poignant. I am sure that I speak for the whole House when I say that our deepest sympathy goes to her loved ones, her family and her friends at the time of this terrible, tragic and appalling loss.

    WPC Fletcher
    Mr. Tam Dalyell: What assessment he has made of the evidence submitted to him from Colonel George Styles, ballistics expert, Professor Huw Thomas, consultant surgeon, and Bernard Knight, Home Office pathologist, in the case of WPC Fletcher. [80950]
    The Secretary of State for the Home Department (Mr. Jack Straw): None. The investigation of crime is a matter for the police.
    As my hon. Friend is aware, there has been a thorough review of the evidence in the case by the Metropolitan police. I understand that the review is now reaching a conclusion.
    Mr. Dalyell: How has that Metropolitan police inquiry dealt with the question of two warnings received by MI5 the night before the shooting, the first warning coming from the interception of telegrams between certain individuals in the Libyan People's Bureau in Tripoli, and the second from MI6, which was certainly passed on to MI5?
    Mr. Straw: As I have made clear, the investigation of this crime is a matter for the police, and in any event my hon. Friend would, with respect, not expect me to comment upon the type of allegation that he has made.
    Sir Teddy Taylor: Several reports and television programmes have indicated that the bullet that killed Yvonne Fletcher came from the fourth floor of a nearby building. Although I cannot expect the Home Secretary to comment on that, will he at least say whether the front-page report in The Sunday Times yesterday that new evidence has emerged showing that the bullet came from the embassy is true or untrue? I think that the House is entitled at least to know what is going on and where that report came from.
    Mr. Straw: In a matter such as this, inevitably many competing claims are made. With respect to the hon. Gentleman, I can no more comment on that claim than I can, or was able to, on the claim by my hon. Friend the Member for Linlithgow (Mr. Dalyell). These are matters for the police investigation, which, as I said, we hope will reach a conclusion shortly.

    Personality Disorders
    Mr. Clive Soley: What responses he has had to his proposal for containment of people with personality disorders who are considered to be dangerous. [80951]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): Let me first acknowledge my hon. Friend's long experience and great expertise in this area. My right hon. Friend the Secretary of State for Health and I are very grateful for his
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    thoughtful letter of 19 November last and the subsequent discussions, and we are giving his ideas careful consideration. We expect to publish a detailed consultation paper on this issue shortly.
    Mr. Soley: I am grateful for that reply. I urge my colleagues at the Home Office to do all that they can to persuade the various professional bodies to pay very careful attention to the proposal. When we do not provide proper security for the very few people who are considered dangerous, we fail them as well as the public. I know of cases when people asked to be locked up before they killed someone, yet one had no power and no authority to intervene. Perhaps we should look on this as a protection order, because it is protection not only for the public but, ultimately, for some of those people with personality disorders.
    Mr. Howarth: I am grateful again to my hon. Friend. The Government are determined to put in place new arrangements that will both safeguard the public by ensuring that the relatively few individuals who represent an extreme risk can be contained indefinitely, if necessary, and ensure that those individuals have their treatment needs fully met. It is a difficult thing to achieve and obviously such arrangements have not been satisfactorily resolved in the past. However, we are well aware that this is something that needs tackling. Following the review, we will ensure that the necessary arrangements are put in place.
    Miss Anne McIntosh: I wonder whether the Minister could share with the House the level of evidence that will be required before such a person could be contained. It is alleged that Jill Dando was stalked by a fan for a substantial period. It is clear that someone should be contained only if he or she has a personality disorder, but if it appears that crimes, including murder, could have been prevented, the House should know of exactly the level of evidence that will be required before the person concerned can be contained.
    Mr. Howarth: As my right hon. Friend the Home Secretary said earlier, while we share everything that has been said about what happened to Jill Dando, it would at this early stage be inappropriate to comment on what may or may not have happened and on who may or may not have been involved. We are looking towards the sort of evidence that should come from a multidisciplinary team, including clinical psychologists, so that all the factors relating to the individual and the risks involved can be properly assessed to make sure that the necessary arrangements are in place to ensure that the safety of the public is put very high on the agenda. I think that the hon. Lady will agree that that is the most important contribution that we can make towards this serious problem.

    Crime and Disorder Strategies
    Mrs. Joan Humble: If he will make a statement on progress in establishing local crime and disorder strategies. [809521
    The Minister of State, Home Office (Mr. Paul Boateng): The Crime and Disorder Act 1998 required the local authority and police in every area to formulate by 1 April 1999 a strategy for the reduction of crime and disorder over the next three years. Therefore all local crime and disorder reduction partnerships—more than 400 of them in England and Wales—should now have strategies in place and be starting to implement them.
    Mrs. Humble: I thank my hon. Friend for that answer. Given the positive and pro-active consultation undertaken by both the police and local councils in developing these strategies, will my hon. Friend encourage local authorities and police to continue to liaise with local communities? For example, in my constituency the police in Fleetwood and local councillors are holding joint surgeries where they are continuing to listen to people's views. They are offering them confidential meetings if they have particular concerns to raise.
    Mr. Boateng: I am grateful to my hon. Friend for sharing with the House the experience of her constituency. The evidence is that the partnership there to which she is referring between the police and the public is being replicated throughout the country, and forms the soundest possible basis for the reduction and prevention of crime.
    Mr. John Greenway: Why, when all the powers given to magistrates to handle crime and disorder are discretionary, are the Government insisting that youth offender referral orders are to be mandatory? Why has consideration in Committee of the youth offender reforms been postponed until the summer? Is it not clear from what we have heard today that the crime and disorder measures are based on only a handful of pilot studies and on only limited uptake by the courts, no matter what the Home Secretary says?
    Does not all this make a mockery of the Government's claims that their policies on law and order are making a difference, especially when the only difference that the public can see is that there are fewer police officers?
    Mr. Boateng: Uncharacteristically, the hon. Gentleman has got hold of the wrong end of the stick. The reality is that we are pushing forward apace with our welcome reforms of youth justice. Magistrates have benefited from the Crime and Disorder Act 1998 and its provisions, in which they are active participants. They are looking forward to the opportunity of making references to the youth offender panels because they know that they represent the best chance of arriving at a concerted focus on the needs of young people before they are sucked into the criminal justice system. That approach is likely to bear dividends later. This is about concerted action to reduce crime and youth offending, something that the Conservative party failed to do when it had the opportunity to act. We are acting and Conservatives are moaning and complaining.
    Mr. Bill O'Brien: The best way to counter crime in communities is to have partnerships within communities. Will my hon. Friend tell the House the best way forward in encouraging community partnerships to combat crime and disorder? More could
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    be done in my area and there could be greater co-operation with communities if the lead came from his Department.
    Mr. Boateng: My officials are certainly ready—as, indeed, are Ministers—to participate in the development of effective local crime prevention and reduction strategies, but we are singularly anxious to achieve recognition of the importance of growing such strategies locally. We are not about being prescriptive and imposing strategies from above, but we are about encouraging good practice and supporting it wherever we find it. We are giving £250 million to support the crime prevention and reduction strategies. Such sums were never available under the previous Conservative Administration.
    The whole House would like to hear—perhaps from the right hon. Member for Sutton Coldfield (Sir N. Fowler), who speaks for the Conservatives on this issue—whether they are prepared to match that sum of money. We have heard about health and education, but we have heard nothing about their support for methods of reducing the effect of crime on our population.

    Kosovo Refugees
    Mr. John Wilkinson: What contingency plans he is making for the reception of refugees from Kosovo in the United Kingdom. [80954]
    The Secretary of State of the Home Department (Mr. Jack Straw): Like our European Partners, the Government's priority is to ensure that, as far as possible, Kosovo refugees are cared for within in region so that they can return to their homes as soon as it is safe for them to do so.
    We have always made it clear that the United Kingdom stands ready to receive some thousands of refugees from the region on criteria agreed with the United Nations High Commissioner for Refugees. The priority of the UNHCR is to relieve pressure on the camps in turn, by giving priority to the most vulnerable and those with family links in the United Kingdom.
    Under those arrangements, the first arrivals—161 refugees, mainly women and children—came to the United Kingdom yesterday, and are being looked after in the Leeds and Bradford areas.
    I am very grateful to the local Members of this House, to all the public authorities and to voluntary organisations in the Leeds and Bradford areas for the great efforts that they have made. I am also extremely grateful to the people of those areas for the welcome they have given the refugees.
    In addition, I should like to place on record my special thanks to the Refugee Council, which is taking the lead in establishing a special reception service for all Kosovo refugees arriving in the United Kingdom.
    Mr. Wilkinson: Although our paramount duty must be to win the war and to enable all the Kosovo refugees to return to their rightful homes—I am sure it is appropriate that most of them should wish to stay as near to their former homes as possible and to be sustained in neighbouring states—will the right hon. Gentleman ensure that we make orphans and widows, who have suffered so cruelly, a priority? Will he follow the example laid down

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    at the time of Idi Amin's expulsion of the Indians from Uganda and ensure that the refugees are spread evenly around the country? A lot of London boroughs, such as my own, bear a very substantial burden already.
    Mr. Straw: As I have said, family union is one of the criteria being followed by the UNHCR and, within that, the vulnerability of orphans and widows is an additional criterion which the UNHCR already takes fully into account.
    On the hon. Gentleman's second point, the Refugee Council, which is a major voluntary organisation with huge experience in this area, is making arrangements to ensure that those who will be arriving are accommodated in areas that are ready to welcome them and have the facilities to do so. We have already made it clear by example that that does not mean only London.
    Mr. Gerry Sutcliffe: May I thank my right hon. Friend for his congratulations to the people of Leeds and Bradford, and West Yorkshire as a whole, for their generosity of spirit in accepting the refugees yesterday? Does he agree that it is right and proper that the statutory agencies operate together, as they did yesterday, to accommodate the refugees in a proper manner? It was clear from what the refugees said yesterday that all they want to do is go home.
    Mr. Straw: Let me place on record again my thanks to the local authorities within West Yorkshire, which have done a magnificent job in co-operation with the voluntary organisations. As my hon. Friend said, the agencies are operating extremely well together.
    On my hon. Friend's last point, it is true that the refugees want to go back to their homes. That is why it is absolutely right that the major focus of humanitarian relief must be in the region around Kosovo—in Albania and Macedonia—because that meets both the necessary aims of the military action against the Milosevic regime and, more importantly, the wishes of the overwhelming majority of the Kosovo refugees.
    Mr. A. J. Beith: Does the Home Secretary agree that our determination to end the terrible treatment that has prevented those people from remaining in their homes is not a reason to be at all slow in responding to the UNHCR's plea for urgent help and relief from the sheer pressure of numbers around the Kosovo border? Does the Home Secretary have in place machinery that is efficient enough to identify the priorities of, for example, those with medical needs? Does he recall that, when the east African Asian crisis happened, a special refugee board was set up to cope with urgent action? The existence of more voluntary organisations now might call for different arrangements. Can the right hon. Gentleman comment on that?
    Mr. Straw: I do not think that there is a case for setting up a special refugee board. As the right hon. Gentleman says, things have changed since the period when ldi Amin was expelling all those east African Asians. The depth of voluntary organisation work in this field is very much greater than it was. I am satisfied that the arrangement that we have put in place, with the Refugee Council in the lead but obviously fully supported by my Department and local authorities, will be resilient.
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    The right hon. Gentleman asked whether we are responding urgently to pleas from the UNHCR. The answer is yes; the first request that we received from it was last Wednesday 20 April, and we responded positively within one hour.
    Mr. Neil Gerrard: Can the Home Secretary confirm the terms on which people are being accepted into this country from Kosovo? I have seen it reported that they are being given one year's exceptional leave to remain, which presumably gives them access to benefits. If that is so, and if we are taking people on the basis of having relatives already here, what is being done to deal with the cases of those who are already here? Is it not anomalous to have people already here but with no access to benefits, whereas their relatives who are now being allowed into the country have access to benefits?
    Mr. Straw: My hon. Friend is entirely correct to say that those who arrive here by way of priority from the UNHCR are being issued exceptional leave to remain for one year, which passports them into benefits and entitles them to work. My hon. Friend will understand that those who come here by other means will, because of their method of arrival and, sadly, questions about their identity—it must be said, however unpalatable it is, that a number of people who come from Albania seek to claim that they are Kosovo Albanians but have no well-founded claim under the 1951 convention—have their claims dealt with by a different process, which necessarily takes longer. However, we have a good record in according refugee status or exceptional leave to remain as quickly as possible to those whom we are clear come from Kosovo and have a well-founded fear of persecution.
    Sir Norman Fowler: Is the Home Secretary aware that we entirely endorse the action to give help and relief to the 160 refugees who arrived from Kosovo yesterday? We also support the general policy that the overall aim must be that the people of Kosovo can return to their homes. One factual question arises from what has just been asked. Ministers, including the Prime Minister, have been saying that this country has already taken 10,000 refugees from Kosovo. Does that figure include people whose applications are still being considered? If so, how many of those 10,000 are applicants whose cases are currently under consideration?
    Mr. Straw: I am grateful to the right hon. Gentleman for his general endorsement of our policy. The 10,000 people who have identified themselves as Kosovan include applications that are in the pipeline. I shall write to the right hon. Gentleman as quickly as possible with a breakdown of the figures.
    Mr. Jeremy Corbyn: Will the Home Secretary outline what help he will offer to local authorities, which will take a substantial number of refugees in the near future, for social services, education and housing assistance? We all support and welcome asylum seekers arriving in this country, but does he realise that it is extremely difficult for inner-urban local authorities to fund existing services, and with an increased burden on them they will need immediate help from

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    central Government? They cannot wait until the end of the financial year and include such assistance in next year's round of bids to central Government.
    Mr. Straw: As I said in response to the original question from the hon. Member for Ruislip-Northwood (Mr. Wilkinson), the Refugee Council and the Home Office are being sensitive about the areas in which they are arranging for refugees who are coming in by plane to be received. They are certainly sensitive to the additional pressure faced especially by some inner-London boroughs. Discussions are in hand with local authorities, and I have no reason to believe that they need be hindered by any financial considerations in the co-operation that they wish to offer.

    Crime and Disorder Act 1998
    Mrs. Christine Butler: If he will make a statement on the role of the voluntary sector in the implementation of the Crime and Disorder Act 1998. [80957]
    The Minister of State, Home Office (Mr. Paul Boateng): Voluntary organisations have a huge amount to contribute to crime prevention and reduction and the safer resettlement of offenders. The Crime and Disorder Act 1998 provides a framework for a wide range of voluntary bodies to be invited to participate in the work of the crime and disorder reduction partnerships. I am glad to say that many voluntary organisations have taken up that opportunity and are working closely with the statutory sector to reduce the levels of crime, not least in the vital role that they have to play in implementing the youth justice measures in the 1998 Act.
    Mrs. Butler: Will my hon. Friend congratulate the voluntary sector in Castle Point on its crime prevention work in the overall strategy for crime reduction in the constituency? In particular, will he send a message to bodies that represent the old, the very young, the vulnerable and the disabled, which promote the interests of those who most fear crime, encouraging them in the vital role that they play in the crime reduction strategy?
    Mr. Boateng: I am happy to do that. My message to the organisations working with the elderly and the vulnerable is to thank them for all that they are doing, and to tell them that their views and their concerns will be taken up in the audits that underpin the crime prevention and reduction partnerships, and will be carried forward in the strategies. They have a vital role to play in ensuring that the elderly and the vulnerable, who are most likely to be the victims of crime, are properly protected. Partnerships between the voluntary sector, the statutory sector and the police are most likely to reduce and prevent crime, and we are determined that they will have all the support that they need to achieve that end.
    Mr. Graham Brady: Will the Minister also pay tribute to the work of voluntary organisations such as the scouts and the guides in helping to keep young people away from involvement in crime? Will he give consideration to the importance of not
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    reducing the resources available to the scouts and the guides through the £.10 levy on the vetting of people to be leaders of scouts or guides organisations?
    Mr. Boateng: Scouts and guides, and indeed the whole array of the uniformed youth service, play an important role in diverting young people from crime. They set an example in recommending a life of discipline and duty that others would do well to emulate.
    As the hon. Gentleman will know, we are engaged in discussions with the sector— my right hon. Friend the Home Secretary had a meeting with representatives only the other day—e that the necessary measures that we have introduced to bear down on the abuse of trust, and the welcome steps that we have taken to provide guides and scouts with access to the best possible information to prevent the service from being misused by those who would abuse children, are implemented in a way that does not place undue burdens on scouts and guides, or on any other part of the voluntary sector.
    However, we are obliged—I make no bones about this—to implement a policy of the last Government as well. We must recognise that there is a cost to be met for those searches, and that we would not do the voluntary sector any good by exempting it from meeting a proportion of that cost.
    Dr. Brian Iddon: May I praise the work of tenants and residents associations, and also place on record my thanks not only to the residents of part of my constituency who have put up with hell for the past 12 months, but to K division of the Greater Manchester police for sorting out the problem?
    Does my hon. Friend agree that "training" is the word that we should consider seriously? Is it not important to train everyone, from the police down, in aspects of the Act that can affect ordinary lives on the streets, so that everyone is aware of their individual powers?
    Mr. Boateng: I wholeheartedly endorse what my hon. Friend has said. Training in the benefits that the Act can bring is essential not simply for the police but for magistrates—and, indeed, to increase local authorities' awareness of the powers now available to them.
    Tenants and residents associations have long asked for the powers that we have given the police, local authorities and magistrates in the Act. I know that they welcome what we have done, and we are determined that the Act be used. The anti-social behaviour order in particular holds out the possibility of relief from behaviour that plagues all too many of our estates and communities. At long last, something is being done—by this new Labour Government.

    Police Stations (Sussex)
    Mr. Tim Loughton: What representations he has received about opening times for police stations in Sussex. [80958]
    The Parliamentary Under-Secretary of State for the Home Department (Kate Hoey): My right hon. Friend the Home Secretary regularly receives representations from hon. Members, members of the public and others on

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    a wide variety of issues relating to the police, including the opening times of police stations. I am not aware of any specific representations on the issue.
    Mr. Loughton: Will the Minister join me in condemning the tragic killing of PC Jeffrey Tooley, a young officer based in the traffic division at Shoreham in my constituency? While carrying out his duties late on Saturday night, he was hit by a van—apparently deliberately—which then failed to stop. The officer died in hospital yesterday. Will the Minister extend her condolences both to his family and to colleagues to whom I spoke this morning?
    Will the Minister tell me how I can convince my constituents that the Government are serious about tackling crime in communities in my part of West Sussex? During the last two years, evening and weekend opening hours have been eliminated in all the police stations in my constituency; no police emergency service response vehicles are now based at any of those police stations; and overall Sussex police numbers have been reduced by 161.
    Kate Hoey: I am sure that all hon. Members throughout the House will wish to send their condolences to the family of PC Jeffrey Tooley. His death shows us again the dangers involved in being a police officer, and the extent to which police officers deserve our support.
    There is always public concern about operational decisions to reduce the opening times of certain police stations. It must be said that all the developments that the hon. Gentleman said had taken place during the past two years took place under a funding regime implemented by the last Government; but the police must clearly make an operational decision on whether their resources are best used to keep police stations open during the evenings so that people can pop in, now that so many people use the telephone and can communicate with the police in other ways. We must allow them to make those operational decisions in their own areas.

    Asylum Seekers
    Dr. Nick Palmer: If he will instruct immigration officials to ensure that asylum seekers who appear to have been tortured are not dispersed to areas without agencies specialising in the support of torture victims. [80960]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): Wherever possible, the immigration service shall endeavour to respond positively to individuals' circumstances by arranging a suitable dispersal location, particularly in the case of torture victims.
    Dr. Palmer: I am grateful to the Minister for his reply, which he mentioned in private correspondence. Although many of us see the sense in dispersing asylum seekers across the country so that there is not a huge burden on a particular area, it would cause enormous distress to all of us if the situation of torture victims or apparent torture victims were aggravated by a lack of support in this country. Will my hon. Friend therefore reinforce his statement by saying that he hopes that immigration officials will give particular weight to that consideration?
    Mr. O'Brien: We shall indeed ensure that we are very considerate of those who have been victims of torture. I have had discussions with the Medical Foundation for the Care of Victims of Torture—which, until now, has been based predominantly in the London area—and said that we have to begin to create infrastructures outside London, so that victims who are already in other locations, and those who might go there in future, are able to obtain full and proper treatment. We are determined to do all that we can to achieve that.
    Mr. Richard Allan: Does the Minister agree that it would be better if Home Office officials spent their time developing proper care packages for victims of torture—as they have done recently in Leeds with their excellent work for the Kosovans—rather than wasting it setting up the ludicrous and unworkable voucher support system for asylum seekers? Will he not now heed the call of The Big Issue and other organisations to amend the relevant part of the Immigration and Asylum Bill, so that those who are fleeing persecution and torture are not thrown into social exclusion when they arrive in the United Kingdom?
    Mr. O'Brien: Unfortunately, I read a copy of The Big Issue, which misquoted me at length, and was particularly disappointed at the way in which it ran that story. It is important that all hon. Members face up to the reality of abuse of the asylum system. Although we have to create an asylum system that delivers for people who are victims of torture and who are genuine refugees, our system should also deter those who deliberately set out to abuse and undermine it. We have to restore integrity to the asylum system, and the Government are committed to doing that.
    Mr. James Clappison: May I bring the Minister back to the issue of victims of torture? He will be aware from the Medical Foundation for the Care of Victims of Torture that many of the experts whom it draws upon to help victims of torture are based in particular areas, especially London. Although sharing burdens in the matter is important, does not the Minister agree that, in both current and future arrangements, we should do all that we possibly can to get help to the victims of torture who need it, to help them to come to terms with their experiences? They have already been through terrible experiences; should not our arrangements be designed to help them as much as we possibly can?
    Mr. O'Brien: We certainly have to be sure that our asylum system is able sensitively to address the particular and very sensitive issues of victims of torture. We are committed to operating such a system. We are therefore committed not only to dealing with victims of torture who are already in the United Kingdom but to capacity building, so that we start to create the types of mechanisms that will ensure that victims of torture are properly dealt with when they come to the United Kingdom. I am not convinced that we have in place sufficient capacity to deliver for victims of torture. We still have much work to do, and I hope to work with the medical foundation and other organisations to improve our capacity to help the victims.

    Victim Support
    Mr. Paul Goggins: What action he is taking to support the work of Victim Support. [80963]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): At least a Labour Member is here to ask a question—we have lost Questions 12 and 13. As my hon. Friend will know, we are making a very substantial increase in Victim Support's annual grant. This year's grant will be £17.3 million, and, by 2001–02, it will be £19 million, an increase of 50 per cent. over last year's figure. Most of the extra money will be used to establish a new and much-needed witness support service in magistrates courts.
    Mr. Goggins: I congratulate my hon. Friend on providing a much-needed, substantial increase in funding for Victim Support. Will he join me in congratulating the staff and the volunteers of Victim Support in Trafford and in Wythenshawe, who do so much to help my constituents? Will he ensure that as much help as possible goes to Victim Support groups in our poorest communities, which so often feel the worst impact of crime?
    Mr. Howarth: Of course I join my hon. Friend in congratulating Victim Support groups in the Greater Manchester area, particularly those that he mentioned. He is quite right to say that the victims of crime are most often to be found in the poorest areas. It is a myth that crime strikes only in areas where people are wealthy. We make every effort to ensure that Victim Support groups in areas of great desperation and high crime are properly funded and resourced. My hon. Friend was quite right to say that it should be a priority.

    Crime and Disorder Strategies
    Mr. Tony McNulty: If he will make a statement on progress in establishing local crime and disorder strategies. [80964]
    The Minister of State, Home Office (Mr. Paul Boateng): I refer my hon. Friend to my response to my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble). I would add that consultation with local communities about the crime and disorder strategies has led to the empowerment of entire communities in the fight against crime. It is about partnership and making a concerted effort to tackle local crime and disorder problems, and it is working.
    Mr. McNulty: I thank my hon. Friend for that response. Does he agree that the real strengths of crime and disorder strategies are simplicity and partnership, and that had the Tories spent rather more time concentrating on partnership instead of demonising local government during their 18 years in power, our communities might be far safer?
    Mr. Boateng: My hon. Friend makes his point in his usual forceful and trenchant way. I agree with him and congratulate him, his local authority and, importantly, the health authority in Harrow which is working alongside the voluntary and statutory sectors, recognising the
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    importance of partnership in preventing and reducing crime. The role of the health authority is particularly important and it has been helped enormously by the efforts of my hon. Friend.
    Mr. John Bercow: Notwithstanding the characteristically sycophantic gloss put on public policy by the hon. Member for Harrow, East (Mr. McNulty), how does the Minister expect local police forces to implement crime and disorder strategies to the maximum effect, given that their funding will increase by only 0.1, 0.3 and 1.4 per cent. respectively over the next three years?
    Mr. Boateng: The hon. Gentleman, who is an assiduous attender in the House and contributor to our discussions, will no doubt soon earn himself, by his abject sycophancy, a place on the Opposition Front Bench. We look forward to that day. In the meantime, we shall continue to spend an extra £1.24 billion on the police, money that the Opposition never had in their Budget and are now not willing to match.

    Closed Circuit Television
    Mr. Jeff Ennis: What assessment he has made of the likely increase in the use of CCTV to combat crime. [80966]
    The Minister of State, Home Office (Mr. Paul Boateng): We announced on 16 March that £170 million would be made available over the next three years to support the deployment of closed circuit television to combat crime and disorder. Guidance for crime and disorder reduction partnerships on how to apply for funding under the initiative will be issued soon.
    Mr. Ennis: I am sure that that reply will be received extremely well by my constituents. At present, three very successful CCTV schemes operate in my constituency. One covers Barnsley town centre, and another Doncaster town centre. The third covers Grimethorpe, the former mining community that has been badly affected by drugs-related crime over the past three years. However, whenever a CCTV scheme is begun, the problem arises of crime being displaced from the area that it covers to neighbouring areas that are not so covered. Does my hon. Friend have any hard evidence about that displacement?
    Mr. Boateng: The evidence that we have is that displacement is not an issue. It is interesting to note that CCTV seems to be capable of reducing crime in a particular area without displacing it to surrounding areas. That is one reason why the initiative taken in this matter by my right hon. Friend the Chancellor of the Exchequer is so very welcome. However, CCTV has to be part of a whole package. There is no substitute for police-public partnerships or vigilance on the part of the public but, in conjunction with them, CCTV can—and does—make a real contribution.
    Mr. James Gray: The £170 million that the Minister has just announced will be welcome in many communities, but it is in stark contrast to the paltry £1 million that has been spent since the Government came into office. In my constituency, the people of Chippenham have had to fund their so far rather limited CCTV

    15
    installation themselves. In the new funding proposals, will the Minister undertake to examine closely Chippenham's desire to expand CCTV coverage in the town centre?
    Mr. Boateng: The point is that, under the previous Government's budget for CCTV, £1 million was made available: under this Government, the sum is £170 million. The hon. Gentleman would do better to ask the right hon. Member for Sutton Coldfield (Sir N. Fowler) whether he is prepared to do battle with the hon. Member for Stratford-on-Avon (Mr. Maples) and other colleagues to match that figure. If Conservative Members cannot say that they will match it, they would do best to button their lips on the matter.
    Mr. Lindsay Hoyle: The use of CCTV has been a huge success in Chorley. Its introduction has been most welcome, but CCTV needs to be extended into the parishes, which may be smaller but are just as important. That would help with the fight against crime in the rural parts of my constituency.
    Mr. Boateng: I have visited my hon. Friend's constituency, and well remember the CCTV scheme there. I urge my hon. Friend to put in a bid on the parishes' behalf. The Government have made £170 million available, but it is now possible for bids to be reopened, and I am sure that my hon. Friend will put his bid in.

    Open Prisons
    Mr. Howard Flight: If he will review the procedure for selecting candidates to serve their prison sentences in open prisons: and if he will make a statement. [80967]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): I hope that the hon. Gentleman will agree that, quite properly, the principal criterion for the allocation of prisoners to open conditions is that they are assessed as posing a low security risk. The Prison Service reviewed categorisation procedures for male prisoners last year, and is piloting a revised formula. Most importantly, it has also developed a systematic risk assessment for determining the suitability of women prisoners for open conditions.
    Mr. Flight: I thank the Minister for that response, but Ford open prison is in my constituency and I can tell him that the system is not working terribly well, as was shown by the escape of a prisoner who had a serious criminal record and who had also escaped from his previous prison. An ex-governor told me that the governor's job was much like that of the headmistress of a boarding school for girls who has to solicit inmates by telephoning around junior schools.
    There is no central system governing the allocation of prisoners from closed prisons to open prisons. Some closed prisons are pioneering their own open units, while some open prisons are inadequately filled. Does the Minister accept that the system that he described is not working as intended?
    Mr. Howarth: As I said, that is being considered, but Ford's occupancy rate is 73 per cent. of operational
    16
    capacity. Were we to go in the direction that the hon. Gentleman suggests, we would, presumably, have to send people there on a much lower standard of risk assessment than at present. We must strike the right balance so that those who go to open prisons are those considered to be the lowest possible risks. To have 100 per cent. occupancy at Ford and elsewhere, which seems to be what the hon. Gentleman would like, would mean relaxing entry qualifications, for which I am sure the hon. Gentleman would not argue.

    Police Manpower
    Mr. David Amess: What criteria he uses for setting targets for police (a) manpower and (b) ethnic recruitment. [80969]
    The Minister of State, Home Office (Mr. Paul Boateng): We do not set targets for overall police numbers. It is for chief constables to determine the number of officers in their forces. Targets have, however, been set for the recruitment, retention and progression of ethnic minority officers. Forces have been set individual targets with the aim that the proportion of ethnic minority officers in each force should match that of the local ethnic minority population. Once those targets have been achieved, forces will be expected to set a continuing target of recruitment in line with the make-up of the local population.
    Mr. Amess: Is the Minister aware that a growing number of my constituents feel that the Government are soft on crime, and soft on the causes of crime? How can the Home Secretary set targets for recruitment of ethnic officers in each police force without setting targets for the overall number? Can the Minister explain why the chief constable of Essex told me when I met him that, contrary to what the Home Secretary told me at the last Home Office Question Time, there has been a 1.7 per cent. cut in the force's overall funding? In addition, the Home Secretary's 10-year target means that no extra policemen will be recruited in Essex for at least three years.
    Mr. Boateng: The hon. Gentleman's perception of his constituents' views has not improved since he left Basildon. Far from our cutting police expenditure in Essex, total spending in the current financial year will be £171.5 million, which is 3.2 per cent. more than would have been provided last year by the budget set by the Conservative party. That is progress under new Labour. We are tough on crime, tough on the causes of crime, and that is much appreciated in Essex, as the hon. Gentleman knows to his cost.
    Ms Sally Keeble: Is my hon. Friend aware that Northamptonshire police have welcomed target setting and have been successful in recruiting black and ethnic minority officers of high profile and high quality? However, the force has raised the need for targets among support staff, including, for example, crossing patrols—lollipop ladies. Not only are such posts often the first point of contact for the public with the police, but black and ethnic minority people must have as much access as white people to the high-quality support jobs that exist.
    Mr. Boateng: Northamptonshire, police are to be congratulated on their efforts, and they have much to

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    teach us all about achieving success in recruitment without diminishing in any way the quality of applicants. My hon. Friend and Northamptonshire police make an important point about the role of support staff, and we shall take it on board as we develop future policy.
    Sir Norman Fowler: As the Minister knows, we support more recruitment from ethnic minorities. However, as my hon. Friend the Member for Southend, West (Mr. Amess) said, there have already been reductions in the strength of police forces throughout the country. Will the Minister admit what chief constables, the Police Federation and police authorities say—that further cuts in the service are inevitable over the next two or three years on current policy? Are not such cuts against the public interest?
    Mr. Boateng: On the contrary, we are supporting chief constables in their operational capacity to determine the level of police manpower that serves the needs of the local community. The power to set levels and numbers of police was a power that the previous Conservative Government reduced and removed from the Government of the day. We have a duty to do what we are doing, which is to support chief constables by a settlement that brings an additional £1.24 billion to the policing of our country. That is something that chief constables welcome. We are giving them the power to do the job—power that they never received under the previous Conservative Government.

    Metropolitan Police
    Mr. David Crausby: What he is doing to enhance the recruitment, retention and promotion of black and Asian police officers in the Metropolitan police force. [80971]
    The Parliamentary Under-Secretary of State for the Home Department (Kate Hoey): My right hon. Friend the Home Secretary held a conference on the recruitment, retention and progression of black and Asian police officers, at which he announced the targets that he would be setting for individual police forces throughout England and Wales, including the Metropolitan police.
    The conference was attended by the majority of senior police officers and police authority chairs, and by members of the National Black Police Association. It looked at recruitment, retention and promotion and attempted to identify barriers within existing procedures that could adversely impact on ethnic minority officers. As a result of the conference, the Home Office will be developing a national strategy to help achieve those targets, which will be issued to all police forces in England and Wales, including the Metropolitan police, and to members of the National Black Police Association.
    Mr. Crausby: I thank my hon. Friend for that reply. Does she agree that the Government and metropolitan police forces throughout the country face a mammoth task in persuading black and Asian men and women that the police force offers them a genuinely rewarding career?
    Kate Hoey: I agree with my hon. Friend. It will be a massive task, but the police—in particular the Metropolitan police, who already have their own programme of work to tackle the recruitment, retention
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    and progression of ethnic minority officers—must know that they have the support of the whole community in undertaking it. We will do what we can to help them, as will the community, and we are pleased at the initial response from within the ethnic minority communities, which are showing that they want to respond. We hope that we will see progress shortly.
    Dr. Evan Harris: Does the Minister feel that the recruitment of settled ethnic minority candidates to the police force will be enhanced by the fact that their immigration status will be checked by their prospective employers under section 8 of the Asylum and Immigration Act 1996—a measure which the hon. Lady was pledged to repeal when in opposition and which the National Association of Citizens Advice Bureaux and the Commission for Racial Equality have made clear has increased the amount of discrimination in employment practice?
    Kate Hoey: The hon. Gentleman makes a ridiculous point and when he reads what he has said in Hansard, he will realise that. We must all unite to ensure that all people in ethnic minority communities are encouraged and persuaded to join the police force so that it is representative of society as a whole.

    Elections (House of Commons)
    Mr. David Winnick: What recent representations he has received about changes to the voting system for election to the House of Commons. [80972]
    The Secretary of State for the Home Department (Mr. Jack Straw): We have received a number of representations, both for and against changing the voting system for elections to the House of Commons.
    Mr. Winnick: Is my right hon. Friend aware that I do not have much enthusiasm for any change in the voting system for elections to the House? Is it not a fact that, in the recent referendum in Italy, those who bothered to vote—the majority of the electorate did not—voted overwhelmingly to bring back a system similar to the one that we use in Britain?
    Mr. Straw: The turnout in the Italian referendum was 49.6 per cent. and of those—just under 50 per cent.—90 per cent. voted in favour of a change towards the first-pastthe-post system—which is a consideration to be borne in mind.
    Mr. Michael Fabricant: Is the Home Secretary aware that Italy is not alone in this? Israel is also considering moving to a first-past-the-post system because proportional representation leads to weak and ineffective government.
    Mr. Straw: I am aware of some concerns in Israel about the system there. I have also noted that even the most evangelical supporters of proportional representation in this country have not gone as far as to recommend the Israeli system.

    Police (Inefficiency)
    Mr. Jim Cunningham: What progress police forces are making in reducing waste and inefficiency. [80973]
    The Minister of State, Home Office (Mr. Paul Boateng): Improving police efficiency and effectiveness are key Government priorities. It is vital that the public get the best possible value from the money spent on policing. Our comprehensive spending review set the police a target of 2 per cent. year-on-year efficiency gains. We expect those targets to be met and the resources so released to help improve delivery of national and local front-line policing priorities.
    Mr. Cunningham: I know that the police are mainly responsible for operational matters, but will the Minister talk to the West Midlands police, because there is concern in the Styvechle area about the Fletchamstead highway police station, whose hours are being reduced? I am sure that he knows that there have been several recent incidents in that area.
    Mr. Boateng: I thank my hon. Friend for drawing that to my attention. I have every confidence in the capacity of the chief constable to meet the operational needs of the local community. He is doing a good job. We are grateful to my hon. Friend for his support for the local police. We will continue to support him and the police in Coventry in doing their job of reducing and preventing crime.

NATO Summit
3.31 pm
The Prime Minister (Mr. Tony Blair): With permission, I will make a statement on the NATO summit in Washington on 23 to 25 April. I was accompanied by the Foreign and Defence Secretaries and the Chief of the Defence Staff. Copies of the Washington declaration, the alliance's new strategic concept, the summit communiqué, our separate statement on Kosovo and other summit documents are being placed in the Library of the House.
The summit was naturally dominated by Kosovo. NATO reaffirmed its basic and unalterable demands: Milosevic must withdraw his troops and paramilitaries; an international military force must be deployed; and the refugees must be returned in peace and security to their homeland. The communiqué on Kosovo made it clear that these demands will not be compromised.
NATO decided that the air campaign should be intensified, that the number of aircraft and targets should be expanded and that the economic measures against Belgrade should be increased. In particular, we agreed an embargo on oil, to be made effective by the measures that were necessary, including maritime operations.
There was also discussion on the circumstances in which ground troops would be deployed. As I said to the House of Commons last week, the difficulties of a land force invasion of Kosovo against undegraded Serb resistance remain, but Milosevic has no veto over NATO's actions. It was agreed at the summit that the Secretary-General of NATO and the military planners should now update their assessments of all contingencies. Meanwhile, the build-up of forces in the region continues.
In addition, we agreed to provide all assistance to the International War Crimes Tribunal in respect of the atrocities committed against Kosovar Albanians. We also warned Belgrade against any move to undermine the democratically elected Government of President Djukanovic in Montenegro.
NATO's military commanders, General Clark and General Naumann, briefed the summit on the progress of the air campaign. NATO has largely isolated the Kosovo battlefield, and built what General Naumann described as a ring of steel around the Federal Republic of Yugoslavia: 690 aircraft and 20 ships are now deployed, more than double the force at the outset of this campaign. Half the key Serb fighter planes are now destroyed. FRY air defences are ineffective, with more than 70 aircraft and some 40 per cent. of SAM3s and 25 per cent. of SAM6s destroyed.
Oil refining and distribution have been massively disrupted, which has already led to Serb operations in Kosovo being halted on several occasions in the past two weeks. The day before the summit meeting, six tanks, 27 military vehicles and an infantry column had all been destroyed in Kosovo. These operations continue and, as the weather clears and more attack weapons arrive, that type of action will become a daily occurrence.
Russian efforts to find a diplomatic solution to this crisis are welcome, but there can be no alteration to our fundamental demands.
NATO will also continue its efforts to relieve the humanitarian crisis that Milosevic has cynically provoked in and around Kosovo. NATO troops have helped deliver
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11,000 tonnes of aid, and provided food and shelter to some 85,000 refugees. I met the Presidents of Albania and Macedonia, and pledged Britain's support for them in dealing with the refugee crisis that Milosevic's repression has created.
The full extent of the horrific repression by Serb forces in Kosovo is only now emerging. There has been organised systematic rape of women, usually in front of husbands and children. Young men have been forced to dig graves, and then shot. Whole villages have been razed to the ground. Some of the stories of the cruelty and barbarity practised by Serb militia are evil beyond belief. We have heard reports of Kosovars hiding in the hills for weeks and having to walk for days to escape Serb repression. Some—particularly children and the elderly—died as they tried to escape. Some who have escaped—including children—have reached safety with bullet or shrapnel wounds inflicted by Serb forces. The UNHCRthe United Nations High Commissioner for Refugees—has today substantiated reports that women and children are now being used as human shields, including in a building used to store ammunition. Those acts remain the essential justification for NATO's actions.
In the meeting with the leaders of the seven non-NATO countries neighbouring Serbia, we were united in our resolve to strengthen efforts to promote stability and development in south-east Europe. For their part, what was remarkable was the view of the front-line states that the NATO action was just, and that NATO must win. Milosevic is now a pariah even in his own region.
We also looked ahead at means of contributing to the long-term stability of all the Balkan states. At our initiative, NATO leaders agreed to establish a regional security forum for south-east Europe between NATO and the countries of that region. It was agreed that NATO should work together with the United Nations, the Organisation for Security and Co-operation in Europe, the European Union and the international financial institutions in that endeavour.
The summit had an important agenda before it-quite apart from the Kosovo crisis. It was the occasion on which to adapt the alliance to meet future needs and challenges. Although NATO's fundamental role will remain the defence and security of the allies, there was an equally strong consensus on the need for a more capable and flexible alliance, able to contribute to security throughout the Euro-Atlantic area and to promote the values of democracy, human rights and the rule of law for which NATO has stood since its foundation. In doing that, member states reaffirmed their commitment to the Washington treaty and to the United Nations charter.
We approved an updated strategic concept, which set out the fundamental security tasks of the alliance and how we intend to fulfil them. Common defence and the transatlantic link will, of course, remain the bedrock of the alliance. However, the new strategic concept recognises that in today's world, the ability to respond to crises and develop partnership with countries that were once our adversaries is crucial to our interests and to the promotion of our values. The strategic concept also provides top-level guidance for the restructuring of alliance military forces. The defence capabilities initiative, agreed at the summit, will give effect to that by adapting and modernising NATO's capabilities along similar lines to this country's strategic defence review.

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The strong partnership between the European and north American members of the alliance is the key to the success of NATO and to our security. The summit unanimously welcomed and endorsed the initiative, which President Chirac and I launched at our summit last December in St. Malo, to develop a European defence capability for crisis management operations where the alliance as a whole is not engaged.
A stronger European capability will strengthen NATO and is fully compatible with our commitment to NATO. Making NATO a more balanced partnership will strengthen the essential transatlantic link. The alliance stands ready, as the EU defines its defence arrangements, to make NATO force planning, NATO assets and NATO headquarters available for EU-led crisis management operations, subject to the necessary approval of the North Atlantic Council. We emphasised the importance of involving fully in that process those allies that are not members of the EU. Those decisions will ensure that NATO and European capabilities develop in a fully compatible manner.
In Washington, we welcomed for the first time at a NATO summit the leaders of Poland, Hungary and the Czech Republic—the alliance's new members. We reaffirmed the alliance's continuing openness to new members and agreed a new membership action plan for countries that aspire to join the alliance.
We met the Heads of Government of 23 non-NATO nations in a summit meeting of the Euro-Atlantic Partnership Council which showed the breadth of support of the alliance's efforts to spread security and stability throughout the Euro-Atlantic area. Regrettably, Russia was not represented at that meeting. However, throughout our discussions and in the communiqué, we made clear our wish to work co-operatively with Russia on a wide range of security issues and to resume regular NATO consultation and co-operation with Russia in the Permanent Joint Council.
There were two key outcomes of the summit. First, a new vision for the future of NATO was set out, of new roles for NATO, new capability and new partnership with the nations of central and eastern Europe and beyond in central Asia. Secondly, there was the total and unified commitment of all the members of the alliance to defeat and to reverse the policy of ethnic cleansing in Kosovo. Each leader began his statement by saying that NATO will and must prevail. It is now our collective task to make that victory—a victory of justice over evil—a reality for Kosovo's long-suffering people.
Mr. William Hague: I pay tribute to NATO's achievements. The alliance has given us peace in western Europe for 50 years and played the major part in winning the cold war. Now, it has new challenges, and there was no more dramatic sign of that than the arrival of Poland, Hungary and the Czech Republic at the summit.
We welcome the announcement of the defence agreement with Macedonia and Albania, and of the security forum with other neighbouring states. We continue to support the NATO action in Kosovo, and share the horror throughout the House at what has happened there. We believe that it is vital that NATO finishes what it has started. We again pay tribute to the
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courage of our service men, who risk their lives there every day. Does the Prime Minister agree that what they need at all times as they carry out their difficult job is clarity about objectives and policy?
I should like clarification of four sets of issues relating to the NATO summit, the first of which is the possible use of ground troops. Last week, the Prime Minister signalled a change in the position—a change in the language—in respect of the use of ground troops. He ruled out a land force invasion against an "undegraded"—the same word he used today—or "organised" Serb military machine, and therefore appeared to imply that a land force could be deployed against a Serb army that was degraded or disorganised.
Does the Prime Minister accept that, although that approach may well be justified, it will require a fuller explanation than has so far been given to the House, as well as clear and achievable objectives? Can he explain what success he has had in convincing our NATO allies of the case for changing the policy? Is the use of ground forces now this country's preferred strategy? The use of ground forces would take some time to plan, assemble and implement, so does the Prime Minister accept that any decision in that respect would have to be made in the very near future, if that force were to be deployed, do its job and ensure that the refugees could return home before winter set in?
Secondly, I ask about the oil embargo, which also may well be justified. NATO has decided to board and inspect all ships; will the Prime Minister assure the House that there is a legal basis for that decision? What does NATO plan to do if the ships decline to be boarded? Will force be used? Does the Prime Minister accept the need for very clear terms of engagement for sailors who will be called on to make instant decisions to enforce such a policy? May we assume that those terms of engagement have been made clear to foreign Governments? Does the pursuit of that policy carry any implications for Russian ships and for relations with Russia?
Thirdly, on the question on the removal or the future of Milosevic, the Foreign Secretary said at the weekend that the politics of ethnic hatred could be securely defeated
"only when we get a change of regime in Belgrade",
but he reiterated the fact that ousting Milosevic was not a NATO military objective. How are those two statements to be reconciled? Will the Prime Minister also clarify his comment last week that we shall carry on until Milosevic steps down?
Finally, there is a need for clarity, not only on the immediate tasks facing NATO, but on its long-term future. The Opposition strongly support a new and more flexible approach that frees the organisation from its cold war role, but where does the development of an EU-led, rather than a Western. European Union-led, capability leave countries such as Turkey—countries of vital strategic importance which are members of NATO, but not of the EU? How exactly will they be fully involved and kept fully informed in the way in which the Prime Minister outlined in his statement? The communiqué says that the European defence identity will be developed within the NATO structures, but the St. Malo agreement that the Prime Minister signed in December provided for

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the development of an EU defence identity inside or outside NATO. Are those two agreements reconciled easily?
The Prime Minister: I thank the right hon. Gentleman for his broad support of NATO's action.
Britain suggested that we should make it clear that Macedonia and Albania will receive support in whatever form they need it. It emerged from the summit that we need to provide those countries with substantial financial support through the European Union and elsewhere—and that will be done.
I pay tribute again to the courage shown by our service men and women in undertaking this military action and to the quite remarkable way in which they have assisted with the humanitarian effort. Wherever I go in the world and speak to people about the British troops in the Balkans, they say that they are stunned by the professionalism of our troops, their ability to react quickly and the way in which they really care for the refugees under their control. That reflects enormously well on our service men in every way.
The right hon. Gentleman asked about the clarity of objectives. As to ground troops, I simply repeat what I said last week and two weeks before that. I think there is a limit—as I have said before—on the degree to which we should discuss every possibility of military tactics and strategy. We continue the air campaign; we do not rule out any options. The Secretary-General and NATO have been tasked with updating their assessments and plans. The right hon. Gentleman is absolutely right: we must begin consideration and planning, for all the reasons that have been given. That is being done.
It was decided to impose an effective oil blockade, and NATO has been asked to outline the precise circumstances in which we will intercept in a maritime or other sense. We must obviously ensure that there are proper rules of engagement and that our actions are compatible with international law. Reports must be made to NATO on those points.
My right hon. Friend the Foreign Secretary set out accurately the position regarding Milosevic. The five objectives that NATO set out at the outset remain. It is not an aim of the military action to remove Milosevic. However, my right hon. Friend is absolutely right to say that, while Milosevic remains, the security situation of this region is more difficult. I think that is a statement of the obvious. The aims remain as we set them out.
The right hon. Gentleman made two final points. First, we were involved in very good discussions with Turkey in which we pointed out that it is to be involved in the decision-making process. It is important that, in developing a European strategic defence identity, we show sensitivity to countries outside the European Union. That is particularly important in the case of Turkey, which is such a valued member of the NATO alliance.
Secondly, as to the European defence initiative, the position remains as it is set out in the communiqué. In that communiqué, we make it absolutely clear that, although there will be circumstances in which the EU decides to act, they will be subject to full consultation with NATO. There is no question of NATO assets being used except with the consent of NATO. The purpose of the defence identity is to ensure that European common defence policy develops in a way that is fully compatible
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with NATO. There may be some in the European Union who are less sensitive to that issue than we are. However, we think it is important to get the NATO alliance's blessing regarding this defence initiative. It must be entirely clear that the European defence initiative and NATO are fully compatible and that the fundamental bedrock of this country's defence remains NATO.
Mr. Paddy Ashdown: This was obviously a successful NATO conference. Unity is a priceless asset at this time. I have three topics to raise with the Prime Minister: front-line states, refugees and the military.
First, I am delighted that NATO has now emphasised the condition of front-line states. Is it not the case that, if Milosevic were to succeed in destabilising Macedonia and the Thessaloniki area of Greece, he could win in Kosovo without a shot being fired? If we are to ensure the security of our rear areas, we have to make it absolutely certain that we are particularly aware of the problems of poverty in Albania—which is bearing the heavy burden of refugees—the delicate ethnic balance in Macedonia and the difficulties that the Macedonian economy will face as a result of the imposition of sanctions on Belgrade.
I draw the Prime Minister's attention to Montenegro. If President Milosevic sought to use VJ—Yugoslav army—units to overturn the democratically elected Government of Montenegro, and Mr. Djukanovic were to ask NATO for assistance, would NATO give a constructive answer to such a request?
Secondly, on refugees, is it not the case that President Milosevic uses refugees as an instrument of war, so we have to be able to win on that battlefield as well? Frankly, the UNHCR has not yet got a grip on the situation in Macedonia and Albania. We may be able to assist the UNHCR with NATO troops, and I would be grateful if the Minister gave us an undertaking that we shall do that as long as necessary, particularly in providing heavy-lift ability from the Albanian border, which was nearly swamped 10 days ago.
On the military, I agree with the Prime Minister that we ought not to be broadcasting our shots and saying in detail what we should do. That is why I wish that we had not said, at the start, that we would not use ground troops. If there are to be troops on the ground, there must be clarity of mission and purpose. Unfortunately, the troops that we now have on the ground were designed, and have a mission designed, around the Rambouillet agreement. Certain elements of that agreement have simply been overtaken by events, so we must begin to update that mission and the posture.
Unless we are prepared soon to make a decision on the reinforcement of those troops against the contingency that we may have to use them on the ground, against whatever opposition there is, we may find that we have left it too late. Surely it would be a disaster if NATO were to achieve its air aims and give us an opportunity to use ground troops, but we had not made a decision early enough. Would that not be snatching defeat from the jaws of victory?
The Prime Minister: On the latter point, I agree that that is precisely why it is important that the Secretary-General and NATO are now undertaking their assessments. In any event, there is a continuing build-up of forces in the region.

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I want to make two points about the front-line states. First, if I had any doubt about the necessity for our action—which I do not—hearing representatives of the front-line states speak at the meeting would have removed that doubt. Those people are in the front line and bear the burden of living next to Milosevic. They experience difficulties with their public opinion and attempts to destabilise their Governments and suffer the economic consequences of the events.
The front-line states have no doubt that NATO has to succeed or that Milosevic stands in the way of the future that they want for south-east Europe. That future is as part of Europe and, in many cases, part of NATO, and it is a future in which there should also be a place for a democratic Serbia. All that is possible. The impassioned speeches of those people, many of whom have difficulties at home, were the most eloquent testimony to the need to continue the action and see it through.
On the money for Albania and Macedonia, we have agreed 100 million euro of immediate budgetary aid for Albania, Macedonia and Montenegro, and 150 million euro of humanitarian assistance, but we are also considering giving those states bilateral and other assistance. So we know that we have a financial commitment, which we must stand behind, to those countries. I believe that they were greatly helped by the sense of obligation among the NATO states.
In respect of Montenegro, I can only repeat what is in the NATO communiqué—that grave consequences would follow any attempt by Milosevic to destabilise that regime. I think we know that Montenegro has been a bastion of democracy against Milosevic, and it is important that we give it every support that we possibly can.
Refugees have been used as an instrument of war. NATO troops are ready to help the UNHCR. There are still some shortcomings—which we need to deal within the way in which that procedure is operating, although I pay tribute to our Department for International Development, which has done a magnificent job in helping. Were it not for the British troop contribution and the contribution of DFID, the situation would be much more serious.
Mr. Donald Anderson: It is clearly vital to deny the Serb war machine the fuel supplies on which it relies. How can that be done without destabilising the democratic Government in Montenegro, and what assessment has been made of the response of Russia to such a blockade of its ships?
The Prime Minister: It was precisely because of the sensitivity of Montenegro that we made mention of maritime operations. As the communiqué says, we shall look at all the ways that we can do so with sensitivity to the situation for Montenegro. In the end, however, the single best security that Montenegro can have is a swift and successful prosecution of this NATO allied effort.
A desire to keep Russia engaged emerged very strongly from the summit. We have made every effort to open lines of communication, and to keep them open. It is now clear that Russia essentially—with some differences of opinion over the nature of the international force—supports the NATO aims and demands. It disagrees, it is true, with the
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action that is being taken, but the fact that Russia is in that position is significant in itself, and—as I made clear—we must go out of our way to demonstrate, not just our sensitivity to Russian concerns, but our desire to make Russia part of the solution.
Mr. Tom King: I strongly support what the Prime Minister just said about giving proper respect to the views of Russia.
I previously raised the question of the Secretary-General having given a security guarantee to neighbouring states. Do I understand from this communiqué that that has now been confirmed by the NATO summit in respect of any aggression from Milosevic?
May I ask the Prime Minister about something that he has not mentioned in his statement? Milosevic regarded the presence of the Kosovo Liberation Army as the one immediate obstacle on the ground to his policy of total ethnic cleansing. What is the position of NATO on the KLA? A recent report in Jane's Intelligence Review says that there are on the ground 24,000 KLA troops of one sort or another. Is it NATO's policy, in the present situation—in advance of any other ground troops—to give any help that it can to the KLA and the rapidly increasing number of recruits coming from other parts of the world, willing to defend Kosovar interests in Kosovo?
The Prime Minister: In respect of the KLA, the position remains as it is, in part because of the UN resolutions, although it is true that the KLA is having greater success on the ground in Kosovo, and indeed has retaken certain parts of it.
In respect of the Secretary-General and the assurances given to neighbouring states, I simply refer the right hon. Gentleman to the language in the communiqué. Milosevic should be under no doubt at all that we recognise our obligation to those surrounding states; that is what I take the words "grave consequences" to mean.
In respect of Russia, we have made a series of efforts to get a message through to it. I have spoken in the Russian media. In the speech that I made in Chicago the other night, I went out of my way to say that I think that we should be presenting a proper economic package to the G8 summit in Cologne. Of course, we must ensure that any assistance given is properly used. 1 think that we should almost use these events as an opportunity to renew our commitment to helping Russia make the transition. If we do that, one good will have come out of this situation.
Mr. Tony Benn: Is the Prime Minister aware that the absolute human calamity that we see on our screens every day, which has become much worse since the bombing began, makes a contrast in our minds between the sums of money paid to help the refugees, running into millions of pounds, and the cost of the war, which is running into billions and billions of pounds? It is clearly creating in Yugoslavia a humanitarian crisis that, with the destruction of its infrastructure, will be much, much more serious than anybody realises.
Will my right hon. Friend explain why it was that the French vetoed at the Washington meeting the idea of a blockade? Will he indicate whether the NATO Ministers agreed in principle to the use of ground troops, or is that an issue on which they are not yet agreed?
The Prime Minister: In respect of the last two points, the position on ground troops is as I set it out, and the

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Secretary-General has been tasked with undertaking the planning and assessment, as I have pointed out. The French have not issued a veto on the oil blockade. That blockade is the unanimous desire of all member states. Indeed, within the past hour, the European Union has issued a list of further economic sanctions.
There is no doubt that the conflict is expensive to prosecute. However, the policy of ethnic cleansing began before a NATO bomb ever dropped. We have just presented a series of pieces of evidence to the International War Crimes Tribunal, which is based on the details that we have received from the Kosovar Albanian refugees. I have it before me. There are pages upon pages reporting incidents of unbelievable atrocities, cruelty and barbarity carried out under Milosevic's express orders.
The campaign waged by the Serb militia and the paramilitaries in Kosovo is a deliberate act of policy. In the end, I agree that war is a nasty and expensive business. However, the choice is, and always has been, that either we allow Milosevic to do this unhindered or we stop him. The front-line states—this made the greatest impression on me throughout the summer—know that, if he had been able to carry out this policy of repression in the name of Serbian nationalism in Kosovo, the entire region would have been destabilised. We have a mission to defeat the policy of ethnic cleansing, and we must do everything that is necessary to see it through.
Sir John Stanley: Will the right hon. Gentleman give further consideration to his answer about the position of Milosevic? Given the appalling atrocities for which he bears direct responsibility, is it not inconceivable that Milosevic should remain as Head of State in any circumstances when this war is over?
The Prime Minister: The aims remain as they are. However, I said earlier that, first, I do not regard these aims as a matter of negotiation with Milosevic and that, secondly, there is no doubt that the security of the region remains at risk while he remains in power. This is NATO action and it is taken on the basis of the demands that we set out, and those remain the objectives.
Ms Rachel Squire: I join my right hon. Friend in particularly welcoming his support of the front-line states, which are dealing daily with the threats and human consequences of Milosevic's brutal regime. Does my right hon. Friend agree that their support for NATO gives a sign of how successful NATO has been as a military alliance for the past 50 years? Does he further agree that those of us who have grown up in western Europe since the end of the second world war should not forget that the peace and security that we take for granted in our daily lives have been delivered largely by NATO?
The Prime Minister: I agree entirely with those sentiments and would add two things. First, let us never forget that 250,000 people died as a result of the Bosnian conflict and 3.25 million people are refugees as a result of Milosevic's earlier actions. Therefore, allowing him to carry on that policy now would be gravely irresponsible.
Secondly, NATO has been a success, without any doubt. It will continue to be a success if it succeeds in setting its course and direction against this policy of
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ethnic cleansing. If NATO succeeds, the next time someone tries such a policy and we make a threat it will be credible. Were we to fail—which we will not and must not—the opposite would happen: people would know that, when NATO threatened, it would not be a threat to be taken seriously. That is why people do not talk about NATO's credibility in some abstract sense; it is a necessary part of building peace and security for the long term.
Mr. Julian Brazier: I join the Prime Minister is his condemnation of President Milosevic, but is it none the less the case that any settlement in Kosovo that is deeply objectionable to the bulk of the Serb people would not stick and would eventually be a recipe for trouble—year after year and generation after generation?
The Prime Minister: In France, at the Rambouillet talks, we had a solution that would and should have been acceptable to the Serbian people. It was rejected by Milosevic. If anyone is responsible for the present situation, it is him; but I do not know what the hon. Gentleman is suggesting. I cannot imagine anything more irresponsible than entering into an agreement guaranteeing the rights of people in Kosovo only with the permission of Milosevic.
Mr. Andrew Mackinlay: In what circumstances would NATO or the Government seek a mandate from the United Nations to put in ground troops? Is the Prime Minister aware that many of us who support the broad thrust of policy are nevertheless somewhat unhappy and find some difficulty in respect of our mandate?
There is provision in the UN charter—the uniting for peace procedure—whereby a special meeting of the General Assembly of the UN can be called to give a mandate. Will that be considered as one of the options in relation to the general policy and, specifically, can we be assured that, whether troops go in to broker peace or go in as peacekeepers, an attempt will be made to get the support of the UN—either at Security Council or at General Assembly level—particularly in view of the increasing marginalisation of Russia, which is felt in that country?
The Prime Minister: The way to answer that is to say again that we keep in close touch with the UN. The Secretary-General has been involved and has essentially backed the NATO demands. There is a difficulty with saying that we will only ever act with a UN mandate, for reasons that are obvious to people. Of course we always prefer to act in such a way, but the action that we have taken is justified in its own terms and we believe that it is lawful in its own terms. That does not mean that we do not work closely with the UN and, indeed, with Russia. That is precisely what we are doing.
Mr. Martin Bell: I wonder whether we can ask for a little more clarity about targeting; we need it because last week, for the first time, NATO attacked a target—the television station in Belgrade—which could not have been destroyed but for the certainty of killing civilians inside it. With that attack, NATO crossed a rubicon which, in my judgment, should not have been crossed. If we are unwilling to adopt a conclusive

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strategy—which, as the Prime Minister knows very well, includes the use of ground troops—surely we have to spare the innocent civilians.
The Prime Minister: People cannot have this all ways round, I am afraid. The television stations and the Serbian media are part of the Milosevic power apparatus—part of the apparatus that keeps him in power and allows his dictatorship to carry out the policies of ethnic cleansing. I have no doubt at all that action was justified. We do everything we can to minimise civilian casualties, but I am afraid that a conflict such as this is an unpleasant business. There is no nice way of conducting it. What is important is to conduct it in such a way that we leave Milosevic and his regime in no doubt that we will carry on pounding every part of that regime day after day until it accedes to the NATO demands. That is the only thing that we can do. The best answer to people who accuse us of risking civilian casualties is to say that we do everything that we can to avoid civilian casualties. Compare and contrast that with the deliberate and brutal murder of people in Kosovo.
Mr. Tam Dalyell: If the Prime Minister is so certain about the states in the region, why are the Austrians denying NATO air space? Why are the Greeks denying NATO the use of the port of Thessaloniki and why has the mayor of Athens said that not a dock worker will lift a finger to help NATO in the port of Piraeus? When the Prime Minister answered the Leader of the Opposition, he talked about proper rules of engagement, and when he answered the Chairman of the Foreign Affairs Committee, he said that every effort would be made to keep the lines of communication open. Let us suppose that a Russian oil ship were challenged entering the port of Bar or somewhere else in the Adriatic and refused to accept that challenge, what would then happen?
Finally, may I say to the Prime Minister that some of us—it may be a minority—are utterly, utterly appalled that he should have been the hawk in Washington?
The Prime Minister: First, in respect of Austria, the point about air space is in its constitution. Actually, Austria has been fully supportive of the NATO action. Secondly, the Greek Government are not denying NATO the use of Thessaloniki. Thirdly, I have already said that NATO has been charged with looking at how the oil blockade is conducted properly in accordance with international law. We would be fundamentally lacking in seriousness if we were undertaking military action and trying to cut off the oil supplies that Milosevic needs in order to have his tanks and other military vehicles carry out that appalling repression on the ground in Kosovo, without taking every possible measure to deny him the fuel. That would be utterly irresponsible. The better that embargo is, the swifter the resolution of the conflict will be.
As for being a hawk, it has nothing to do with that. I happen to believe that we are right to take this action. Having done so, we must see it through. It is as simple as that. I simply ask my hon. Friend to read the account that we shall submit to the International War Crimes Tribunal of what those people have done. Page after page shows that, in whole villages, people have been driven out at the
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point of a gun, if they are lucky, or murdered on the spot, if they are not lucky. Some of the tales of brutality towards the women on the part of the Serb militia are just unbelievable.
We cannot deny those facts. They are happening. We either do nothing and say that this can carry on—in the south-east of Europe—or we act. There are no easy options, which is why, for nine months, we tried to find a diplomatic solution. We bent over backwards to get a diplomatic solution. Possibly, we did more than we should have done; but we did it because we knew that, once a conflict starts, those ghastly things happen. We knew that there would be civilian casualties—there always are in a conflict such as this—but we cannot allow a policy of racial genocide to continue unchecked in Europe. If we did that, everyone who believes in the principles of my political party would feel a sense of betrayal.
Mr. Ian Taylor: As I was in the United States in the past few days, I welcome the Prime Minister's efforts to strengthen the body politic of the United States. First, is he absolutely convinced that the American President understands that this venture, now launched, will almost certainly require ground forces, and will the American President therefore lead American public opinion? Secondly, in his statement, the Prime Minister referred to "international military force" going into Kosovo. Did he mean a NATO-led force, which might well have international support? Lastly, I welcome the NATO statement on links with the European Union; but was it apparent from all the members of both organisations—NATO and the EU—that the European countries would probably need to increase their defence effort over the next few years, certainly if EU efforts were to be credible in any future ventures?
The Prime Minister: I have found America, and the American President in particular, to be absolutely staunch throughout this action. Let us be quite clear: this action would not be happening without the strength and support of the United States of America. I believe that the leadership that has been shown by America is wholly welcome and will remain. On the issue of the international military force, as I said in answer to questions last week, we believe that other nations could be involved, but it must have a NATO core.
The hon. Gentleman makes a fair point about the defence effort. EU countries will have to give serious consideration to what the defence capability in Europe should be in the next few years, as will other NATO countries. The strategic defence review puts us at the head of the game by quite a considerable distance—that is recognised by most of the other NATO countries—because it expands the elements of strategic capability that we need for such operations. The hon. Gentleman is quite right in saying that, if we are to develop any sense of a proper European common defence policy, we must realise that that begins with capability.
Mr. Giles Radice: Is my right hon. Friend aware that most hon. Members applaud the unity and determination of the NATO alliance to ensure its objectives in Kosovo? Is he also aware that many of us

33
believe that, sooner or later, considerable numbers of ground troops will be required in Kosovo if the Kosovar refugees are to return home?
The Prime Minister: I believe that there is support for our objectives in the House. I do not want to add to what I have already said about ground troops, except to say that it is important for people to understand that the air campaign would, in any event and on any basis, be carrying on now. That campaign is being intensified, and, as the weather clears, it can be made more effective. It is possible both to exaggerate and to understate its impact. It is having a huge impact on Milosevic's military capability, and it is important that it continues and intensifies.
Ms Roseanna Cunningham: With specific reference to the decision on the oil embargo, the Prime Minister will be aware of recent reports suggesting that, among others, Texaco shipped oil from west Wales to Serbia some three weeks after the bombing started, that the French were delivering diesel as recently as 21 April, that the Italians and Greeks have continued to supply oil and that the Hungarians shipped Russian oil at the beginning of April.
Given the Prime Minister's remarks about being taken seriously on the imposition of the oil embargo, will he explain why these deliveries have been allowed to continue, particularly from countries with NATO membership? What does he think should be done with the profits that the companies have made from those deliveries? Has not an oil embargo always been one of the most effective sanctions against Serbia? Why was the decision to impose an embargo not taken considerably earlier?
The Prime Minister: It is precisely to make the oil embargo effective that the European Union has made it clear that all its members are expected to ensure and police the effectiveness of the oil embargo. That was the reason for the NATO statement. The idea that economic sanctions or the oil embargo alone would stop Milosevic is pie in the sky and naive beyond belief. We require the economic blockade and the oil embargo alongside other measures that are being taken. That is the only realistic way of defeating Milosevic.
Mr. Denzil Davies: When will the oil embargo commence? Will it involve, if necessary, the stopping and even the seizure of Russian ships carrying oil?
The Prime Minister: European Union members are committed to ensuring that no oil reaches the Serbian regime. As I said earlier, the NATO planners are charged with ensuring that the oil embargo is carried out in accordance with international law. I repeat to people who raise the issue of Russia to cause difficulties over the oil embargo that we would be very foolish if we conducted this air campaign without taking every measure possible to cut off the supply of fuel to Milosevic's regime.
Mr. Edward Leigh: In his reply to my hon. Friend the Member for Esher and Walton (Mr. Taylor), the Prime Minister used the phrase "NATO core". In the past, we have heard references to a NATO-led peacekeeping force. At the NATO summit, were there any
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discussions about the make-up of the peacekeeping force to try to bring the Russians on side? They are the key to the process.
It may well be true that NATO has to leave a force in the bulk of Kosovo, for obvious reasons, but was there any discussion of the possibility of a Russian-led peacekeeping force operating in areas of Kosovo, particularly those adjacent to Pec, near the monasteries, which are sacred to the Serb nation and the whole Orthodox world? That might reassure Serbia and her allies, and thus secure a settlement that would be accepted by both sides.
The Prime Minister: The hon. Gentleman referred to areas that are sensitive for the Serb minority. I shall not go into the details of which parts of the international force, when it arrives, will go into which areas to police them; that will be discussed at a later stage. It is, however, important for us to state constantly that our policy is to ensure that people in Kosovo, whether they are Serbs or Kosovar Albanians, can live in peace. That is an important part of our objectives. We are not fighting a battle on behalf of one ethnic community against another; we are fighting a battle for all ethnic communities to enjoy the same rights and freedoms.
I use the terms "NATO core" and "NATO-led force" interchangeably. As for the involvement of Russian troops, we have suggested that Russia could be part of such a force, and there are precedents for it.
Mr. Dale Campbell-Savours: Given that more than half a million people in Serbia are on-line on the internet, and given that CNN and BBC News 24 are listened to by perhaps millions of people there, is it not clear that ignorance can no longer be an excuse? Those people know exactly what is happening in Kosovo. That being the case, why does NATO not take a more hawkish line in its selection of targets and start to attack centres of public administration, so that public confidence in the state can be broken down in that society?
The Prime Minister: We believe that a large part of the population is completely in the grip of the Serb-controlled media. My hon. Friend will know that, just a few days ago, one of the most respected editors of a newspaper opposed to Milosevic was murdered. That is how Milosevic deals with people who oppose him in the media. As for the targets, they are carefully chosen when there is a civilian element, but the target is part of Milosevic's power apparatus. I think that they are the right targets.
Dr. Julian Lewis: In eastern Poland, during the second world war, my family underwent an experience very similar to the ordeal suffered by the Kosovars today. The handful who survived were rescued by Russian ground forces. No amount of aerial bombardment could have saved them. Milosevic should not have been told at the beginning that the use of ground forces was out of the question. Will the Prime Minister now reverse the statement that he made at the beginning of the crisis?
The Prime Minister: I have set out the position relating to ground forces, and I see no reason to go over it again. However, let me say to the hon. Gentleman—

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I know and respect his reasons for feeling strongly—that, even if we had committed ourselves to any number of land force invasions at the very beginning, we would be where we are now. The important thing is to ensure that we conduct all the necessary assessments, and continue to build up forces in the region.
Mrs. Alice Mahon: In the event of a blockade of Yugoslavia, will NATO stop by force Russian ships from delivering oil or other goods to the port of Bar in Montenegro?
The Prime Minister: I have said in answer to earlier questions that NATO has charged its planners with coming back with a way of ensuring that the oil embargo is satisfactory, consistent with international law, and I really do not intend to add to that.
Mr. Michael Colvin: When the Prime Minister spoke of NATO's new strategic concept, he referred to the Euro-Atlantic area. Are we to take that to mean that NATO is still a regional security organisation? Bearing in mind the reach of intercontinental strategic missiles, their proliferation around the world and Britain's worldwide national interests, may we take it that NATO can perform operations out of area? If so, will the right hon. Gentleman say something about the mandate required? Is it possible for NATO to mandate itself through the North Atlantic Council, or will a mandate always require a United Nations Security Council resolution? If the latter, will NATO not become a United Nations enforcement force?
The Prime Minister: In respect of the hon. Gentleman's latter point, we state in the communiqué that of course we want to act with United Nations support, which is important. However, we cannot—as we are not doing in Kosovo—say that those are the only circumstances in which we shall ever act.
We are still essentially a regional alliance. However, NATO is changing and adapting, because the world in which we live is changing and adapting. The fact is that,
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15 years ago, or even 10 years ago, NATO's purpose—which arose out of the cold war—was very clear; today, the position is different. The purpose of the new strategic concept is to allow us the flexibility, when we believe it necessary, to take other action. In the communiqué , we set out some of the circumstances in which that might apply. However, no, that does not change the basic nature of the alliance.
Mr. Stuart Bell: The House will have been moved by the Prime Minister's description and definition of what constitutes ethnic cleansing—barbarity, cruelty, brutality and the human calamity to which my right hon. Friend the Member for Chesterfield (Mr. Benn) referred. That type of suffering is not a once-in-a-lifetime matter, but—for those who have suffered it—lasts for a whole lifetime.
The Prime Minister mentioned an enhanced European capability for the European Union. Does he agree that a common foreign and defence policy for the Union is evolving?
Those who have listened to this debate will have heard the encouragement that the Prime Minister has given to Russia. Will he comment and elaborate on the visit of a high-ranking United States diplomat to Viktor Chernomyrdin, and agree that that line of communication should be kept open?
The Prime Minister: On the latter point, all lines of communication remain open. The purpose of the visit is obviously to continue to keep Russia engaged, and to try to ensure that Russia understands that we have no quarrel with the Russian people. However, we believe that the demands have to be met in full. Moreover, as I said, those demands are now very largely supported by Russia itself.
My hon. Friend was right on European capability. The common foreign and security policy is an agreement into which the European Union has entered. I think that we shall learn many lessons from the conflict in Kosovo about how that policy should be conducted in future.
Several hon. Members rose—
Madam Speaker: Thank you, Prime Minister.

London Bombings
4.29 pm
The Secretary of State for the Home Department (Mr. Jack Straw): With permission, Madam Speaker, I should like to make a statement about the bomb attacks at Brixton and Brick lane.
Last week, on Saturday 17 April, the explosion in a busy market street in Brixton, south London, injured 39 members of the public and three police officers. This Saturday, at about the same time, another improvised device exploded at Brick lane in east London, injuring six people. In both cases, no warnings were given.
I know that I speak for the whole House in expressing my deep sympathy to those injured in the blasts and to their families and friends, and our admiration for the very prompt way in which the police, fire and ambulance service responded.
Sir Paul Condon, the Commissioner of Police of the Metropolis, yesterday emphasised that the investigation into those evil acts is the No. 1 priority for the entire Metropolitan police service. The investigation is being led by the anti-terrorist branch, which has a great deal of experience of this kind of outrage, but the perpetrators are likely to be brought to justice only with the help of all sections of the community. I urge anyone who believes he or she has information which might help the police to contact them immediately.
Sir Paul Condon has already stated that he considers that the bombings were racially motivated. Brixton is at the heart of London's African-Caribbean community. Brick lane is at the heart of Britain's Bangladeshi community. I want to make clear that any attack on those communities is an attack on all British people—[Horn. MEMBERS: "Hear, hear."]—and the whole of British society. We will not tolerate racism of any kind, still less this pernicious and abhorrent violence.
Ours is a country that can be proud of its achievements in race relations, which make it a better and stronger society. Of course there is much more to be done to make Britain a truly multiracial and multicultural society, but the overwhelming public support for the recommendations of the Lawrence inquiry shows the strength of our commitment to achieve that aim.
The criminals who committed those attacks will not succeed. As in Brixton last week, the whole community in Tower Hamlets has come together to assist the police in every way possible. As my hon. Friend the Member for Bethnal Green and Bow (Ms King) said,
"History shows we do not tolerate this type of racism, however violent. If anything, I hope that some good will come out of this because both the black and the white community will strengthen so it will be overcome".
While the perpetrators of the violence remain at large, there is plainly a risk that they may strike again. We must meet that threat with vigilance, but without panic. The police are pursuing the investigations of the bombings and the protection of the public with the utmost vigour. I have every confidence in them, and I know that the whole House will share their determination and condemn those mindless crimes.
Sir Norman Fowler: The Opposition join the Home Secretary in utterly
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condemning this action and the people responsible for it. We also join him in sending our deep sympathy to those injured by the two bombs. I also pay tribute to the emergency services, particularly the police, who demonstrated in a very practical way that they are there to serve all the community.
Let me ask the Home Secretary three short questions. First, is not the most important message that we should send out that such bombings will in no way influence policy or affect our determination to achieve the best possible community and race relations in Britain? A few extremists, however dangerous they may be, will not alter that aim and if the people who planted the bombs think otherwise, they do not understand either the determination or the decency of the British people.
Secondly, will the Home Secretary say something about the potential danger in cities outside London which have significant black and Asian communities? I assume that there is the prospect of the terrorists attacking other cities, so what precautions are being taken?
Finally, may I ask the right hon. Gentleman about policy on the future strength of the police? The police now face demands for more community policing and more policemen and policewomen on the beat, as well as other officers to deal with such outrages. Does the Home Secretary agree that now is an opportunity to assess anew the demands on the police service and to look at future policy on the strength of the service?
Above all, this afternoon we join the Home Secretary in absolutely condemning the bombings and the people responsible for them. We want more than words of condemnation, however: we want the most effective possible action to be taken to bring these terrorists to justice.
Mr. Straw: I am grateful for the right hon. Gentleman's support for what I said, and especially for the support that he has expressed for the efforts of the police and the other emergency services. I am in no doubt of the resolve of Sir Paul Condon, the Commissioner of Police of the Metropolis, and of every other officer in the service to ensure that those who perpetrated those terrible deeds are apprehended and brought to justice.
The right hon. Gentleman asked three questions. First, he asked whether I believe that such bombings may influence policy, and the right hon. Gentleman spoke for the whole House when he answered that question himself. Indeed, I believe that such outrages merely strengthen the resolve of every decent person in the country to reject racism in all its forms and to work towards a multiracial and multicultural society.
Secondly, the right hon. Gentleman asked about the potential danger in other cities. As I said in my statement, there continues to be a risk while those who perpetrated the bombings remain at large. By definition, we do not know where they may decide to plant bombs next, if they in fact make such a decision. That emphasises the need for vigilance in all communities and especially in those with substantial numbers of black and Asian people. Of course, police across the country are giving guidance to such areas, and especially to those that are considered vulnerable.
Finally, I can tell the right hon. Gentleman that the resources available to the Metropolitan police service were increased by 2.7 per cent. this year. As part of that,

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I increased by £25 million the special payment to the Metropolitan police service in respect of its national police functions, and it now has the resources to fight this kind of outrage.
Ms Oona King: The House has just heard about the Government's welcome and proactive role in combating ethnic cleansing in Kosovo. Will my right hon. Friend confirm that the Government will be equally proactive in tackling ethnic cleansing in our country, whose most recent manifestation occurred in my constituency? I hope that my right hon. Friend will forgive my presumption that his answer to my question will be yes. Will he therefore consider making extra, emergency resources available to the communities that are being hit? That would allow the Brick lane police station to remain open, for a limited time, for 24 hours a day.
Also, will my right hon. Friend visit my constituency, so that he can hear the concerns of local residents? If so, will it be possible to make that visit within the next 24 hours, perhaps? Finally, when will he bring forward a new race relations Act to ensure that the only thing that is nailed—in my constituency or anywhere else—are the profoundly undemocratic and unpatriotic forces of racism?
Mr. Straw: On my hon. Friend's first point, at least the injuries suffered at Brick lane and Brixton are not on the scale of those incurred in Kosovo, but she is of course right to point out the link between the two sources of violence. That link is racism: people who hold such evil views decide that whole groups should be considered to be without human rights simply because of their skin colour or religion.
I shall of course raise with the Commissioner the question of resources for the Brick lane and Brixton areas, but so far he has not requested additional resources. My hon. Friend asked also about the Brick lane police station. In many parts of London, divisional police stations are open for 24 hours a day, while sector bases such as Brick lane police station are open for a limited number of hours each day. Up to now, that police station has been open for eight hours a day, and those hours have been publicised in the local community. However, I now understand that the base will be open for a minimum of 12 hours a day for the foreseeable future. I shall be happy to discuss the possibility of longer opening hours with the Commissioner.
My hon. Friend asked whether I would visit her constituency, and I plan to do so tomorrow. There are always questions about whether Ministers should visit the scenes of such crimes immediately. I discussed the matter with the Commissioner last Saturday following the first bomb outrage, and we jointly decided that it would inevitably detract from police efforts if I visited Brixton then. In my judgment, the fine balance to be struck was better struck when the local Member, my hon. Friend the Member for Vauxhall (Kate Hoey)—who happens also to be a Home Office Minister—visited the area to discuss the problems that had arisen following the outrage. It is similarly right that my hon. Friend the Member for Bethnal Green and Bow (Ms King) should take the lead following the outrage in her constituency.
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My hon. Friend asked about a new race relations Act. She will know from my statement on the Lawrence report in February that we aim to legislate as quickly as possible, and I hope that that will happen next year.
Mr. A. J. Beith: Is the Home Secretary aware that there is revulsion throughout the country at the way in which these crimes have visited injury on ordinary families going about their Saturday activities? Does he recognise that minority communities—racial and religious—will want to see evidence of extra security and support around commercial centres, community buildings and places of worship during the coming days? Is he satisfied that the existing law on incitement to racial hatred is being used actively enough to deal with some of the literature that circulates and that may act as a kind of recruitment for people to help those who committed those terrible crimes?
Mr. Straw: I join the right hon. Gentleman in his condemnation of the bombings. Considerable efforts are being made to give advice, support and guidance and to try to reduce risks in areas deemed vulnerable. However, as long as the people who committed these evil acts and others like them are at large, we cannot eliminate risk. We must be on our guard and we must be vigilant, but, at the same time, we must not panic and allow those people to achieve their aim of the disruption and dislocation of the communities in which they are carrying out their evil deeds.
As to the existing law on incitement, under the Public Order Act 1986, prosecutions for incitement to racial hatred require the agreement of the Attorney-General. My recollection is that about 45 prosecutions were authorised in the last period for which statistics are available. I have seen no evidence that there is a particular problem with the law on incitement, but there may be difficulties in the way in which the law is framed when it comes to evidence.
Certainly, there is a problem with incitement on the internet as its authors may come from outside our jurisdiction. We have actively considered that point, not least in the context of the G7-G8 agenda on the fight against organised and international crime.
Ms Diane Abbott: Is the Home Secretary aware of the great fear and concern that the two nail bomb attacks have provoked in black, Asian and Jewish communities? He will know that in addition to having one of the largest black communities in the country, my constituency has one of the largest, and oldest, Jewish communities. Is he aware that people up and down the country, whether in Bradford, Birmingham, Hackney or Willesden—black and Asian people—are wondering whether their community will be next? Is he aware of how much those communities welcome his strong stand on those outrageous attacks?
Mr. Straw: I am grateful for what my hon. Friend has said. I am aware of the great fear in black, Asian and Jewish communities. It is particularly poignant that there have been repeated waves of immigration in the Brick lane area. Indeed, a building there was first a church, was then a synagogue and is now a mosque, illustrating the multiracial, multicultural nature of society in the area.

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We are doing everything that we can to minimise the risk to communities and to give people advice, support and guidance. However, as I said, we must remain very much on our guard as long as such people remain at large.
Mr. John Wilkinson: All terrorism is vile. Is it not the case that it needs to be deterred with exemplary non-remissible sentences? Were not the outrages at Brixton and Brick lane particularly despicable not merely because of the terrible injuries that they caused, but because of the deliberate intent to provoke prolonged intra-communal strife in this country? Will the Home Secretary look again at the answer that he gave my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) on police resources, as Conservative Members have long been making representations to the Home Office about the fact that police manpower has gone down in the capital under this Administration and needs to be increased significantly?
Mr. Straw: I regret the fact that the Opposition have decided to use this occasion to make points about police resources, which I do not believe are justified. Since the right hon. Member for Sutton Coldfield (Sir N. Fowler) and the hon. Gentleman have raised the matter, it is a matter of record that the strength of the Metropolitan police declined by 2,000 between 1992 and 1998 in a period for which the Conservative party was responsible. As I have made clear to the House, for this year, in the first period for which this Government have followed their own public spending plans, the Metropolitan police commissioner has told me that he is satisfied that police numbers will remain as they were last year, within the range of plus or minus 75. Resources have been substantially increased to the Metropolitan police service and are, in my judgment, entirely adequate for the task.
On the type of sentences that the perpetrators of this sort of violence may receive from the courts, obviously I cannot anticipate any trial or conviction, but the courts have always regarded such outrageous acts of indiscriminate violence extremely seriously and have ensured sentences that reflect the seriousness of the crime.
On the motives of the bombers, the hon. Gentleman said that there was a deliberate intent to provoke intra-communal violence. I think that he is right about that and I take this opportunity to pay my tribute to some of the community leaders who recognised that from the outset and who have not fallen into that trap. I mention two by name. Mike Franklin and Arlene Mundle, who are respectively the chair and vice-chair of the Lambeth community police consultative group, acted with great restraint, dignity and responsibility when the first outrage took place in Brixton just over a week ago.
Mr. Peter Mandelson: I welcome the Home Secretary's firm statement and would highlight the steady and calm response of the communities in the areas affected by those wicked and cowardly outrages. I mention in particular the great sense of responsibility of the community leadership in Lambeth—the area that I know best—which my right hon. Friend mentioned. He was right to single out the very responsible and dignified response and role played by the Lambeth community police consultative group and, in particular, Mike Franklin and Arlene Mundle. That view and admiration is shared
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by the Under-Secretary of State for the Home Department, my hon. Friend the Member for Vauxhall (Kate Hoey), and my hon. Friend the Member for Streatham (Mr. Hill). Does my right hon. Friend agree that that strength of community leadership is essential in such circumstances? Does he also agree that strengthening the co-operation between the community and the police is equally essential if communities are to get through and to withstand the sort of outrage experienced in Lambeth and Bethnal Green?
Mr. Straw: I am grateful to my right hon. Friend for his remarks. He knows Lambeth well, not least as a former councillor for the area. As I know, as a resident of Lambeth for 20 years, one thing that has been very much to the good in recent years has been the way in which relations between the police and the community in the area have greatly improved since the terrible period in the early 1980s. The strength and resilience of a relationship are truly tested only when such incidents occur. It is tested not in committee rooms, but in real situations. The police and the community passed that test in an exemplary way, and I commend them all.
Mr. Michael Fabricant: The Home Secretary will know that the whole House condemns these terrible acts. Can he confirm reports that emerged over the weekend that peers of Jewish, black and Asian origin have recently received death threats and racist letters? Does he believe that there is any connection between that and the two recent events in London? To what extent does he think that there might be a conspiracy rather than a small, evil cell operating in London?
Mr. Straw: I cannot give any information about whether peers have received death threats. None has come to my attention. It is perfectly possible that peers, like Members of this House, have received revolting racist mail. I am afraid that that happens and it is to be deeply condemned when it does. It is impossible to put a precise figure on the number of people involved in extremist violent right-wing organisations, but I emphasise that all the evidence suggests that the numbers are very, very small indeed and diminishing, as they have done over the years. We must be vigilant because such people, however few in number, plainly have a capacity to commit great violence; it was fortuitous and providential that no one was killed in either outrage. We should not dignify their outrages by suggesting that they are anything other than a mindless and tiny band of evil people.
Mr. Gerry Sutcliffe: These bombings are extreme acts of cowardice perpetrated by a minority. I am grateful to the Home Secretary for mentioning other communities in fear, such as mine in Bradford. Fear will not win. The communities will be united in opposing all forms of racism, as we have done in Bradford over many years. Will he consider the activities of groups such as Combat 18? West Yorkshire police have been informed about many of the activities of this minority, but will he ensure that such information is acted on as quickly possible?
Mr. Straw: I agree with my hon. Friend, particularly in respect of the community in Bradford. Wherever groups such as Combat 18 come to the notice of the authorities, they are the subject of study. That gives me an

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opportunity to repeat that while the anti-terrorist branch is bringing its extensive professional skills to bear on the Brick lane and Brixton investigations, the perpetrators are much more likely to be apprehended if information about those who are likely to have committed these acts is provided by members of the public. I repeat my appeal, as the Commissioner has done, that any people with any information about neighbours, people at work, or people they know who appear likely to be involved in such organisations should tell the police. If they do not wish to give their identities to the police, they should phone the Crimestoppers number, which is 0800 555 111.
Mr. Dominic Grieve: I join the Home Secretary in condemning these appalling crimes and, as a former vice-chairman of the Lambeth police community consultative group, in his praise of that group and the remarkable change that it has brought about in intercommunity relations in Lambeth in the 10 years since I was involved in it. Does he agree that it is important in dealing with such problems to isolate those who perpetrate such crimes? The best way to do that is to create a climate in which even people of the community involved who might sometimes be tempted towards the perpetrators' views, in their awareness of the hideous consequences, help to isolate them and provide the information that may lead to their arrest. It is important to categorise their activities as the criminal acts that they are and not to draw wider conclusions, which is often tempting and thereby starts to create the intra-communal tensions that 1 am certain are exactly what these people seek.
Mr. Straw: As a former vice-chairman of the Lambeth police community consultative group, the hon. Gentleman brings to bear in his remarks considerable experience of policing in the inner city. I am pleased that he endorses what I have said, and what others have said, about the great change—a most optimistic change—that has occurred in police-community relations in Brixton during the past decade. He is right to say that people who perpetrate these crimes need to be isolated; they should not be dignified with any ideological or political label. They are criminals and terrorists first and last.
Mr. Clive Efford: Does my right hon. Friend share my concerns about the ease with which publicity is gained by certain right-wing groups on the back of the events that have occurred during the past two weeks? Is he concerned that the media are too willing to name groups with no evidence that they are involved in such crimes? I am not suggesting that there should be any form of censorship, but does my right hon. Friend think that there should be some voluntary restraint on the part of the media? Does he share my concern that the ease with which such groups have obtained publicity could encourage a deranged individual or group to commit further crimes and seek similar notoriety because they are members of an organisation, rather than merely violent criminals?
Mr. Straw: I understand the point that my hon. Friend makes. However, there is a fine balance to be struck and a fine line to be drawn—both for the media and for
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Ministers—between not giving those individuals the oxygen of publicity, while recognising that they have committed outrages and inflicted considerable violence. The public have a right to know about that and to understand the concern that, for example, the Government and Members of Parliament have about such matters.
I have no complaint about the way in which the media have handled these matters. In relation to the balance to which I referred, one of the reasons that the police held back before they concluded that the bombings were racist crimes was precisely that they did not wish to give unjustified publicity to the right-wing extremist groups which—it now appears—committed those crimes. Happily, I do not think that anyone has criticised the police for holding back their judgment until they were reasonably certain that the crimes were racist. For similar reasons, when the Brixton outrage took place, after discussions with the Commissioner, I decided that it would not be appropriate for me to visit the area—as I pointed out to the House earlier. That was not because I was not concerned—indeed, I was extremely concerned—but to ensure that we calibrated the response to meet the public's concerns, and not the perpetrators' appetite for gratuitous publicity.
Mr. Richard Allan: The Home Secretary will be aware of the racist filth that feeds organisations involved in such crimes. I hope that he shares my appreciation for the work of Gerry Gable and Searchlight magazine in bringing to public attention the producers of that material. The right hon. Gentleman has already mentioned taking action against racist material on the internet. As a priority, will he also investigate the producers and distributors of CDs of racist music, and the organisers of racist music concerts? A recent report in Searchlight showed that that music is a key component in the funding of organisations such as Combat 18, so that they can carry out crimes.
Mr. Straw: I pay my own tribute to Searchlight and its editor for the phenomenal work that they have done over the years in exposing racists and other extremists. As for the producers of racist CDs, they are subject to the law—as are other publishers. If the hon. Gentleman has any evidence about that matter, I should be happy to receive it.
Mr. John McDonnell: The Home Secretary has visited my constituency on several occasions and is aware that we have one of the largest Sikh communities in the country. Indeed, yesterday at the Royal Albert hall, he was entertained by children from the Guru Nanak Sikh college in my constituency. My right hon. Friend will be aware that the community is anxious about being a soft target. I ask him to consider urgently applications for additional resources for closed circuit television cameras to cover our town centre and other vulnerable areas, so that we can at least increase our vigilance, as he urges us to do.
Mr. Straw: I have indeed visited my hon. Friend's constituency on many occasions; as he says, it contains one of the largest Sikh communities in the country. One event that emphasises the progress that we in this country have made in community and race relations was yesterday's wonderful celebration at the Royal Albert

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hall, attended by His Royal Highness Prince Charles, when 5,000 Sikhs came together to celebrate the 300th anniversary of the 10th Guru Gobind Singh. It was a wonderful, ecumenical and multi-party celebration that showed the strength, not only of the Sikh community, but of the determination of all our communities to make this country a truly multiracial society.
On the question of soft targets, I understand my hon. Friend's concern. I should have mentioned in my answer to an earlier question that £400 million is now available through crime reduction programmes for measures such as targeted policing; of that sum, £170 million is principally for closed circuit television schemes. I shall certainly ensure that applications from areas that are at risk of racist violence are carefully considered.
Mr. Jeremy Corbyn: The Home Secretary will be aware that hon. Members who represent multicultural communities are detecting enormous concern among ordinary people about the danger and about threats to their way of life, which is what the explosions at Brixton and Brick lane amounted to. Is he satisfied that the police have sufficient knowledge or intelligence about the activities of far-right racist organisations in this country? What connections have the police uncovered between organisations in this country and those in continental Europe, where, tragically, the sort of atrocities seen for the past two weekends in London are more commonplace? The connection is there to be seen; is my right hon. Friend satisfied that the police are able to deal with that?
Mr. Straw: In this as in other respects, I am satisfied as to the professionalism and assiduity of the police and the intelligence agencies. As can be seen from Irish terrorism, when terrorist groups are highly organised, even extensive intelligence coverage of those groups cannot provide a guarantee against the possibility that they will commit terrorist outrages. With the best will in
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the world, whatever the extent of the coverage by police and intelligence agencies of such extremist right-wing groups, the risk remains that members of those groups will continue to perpetrate violence for as long as they remain at large. That is why the investigation led by the anti-terrorist branch is so important, and why the Commissioner will ensure that nothing is left undone until the perpetrators of the violence are brought to justice.
Mr. Tony McNulty: Does my right hon. Friend agree that the perpetrators of the bombings are no more and no less than mindless, murderous thugs; and that to attribute some sort of political dimension to their crime, for example, by calling it a backlash to the Lawrence inquiry, is entirely wrong—at best naive and at worst perverse? Can he assure me that communities such as the one represented by my hon. Friend the Member for Hayes and Harlington (Mr. McDonnell) and me, which are less well known as significant centres of ethnic communities, are being made as alert and are being as well looked after by the Metropolitan police as more well-known areas such as Brick lane and Brixton? Outer London suburbs must not be forgotten, for they too contain significant ethnic communities.
Mr. Straw: My hon. Friend is right. There are significant black and Asian communities throughout this country—in inner London, outer London, almost all of our major cities and many of our towns and rural areas—and in Wales, Scotland and Northern Ireland. The police in the Metropolitan area and outside are applying themselves with great vigour to giving advice and guidance to communities about how best they can minimise the risk. There is no way in which risk can be entirely avoided as long as there are mindless, murderous thugs who are intent on planting further bombs. That emphasises the need, first, for proper information—the best available—to be given to the police; and, secondly, for continued vigilance to be maintained.

Defence Equipment
Motion made, and Question proposed, That this House do now adjourn.-[Mr. Pope.]
5.5 pm
The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): Following the Prime Minister's statement earlier this afternoon, I am sure that I have the support of the whole House in beginning this debate on defence equipment by paying tribute to our service men and women who are currently deployed on NATO operations in the Balkans. They are, once again, earning not only our admiration, but that of the whole world for their dedication, courage and professionalism. The fact that so many of our young service men and women are deployed on a variety of missions in the Balkans brings home to us, yet again, how important it is to ensure that they are provided with the equipment they need to do the jobs that we ask of them— we take that responsibility very seriously.
A recurring feature of debates about defence equipment has tended to be long, but by no means comprehensive, lists of new equipment that we are buying or are considering buying. That is natural, as is the considerable concern expressed by individual Members of Parliament about programmes that are important to workers or companies in their constituencies. I hope to address today some of the most topical and significant of those programmes.
However, I will also outline some of the steps that we have taken to improve the process by which we supply our front-line forces with the tools that they need to do their job. This must be a seamless process from cradle to grave. It includes not only specifying and purchasing equipment from manufacturers, but maintaining and managing that equipment throughout its life. In parallel, we are also reforming the way in which we run our construction projects and services, on which we spend some £1.5 billion a year. We are drawing heavily on the recommendations made by Sir John Egan in his "Rethinking Construction" report, and taking forward the initiative led by the Deputy Prime Minister and the Department of the Environment, Transport and the Regions. We intend that the Ministry of Defence will be clearly recognised as a best-practice client in construction.
The theme that unites all those reforms is that we identify best practice in Government or the private sector, here or overseas, and work it into an acquisition process that delivers solutions to defence requirements faster, more cheaply and better. We started that process in opposition and, in consultation with industry and trade unions, and with good consultancy support, we developed those ideas and carried them through into a blueprint for modernisation in the strategic defence review. It is yet another item on our agenda for modernising government, which will deliver more responsive and effective public services for Britain in the new millennium.
The SDR involved a fundamental reappraisal of our defence roles, re-evaluating from first principles what we will require from our armed forces in the new millennium. The outcome was a comprehensive and coherent account of our plans for the future capabilities of the armed forces.
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However, as my right hon. Friend the Secretary of State said when introducing the debate on the strategic defence review last autumn:
"it is not enough to set the right course. What really matters is to see that course through."—[Official Report, 19 October 1998; Vol. 317, c. 971.]
In that context, I start by focusing on smart procurement. One of the key differences between this and previous attempts to reform defence procurement—which we have drawn on freely—has been the creation of an implementation team to drive the changes through. That has been mirrored in defence logistics and the SDR as a whole.
When we announced the outcome of the review to the House last July—[Interruption.] Does the right hon. Member for Bridgwater (Mr. King) wish to intervene? What a shame—I was preparing an excellent riposte.
Mr. Michael Colvin: On the issue of smart procurement, will the Minister confirm that the anticipated savings over the three years of SDR are £2 billion? Are the Government on target to make those savings?
Mr. Spellar: Later in my speech, I will reveal how well we are on target to make those savings—indeed, we hope to exceed that figure.
When we announced the outcome of the review to the House last July, we promised to modernise defence by making a number of significant improvements in the way in which we do business. We emphasised our determination to obtain maximum value from every pound of taxpayers' money that is spent on defence. That means equipping, training and supporting the armed forces as cost-effectively as possible.
The reforms launched by the smart procurement initiative—a key element in our review—were long overdue. Members on all sides of the House have become tired of hearing in recent years of cost overruns and delays on major defence projects, leading to waste for the taxpayer and depriving our armed forces of the equipment that they need.
Of course, it would be wrong to suggest that every procurement programme went badly. For example, the recent acquisition of a capability to launch cruise missiles from our fleet submarines has been a notable success. The contract was let in 1995; a demanding timetable was set down, and successful test firings took place in November 1998, on the exact day that had been specified three years earlier. The House will know that HMS Splendid has been employing the system operationally over the past few weeks in support of operations in the Balkans.
Mr. Harry Cohen: Will the Minister state how many British cruise missiles have been fired in the current conflict over Kosovo, and whether it is likely that we shall have to purchase more such missiles?
Mr. Spellar: No, for reasons that I suspect my hon. Friend and others will understand, I shall not state how many cruise missiles have been fired.
I would not wish to suggest that the defence procurement task is easy. Many of the projects in our equipment programme are at the leading edge of current technology. They often involve complex and hard-fought competitions between some of the world's largest

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companies. In some cases, their costs run into billions of pounds. That makes us all the more determined to achieve the goals of the smart procurement initiative.
We examined how, over recent years, industry had changed the way in which it managed its relationships with suppliers. We recognised the advantages of partnership over confrontation which, with an atmosphere of greater transparency and trust, we hope will deliver improved performance and shared benefits.
That means that there will be more investment in the early stages of projects, with trade—offs between military requirements, time and costs, to enable more rapid, less risky development. Projects will be managed by integrated project teams—IPTs—with an empowered team leader. Those teams will include all stakeholders, including industry, except during competitive phases. We anticipate that some team leaders will be appointed from industry, through open competition. There will be more use of partnering arrangements with the private sector, including the private finance initiative. We shall exploit new procurement techniques, including incremental acquisition.
Clearly, a new organisation was required to implement such a radical programme of change. That will mean a single customer for the equipment programme in MOD headquarters, bringing together the staff who identify new equipment requirements and those who allocate resources for them. IPTs will bring together all the skills necessary for the successful running of a project. Those teams will be led by an empowered team leader with the authority to make trade-offs against performance, cost and time, within boundaries set by the customer. Other key features include more investment in the early stages of projects and a flexible, streamlined and modern approach to the running of the procurement organisation.
We have achieved a great deal since last summer towards reaching the goals of smart procurement. On 1 April, on schedule, we launched the Defence Procurement Agency. We have piloted the new processes and structures on 10 projects. We have formed integrated project teams made up of specialists responsible for every aspect of acquisition activity, operational requirements, scientific analysis, procurement contracts, finance and integrated logistics. I stress that those teams will have representation from industry except during competitions.
As a result of the pilots, we know that we are on track to deliver the £2 billion of savings over 10 years which we promised would be achieved through smart procurement.
Mr. Tam Da!yell: Before my hon. Friend leaves the subject of scientific analysis, will he tell the House what scientists say about the use of depleted uranium in armour-piercing shells?
Mr. Spellar: That is not part of the acquisition process and is not a matter for those teams, but I understand that our scientists have published a paper on the use of depleted uranium which is in the public domain. If my hon. Friend has any questions arising from that, I am sure that our people would be more than happy to reply.
The IPTs have also identified significant opportunities to get equipment into service faster, or—for equipment already in service—to improve its availability and reliability. For example, the type 23 frigate IPT is looking to reduce the length of an upgrade programme by about
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30 per cent. The VC 10 IPT has already identified initiatives to achieve a 10 per cent. increase in serviceability.
During April, we have launched the first wave of IPTs covering another 23 projects or groups of projects in the Defence Procurement Agency and in the new Defence Logistics Organisation. Other projects will migrate to that new structure over the coming year in two further waves, with about 150 teams forming in all—about 90 in the Defence Procurement Agency and 60 in the Defence Logistics Organisation. Given the success of the pilots, we can expect further significant savings, faster procurement and improved availability.
Smart procurement is also about a new relationship with our suppliers. Industry's involvement at an early stage will encourage its participation in the key process of trading off time, performance and whole-life costs. It will help us to produce solutions to military requirements that are better tuned to industrial and technological realities, so that we do not pay an unnecessary premium or introduce unmanageable risk to achieve the last small bit of performance.
Let me clarify what I mean by "our suppliers". There is understandable concern among small and medium-sized companies that this process will involve the large project integrators, but not them. On the contrary, we believe that the real benefits of smart procurement will come only if there is real partnership throughout the supply chain. We shall make that very clear to industry because we recognise the huge contribution that small and medium enterprises make to the competence of our defence industry, and to the whole economy.
Competition will remain at the heart of our strategy to obtain best value for money, but it will be used flexibly. Our aim is to foster an enhanced partnership with industry, reduce risk, encourage innovation and increase the competitiveness of a defence industry that generates about £5 billion in export orders for the United Kingdom each year, and last year achieved 26 per cent. of world exports in that field. Such a programme is a great opportunity for the British defence industry and for its highly skilled work force, on whom it depends.
However, smart procurement is also about being more willing to accept that not every programme that we initiate will progress as planned—and being more willing to change our plans and approach, if that is what success requires, before making the major financial commitment to new projects.
In that context, many hon. Members will be aware of our increasing concerns over the progress of a programme that we inherited, the common new generation frigate programme—a major collaborative project with France and Italy. The project comprises two elements: a medium-range air defence system known as the principal anti-air-missile system—PAAMS—and the warship on which to deploy it, known as Horizon.
The PAAMS project, in which Matra-BAe Dynamics is a key industrial partner, has made excellent progress. Detailed proposals have now been received from industry and, subject to national approval processes by the three nations concerned, we have decided with our partners to move quickly to place the contract for the development of PAAMS.
However, the partners have now concluded, in light of the industrial proposals that we have received, that it would not be cost-effective to pursue a single prime

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contract for the warship. The three nations will, however, continue to build on the tri-national project work already carried out, and will pursue opportunities for co-operative procurement in equipping those vessels.
Mr. John Wilkinson: The hon. Gentleman is making an announcement of immense industrial importance because he is saying that the tri-national Horizon programme has essentially folded, although the missile system for a future vessel could be common. Has he considered the employment aspect of that? Is he now hopeful that British yards—in pursuing, I presume, a national solution to build the hull and related systems—will have a greater opportunity for work in this country? From the outset, work share was an inherent difficulty in the programme.
Mr. Spellar: I thank the hon. Gentleman for his welcome for that announcement, although we have always believed that British warships would be built in British yards. I accept that one part of the programme made much greater progress than the other. That has enabled us to initial the PAAMS part of the programme. On the Horizon side—the ship side—we are still building on the work that was undertaken. We shall do so within national programmes, but still working on the tri-national project work and reaping the benefit of the work that has been undertaken on that.
Mr. Menzies Campbell: Perhaps I should begin by apologising for not being present when the Minister began his speech. I was engaged elsewhere. As has just been said, the Minister has made an announcement of considerable importance. Following the failure of the NATO frigate for the 1990s programme, two consecutive programmes designed to produce common procurement for naval vessels have not been successful. Will the Minister say a little more about what he means by national use of existing work? Are we talking about a new design or an adaptation of the Horizon design in so far as that had been progressed?
Mr. Spellar: We are waiting for industry to respond to invitations to come back with proposals to construct the ships to carry the extremely effective PAAMS equipment. We inherited the programme, with the difficulties that have become clear. The hon. Member for Mid-Norfolk (Mr. Simpson) will not know about this issue because he was not a Member in the previous Parliament, but many of us will recall the debates that took place. We believe, in agreement with our partners in France and Italy, that we have arrived at an effective and positive resolution of the difficulties, and one that we are able to take forward.
As my right hon. Friend the Secretary of State—
Mr. John Maples rose—
Mr. Crispin Blunt rose—
Mr. Spellar: I shall return to the point in a moment.
As my right hon. Friend has commented:
"We now have a very good result for the navies and industries of the three nations, and for European defence. The PAAMS missile system will provide a powerful air defence capability for the Royal
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Navy which will be simply the best in the world and will be effective well into the next century. The advanced technology and the employment which this multi-billion pound project will provide will help to keep Britain in the front rank of the aerospace and the electronics industry."
Mr. Maples: The Minister talks about a successful outcome, but it is not. It is not a successful outcome for future multinational projects and it is disappointing. It would be interesting if the Minister were to go into a little more of his reasoning and explain why he thinks that collaboration has been successful on the anti-air-missile project, but not on the ship. One would think that in some ways, building a ship was rather easier than building an anti-air-missile system. Why does the Minister think that collaboration has been successful on one aspect of the project and not on the other, and what lessons are there to learn for future potential multinational projects?
Mr. Spellar: The key lesson to be learned is that joint collaboration requires joint work on all sides. That ties in very much with the theme that I was developing earlier. The essence of modern procurement requires a good working relationship between the customer and the supplier. I think that the working relationship on the supplier side on the PAAMS project was possibly much better than on the shipbuilding side. There are lessons to be learned and we shall be drawing on them in the near future when considering how we can be more effective on multinational procurement.
As the hon. Gentleman knows, we estimate that about 40 per cent. of our future equipment orders will be placed on a collaborative basis. We need to draw lessons from failures and from successes in deciding how we proceed with future programmes. However, we have managed to achieve an effective result that is good news for the Royal Navy, and we shall be able to move forward with the programme.
Mr. Blunt: What is the expected in-service date of the ships and the missiles? Is there any chance of the missiles arriving before the ships?
Mr. Spellar: Conservative Members were responsible for the early stages of the programme. They resolutely refused to listen in debate after debate when questions were raised to the effect that the programme was going wrong, and took no action. We have taken over the programme and have achieved an effective resolution of it, so I find it extraordinary that they want to make such a meal of the matter. I should have thought that Conservative Members, as a matter of decency, would want to pass this by and move on to some other area—they were absolutely responsible. I anticipate that we shall try to build and equip the boats at the same time, and we are looking at an in-service date of towards 2006.
Mr. Menzies Campbell: I am sorry to press the Minister, but the announcement has considerable significance. What are the consequences for capability in the meantime? The vessel was designed to replace the type 42s. Will we have to stretch the lives of some of the type 42s; if so, with what consequences for capability?
Mr. Spellar: The right hon. and learned Gentleman is exactly right—we will have to stretch some of the

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operations of existing vessels. That is precisely the problem that we inherited and we have managed to get it sorted out. I should have thought that Conservative Members would be congratulating us on that and, as a matter of decency, they should be reticent about their role.
I want to leave the House in no doubt that we remain fully committed to the principles and practice of collaboration, which is increasingly important in our forward equipment programme. Our membership, with France, Germany and Italy, of the joint equipment organisation known as OCCAR presents a real opportunity to establish improved collaborative practices that deliver value for money.
Hon. Members will know that we and our partners have placed the counter battery radar programme, known as COBRA, under the supervision of OCCAR. We shall continue to pursue common objectives in OCCAR with our partners.
Mr. Tom King: The Minister has raised the question of collaborative projects. Does smart procurement include security of supply? I declare my constituency interest in Royal Ordnance, but I also make a serious national point. If there is one lesson to draw from the present events in the Balkans, which follow the Gulf war and the Falklands war, it is how different each of those actions was, that our partners in each were totally different and that it is impossible to predict which countries could be considered to be a certain, secure and willing source of supply in any future difficulty that we might face. In respect of munitions and the point that has been made about Royal Ordnance, what consideration has been given to ensuring that we have not only security of supply, but security of resupply, if we need to reorder during an emergency?
Mr. Spellar: As the right hon. Gentleman will know from his experience, resupply in such circumstances is nearly always from stock rather than from reproduction. He will know from his own time in office that that was certainly the case within the time scales of nearly all the operations that we have experienced. He will also recognise that there has been a considerable reduction in demand for munitions—not only in the United Kingdom, but right across the world.
That reduction is due partly to the reduced size of the armed forces, but also to improved training techniques. For example, there is greater use of simulation. At peak, we were ordering £300 million of munitions; now we order £80 million—worth. Our experience has been replicated and munitions firms across Europe—and, indeed, across the world—face a similar situation. Therefore, there will be a greater degree of international rationalisation between companies and between countries.
The right hon. Gentleman is absolutely right to draw attention to questions of security and assurance of supply. Inevitably, the restructuring in the industry cannot involve only the companies, although they will play a prime and initiating role in the process. Governments must also be involved in the equation so that effective rationalisation, which is inevitable given the changing pattern of the industry, is combined with considerable security and assurance in this respect. I think that I have described the situation fairly accurately to the right hon. Gentleman and he will be aware of it from his experience.
Mr. King: When the Minister says "assurance", is he relying on assurances by Governments that, all things
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being equal, they will guarantee that their firms will supply to meet our requirements? As he knows, I had the experience in the Gulf war of a fellow NATO country that declined to supply us with the ammunition that we requested because it did not support the action being taken to liberate Kuwait. If we are talking about governmental assurances, the Minister might find that, in certain circumstances, overriding national interest in the country concerned will result in its assurance not being honoured.
Mr. Spellar: I should point out that that assurance is also mutual and many of those countries will also be dependent on us. That is a further part of the equation. I think that the right hon. Gentleman understands that the changing nature of the industry is forcing all countries to look at a greater degree of international rationalisation and interdependence.
I have spoken in some detail about our smart procurement initiative. However, delivering effective equipment to the front line is not just about buying new kit; it also means ensuring that equipment is well-maintained and reliable. It means ensuring that equipment is in the right place at the right time, together with the ammunition, spares and technical back-up needed to support it. We need a taut, efficient and responsive supply chain that stretches, as they say, from factory to foxhole.
That means adopting a truly "whole-life" approach to managing our equipment. Those responsible for procurement must work closely with those responsible for supporting it. We must ensure that the whole-life costs of equipment are properly considered when procurement decisions are taken. We also need to be able to make better-informed decisions about technology insertion to keep systems current, and about spares and maintenance to keep them fit to fight.
We have seen a revolution in the way that industry manages its own supply chains and in the capability of logistics businesses in the private sector. In the automotive industry, for example, the improved organisation of the supply chain has been the engine of tremendous gains in productivity. The logistics industry has seen a similar transformation. Many of those businesses need to have a global reach, just as our armed forces do. We have looked long and hard at world-class best practice and we are bringing the lessons learned to bear on our own organisation.
What I am talking about is no less than a revolution in defence logistics. The reforms lie at the heart of our modernising programme and their success is fundamental to the success of the strategic defence review overall.
The process will be greatly facilitated by the appointment, at the start of this month, of General Sir Sam Cowan as chief of defence logistics to head the new Defence Logistics Organisation. However, the CDL's job is not simply about ensuring that whole-life costs inform our procurement decisions, important though that is. It is also about delivering support to the front line in the most cost-effective manner.
Much has been achieved in recent years, with better rationalisation and co-operation between the services' logistics areas. I pay tribute to the logistics staffs for what has been achieved. However, the creation of a CDL represents a step change. The Defence Logistics Organisation that he heads brings together the organisations of the Chief of Fleet Support, the

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Quartermaster General and the Air Member for Logistics into a single entity. It will be the largest joint organisation in defence, with some 41,000 staff and a budget of nearly £5 billion a year.
The task of reorganisation is enormous and will not be completed overnight. It is being tackled in two phases. Phase 1, completed on 1 April, was to create the essential elements of the core headquarters. That has enabled the CDL to assume budgetary and management control of the current logistics areas, and to plan the change management task necessary to achieve phase 2.
The time scale has also seen the creation of three new defence-wide support organisations: the Defence Aviation Repair Agency, the launch of which I had the pleasure of attending on 7 April; the Defence Transport and Movement Agency; and the Defence Storage and Distribution Agency.
The DLO will look to harmonise systems and achieve greater efficiency by adoption of best practice across the whole area. A key strand will be the integration of similar systems. That, in turn, will provide the opportunity for strategic management of all logistics support. In short, it will achieve better, more effective support through the application of sensible processes and common practices. That will be a change of the greatest magnitude.
We shall, however, retain the single service logistics units at the front line. That decision recognises the particular nature and characteristics of single service operations at sea, on land or in the air. The challenge is to blend logistics support seamlessly into the front line.
We also need to improve the procurement of logistics support to the front line. That is a major task, and smart procurement is again very relevant. We recognise the wealth of expertise and experience in industry in procuring and managing logistics. We shall harness those skills in our project teams. We shall look to partnering approaches, where appropriate, to ensure the most cost-effective delivery of logistics support. We also need to ensure that much better use is made of advanced information technology.
Mr. Andrew Lansley: I am sorry to interrupt the Minister in the middle of his explanation of logistics matters. Before he concludes, will he help me on the issue of future procurement? Have he and his colleagues had the opportunity to reflect on the potential value to our armed services of the airborne stand-off radar? Does he have any information on the prospects for that procurement? Can he assure the House that he will take fully into account the value of the UK-developed Racal radar system in circumstances such as Kosovo, as it is able to identify potential targets with greater precision?
Mr. Spellar: I thank the hon. Gentleman for that intervention. I shall come on to individual equipment programmes, but it is right that hon. Members should intervene in support of the companies and work forces in their constituencies, and the excellent work that many of those companies are undertaking.
Before I deal with equipment, I shall return to the logistics side. Our stockholdings will need to be reviewed further. The aim will be to move towards a demand-led
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system, based on the assumption that stocks should be held only when they cannot be regenerated within the readiness time of the forces that they support. Accordingly, our target is to reduce the book value of non-munitions holdings by £2.2 billion by April 2001; and we further intend to rationalise our stock procurement to achieve savings of £130 million a year from 2001–02 onwards. For that, we need to develop better forecasting techniques, and if we are to reduce stocks safely, we require improved lead times from industry that match our readiness needs.
The hon. Member for South Cambridgeshire (Mr. Lansley) will be pleased to know that I shall now turn to some of the individual programmes that I spoke about earlier. Each of the services can look forward to vastly improved equipment capabilities as the plans we laid out in the SDR are brought to fruition. For the Royal Navy, the valuable flexibility offered by aircraft carriers has recently been demonstrated by the deployment of HMS Invincible from the Gulf to the Adriatic. Carriers allow us to project military force rapidly and over long distances. The strategic defence review concluded that we should replace the current generation of carriers and their aircraft in about 2012. It also concluded that the future carrier force should comprise two larger carriers. Modern ship upkeep practice means that there will not be lengthy refit periods for these vessels, as is the current practice, and we should therefore be able to achieve the same availability from these two vessels as we do from the current three.
We have already issued invitations to tender for the assessment phase of the future carrier programme in January to six potential prime contractors. We expect to place a contract with up to three companies in the autumn, and the ships will be built and outfitted in the United Kingdom. Contrary to the suggestions we have heard previously from Opposition Members, the programme is running to schedule and with the full commitment of the Government.
The new carriers are a key element of our future defence plans. We are encouraging the sensible use of the latest technologies and innovative ideas to ensure that carriers are acquired on time and to cost. Future carriers will be capable of deploying air power in the form of the joint Royal Navy-Royal Air Force future carrier-borne aircraft. This new aircraft will fulfil a wide range of military tasks. A variant of the US joint strike fighter remains a strong contender, but other options are also being considered, such as a naval variant of Eurofighter, Rafale, the Fl 8E/F and an upgraded Harrier.
We are pressing ahead with plans to triple our sealift capability through the acquisition of additional roll on/roll off vessels for the joint rapid reaction forces. In the meantime, our strategic sealift requirements will continue to be met by the chartering of Royal Fleet Auxiliary Sea Crusader and RFA Sea Centurion, which are proving to be tremendous assets. Centurion continues to transport heavy equipment in support of operations in the Balkans. The provision of a six-ship ro-ro capability will significantly improve Britain's ability to move its forces rapidly to deal with crises anywhere in the world.
On 31 March, we issued an invitation to tender to four companies seeking bids to provide those services. The four companies are Novomar, the Maersk Company, Andrew Weir Shipping Ltd. and the Sealion Consortium, which includes Kvaerner Govan. The House will be aware

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of the difficulties the Govan shipyard faces in the wake of the announcement by Kvaerner that it is to dispose of its shipbuilding interests. We are, therefore, glad to have been able to shortlist their consortium for the sealift competition. We are, of course, co-operating with the task force and keeping in close touch with the Scottish Office, to see if there are ways in which we might assist.
Mr. Wilkinson: I am sure that hon. Members on both sides of the House are interested in what the Minister has said about Kvaerner Govan. The Govan yard built the hull for HMS Ocean, and is one of the few shipyards in the United Kingdom capable of building the hull for a big aircraft carrier.
Can the Minister tell us whether Swan Hunter on the Tyne is back in the business of receiving naval requests for tender? Is it to be considered, or are we down to Barrow and Harland and Wolff if Kvaerner is not bought by a company that wants to proceed in naval shipbuilding?
Mr. Spellar: The hon. Gentleman should not forget Cammell Laird in Birkenhead. Those are the yards that are the main contenders; then there are the companies that have been invited to tender for the role as prime contractor—systems-integrating, weapons-integrating companies. There is, in fact, quite robust competition, as a considerable number of yards are potential builders of the carriers.
Mr. Wilkinson: What about Swan Hunter?
Mr. Spellar: As far as I am aware, Swan Hunter is a potential bidder, but the companies concerned will have to decide whether they wish to upgrade their yards and take part in the competition, given that they have the basic capability.
Let me now deal with the Army side. The SDR placed great emphasis on our information, surveillance, target acquisition and reconnaissance capability, known as ISTAR. That capability is needed to provide the fast, detailed, accurate intelligence that is essential for rapid decision making in complex circumstances.
The competition for the airborne stand-off radar contract—mentioned by the hon. Member for South Cambridgeshire—is now in its closing stages. As I think we all know, the fight for that contract has been conducted intensively by three determined bidders. United States prime contractors have been prominent, but scores of capable British companies have been involved with the three consortiums. The decision is receiving close ministerial attention and, as some hon. Members may know, my right hon. Friend the Secretary of State for Defence gave each consortium an opportunity to present its proposals to him personally last week.
Mr. Michael Jack: I am grateful to the Minister. I hope that he has not drowned in his glass of water.
About four weeks ago, during the business slot on the "Today" programme, a representative of the Raytheon corporation clearly intimated that the corporation thought that it had won the ASTOR contract. In that context, it was discussing the potential creation of additional defence jobs in Belfast. Did the Minister receive any reports of
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that broadcast, and Raytheon's assertion of its position? If so, did he investigate the source of the stories, and can he assure me that Raytheon was speculating?
Mr. Spellar: I did not receive a report about the programme. If such a report had been submitted, it would probably have been lost in the welter of reports on the various companies involved in that and other competitions which, understandably, drew attention to the industrial benefits that would result from their particular projects. Given the right hon. Gentleman's constituency, he will know that companies rightly focus on that.
As I said earlier, the Government are anxious to maintain the country's defence industry capability, but, although it is inevitable that companies will highlight that aspect, we are still evaluating all the programmes. Having received a number of representations from companies, my right hon. Friend the Secretary of State invited each consortium to make a final presentation. Decisions are being considered, but, as the right hon. Gentleman would imagine, there are currently other pressing matters on Ministers' minds.
Mr. Barry Jones: My hon. Friend will know that my constituents who are employed by Raytheon have a crucial interest in the decision that the Department might make shortly. He will also know that we had hoped to hear of a decision in March—understandably, that date slipped—and that, clearly, no decision will be made this month. Will he tell my constituents when a decision might be made? He will know that there is great interest in the matter in my constituency.
Mr. Spellar: The answer is "shortly". I pay tribute to my hon. Friend's regular—incessant, repetitive—campaigning on behalf of his constituents, and to the way in which he constantly presents their case to the Government. He was equally active in that campaign in previous Parliaments, and in making his constituents' case to the previous Government. He certainly ensures that the very strong case for the excellent plant in his constituency never ceases to be in the public eye, and I congratulate him on that.
Mr. Lindsay Hoyle: There is concern across the country about who will be chosen for the airborne stand-off radar programme. In considering the matter overall, however, will my hon. Friend take into account not only the United Kingdom's technological base and abilities, but United Kingdom jobs?
Mr. Spellar: My hon. Friend rightly says that we have to consider the entire range of the UK defence industry's capabilities, including its future health and ability to compete for future contracts. We should be clear about the fact, however, that our defence manufacturing industry is thriving and is internationally competitive. As I said only last month, our industry has 26 per cent. of the world market for defence equipment. Moreover, hon. Members who have been demonstrating their support for various programmes represent many of the companies that have achieved precisely that success.
On the Air Force side, hon. Members will know that, last September, we signed a contract for the first tranche of production aircraft for Eurofighter, which will start to

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enter service in 2002, under a contract tautly linking payments to achievement of a demanding set of milestones. Eurofighter is a world-class aircraft—which is further demonstrated by the considerable potential that it is showing already in the export market.
I am sure, looking around the House, that many hon. Members will also be interested in our plans to deal with the shortfall in our strategic airlift capability that was identified in the SDR. We already have 25 Hercules C 130J aircraft on order from Lockheed Martin to replace the first part of our current Hercules fleet. There have been difficulties with the programme, as many hon. Members will know, and the in-service date has slipped to next spring. However, the programme is now on track, and we are being paid liquidated damages by the prime contractor to offset the additional costs of running on our current fleet.
The remainder of our future requirement for large transport aircraft is the subject of a competition that we are running in conjunction with some of our European partners. Bids were received in January for the Airbus consortium's A400M, as the future large aircraft is now known; for the Boeing C17; and for a further tranche of C130Js. We aim to be in a position to make a decision—in consultation with potential European partners—by early next year.
Such a procurement will take time, however, and our need for enhanced strategic airlift is urgent. We are, therefore, running a parallel competition for short-term strategic airlift to bridge the gap. We have asked for proposals for lift capability equivalent to four C17 aircraft, and received a number of bids in January, in parallel with bids for the longer-term procurement. Evaluating the long and short-term proposals together will enable us to identify the most cost-effective overall package to meet our needs.
Today, as ever, there is a range of other programmes about which I have not been able to speak. Nevertheless, I hope that I have mapped out our strategy, and our plans for ensuring that we supply our front-line forces with the equipment that they need, in a timely and cost-effective way.
The strategic defence review has provided the blueprint for our armed forces for the future. As I have made clear, however, the planning phase is over, and we are steadily rolling out the programme. We recognise and appreciate that that entails a tremendous amount of hard work for service men and for civilians in the Ministry of Defence, and for our partners and suppliers in industry. It involves fundamental change in the way in which we buy our equipment—in our processes and organisation. Changing the organisational arrangements is the relatively easy part. Changing the culture, which is a much more challenging enterprise, is the key to success.
Our armed forces deserve to have the right equipment and logistics support at the right time, at the right place and at the right cost. We are determined that that is what will be delivered.
5.50 pm
Mr. Robert Key: The Opposition always welcome the opportunity to debate defence issues on the Floor of the House, although I dare say that the timing of
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today's debate—in the midst of the Kosovo crisis—was as unexpected for Ministers as it was for the rest of us. We recognise the immense pressure on Defence Ministers and entirely understand why the Secretary of State is not present this afternoon. However, so far it has been a disappointing debate as to content. I must gently remind Ministers that their Government control the business of the House and, if it were altogether too much to have such a debate, they should have said so.
We also welcome the first defence debate in the new format under which we shall consider, in three separate debates, people, policy and procurement. The House will recall that I first suggested this in the debate on the Royal Air Force on 23 April 1998, at column 997 of Hansard. At the time, in an optimistic surge of enthusiasm, Labour Ministers were working on their strategic defence review. The Labour party had abandoned its objections to nuclear defence and taunted us with the force and budget reductions that we had made in government, in step with all our NATO allies.
Labour Members mocked us for those defence cuts, but they want the British people to forget the facts. The first fact is that the Labour party not only supported those cuts, but begged us to go further in pursuit of the elusive post-cold-war peace dividend. The Labour Government then cut defence deeper than we had ever dreamed of doing.
Even before the strategic defence review, the Secretary of State for Defence had capitulated to the Treasury's demand for a £500 million cut in the defence budget to fund national health service winter spending in 1997.
The Government started the strategic defence review with the proposition that their great, no-holds-barred, welcome all-corners, thinking the unthinkable, foreign-policy-led review would, in practice, result only in defence cuts. The Secretary of State made that very clear at the strategic defence review seminar in Coventry on 11 July 1997. It was quite clear at that seminar that the Secretary of State knew that the pressure was on him to cut the defence budget. It then went into free-fall in the comprehensive spending review. He lost the argument with the Chancellor of the Exchequer and the Prime Minister did not ride out on his white charger to save the defence budget. This year, Labour slashed defence by £;800 million or 3.6 per cent. and will do so again over the next two years by a further £400 million-an additional 2 per cent. That was not enough, however. In addition to those savage cuts, and as the only possible way of meeting his commitment to the Chancellor of the Exchequer, the Secretary of State for Defence then imposed efficiency savings of a further 3 per cent. a year across the board for all three services.
I take off my hat to the Navy, the Army and the RAF. They worked themselves to the bone preparing the strategic defence review, which delivered a great deal of military common sense. However, there was no common sense in asking the military to deliver the outcome of the strategic defence review with a sharply declining budget and a fresh round of efficiency savings. All three services had been living with efficiency savings for year after year. By 1997, the Navy, the Army and the RAF had reached

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the point at which there were precious few efficiency savings to be made; indeed, the only savings that could be made would lead to inefficiencies.
Ms Rachel Squire: Will the hon. Gentleman give way?
Mr. Key: I had better give way to the hon. Lady, but I bet that she will say exactly what she said last year.
Ms Squire: I am delighted that the hon. Gentleman gives such significance to what I say in any and every debate that he can remember exactly what I said last year. I take my hat off to his portrayal of the 28 per cent. cut in the UK's armed forces that was undertaken by the Conservative Government in the 1990s and their reduction in the Army, Navy and RAF by up to a third, which left the forces feeling that they had been cut to the bone—[Interruption.]
Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Lady must be allowed to make her intervention.
Mr. Key: Of course the hon. Lady must be allowed to make her intervention and I look forward to hearing it again next year. She said exactly the same last year and no doubt she will say it again next year. The answer is exactly the same. If she thinks that our reductions were so terrible, why did she call for more at the time and why have the Government whom she supports made further cuts?
We knew that we had reached the point at which savings would often lead to inefficiency. That was why the then Conservative Secretary of State for Defence, Michael Portillo, announced a period of stability for the defence budget. New Labour hoped that the world would believe that it had put on a glittering new military uniform, but, two years on, we see it for what it is—the emperor's new clothes.
Mr. Colvin: My hon. Friend referred to the 4 per cent. cut in the defence budget over the three periods covered by the strategic defence review, but he has not told the House how much further the budget will be cut if the savings on smart procurement, the sale of assets and greater efficiency are met. Does he know what that figure is?
Mr. Key: My hon. Friend is absolutely right. I am coming to that, but we have already had a clue. We are told that there will be £2 billion of efficiency savings over the next 10 years, but we need to know when an efficiency saving is an efficiency saving and when it is a cut. I shall return to that point, but today I seek three commitments from the Minister. I should be grateful if the Minister of State would address them in his reply to the debate, and I invite my hon. Friends to listen to his answers.
First, the cost to the UK of the Kosovo conflict must fall not on this year's already depleted defence budget, but on the Chancellor of the Exchequer's reserves. Estimates of the cost of the Kosovo conflict vary enormously. Of course, there is no formal mechanism for apportioning costs between NATO members. In the UK, it is a matter of negotiation how much the Treasury will contribute over and above the current defence budget, but,
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given that the Government have already decided to slash the contingency reserve, it is doubtful whether that modest pot of gold will be enough to cover the costs.
The overall cost to the British taxpayer will include spending by other Government Departments, notably the Department for International Development, the Home Office and the Department of the Environment, Transport and the Regions. We acknowledge that those spending commitments are inevitable, but it is my duty to stiffen the Minister's resolve to protect the defence budget.
Assuming that Milosevic is removed by the Serbian people and the Serbs join the democratic nations of Europe, the wider international community realises that there will be massive costs in physical and social reconstruction over many years in Kosovo, Serbia and the seven neighbouring countries.
Mr. Tom King: I am glad to hear my hon. Friend's firm support for the Ministry of Defence in ensuring that it is properly reimbursed for additional costs that our foreign policy—I do not criticise it—will involve. Does he recall that there was a significant difference in respect of the Gulf war, when the first decision of Baroness Thatcher was to make sure that the Chancellor of the Exchequer was not on the War Cabinet? I am sorry to say that that precedent has not been followed.
Mr. Key: Yes. I was discussing the matter with my hon. Friends only recently. I hope that Ministers have duly noted that point.
Our Prime Minister is seeking to keep up with President Clinton. Indeed, press reports in the United States suggest that he has rather overtaken him as the hawk. However, President Clinton has just asked Congress for $6 billion extra to spend on the Kosovo conflict and has already announced a 10 per cent. increase in the United States defence budget. That increase is about the same size as our total defence budget.
Secondly, will Ministers guarantee for the benefit not only of Her Majesty's forces but of our national and international defence procurement industry that the cost of Kosovo will not be taken from defence equipment programmes, that we will see neither the cancellation of promised purchases big and small—from aircraft carriers to new boots—nor the slippage into the future of new equipment purchases that are needed now?
We have heard about the decision on the airborne stand-off radar being delayed again, but the Minister did not give the reason. Will he say whether there are any reasons, apart from the Kosovo conflict, for that delay? We need that procurement now.
Thirdly, will the Minister revisit the strategic defence review?
Ms Squire: Will the hon. Gentleman give way?
Mr. Key: No, not until next year.
We have already been told not to take the SDR as gospel but to regard it as a set of guidelines or, as a senior military man put it to me over the weekend, as "one for the Library."
Revision by stealth of the plans for the Territorial Army were already evident last week, in an answer that can be found at column 400 of Hansard for 19 April. When will

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the Government acknowledge that chapter 10—entitled "Resources"—the last substantive chapter of the strategic defence review, should have been chapter 1? Its contents are exactly as the Treasury intended. When will Ministers realise that it was never credible that the chapter on resources should be only one page long? Half that page is taken up with a picture, and just 15 lines of text are devoted to financial detail. That is just the tip of the iceberg, and the Government must be careful that it does not sink the strategic defence review.
Another real problem is determining when an efficiency saving is a saving and when it is a cut. In paragraph 396 of the eighth report from the Select Committee on Defence, the Chief of the Defence Staff told the Committee about the effect on the Ministry of Defence of the sustained efficiency programme over the past decade. He described "hollowing out", and the debilitating effect of constant raids on the Army budget when he was Chief of the General Staff. Efficiency savings targets had been passed down the line from top-level budget holders to base-level budget holders. He had had to tell the Prime Minister that the targets were "challenging". Other chiefs of staff also told the Committee that they were a "very stiff challenge".
The Select Committee concluded that the practical effect of the 3 per cent. target was that various real-terms cuts totalling £2 billion would have to be made in operating costs subsumed in the efficiency baseline. It reported that the Ministry of Defence expected operating costs overall to fall by only 2.5 per cent. a year in real terms, so some items of "operating" expenditure might rise.
The conclusion of the Select Committee, printed in bold type, was:
"Provided sufficient efficiency measures are identified to score against the 3 per cent. target"—
they are usually found in budget setting before the year starts—
"the MoD will be able to live within its operating costs"—
that is, non-procurement—
"budget. It is important, however, that the Ministry of Defence secures genuine efficiency improvements."
Mr. Blunt: Does my hon. Friend welcome, with me, the evidence given by Mr. Colin Balmer—the deputy under-secretary at the Ministry of Defence in charge of efficiency savings—to the Committee at its last evidence sessions? He intimated that the Ministry of Defence would produce a list of efficiency measures so that the Committee and the House would be able to come to their own judgments as to whether all the measures taken in pursuit of efficiency savings were either efficiency savings or cuts.
The Minister for the Armed Forces (Mr. Doug Henderson)indicated assent.
Mr. Key: Yes, that is good news. I notice too, from the Select Committee's forward programme, that it will be taking evidence on that matter. I look forward to that.
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Whatever the statistical explanation, in every single part of the Ministry of Defence's organisation, from basic research to front-line forces, there is a real struggle going on to make ends meet.
Mr. Blunt: I beg my hon. Friend's pardon, but the Minister for the Armed Forces gave a nod of assent at the end of my intervention. It would be appropriate to ensure that that is put on the record.
Mr. Key: I am grateful to my hon. Friend. I noticed that nod, but the Minister is a cheery fellow and often nods at me. That has nothing to do with the strain that he is under at present.
Time after time, I have been told—as I am sure have other hon. Members—that the 3 per cent. savings are simply unachievable. In some areas, it is clear that it will be impossible to deliver the changes required in the strategic defence review and at the same time to live within budget and deliver 3 per cent. savings. That is the stark truth, but it is what the Secretary of State signed up for in the comprehensive spending review last July.
Mr. Menzies Campbell: Is the hon. Gentleman aware that the problem is compounded by the fact that much of what is spent in defence budgets is the subject of existing contracts taken out with private firms, which will be unwilling to accept 3 per cent. less for those contracts? So the 3 per cent. savings have to be found in the remaining portion of the budget, rather than the whole. Does that not make the consequences much more acute?
Mr. Key: Yes, of course. The right hon. and learned Gentleman is right, and the current arithmetic includes one-off sales of assets, revenues from which are very dubious. I am astonished that the Treasury even countenances the idea that such estimates, which will be crucial to the Ministry of Defence's spending, can be included.
The celebrations for the 50th anniversary of NATO, held over the past few days in Washington, have been sombre. That is entirely appropriate in the circumstances, but we should celebrate the organisation's achievements. As a nation, we should be confident about its future. NATO is about human values, democracy, the power of ideas and military power. For each member state, new and old, it is also an expensive commitment.
I have criticised the Government for their current and future cuts to the British defence budget. Apparently, they intend to pursue defence and foreign policies that have already gone beyond the remit of the strategic defence review. Following the Washington summit, NATO has announced new guidelines for the alliance's force posture. We welcome the statement, in paragraph 52 of the summit communiqué, that the size, readiness, availability and deployment of the alliance's military forces will reflect its commitment to collective defence and to the conduct of crisis response operations—sometimes at short notice—distant from their home stations and in areas that lie beyond the allies' territory.
When the Minister of State winds up the debate, will he clarify the role of the Western European Union? Paragraph 30 of the communiqué after the Washington summit states:
"We are relieved that the European security and defence identity will continue to be developed within NATO."

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The communiqué states that
"this process will require close co-operation between NATO, the Western European Union and, if and where appropriate, the European Union."
In paragraph 30, it describes the European allies acting by themselves
"under the political control and strategic direction either of the Western European Union or as otherwise agreed."
What is meant by "if', "where appropriate", or "as otherwise agreed"? Unless Ministers say something more positive, we must assume that the future of the Western European Union has not been settled. If so, that would be a significant failure on the Government's part.
The Prime Minister's statement this afternoon compounded the confusion. He said:
"The Alliance stands ready, as the EU defines its defence arrangements, to make NATO force planning, NATO assets and NATO headquarters available for EU-led crisis management operations, subject to the necessary approval of the North Atlantic Council."
I entirely understand why the bit about the North Atlantic Council's approval was put in. That is especially important for allies such as Turkey, which are so important to the alliance. Yet the Prime Minister made no mention of the Western European Union. Do we assume that he has written it off, and that it is Government policy to subsume it within the European Union? I hope that Ministers will clarify those points later.
NATO countries already face defence budget constraints, but does the Washington announcement at the weekend mean that they will have no option but to consider increasing defence expenditure as a percentage of their gross domestic product? The average defence expenditure of all NATO countries as a percentage of GDP fell from a high of 4.8 per cent. in 1985–89, to 2.8 per cent. in 1997, the last year for which figures are available. The United States bore the greatest burden, with a high of 6.3 per cent. and a current total of 3.6 per cent. The United Kingdom spent 5.2 per cent. of GDP in 198084—, and we now spend 2.7 per cent., although that total will fall to 2.4 per cent. over the next three years. European members of NATO peaked at an average of 3.6 per cent. in 1980—84, and that fell to 2.2 per cent. in 1997.
Mr. Dalyell: Against the background of protests against the Yugoslavian war in 40 German cities this weekend, and given that the Greens are part of the German coalition, can the hon. Gentleman see the German Government telling their people that they will increase the defence budget because of the war against Serbia? Is that real?
Mr. Key: The hon. Gentleman should direct that point to his own Government. There is no doubt that the solidarity shown in Washington is most impressive. It may be that 40 cities demonstrated in Germany, but I suspect that 40 cities in the United Kingdom were horrified by what is happening in Kosovo and dipped into their pockets for the people of that sad, war-torn part of the world.
I do not suggest that the figures that I have given reflect any lack of commitment to NATO or its ideals. However, the Kosovo operation will teach us the hard way that we get what we pay for, a concept well known at Abbey
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Wood. I pay tribute to Sir Richard Walmsley, chief of defence procurement, and all his team at the Defence Procurement Agency, which replaced the Procurement Executive on 1 April. We also wish success to the new chief of defence logistics, General Sir Sam Cowan, who faces the massive task of creating a fully unified tri-service logistic structure by 1 April 2000.
When the United States military introduced its smart procurement initiative some years ago, it was inevitable that Britain would follow suit. We have done so. In the United Kingdom, the smart procurement implementation team has worked hard to create integrated project teams. I believe that the Minister said that 10 IPTs—I thought 11—were set up last year. Another 23 were created on 1 April. Around 40 will be created in September and 80 more will come on stream in January 2000.
It is said that the pilot IPT leaders have already identified major cost and time savings, as I saw when I visited Abbey Wood recently. However, the pressure on them has been immense, and only time will tell whether savings materialise. The new acquisition cycle has replaced the Downey cycle, with anticipated streamlining of procedures. More important are increased financial delegations to two-star and one-star levels. The real proof will lie in the empowerment of individuals such as the leaders of the IPTs.
Is it really sensible that projects that may span 20 or 30 years may be led by military personnel on short, three-year postings? They will be dipping in and out of the job. I was glad to hear the Minister say that some IPT leaders might come from industry, but there will be similar problems if they are not appointed for significant periods.
Little progress is apparent in several areas, including partnering arrangements with industry. As the Minister said, that is a central plank of smart procurement, but is not defined either by the Ministry of Defence or industry. Without progress, there will continue to be cynicism in industry about the MOD's real intentions.
A more important concern is the lack of evidence of definable progress in the building of clear customer-supplier relationships in the MOD. The suppliers are clear enough. Before fielding equipment, the supplier is the chief of defence procurement, and afterwards it is the chief of defence logistics. The customer before fielding is expected to be the deputy Chief of Defence Staff (Systems), and after fielding, the customer will be the appropriate commander-in-chief.
Both suppliers are full members of the all-important equipment acquisitions committee, however, and they will task themselves as well as accepting their own work. Even more extraordinary is the fact that no customer will be a member of that committee. The vice-Chief of the Defence Staff will be on the committee, but the commander-in-chief will not, and nor will the deputy Chief of the Defence Staff (Systems). That seems to suggest that the tail will wag the dog. The top structure is not yet right in the MOD, and I urge Ministers to address that point.
Significantly, the Minister omitted any mention of the Defence Evaluation and Research Agency. We all understand the way in which business arrives on the Floor of the House. The wishes of Departments are by no means always heeded by the Whips. I dare say that the Ministry of Defence would not have wished today's debate to take place in the midst of the Kosovo crisis. I am prepared to

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give Ministers the benefit of the doubt because they expect next week to publish their proposals and preferred options for DERA in a document that will invite comments to inform their final decision. We hope that the Secretary of State will reach that decision before the House rises in July. There will by then have been a full two years of uncertainty for DERA and its staff and for the whole defence equipment industry. It is time to end that uncertainty.
The House is well aware of the serious concerns expressed over the past two years about the way ahead for DERA. The Minister for Defence Procurement has made it clear that total privatisation is not an option. It would not be fruitful to speculate on what the new document will say, but the Government must expect detailed scrutiny of their proposals. The UK is highly dependent on access to United States technology and, to a lesser extent, to French technology. It is essential that future changes at DERA do not jeopardise that access.
The USA and France retain their research programmes in Government-owned facilities. Of course they will be concerned about allowing access to their research for commercial enterprises. If access is denied, there will be a penalty out of all proportion to the short-term financial gain.
The future of DERA is not only a Ministry of Defence issue, or even an internal UK issue; it is a collaborative, export and global positioning issue. The equipment industry sees DERA as having a crucial part to play in the success of smart procurement. Its advice to the MOD must be independent, impartial and based on scientific expertise gained from active participation in research. That need not necessarily be in every area of research, but it must be enough to maintain a capability and to generate technology in defence-only areas so that it continues to create intellectual property and other items to trade.
Where core research and Ministry of Defence advisory business end up will be crucial to confidence in the new DERA. Many would prefer to see that part of the DERA function remain firmly in MOD ownership, and funded by the MOD. Since 1995, when DERA was established as a next steps agency, there have been many difficulties in its relationships with small and medium-sized enterprises. Those difficulties have arisen from concern that DERA represents unfair competition where it bids in cases in which commercial companies are also invited to bid. DERA has also sometimes been involved in the bid assessment process, although it has itself bid. Many have been unconvinced that Chinese walls have worked properly. There have also been concerns about intellectual property rights.
The Minister knows that mutual trust is crucial. Significant parts of DERA could, most people agree, be sold to raise money without risk in order to beat off the Chancellor. However, much of DERA could be privatised only at great risk to the blue sky and applied defence research programme, future defence capability and exportable technology. I should be grateful if the Minister would confirm that we can expect an announcement on the future of DERA next week.
There has been much talk of military technology, and there is another side to it. In Ethiopia, Somalia, Sierra Leone, Rwanda and, of course, Kosovo, it does not take
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much for evil men to wreck lives and nations. The man with the knife, the bullet and the bomb is still deadly. Nations with conscript forces may not only face low morale and inefficiency in the face of conflict, but may procure defence equipment with little regard to the costs of manpower. That may be one reason why the Horizon frigate project failed.
Troops without the highest technology also have a vital role to play. In many circumstances, there is still no substitute for ground troops. It is quite feasible that we shall continue to see different tiers of technology in the NATO alliance. At present, Britain is clearly within the first tier, along with the USA.
Information warfare and its consequences are slowly being addressed by the MOD and other Departments. However, I believe that we are not devoting nearly enough time or resources to that problem. Where is the initiative on enhanced defence of critical national infrastructure which we were told on 13 January would be announced shortly?
In the first technological defence tier, digitisation is the name of the game. If we are not up with the United States, we will not be able to operate alongside our principal ally. To put it bluntly, on the digitised, three-dimensional battlefield, where there is no barrier between land, sea and air, if we do not come up on United States screens as a friend, we will be an enemy force. The digitised battlefield is probably only five years away.
The prevailing MOD culture seems to suggest that we should not move too quickly until we know which system works—that we should wait a little before we decide. So, what are Ministers doing while we wait? We should be expending a huge effort and a huge amount of money on research in that highest of technologies. It is not in our interests to allow the technology gap to grow wider between the United States and the United Kingdom. That is another reason why DERA is so important to the national interest.
We should also be concentrating on the reliability of defence systems where we are still lagging behind. The process of incremental acquisition will certainly help where upgrades are planned during the lifetime of a procurement process. However, the basic lesson of experience must be that equipment will often be used in circumstances entirely different from those for which it was designed—such as frigates that were designed for the north Atlantic being in service in the Gulf without adequate air conditioning.
Whether we are talking about new aircraft carriers or new assault rifles, if the Government intend that United Kingdom forces and all their equipment are to operate worldwide in all conditions, the design and the financial consequences must be recognised. Of course, if the best design and the best technology are to be combined, it is most likely that commercial firms making commercial decisions will produce the best answers. It follows that it is less likely that Government meddling will produce anything but second best.
The British defence industry does not need to be reminded that what were already American giants by European standards have now successfully restructured. It does not follow that the best, or even the only, answer is for Governments to force European defence companies into arranged marriages. Nor does it make much sense to force European companies to merge at the expense of the

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two-way street in US-UK defence procurement and, potentially, at the cost of losing out on the highest technology in the world on the other side of the Atlantic.
A number of my colleagues intend to mention individual procurement projects. I have briefly mentioned a few. I am not at all sure why the Navy is reported to be so happy with the outcome of the strategic defence review—it needed three carriers and is promised two, and it needs more frigates urgently. The SDR effectively ignored the importance of anti-submarine capability. Given that the best anti-submarine weapon is another submarine, the Royal Navy cannot have been happy that it needed six Astute class submarines but got only three. There will be huge relief that the principal anti-air-missile system is to go ahead. The common new generation frigate project has been a failure as far as the hull is concerned. The Royal Navy needs new frigates now, so the Minister has said that the Government are waiting for industry to come up with something.
I congratulate the Ministry of Defence press office on its statement on the future anti-aircraft missile system. The statement is a masterpiece. The Secretary of State is quoted as saying that there would be
"a collaborative approach to meeting … respective requirements for the warships … Although it would not be cost-effective to pursue a single prime contract … the three countries will build on the tri-national project work already carried out"—
it might be more appropriate to say that they will save something from it. The press release continues:
"We have now a very good result for the navies and industries of the three nations"—
a bit of optimism—
"and for European defence"—
and also two wasted years. Hopefully, we will get some collaboration over the equipment of ships.
I felt cross at the Minister's attitude, which seemed to be, "It's all the fault of the previous Government." He has had two years to get this right. Which country dragged its feet? It was either France or Italy. Will the Minister tell us which country sunk the project? There have been two years of slippage in the in-service date from 2004 to 2006. British shipyards told me a year ago that they were raring to go on a new frigate hull. Ministers have sat around for a further year.
Will the Minister assure me that any new frigate procurement will include gyroscopic satellite decks for the reception of satellite television for British frigates? I understand that only aircraft carriers have that facility and that frigates cannot pick up CNN, BBC World or Sky News, which is a real problem in this day and age of instant communications. I am told that it is a question of cost, but, given the cost of the armaments being used in the current conflict, allowing the crews of our ships to watch satellite television is surely not too much of an expense.
Can the Minister tell us whether his right hon. and noble Friend the Minister for Defence Procurement will make an announcement in another place about the Horizon project? We look forward to the announcement of a way forward for a future transport aircraft. I will not repeat the arguments that have been so well aired in previous debates. Recently, Russia and Ukraine made a bid to offer a westernised version of their jointly developed Antonov AN70 to France, Germany, Italy and Spain, following continued interest from Germany. The
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patience of Airbus, Boeing and Lockheed Martin is indeed commendable, but when will generosity in the face of caution turn to despair in the face of incompetence?
The United Kingdom has faced a potential threat from ballistic missiles for the best part of a decade. For some years, the UK has been prepared to be the passive partner in the development of a defensive system. We have spent some hundreds of millions of pounds. Time is running out. We had expected to see much more about ballistic missile defence in the strategic defence review, which acknowledges the threat to the United Kingdom and to UK forces deployed overseas, yet the Government apparently remain committed to "monitoring developments". We have not got time for that.
Allied forces in the Gulf were subject to ballistic missile attack, and a recent report by the former United States Secretary of Defence, Donald Rumsfeld, underlined the threat posed by China and North Korea. The Government are dangerously out of step with their allies on the issue. The United States has three operational ballistic missile defence systems and is spending huge sums on theatre and national defence systems. The Government must understand that they need to commission work in that area so that the United Kingdom at least has partial ownership of the necessary systems and British defence companies are at the cutting edge of new defence technologies.
I have been the Member of Parliament for Porton Down for the past 16 years. It has been a privilege to represent that defence scientific community, both military and civilian, and to have observed not only the huge scientific advances that have been made, but the contribution that United Kingdom expertise and technology have made to monitoring chemical and biological weapons in Iraq.
Incidentally, I am most grateful to the colleague who has passed me a message telling me that he wants me to continue speaking for another 45 minutes.
Earlier this month, the Ministry of Defence generously sent me on a briefing mission to the middle east, where I was left in no doubt of the importance of protecting the British military and our allies working together in theatre from the potential effects of weapons of mass destruction. Back in the United Kingdom, I warmly welcome the establishment of a defence, nuclear, biological and chemical headquarters at Winterbourne Gunner, which will control both the defence NBC centre and the new joint Army-RAF NBC regiment at RAF Honnington, which will include elements of the Territorial Army and the Royal Auxiliary Air Force.
I remain concerned, however, about the United Kingdom's strategy for coping with NBC threats to the UK mainland. Disrupting civil society directly by information warfare is a concept that has received wide and mature public recognition. Disruption of civil society by chemical and biological weapons delivered by terrorists or rogue states is a real threat, but it has not been handled adequately, in stark contrast to the experience in the United States of America.
Today's debate on defence equipment is important. Clearly, it comes at an inconvenient moment. It has been necessary to criticise the Government for some shortcomings and to probe, cajole and spur them on to greater things, as I know that my right hon. and hon. Friends, as well as other hon. Members in all parts of the House, will do. However, let there be no doubt that Her

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Majesty's loyal Opposition fully support our service men and women and the scientific, industrial and administrative civil servants who support them. We are proud of the hundreds of thousands of civilians who work in the defence industries as well. Above all, we think today of those undertaking military activity on our behalf, whether in the Balkans, Northern Ireland, Cyprus, the middle east or anywhere else. They know that they can count on us.
6.29 pm
Mr. Barry Jones: I apologise for the state of my voice, but it will guarantee brevity. I was glad to listen to the hon. Member for Salisbury (Mr. Key). His was a furious gallop through a crowded field, but I listened carefully to what he said about matters concerning NATO.
I congratulate my hon. Friend the Under-Secretary of State for Defence on his cogent and sometimes typically combative speech. I think that his statements on smart procurement were important. I am sure that Ministers will deliver those necessary savings. Best value is also very important. Surely my hon. Friend was right to say that a revolution is taking place in procurement and logistics.
We are debating equipment, but the weaponry of war, however brilliant and sophisticated, is useless kit without well-led, well-trained and well-motivated soldiery. I pay tribute to our fliers over Yugoslavia and to our naval and ground forces adjacent to Kosovo. The prime quality of the British military presence is surely discipline. In what other national armed force is there such discipline, patience, professionalism and resolution, whether in Northern Ireland, the Gulf, the Balkans or the Falklands? I do not know how many of my constituents are engaged in the Balkans, but I wish them all well and thank them for their contribution.
I back my right hon. Friend the Prime Minister's statement today all the way and agree that a moral issue is at stake. We cannot stand aside and ignore the nightmare of Kosovo.
My constituency contains RAF Sealand, which has 1,600 people on site. It is an amalgam of skills and discipline. It is Well led, in the best RAF Sealand style, by Group Captain Nigel Bairstow. There is a mix of the civilian and the uniformed, chiefly civilian. It played a distinguished part in the Falklands war and the engagements in the Gulf. I have no doubt that it will always rise to any challenge to keep our front line in the air with precision and safety. The board of management and the work force are collaborating well, as they always have. They do that to maintain at all times the equipment that is required for our fliers.
The Minister made a well-received visit to the unit in the spring. Several years ago, we at RAF Sealand won the in-house bid against all corners, not without a protracted struggle. The reward we ask is to settle down for a long-term role. Our work force want stability and certainty in their employment and agenda. If we have that, we can face the new century with confidence. I respectfully put that point to Ministers and hope that they will respond later.
The Minister mentioned smart procurement. British Aerospace, the major employer in my constituency, tells me that, with other parts of the defence industry, it is
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working closely with the Ministry of Defence to develop that concept further, believing that it will offer significant benefits to the services, the taxpayer and the industry. The Defence Procurement Agency was created on 1 April, as was the Defence Logistics Organisation. Those are fundamental changes to the Department's structure. How will Ministers ensure that the cultural changes necessary to achieve a new style of management are achieved?
Raytheon Systems has a significant presence in my constituency, with a 200-strong work force and the service centre for the world-renowned Hawker jet, whose fuselage it still manufactures. My Raytheon constituents and I campaigned long and hard to win the MOD's airborne stand-off radar—ASTOR—competition. As I said in an intervention, the inevitable slippage in the announcement of the competition winner has understandably made all of us on Deeside and at the Raytheon factory at Broughton edgy. If we won that competition, Deeside would receive a big boost to its employment and skills base. Wales would benefit hugely from such a success, because Raytheon, with ASTOR under its belt, would become a world centre of excellence. Our school leavers would be able to train for some of the best and most demanding jobs in Europe.
Wales needs more skills-based industries. We gave Britain and the world our very best in steel and coal. Those industries have disappeared or contracted and we are working very hard in Wales generally and in my constituency to make new economies. We need more employment and more skills. If we won this big competition, Wales and my constituency would benefit hugely. I sincerely believe that the work force, led by Billy Mullin, the stewards' chairman, and Peter McKee, Raytheon's UK managing director, can meet any challenges that the Department wishes to place their way.
I understand that, if Raytheon were to win the ASTOR competition, it would involve some 108 United Kingdom companies, create 2,500 technical jobs throughout the country and, with exports, add another 4,000 jobs over time. Mr. Mullin, who leads the work force, believes that Raytheon, with its experience of 100 aircraft types, has a proven capability to integrate such a complex system. That capability would be transferred to Raytheon in Broughton in my constituency and provide a much needed United Kingdom systems capability, some 400 jobs and a long-term future in high-technology aircraft systems integration. I hope that we are successful.
Another huge employer is British Aerospace, particularly through Airbus, for which great company 3,800 people in my constituency work. Airbus has planted its golden feet on the banks of the River Dee, and the prosperity of north-east Wales is underpinned by that expanding and successful company. Every time I see the huge twin-engined jet transporter that we call a Beluga thundering down the runway to take off for Toulouse or Hamburg with 70 tonnes of wings, I know that there are good prospects for my highly skilled constituents.
We want to make a further contribution to our country and to Europe. The positive collaboration of the works director, Bill Travis, and works convenor, John Hamilton, and his senior stewards, is instructive and augurs well for the future. I want to discuss the A400M, the military airlifter, to which the Minister referred. A400M is now the official Airbus designation for what was the future

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large aircraft and is its bid to the MOD to meet the second tranche Hercules replacement programme. I understand that the bids are being assessed by the MOD.
Airbus believes that its bid is competitive in every respect and that the A400M is the only aircraft that can fully meet the European staff requirement agreed by the nations involved. If Airbus won that competition, the wings of the heavy-lift A400M would be made in my constituency. In order to ensure that the UK has a significant part of the manufacturing programme, I ask that the 40 to 50 aircraft commitment made by the previous Administration be retained. My hon. Friends on the Treasury Bench may consider confirming that commitment during our debate.
As Airbus has delivered more than 2,000 civil aircraft to customers worldwide and is offering to manage the programme on a wholly commercial basis—unlike other military aircraft programmes—it is fair to say that the A400M project is completely consistent with the Government's determination to achieve smart procurement.
I promised brevity, so I conclude by pointing out that, in relation to these matters that concern my constituency, it is only right and proper—certainly, it is most honourable—for an hon. Member to express a point of view of behalf of his constituents, and to be their advocate in the mother of Parliaments. Sometimes, it is said that Executives—of whatever political party—are overmighty. It is certainly true that the role and standing of hon. Members are in constant flux and change rapidly, but the bedrock of our activity, as I see it, is to be an advocate for a community. I make those points to Ministers most sincerely and thank them for hearing me out.
6.42 pm
Mr. Michael Colvin: It is a pleasure to follow the hon. Member for Alyn and Deeside (Mr. Jones). I certainly accord with the sentiments that he has just expressed. I do not think that I have ever taken part in a debate on defence or procurement in which he has not spoken up on behalf of his constituents.
Back in 1976, I was not a Member of Parliament, but gave the Conservative party a hand while we were in opposition. During debates on the nationalisation of the aircraft industry, we identified no fewer than 465 constituencies with an aerospace interest in relation to factories. It is significant that, after the mergers of so many companies—especially in the defence and aerospace fields—the number of facilities has fallen. However, about two thirds of hon. Members still have an interest in aerospace and the defence industries. It is a pity that more of them are not in the Chamber today, to speak on behalf of the communities that they are sent here to represent.
My hon. Friend the Member for Salisbury (Mr. Key) was correct to refer to the way in which our defence budget has been cut by about 4 per cent. and to say that it might be cut by a further 4 per cent. during the three-year period, if the savings are not met on smart procurement, the sale of assets and greater efficiency. He might also have referred to the impact of the growing cost of procurement on the overall budget. At present, it is significant that £10.2 billion is spent on procurement out of the total defence budget of £22.2 billion. From those current figures, given in the pocket aide memoire supplied
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to us by the Ministry of Defence, we see that 46 per cent. of the defence budget now goes on procurement. That is higher than the original amount of £9.8 billion budgeted for 1998-99, which was only 44 per cent. of the total budget. That share is greater than that for last year, when the percentage of the budget allocated for procurement of equipment was only 43 per cent.
Those figures prove a point that many of us have realised for a long time: inflation, in terms of the equipment that we have to buy for our armed forces, grows at a faster rate than general inflation. If, with a shrinking budget, we are spending an ever higher portion of that budget on procurement, there is less to spend on personnel. That is important, because there is a shortage of men and women in the armed forces; there is a recruitment and a retention problem. If the proportion of the defence budget spent on personnel is to shrink, there will be implications for recruitment and retention.
Mr. Doug Henderson indicated dissent.
Mr. Colvin: The Minister shakes his head. Perhaps, he would like to read the aide memoire provided by his Department—I have it here. I assure him that the figures that I quoted were correct.
I congratulate the Government on the good idea of introducing separate defence debates on procurement and on personnel. Procurement is fundamental to the overall strategy for the security of the realm. The matter was addressed by the Defence and Trade and Industry Committees about four years ago. We found that the United Kingdom could no longer supply certain crucial items of equipment that were required for our armed forces. I think that it was then our lack of ability to supply semiconductors that triggered the original concern. Our first report, published in 1995, contained a great deal about collaboration throughout the defence industries and about research and development—indeed, one section of the report was on that subject—but little about the restructuring of Europe's defence industries.
That is why the same two Committees decided last year that the question of the reorganisation of our defence industries should be revisited. The Committees produced another report on "Aspects of Defence Procurement and Industrial Policy"—a mark 2 version—in which the emphasis was entirely different. Our report echoed some of the comments made by the Minister in his introductory remarks; it emphasised the importance of the defence industries to the UK economy. In particular, we addressed the question of security of supplies. We must be able to supply our armed forces with the equipment that they require; we must not be dependent on other countries. Our report drew attention to the fact that more than 400,000 people worked in those industries and stated:
"in 11,000 companies, 10% of the UK's industrial manufacturing workforce. The industry exports 30% of its output, and in 1997 won 23% of the world defence export market."
The industry is remarkably successful. It has been exercising not only the minds of Members of this House, but those of Members of the European Parliament. I pay tribute to Mr. Gary Titley, a Member of the European Parliament who was the rapporteur for the committee that reported to that Parliament on this subject. The Western European Union has also studied the matter; last December, its members considered a report on the

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restructuring of our defence industries. I want to address that aspect of procurement. It was rather skated over by the Minister, but it is fundamental and should be recorded during the debate, because it provides a background to the points made by hon. Members on defence projects in which they might have a constituency interest.
During the past decade, our European defence industries have been influenced by three broad trends. First, since the end of the cold war, our defence budgets have been cut by about a third in real terms. That is common to all countries in the west. Secondly, although the volume of the global arms trend has shrunk, the defrosting in international relations has made arms markets hugely more competitive. Before 1990, defence exports faced numerous political restrictions. Soviet defence industries had a closed market with their communist satellites. For reasons of security, the USA was often unwilling to license its most advanced weaponry for export beyond its immediate allies in Europe and the far east. That left much of the third-world market open to European manufacturers. Now, most of the rigidities in the post-second world war arms market have been removed. There is almost a free-for-all, in which the traditional arms exporters, unfettered by political limitations, fight in savage competition with newcomers in gradually declining markets.
US defence industries, actively backed by the Pentagon, now sell throughout the world; Russian and Chinese exporters offer cut-price products in their mad scramble for foreign currencies; formerly isolated states, such as Israel and South Africa, developed indigenous industries to be self-sufficient and now bid for most foreign contracts; and the new defence industries in the far east are expanding. When we do succeed in selling abroad, the arrangements often include offsets for local assembly and other technology transfers, which will result in new competitors emerging in defence sectors that were previously the domain of western and former Soviet states.
The third trend is that defence inflation continues to run ahead of average inflation, especially as defence equipment becomes more complex. It has become impossible for any country, with the exception of the United States and perhaps, to a limited extent, Russia, to develop, manufacture and acquire unilaterally a full range of high-technology weaponry.
Falling defence procurement has caused a loss of defence jobs: 600,000 jobs have gone in the EU over the past 10 years; and in the United States employment in the military and space sector has halved, as it has in the UK.
National reactions to the global decline in defence orders have been mixed, but the United States has led the way, with dramatic consolidation of manufacturers and restructuring of the industries. For Europe, more joint ventures and new cross-border mergers are really the only way forward. In the US, the notorious "last supper" cut the number of prime contractors in the aerospace sector from 22 to only four; and two, if not three, of those four are bigger than the whole of western Europe's aerospace industries put together.
Those mega-mergers in the United States have been supported by the Pentagon through the controversial practice of reimbursing military contractors for some of
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the costs of mergers and rationalisations: for example, Lockheed Martin has requested $1.7 billion in reimbursement payments for its consolidation activities. My question is whether those pay-offs for lay-offs constitute fair international competition. Direct reimbursement for merger costs is not policy in Europe, but should it be?
We should also bear it in mind that US defence spending is twice as high as that of the EU countries combined. That means that the reduced number of US defence manufacturers can survive on US procurement spending alone, so any exports gained are an added bonus. US companies can often undercut their European rivals, which might eventually eliminate foreign competition. We also have to reckon with the pork-barrelling power of American congressmen fighting their constituency corners. We in Europe must adapt our defence industries and procurement policies to enable ourselves to stand up to American competition without creating a fortress Europe. I applaud the Government's having always made that point, and I reinforce it today.
There is no shortage of western European co-operation on specific projects—I believe that most of our current collaborations are with France, with some 33 different defence projects on-going jointly between the UK and France—but we urgently need more permanent commercial mergers, so I applaud the decisions by British Aerospace and GEC-Marconi to merge, and by GKN-Westland and Agusta to get together.
However, such mergers raise an important point touched on by my right hon. Friend the Member for Bridgwater (Mr. King) when he spoke about security of supply. Once a cross-national boundaries merger takes place, if one of the countries happens to be at war and needs supplies but the other country takes the view that it does not want to be involved in any way, a problem arises because the second country can effectively veto supply of the necessary equipment. I understand that there is a letter of intent signed by the countries involved in OCCAR. Will that letter of intent in respect of supply from one country to another to guarantee security of supply become anything more? Is it to become a memorandum of understanding? Might it eventually be enshrined in a treaty? Surely, that is what we want so as to be absolutely certain that the availability of supplies in a time of crisis is guaranteed.
On the question of restructuring, Governments must do their part, especially legislatively, to create the political and economic environment in which such international grouping and cross-border mergers can take place. However, privatisation is a prerequisite. We all know that France has most to do in that respect, and attempts are being made by officials of the French Government to persuade politicians that privatisation is the right way forward. They have a long way to go, but, until privatisation has occurred, the cross-national boundaries mergers that we want will not be possible—certainly not any involving France, which is a considerable hurdle, as it is the UK and France that have to take the lead in Europe.
At the ministerial meeting in November 1997 in Erfurt, an ad hoc group within WEAG—the Western European Armaments Group—was tasked with drafting a master plan for the creation of a European armaments agency within the WEU framework. Most people would agree that the poor old WEU, which is always desperately seeking to justify its existence, does have a role to play

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within the defence industries, and it has been effective in making the case and becoming a driving force behind restructuring. The draft master plan was sent to national armaments directors last August, and three questions remain to be resolved among the states concerned.
The first is the problem of "juste retour": states involved in collaborative programmes usually call for a fair industrial return on their respective investments, and the principle of "juste retour" applied on a programme by-programme basis considerably hampers implementation of programmes. The aim of a European armaments agency would be to favour "juste retour" being applied over all programmes, rather than to individual programmes. Although that might be acceptable to countries with large shares of programmes, those with less extensive participation might be worried about their not obtaining a satisfactory return.
Secondly, what arrangements are to be made for exchange of defence technological know-how? Should it be pooled in the armaments sector? How do we accommodate the different categories of status of the 28 WEU nations?
Thirdly, what degree of autonomy should be delegated to the European armaments agency, and what decision-making powers will it have?
We have witnessed the creation by France, Germany, Italy and the United Kingdom of OCCAR, which will enter into force by ratification by national Parliaments. It will be a programme-led organisation, but what will happen when the United States is a partner in the defence programme being undertaken? Will that be permitted and what powers will the US have within OCCAR if it is?
I stress the importance of Europe-wide thinking in planning the restructuring of our defence industries. The countries of central and eastern Europe, especially the three that have just joined NATO—Poland, Hungary and the Czech Republic—have established defence industries, and cross-border mergers with them will facilitate interoperability and hasten standardisation within NATO.
The bulk of Soviet armaments were manufactured by Russia and the Ukraine, with about 10 million people involved in those industries. They will continue to have an aggressive export policy, but privatisation in those countries has been chaotic and there has been a brain drain to the west. Domestic armaments orders are scarce, but those industries, with their high added value, are precisely the sort that those countries should be trying to retain and develop to solve their economic problems.
I think the European Commission should be asked to extend the Konver programme to facilitate that. It could include collaborations and mergers across the continent of Europe and, incidentally, make it easier for British companies to sell into central and eastern Europe. As I said earlier, when sales are made, the question of offset and assembly in the purchaser country often arises. If the industries do not exist, how on earth can they provide the offset facilities?
I said before that we must never create a fortress Europe or forget that the north Atlantic alliance underpins our security. However, the two-way street in European defence sales and procurement across the Atlantic is outrageously unbalanced by 6:1 in America's favour. The United Kingdom fares better: the balance is about 2:1. We get the lion's share of American business, and long may that remain so. Our European partners do not do well and that 6:1 imbalance must be rectified. We must do
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everything we can to try to restore balance, but we will stand a far better chance of achieving our goal if the European industries, united through commercial mergers, provide the critical mass necessary to maintain a leading technological edge at low unit cost. If we do not muster the political and commercial courage to achieve that outcome, at the end of the day, we will have no alternative in this country but to buy American.
7.1 pm
Ms Rachel Squire: I shall comment briefly on specific procurement issues and pick up on some of the important issues covered by the hon. Member for Romsey (Mr. Colvin).
I think that it is appropriate to begin by mentioning the people who design, develop and produce our defence equipment. It is a tribute to them that, in spite of years of procurement delays on so many bids and rationalisation of the industry that halved its work force in this country in less than a decade, we still have a defence manufacturing industry that is viewed as a world leader and as an industry that is worth doing business with globally.
I should also pay tribute to the people who use that defence equipment. Our armed forces personnel depend for their lives on that equipment not letting them down when they need it most. As we speak, thousands of members of the British armed forces and the forces of our NATO allies are relying on that equipment to ensure that they return safely to their barracks and posts.
A central aim of the strategic defence review was to ensure that our armed forces are equipped properly. They must be able to undertake a wide variety of military tasks from peacekeeping to high-intensity conflict. That requires equipment that is inherently flexible. I highlight the area of research and design, which comes long before the production stage. Equipment is designed sometimes for military and sometimes for civilian use. More often, dual-use technology is designed for use in both civilian and military spheres. That is certainly the case in the avionics and aerospace industries.
Although it is not strictly a Ministry of Defence initiative, I welcome the Government's recent decision to retain the civil aerospace research and development budget in the Department of Trade and Industry for another year. I hope that will continue as the programme has spin-offs for military research and design.
I am extremely sorry that the hon. Member for Salisbury (Mr. Key) has left the Chamber because I am about to say something truly memorable: I agree with some of his remarks about the Defence Evaluation and Research Agency. I hope that that body will continue to be the MOD's main source of honest and independent scientific and technical advice of the highest quality. I admit to having a direct constituency, as well as a wider, interest in DERA as part of its operations is located at Rosyth. I share some of the concerns expressed by the Defence Committee report and by the industry.
DERA was created to gather scientists and engineers from a full range of areas to work for the MOD. That collaboration of minds was intended to foster the exchange of technical information and to provide a method of forming the multi-disciplinary teams that are

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vital to today's research process. I am concerned that we risk losing some of our best British brains if we over-commercialise DERA.
Mr. Colvin: I am delighted to hear that the hon. Lady has read the Select Committee report specifically about DERA. During our visits to the United States, we discovered that it is enthusiastically embracing co-operation in research and development. That initiative would be undermined if DERA lost the impartiality that it enjoys as a public sector body.
Ms Squire: The hon. Gentleman must be able to read my mind because that is my next point. DERA is trusted as an organisation with integrity. It has developed very good relations with the US Government, in particular, and we recognise that it has access to aspects of US research and development that is not available to other NATO allies.
Mr. Gerald Howarth: I agree entirely with the hon. Lady's remarks about DERA, whose headquarters are located in my constituency. Has she spoken to DERA senior management, who face very real difficulties? DERA's funding has been cut by about 10 per cent. and some of its potential research projects may be put out to the private sector. How may that problem be resolved to preserve DERA as a vital resource in the national interest?
Ms Squire: I have not received that much co-operation from DERA senior management recently. I have attempted to visit DERA at Rosyth to obtain an up-to-date picture of its operations, but I have made little progress in that regard. While I have read the Defence Committee's report, I do not claim to have full knowledge of the fine details of DERA's operations. Therefore, I cannot offer the answers that the hon. Gentleman seeks.
It is important that we maintain DERA's reputation and high standards. DERA at Rosyth will contain the Scottish wing of the Defence Diversification Agency. I am keen to harness its skills and innovative ideas in translating military technology to civilian use and encouraging jobs in that area. Like Conservative Members, I hope that there will soon be an announcement and a report stating how the MOD views the future direction of DERA and confirming that there will soon be security for the highly skilled engineers and others who are involved.
On specific procurement projects, my hon. Friend the Member for Alyn and Deeside (Mr. Jones) has mentioned ASTOR and argued extremely well in its favour. To my knowledge, ASTOR has been considered by the MOD for more than 20 years, so it is a little rich for Conservative Members to say that the Government are causing the project undue delay. I have been inundated—as, I am sure, have other hon. Members—with strong arguments from all the three main bidders about which option the Government should choose. All three have points in their favour relating to retention and support of British jobs and the consolidation of Britain's leading radar technology. I do not envy Ministers in having to make that decision, but like other hon. Members, I hope that it will be announced shortly.
Mr. Michael Foster: Does my hon. Friend agree that the Wizard project has an advantage
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because when it becomes the market leader, as it inevitably will, the industrial benefit from the jobs that it will create will be significantly greater than that offered by the other bidders?
Ms Squire: I sympathise greatly with my hon. Friend's arguments for one of the bidders, but I have said to all the firms that they have a strong case, so 1 shall not, at this stage, come down in favour of a particular one.
Hon. Members would think that something was seriously wrong with me if I did not mention Rosyth dockyard. I recently had the pleasure and honour of opening an excellent example of Scottish engineering. It seems appropriate that, as we move into the next century, I performed that duty while in the background stood an example of Scottish engineering from more than 100 years ago—the Forth rail bridge. The new engineering project at the dockyard is a world leader; it is a seismic docking cradle for submarine refits which will withstand an earthquake of point five on the Richter scale. The dock gates also utilise innovative concrete caissons. I pay particular tribute to the Babtie Group and Babcock Defence Ltd and all the designers and engineers who were involved in that project. I pay tribute also to the Minister for the Armed Forces and the Secretary of State for Defence for committing themselves to the allocated programme that was set out by the previous Government. That commitment means that HMS Spartan is, at this very moment, sitting in that seismic docking cradle, providing hundreds of jobs at the dockyard.
I cannot resist pointing out that the project is a prime example of the benefits bestowed by a United Kingdom Government on a Scottish manufacturing work force. It is notable that, once again, the hon. Member for Banff and Buchan (Mr. Salmond) and his colleagues are absent from a defence debate.
I have a question for the Minister about Rosyth dockyard, which I am sure will be of interest to those involved in the procurement process. Is the Kosovo conflict likely to lead to a delay in procurement decisions? At Rosyth, the sonar 2087 programme and the alternative landing ships logistics programme are of particular interest.
On the subject of the shipbuilding and ship refitting industry, like other hon. Members, I was sorry—but not surprised—to hear about the demise of project Horizon. I congratulate the Government for making a decision on that, rather than putting it off as the previous Government did. I hope that the decision will provide additional work opportunities in the British shipyards that we all support. We are keen that they should have a future.
I thank the Minister for the Armed Forces and his colleagues for their interest in and assistance to the troubled Kvaerner Govan shipyard. They have tried to encourage all interested parties to give the shipyard a future.
My impression, when reading of some new technological developments, is that the days of "Beam me up, Scotty," are not far off, but, unfortunately, I am already too ancient to be the first captain of the starship Enterprise. There seems to be widespread agreement that technology has always shaped the battlespace. The battlespace of the future will require—as, to some extent, the present battlespace does—mobility, rapidity of reaction, dispersal of troops and equipment and

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disengagement of fighting. Technology and its application must be a high priority. It is vital that our armed forces have equipment that gives them a technological edge over any potential opponents.
As we know from struggling with our office computer hardware and software, information technology changes extremely rapidly. That presents difficulties to the Government, particularly the Defence Procurement Agency. I welcome the introduction of the long-overdue smart procurement initiative in 1997 and the establishment of the agency. I particularly welcome the fact that procurement policy will allow equipment to be upgraded instrumentally, which is one way of trying to keep pace with the developments in information technology.
I welcome the Under-Secretary's mention of the integrated project teams, which are also long overdue and may help us to keep up with information technology. I stress to him the importance of examining all the ways in which we can keep pace with that technology and ensure that our troops on the front line have the best technology available. I know that the MOD has produced a technology strategy, as has the national defence industry. I welcome the Department of Trade and Industry's involvement in the group for aeronautical research and technology in Europe—GATEUR. By such actions, the Government are recognising the crucial importance of information technology to military command, control and communications, and the dual nature of its use.
Increasingly, it seems that the in-phrase to describe that area of information technology, warfare and systems is
"the revolution in military affairs"
which has been the subject of considerable debate in the United States. It is said that it could result in more effective coalition operations if there is compatibility and inter-operability. Therefore, we can scarcely talk about defence equipment, the industry that produces it and, ultimately, the effectiveness and security of our armed forces and of the United Kingdom without talking about international co-operation and collaboration. That means, as the hon. Member for Romsey said, and as the Select Committee reported, that the defence industry can rarely now go it alone.
We shall all continue to argue for defence jobs in our constituencies, and to argue that we must always retain a core defence manufacturing capability for strategic reasons; but, as the excellent joint report on defence procurement by the Defence and Trade and Industry Committees, published in July 1998, said in paragraph 22:
"There are likely to be few cases in the foreseeable future where the UK would wish to operate alone militarily and, with globalised markets, retaining a self-sufficiency in strategic capabilities is becoming an increasingly difficult and expensive option. The key to retaining access to strategically important technologies and manufacturing capabilities, in an era of increasingly rationalised industry and collaborative programmes, is to ensure mutual inter-dependence."
That must be a key theme.
Those two sentences alone have far-reaching consequences for our defence exports, for defence industry rationalisation in Britain and in Europe, equipment interoperability and, ultimately, for defence capability. One cannot consider any of those areas in isolation from the others. It is a very complex area.
Other hon. Members want to speak, so I shall not mention OCCAR and WEAG, ably discussed by the hon. Member for Romsey. However, we must accept that such
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projects will be affected by the background against which they operate—the enlargement of NATO and of the European Union.
In the strategic defence review, under the supporting objective headed "Equipment Programme", it merely says in one line:
"to procure equipment which most cost-effectively meets agreed military requirements."
That sounds simple and straightforward; yet, as I have learned in my time in the House—and, I hope, have shown in some of my remarks—the area is complex and has implications that go far beyond British shores.
I end as I began, by talking about the people and about my hope—which is shared by other hon. Members—commitment and determination that the defence equipment that is currently being used to deal with the Kosovo crisis will, first, ultimately achieve an end to the brutal butchery of Milosevic's regime; secondly, ensure that more than 1 million refugees can return to live, without fear, in their own country; and finally, and very importantly, enable all our service men and women and those of our NATO allies to return to their own homes and families in safety.
7.24 pm
Mr. David Heath: We have already had an interesting debate. I agree with the right hon. Member for Bridgwater (Mr. King) and the hon. Member for Romsey (Mr. Colvin) that this tri-service debate is of great benefit to our deliberations and shows that jointery can take place even in the Chamber.
I am grateful to Labour Members for having avoided the use of the term "joined-up government" throughout the debate so far. It is always nice to hear these catch phrases, but perhaps we may be spared them once in a while.
As has been said, we have a unique opportunity to debate the vital subject of defence procurement, against the backdrop of the unfolding scenario in Kosovo. That has advantages and disadvantages, but it means that what we are talking about moves from the theoretical immediately to the practical. I join the hon. Member for Dunfermline, West (Ms Squire) in paying tribute to the men and women who are serving with our forces in that theatre and to those who perform the equally crucial job of providing support for those forces.
I start by discussing two financial matters. The first is the implications of the Kosovo conflict. I accept that we have an incomplete picture at this stage, and I would be the last to suggest that an accountant should ride on the back of every fighter, working out the cost, but by 8 April, it was estimated that the conflict had cost £17 million, not including used ordnance. That figure is likely to increase rapidly. Paul Beaver of Jane's Defence Weekly estimates that the costs are running at £2 million a day and are set to rise.
The Government have stated their intention, in accessing the contingency reserve, to ensure that the defence budget is not directly harmed as a result, but a very considerable sum is involved. I have it from a source as authoritative as the Liberal Democrat Treasury team—and I certainly would not wish to argue with them—that the total cost might be as much as £1 billion, plus equipment replacement costs. That takes a very considerable chunk out of a £1.2 billion contingency fund.

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There is a significant risk that, consequently, the Ministry of Defence will seek all of the normal means available to stretch its budget. We are talking about virement, and about slippage within capital procurement costs. Our involvement in Kosovo—or in the region—is unlikely to end in the short term, and we are likely to have an on-going commitment, which will be an expensive option. That must mean that although the strategic objectives of the strategic defence review have probably been reinforced by the conflict, the financial assumptions that underlie the SDR must be revisited, because it is no good ploughing ahead with a strategy based on a specific financial scenario if those resources are no longer available.
The second financial factor, which will interplay with the first, is the success or otherwise of the smart procurement initiative. The Under-Secretary uttered profuse expressions of hope that it would all turn out all right. I should like a little more evidence that it will.
Let us recall the Public Accounts Committee report published in December 1998. It analysed the National Audit Office report on defence projects during 1997. Cost overruns averaged 9.1 per cent. of approvals. Time overruns averaged 37 months. I have to say, as a former leader of a local authority and member of the Audit Commission, that if that sort of thing were happening in programmes within my control, I would be extremely concerned—but it has become the norm in defence procurement.
Those figures are very difficult to reconcile with the aim of saving £2 billion over the next decade. We spend £9 billion a year on defence equipment, so a £2 billion saving over 10 years is about 1.8 per cent. of overall spend. If we set that against a 9.1 per cent. overspend on each project, one dwarfs the other. The possibility of the smart procurement initiative not releasing the funds that are expected is substantial. That is a proper concern.
We might have been better informed had this debate taken place in a few weeks' time. We should then have had the National Audit Office report on major defence projects for 1998, and we could then have tested the hypothesis that new structures were in place that reduced the overspend and made projects more manageable. However, we do not have that information. That is an accident of timing and I accept that Ministers are probably not responsible for that. Nevertheless, it means that we cannot support the theses that have been put forward by Ministers with hard facts. We shall have to consider the consequences for the strategic defence review if there is a lack of achievement.
I shall move on to specific programmes. I appreciate that there is a tradition in this place that Members use these debates as an opportunity to trail the enticements of their specific constituency interests before Ministers in the hope that they will bite. I reassure the Minister that I do not intend to do that. That is not because I have any lack of confidence in the defence contractors within my constituency. I appreciate that GKN Westland's and Thomson Marconi's merits are transparently obvious to the Ministry and do not need amplification by me.
What are the early lessons from Kosovo? First, we saw that British high-level bombing missions were hampered in the early stages by cloudy conditions. Can the Minister
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assure me that the Brimstone anti-armour missile—I believe that its in-service date is 2001—will rectify that problem and will not suffer in the same way? Given that the strategic defence review's pledge is to decrease book-value stocks by 20 per cent.—I think that we have had that confirmed this evening—will the ordnance that is being used be replaced at lower stock levels than at present? If that is the case, is that wise, given the future commitments that we may have? Should we not be increasing stocks rather than depleting them?
While we are talking about stocking levels, let us consider spare parts for both fixed-wing and rotary-wing aircraft, which are in short supply. How much longer are we to require our maintenance crews to cannibalise aircraft to keep other aircraft in the air? What is the effect of the SDR's reduction of stock on that situation?
We have already had a substantial debate on the contract for the ASTOR project—namely, airborne stand-off radar. As we know, the contract has not yet been let, although we are told that it is receiving close ministerial attention. I wonder to what extent the experiences of Kosovo have informed that consideration by Ministers. Have the operational, interoperability and industrial participation benefits been properly evaluated? Indeed, have operations in Kosovo clearly demonstrated the need for ASTOR and its value to our forces in future?
Earlier this year, we had Phoenix entering service—an unmanned missile used for reconnaissance purposes. Has it been deployed in Kosovo? If not, what is the theatre in which it is to be deployed? If it has been deployed, how does its performance compare with the American and German systems?
The aircraft carriers are close to my heart. We have a renewed commitment that they remain a fundamental part of forward planning. Give the logistical difficulties of relying on other allied nations for rear area deployment, Kosovo has underlined the need to have such a platform if we are to extend our reach. Can we be absolutely sure that nothing in the financial consequences of Kosovo or other decisions that may be taken elsewhere in government will delay the in-service date of 2012 for the two carriers?
Can we see an early decision on future carrier-borne aircraft? I am aware that other options are being considered. It seems that those who will fly the aircraft feel that there is no sensible option other than a short-take-off, vertical-landing version of the joint-strike fighter. The sooner that the Government make that decision, the better.
The Under-Secretary of State unleashed a small bombshell with his announcement on the Horizon frigates. It was a curious way of making a decision with such ramifications. Many questions have been raised. I felt that the Minister was a little reluctant to share with the House the assessed consequences of his decision—what it will mean in prolonging the life of type 42 frigates and the extent to which we can rely on that. What are the consequences of the Minister's announcement for the common foreign and security policy and the European maritime force? How does he reconcile the in-service date of 2004 for the principal anti-air-missile system—PAAMS—and the year 2006 for the commissioning of the frigates? What is to happen in the meantime, or do we assume that PAAMS is delayed by a further two years?

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What future is there for TRIGAT, the third generation anti-tank guided weapon? We have chosen to receive the Apache Longbow helicopters with Hellfire missiles, not TRIGAT. However, as I understand it, we are still obliged to fund development. France and Germany have limited needs as well. If the TRIGAT programme disintegrates—that would not be an unlikely scenario given what we have heard this evening about other programmes—how will we maintain European development of anti-tank guided missiles?
I agree with the Minister that Eurofighter is likely to be a very successful aircraft. However, it will need beyond-visual-range air-to-air missiles. A decision has still not been made between the American and European bids. However, if the European bid—the Meteor bid—meets all our operational requirements, is there not a substantial argument for that rather than the American option? The hon. Member for Romsey is absolutely right to say that the so-called two-way street between America and Britain runs substantially in one direction. Indeed, there is no evidence of a two-way street. Perhaps it is better that we should have reliability and confidence in our own systems.
Mr. Colvin: There is a further reason for buying British in this instance, and that is the sale of the Eurofighter to third countries, which could well be stopped if it were equipped with the American version of beyond-visual-range air-to-air missiles. That would not be a very good reason for buying British.
Mr. Heath: The hon. Gentleman is absolutely right. There is a potential restriction on our sales at the diktat of the American Government. That is not an entirely acceptable position. It will be far better if we can ensure that we have a home-grown product that we can sell to those countries that we consider to be appropriate.
The replacement for Hercules and the A400M Airbus project have been mentioned. We have heard from the hon. Member for Alyn and Deeside (Mr. Jones) that they would have a substantial British manufacturing component. We have not yet heard from the Government whether they retain the commitment to 40 to 50 aircraft to maintain the full fleet of heavy lift. I hope that the Minister will be able to enlighten us.
We have heard a little about information technology introductions. One of the great problems is the propensity of IT companies to sell products that they have not even started to develop—so-called vapourware rather than software. We understand that this is a problem in defence procurement as it is elsewhere. However, what recourse do Ministers have in the construction of their contracts when systems that are being introduced appear not to perform the functions for which they are intended? I bring to the attention of the House the introduction of a back-room service—the payroll and exchequer computer systems for the Royal Navy. I understand that there are significant problems in getting them to do the job for which they are intended.
All those systems are based on private-public partnerships. As hon. Members know, we have no intrinsic ideological argument with that, but will they provide the contract flexibility that we will need—to which my right hon. and learned Friend the Member for North-East Fife (Mr. Campbell) referred—and will they
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provide value for money, given that they lock us into contracts that may, over the longer term, cost more to run? How should we reconcile that with the limited budget within the strategic defence review? Will those systems ensure the maintenance of this country's technological base, which is so important to our future development. As the right hon. Member for Bridgwater said, will they maintain the continuity of supply?
All systems that we procure for our armed forces must have effectiveness in a fighting capacity as their basic requirement.
Mr. Keith Simpson: Will they work?
Mr. Heath: The hon. Gentleman is absolutely right, but we put further demands on our armed forces, as is being shown in Kosovo and elsewhere around the world. Their work has a humanitarian aspect. I ask the Minister to do everything he can, where possible and without in any way compromising the military effectiveness of what is bought for the forces, to build into the construction of ships or planes the appropriate machinery and the appropriate space so that such equipment can fulfil humanitarian functions as well, because they will become an increasingly large part of the work of our armed forces.
The Minister has a huge number of questions to answer at the end of the debate. I suspect that he will not answer them all, or we should be here for a very long time, and that he will write to me in answer to questions that he does not reply to specifically, but I hope that he will ensure that we maintain the basic thrust of the strategic defence review, that the budget lines follow the review's strategic intentions and that we improve the inter-operability of and co-operation between forces on the European continent so that we can achieve the best value for money and effectiveness for those systems.
I also hope that the Minister will ensure that, if we ask our forces to do extremely difficult jobs in dangerous circumstances, we and they are confident that their kit will do the job that we want them to do.
7.42 pm
Mr. Lindsay Hoyle: This is obviously an important debate for all hon. Members and one in which they can put their views across. Whatever hon. Members might say tonight, we should all be a little more honest and accept that, to be fair to them, the Government have given new hope to the armed forces following the failures of the previous Government. If Conservative Members were as honest as the Leader of the Opposition expects them to be, they would apologise for what went on previously.
We should be saying how well the Government have done so far, and even the Opposition must admit that they have been proactive and have engaged in the right way—by speaking to the experts and delivering on behalf of people in the armed forces. I am proud of what the Government have done so far. We are sceptical on some issues, but the majority of what has been done is good. We may worry about certain aspects, or not accept them, but we must look at needs.
BAe-Matra Dynamics, which is just down the road from my constituency, is an important player in the defence of this country and a major supplier that can give us a beyond-visual-range air-to-air missile—the Meteor,

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which we must go for. We must have the right equipment for Eurofighter and Gripen, and Meteor will fit both those aircraft. If we fit Meteor to Eurofighter and Gripen, not only will they be the most effective aircraft, but we will be free from United States export restrictions, which could be placed on us if we go for the opposition and manufacture under licence. We must always remember that.
We must also remember that Russia and China have strong capabilities. China might buy Russian expertise to develop a missile that could take out our aircraft and which could be sold around the world. Meteor, which is by far the most advanced missile in the world, would give us a cutting edge in technology and the air superiority we need. There is no doubt that Eurofighter could be the world's leading aircraft. There is no point in having that aircraft if we do not arm it with the best missile, and Meteor fits that requirement superbly. We have had the arguments and we have delivered on Eurofighter. Hon. Members on both sides of the House recognise the need for that aircraft. Jobs will be created in Lancashire and we need to ensure that there is no job reduction in its defence industry.
We also need to consider the need for the future large aircraft, which is essential. We are a few years from production, but we ought not to lose sight of the important role that it has to play. The FLA is important to the aerospace industry of this. country and of Europe. It would allow us to be at the top end of the world heavy-lift aircraft market and, if we do not go ahead, we will end up out of that market and will never be able to step back in. There has been a lot of support for the FLA on both sides of the House.
The alternative is looking for a stopgap, such as C17. The Royal Air Force wants it, but the question mark over the C17 is its expense. We are setting up a scheme in which we can look for a stopgap to be used for the next six to eight years. There is an alternative to the C17—the Antonov. People may ask why we would want to use the Antonov. The answer is simple: Antonovs were used 14 times in 1996, 10 times in 1997 and 16 times in 1998, so why are we worried?
It is important to recognise that the benefit of the Antonov is that it would be operated by a British company and flown by RAF crews, and would save 50 per cent. of the cost of a C17. Let us have a good competition, but a fair one, and let us judge our needs for six years. We should not lose sight of what we should be doing: delivering an FLA with Rolls-Royce engines and securing many jobs in the UK, which is important to us all. We must not lose sight of the fact that there is an alternative to the C17. I hope that my hon. Friend the Minister will take that on board and realise that the British-based Antonov, operated with RAF crews on board, is available to him.
The aerospace industry is important to Lancashire and to the north-west. We have good companies up there, such as Pendle Manufacturing and the Computer Science Corporation in my constituency, and the Lancashire Aerospace Society. Those leading companies have a role to play in the future of the aerospace industry in the north-west.
The headquarters of Royal Ordnance is also in my constituency. That important company's capability ought not to be lost. It should be able to supply ammunition as
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and when it is needed. The high explosives capability at Bridgwater could also be put at risk. We would be foolhardy to rely on overseas competitors after the previous Government's embarrassment with Belgium. Royal Ordnance has a part to play and should be supported. We must recognise that we need ammunition and ordnance to be supplied from this country and for this country.
Mr. Key: Does the hon. Gentleman agree that none of us disputes for a moment the ability of Somchem and Denel in South Africa to produce those products? It is simply that we doubt very much whether it is in Britain's long-term national interest to be unable to do so.
Mr. Hoyle: I have worries as well. Although Somchem and Denel in South Africa are reputable companies, they might not be able to deliver supplies when we want them. The UK should, therefore, have that capability. This Government must look back at what the previous Government did, because it was a disaster for the Royal Ordnance factories. The previous Government did not support them in their hour of need and we must now recognise that Royal Ordnance will take its last breath unless we support it. It has been strangled for 18 years and we now have the chance to give it a new lease of life. I hope that the Minister sees the benefit of having that capability within the UK, with the headquarters at Chorley.
Another matter that worries me is the trucks that are supplied to the armed forces. What could be better than Leyland Trucks, which has a good record on supplying the armed forces? I am afraid that a contract was given to Volvo. Although Volvo made many promises, 12 months after it had secured the contract, it pulled out. I presume that it will take production back to Sweden. Some will be in Poland, but that is not good for the UK. Indeed, I think that it is a breach of contract. We should be supporting the UK truck industry, which produces quality trucks built by a quality work force. It will give us a long-term commitment, which the UK has always had in the past. To have trucks supplied from abroad is worrying for the future because the supply chain could break down at any time. If we stick with companies like Leyland Trucks, we shall have the benefit of Multipart, which could make all the spares for the Ministry of Defence in Chorley. I hope that the Minister recognises the benefit to be gained from that.
Other speakers have mentioned the fact that helicopters and rotor-wing aircraft have a major role to play. GKN Westland is a wonderful company, which supplied and delivered EH101s to the armed forces. It is a superb helicopter with a long-term role. However, we must not lose sight of what is happening. When we signed up for a joint venture with Agusta, the Italian helicopter company, we were told not to worry because the Italian Government would take some of the helicopters. It never quite happens, does it? We always play our part, but get left high and dry by our partners. We should recognise that Westland has a long-term future and should invest in helicopters beyond the EH101. The building of the Apache helicopter will be under licence and that superior aircraft will give us a strong defence, as well as an attack capability. I look forward to seeing the role that those helicopters will play in the future.

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Aircraft carriers have rightly been mentioned, as they are an important theme of the strategic defence review. We were told that two new carriers were required and, hopefully, they will be delivered on time. However, an early order will stop wrangling in the House. It must be recognised that the carriers need to be big enough—well over 50,000 tonnes—because, if nothing else, that provides a floating land mass that can move around the world's hot spots. Obviously, the bigger the carriers are, the better their ability to carry all types of aircraft. Eurofighter should have a naval version, and the new aircraft carriers should be capable of allowing all our aircraft to be used on them.
We should remember that HMS Ocean is a wonderful ship, which is going through sea trials now. It was a brave commitment by the previous Government who, in the face of all that was happening in defence and all the cuts that were going on, ensured that HMS Ocean was built. However, we must learn from their mistakes not to do things on the cheap. HMS Ocean was built on the cheap and that is now proving costly—the anchor that had come from China fell off, so that was not a good start. We had problems during the sea trials, and the carrier is still having hiccups now. It is one thing to get value for money, but to build a ship like a Meccano model, shipping bits in from around the world, simply does not work. We can learn from that and I look forward to hearing a commitment from the Government on carriers.
Mr. Blunt: I have listened with great enjoyment to the hon. Gentleman's endorsement of huge aircraft carriers that can float all our aircraft—in addition to Cl7s. He is now discussing HMS Ocean. Can I take it that he supports an increase in the defence budget from the projected 2.3 per cent. of our gross domestic product in order to pay for all that?
Mr. Hoyle: I would be foolish to be drawn in by somebody who was an adviser to the previous Government and who made all the mistakes at that time. For the hon. Gentleman to try to tempt me with a bit of bait like that is quite ridiculous. Let us move on to more sensible matters that need to be discussed.
The textile industry is in dire straits. What better way to help it than to allow it to play an important part in equipping the armed forces? When one studies MOD policy on international procurement, one sees that that has been the theme behind it, but we have always wanted to ensure that there is a UK market. That remains healthy at 76 per cent., which is an improvement on previous years. Let us ensure that we give UK companies a fair crack of the whip when contracts are being awarded. It cannot make sense that uniforms are imported from Germany, Belgium, Italy, Spain and Canada. We should look for a supply base in the UK.
The number of contracts awarded to UK companies has increased. In 1996–97, 155 contacts were awarded; in 1997–98, 300 contracts were awarded: and in 1998–99, 358 contracts were awarded, so there has been an improvement for the British textile industry. It is an important manufacturing base and we should support it. Pincroft in Adlington in my constituency is one of the leading companies in the world for supplying camouflage for the armed forces, from New Zealand to the Falklands. Clearly, it is best placed to take up further contracts when they are being awarded.
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I should also mention the Royal Marines and the fact that a fast response force is the way in which to proceed. The Royal Marines have a major role to play, but we must ensure that they have the best equipment and the best possible support from the MOD. Let us never do things on the cheap again.
It would be remiss of me not to mention the Territorial Army. Ultimately, the TA's equipment has to be stored and we must take a strategic view on that. We have made a slight mistake, especially as regards Chorley and the 101 TA battalion at Lancaster house. Even at this late stage, I urge the Minister to recognise that Chorley has a part to play. if buildings are to be knocked down—[Interruption.] I hear my hon. Friend the Member for Dunfermline, West (Ms Squire) grumbling. She should understand that the problem is bigger than she realises. She has not yet heard about this issue and I am sorry that she feels that she has to sigh, although she is free to do so if she wishes.
Although decisions have been taken, there is still time to reconsider what happens to Lancaster house, because it has a part to play in the future of the Territorial Army as well as the cadets. What has not been allowed for is the fact that everything that the cadets have now will be replicated. A new building where the existing building is demolished does not make much sense, and in addition, the shooting range used not only by the cadets of the Army and the Air Force, but by the sea cadets will be lost. A major cost will be incurred in trying to rebuild that. I urge the Minister to rethink the future of Chorley, because there is still hope there.
Obviously, the National Audit Office has been mentioned. I think that we have a part to play. I question the investigations that the NAO does. It should be more responsible and should act on behalf of Members of Parliament.
7.59 pm
Mr. John Wilkinson: It is always a privilege to follow the hon. Member for Chorley (Mr. Hoyle). He clearly cares about the defence of this country. He made his reputation in defence of his local Territorial Army unit, and he made a speech which showed a wide-ranging interest in a number of important equipment issues.
I regret profoundly the loss of the single-service days. Each armed force—each service of the Crown—merits at the very least a day that it can call its own in Parliament, in which we can have a structured debate about the issues that concern that particular service. Today, when we are at war with Serbia—although the Foreign Secretary does not allow us to use the phrase "at war"—I am sure that right hon. and hon. Members would have warmed to the opportunity of being able to pay tribute at length to the air crews of the Royal Air Force who are risking their lives on our behalf over the skies of Serbia and Kosovo, to the Royal Navy and to the Army personnel who have given humanitarian aid. The House should have a debate on equipment, but not at the expense of single-service days.
I shall deal with just one subject. I hope that hon. Members will not think me one-track minded if the subject is mobility. It takes a war to make us realise that our function is never to second-guess military decisions once battle is joined. Our role is to ensure that our service

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personnel have the budgets necessary to conceive, define, develop and procure the equipment necessary for success in war; to man, maintain and modernise it; and to sustain it successfully in operations.
One central theme is worth repeating again and again. It is relevant in peacetime operations, in crisis management, peacekeeping, war fighting and humanitarian relief alike: it is the essential need for mobility. I shall focus on air mobility, because it was featured in the strategic defence review and because the ability to concentrate force rapidly at the decisive point has always been crucial to success in warfare. As we are daily reminded by the misery of the Kosovars, being able to project dominant force rapidly can have a deterrent effect. We seem not to have been able to do so, whether for political or military reasons. A war has erupted and the Kosovars and many others are suffering immeasurably. Once conflict is joined, mobility is central to a war-winning potential.
The need for enhanced air transport, and specifically for strategic heavy lift, grows as our armed forces shrink steadily in size. As we have seen in the Kosovo crisis, the ability swiftly to deploy forces into theatre with their combat equipment and munitions is at a premium. Forces that now take three weeks to deploy to the Balkans from Germany and the United Kingdom would take about the same number of hours from take-off to landing into theatre.
I mentioned the strategic defence review of July last year because it identified as urgent the need for four Cl7s or their equivalent to improve our strategic air transport. The industrial responses to the invitation to tender for the Royal Air Force's short-term strategic airlift programme only went in at the end of January this year. A decision is not anticipated before the end of 1999. That leisurely time scale is not now tolerable. The Royal Air Force has been able to assess the C17 for years, and has had exchange personnel flying the aircraft with the United States air force. It has also assessed the other contender, the Ukrainian Antonov 124 100 series aircraft, which has been in service with Heavy Lift Cargo Airlines at Stansted for some time.
Furthermore, the delay in the Hercules C130K rolling replacement programme with the more capable C130Js, which are unfortunately not now due to enter squadron service until early next year, accentuates the Royal Air Force's lack of transport volume. The Kosovo war verifies the familiar argument that, as air transport aircraft have to operate into war zones, they must be flown and have their first line servicing performed by uniformed personnel who are subject to Air Force discipline.
For a long time, I have argued that Heavy Lift Cargo Airlines at Stansted should become, under the sponsored reserve concept, a designated Royal Auxiliary Air Force squadron. If the cost of buying or leasing the hugely desirable C17 aircraft, which has an outstanding tactical capability to operate into small airfields, is now prohibitive—I am not able to judge that, only the air staff or perhaps the Treasury can—I believe that the requirement to carry outsize loads, be they main battle tanks, multiple launch rocket systems, armoured fighting vehicles, helicopters, bowlers, bulldozers, munitions, artillery pieces, Bailey bridges, mobile radars, stores of all kinds, fuel or water, is so urgent that the Ukrainian
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Antonov 124 should be procured. I say "Ukrainian" advisedly because of the risk of political interference were Antonov 124 aircraft leased from Russia.
In size, volume and weightlifting capability, the Antonov 124 is a remarkable aeroplane, but only the air staff can judge its potential against the C17 and the potential of reserve crews to operate it. Suffice it to say that many more transport aircraft are operated by the air national guard and the United States air force reserve together than are operated by the regular United States air force.
Furthermore, the evaluation, in parallel with the short-term strategic airlift programme, of the future transport aircraft to replace the second tranche of some 30 remaining C130Ks should not just consider the relative merits of the C130J, the A400M and the C17, but should also provide the Government with a crucial opportunity to rationalise and optimise the Royal Air Force's military air transport fleet to secure the maximum economy of operation.
I make two passionate pleas. First, the projected in-service date of 2007 for the replacement of the second tranche of C130Ks is too late, as they are uneconomic aircraft and some will have been in service for almost 40 years after their first procurement by the Royal Air Force. The in-service date should be brought forward as far as possible. Early availability of aircraft should be a key factor in the competition; so should spares and support simplification, and the need to avoid the construction of politically rather than militarily motivated aircraft. The Horizon fiasco is a case in point. Collaboration is not an end in itself. What is needed is affordable equipment available to the services within the required time scale and to the performance outlined in the specification. The RAF's fixed-wing transport fleet should therefore have only two fixed-wing aircraft types, one of which must be a genuine heavy-lift aircraft.
The final aspect of this theme, which we shall soon find in the Balkans war to be one of the perennial verities of modern combat, is that the need for helicopters is almost infinite, especially in difficult terrain and against guerrilla and regular armed forces alike. I therefore welcome the modification of the RAF's Chinook fleet to mark 2 status, and the RAF's acquisition of the support helicopter version of the Merlin. The process needs to be accelerated, however, as does the procurement of a more modern fixed-wing fleet.
There is a premium on mobility in modern warfare. It is the message of my speech, and I am sure that, as events unfold in Kosovo, its relevance will become clearer by the day.
8.11 pm
Mr. Tam Dalyell: On one point, I strongly agree with the hon. Member for Ruislip-Northwood (Mr. Wilkinson). There is much to be said for the old-fashioned single-service debates that we used to have. I must confess that this is the 78th defence debate in which I have taken part. Those single-service debates were productive, and I think that the services welcomed them. In the first in which I took part, the post of Minister for the Armed Forces was occupied by Brigadier John Profumo—and a very good Minister he was to go to. I was brought up in these matters by the predecessor of the present Minister for Defence

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Procurement. I refer to George Wigg, with whom my first quarrel concerned his treatment of John Profumo.
As an 18-year-old, I served as a gunner operator—what the Guards call a "donkey walloper"—in the Scots Greys. Although I am strongly opposed to the action in Kosovo, I am neither a pacifist nor other than deeply concerned about our service men. Indeed, when I had the honour to stay with my former national service regiment for three days last year in Bosnia, I was made an honorary member of the mess. I say that because although some of us—including my right hon. Friend the Member for Chesterfield (Mr. Benn) and my hon. Friend the Member for Halifax (Mrs. Mahon)—have been labelled pacifists and heaven knows what, we are not. What we are against are ill-conceived military adventures with an uncertain outcome and an unclear purpose.
It is in that context that I want to ask a question that was put to the Prime Minister five times this afternoon—first by the Leader of the Opposition, then by the Chairman of the Select Committee on Foreign Affairs and then, very directly, by me, by my right hon. Friend the Member for Llanelli (Mr. Davies) and by my hon. Friend the Member for Halifax. The question was this: what actually happens if a Russian ship in the Adriatic, coming into, say, the port of Bar, is apprehended, it is found that there is oil on board, and the ship refuses to take the action—unspecified action—that is asked of it?
That question did not suddenly occur to us. On 25 March, I asked the Foreign Secretary:
"Will my right hon. Friend refer to relations with the Russians? I was talking to The Economist's correspondent in Moscow, Edward Lucas, who asked what would happen to Russian cargo ships or Russian aircraft that might be carrying arms to the Serbs. Are they likely to be intercepted by NATO forces?"
The Foreign Secretary replied—I will not give all his answer—that he was glad to have the opportunity to reply to my question. He added:
"I am confident that the Russian Government will not seek to break the United Nations arms embargo on Serbia. I know that voices have been raised in Russia urging that; but as yet we have had no suggestion from the Russian Government that they intend to supply arms to Serbia".
Clearly, there is the possibility of oil being supplied. It is also clear that, whatever may be the negotiations between the Foreign Secretary and Mr. Ivanov, there are others in the background—General Lebed, Mr. Zugianov and, indeed, relative moderates such as Mr. Gadar—who may take a very different view. It is at our peril that we do not understand the anger of the Russians in this context.
I again ask the question that was asked this afternoon. What are the instructions to British ships? I suppose that this comes under the general heading of rules of engagement, but the blunt question is this: what the hell is a crew meant to do if it apprehends a Russian ship with the prospect of setting alight a serious international incident? That question deserves an answer.
Mr. Deputy Speaker: Order. I hesitate to interrupt the hon. Gentleman, but the debate is about defence equipment, and I think that he should direct his remarks more specifically to that.
Mr. Dalyell: I shall turn to another matter concerning equipment.
Mr. Gerald Howarth: Will the hon. Gentleman give way?
Mr. Dalyell: Of course.
Mr. Howarth: When I listened to the hon. Gentleman's exchange with the Prime Minister this afternoon, it was clear to me from the Prime Minister's answer that he was more than prepared to use some of the equipment that we have been discussing.
Mr. Dalyell: That means military action against the Russians, if I interpret what the hon. Gentleman has said correctly, and that prompts all sorts of questions. Once we embark on armed conflict with the Russians, we embark on a chain of unpredictability that I suspect was not bargained for when some of my colleagues started out on this adventure.
Let me return to the question of equipment. I also asked the Foreign Secretary:
"What is the position of the valuable contacts that my right hon. Friend the Foreign Secretary has had with the Russians over the Arctic fleet and the millennium bug? Has all that co-operation vanished?"
The answer was:
"I assure my hon. Friend that contact and co-operation will not come to an end through any wish on our part. I do not believe that there will be any wish for that from the Russian Government"— [Official Report, 25 March 1999; Vol. 328, c. 539-40.]
As I understood it, we were supplying equipment.
This week's issue of New Scientist reports:
"Plans for Russia to cooperate with Britain to prevent a nuclear alert caused by the millennium bug have been put on hold because of the Kosovo conflict. The countries were to have exchanged information about early warning systems for nuclear weapons to pre-empt any problems that might be caused by the date change on 1 January. But a spokesman for Britain's Ministry of Defence says that all plans for Y2K cooperation have been 'placed on the backburner for the foreseeable future'."
I ask Ministers what the position regarding Y2K co-operation is now. I understand from constituents in the university of Edinburgh who are involved that these are important matters, and that is it possible that the rusting Soviet Arctic fleet will create difficulties at the millennium.
I say that against the background of having been invited by the Foreign Office to a seminar on precisely this subject in the Locarno room there. One of those addressing the seminar was the governor of Murmansk. Anyone who heard him and the other Russian scientists there must be very clear that—given the end of December 1999—it is a perilous situation.
I come to another technical question, on the bombing of chemical factories. The Serb authorities have warned of an ecological catastrophe if NATO strikes a chemical plant—the Prima Iskra factory—near Belgrade. The Serb authorities have floodlit the factory, so that allied airplanes might see it clearly. The issue is the 180 tonnes of highly toxic hydrofluoride in the factory.
What is the policy of using equipment against chemical installations? As I understand it, real problems of pollution—in relation to chlorine, mercury, phosgene, sulphur dioxide, benzene and ammonia—are caused by the bombing. It will be perfectly satisfactory if the Minister would care to write to me with an answer to that

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question. However, I do hope that there is some policy on the folly of bombing highly technical installations in a modern society, with results that cannot be known.
I ask specifically about the Vinca institute, which is currently a very small nuclear installation. However, in 1984, the reactor—an 80 per cent. fissile highly enriched uranium reactor—was closed down. The core is still in it, as negotiations with the Chinese—who had the expertise to remove that particular core—have not been concluded. The fact is that, if any missile hits that type of reactor, regardless of whether it has been closed down—
Mr. Deputy Speaker: Order. Although this is an Adjournment debate, may I remind the hon. Gentleman of my earlier stricture? He should try to direct his remarks more directly to the subject of defence equipment.
Mr. Dalyell: I am asking what defence equipment is used against reactor cores that could be extremely Chernobyl-like dangerous.
I ask also about RAF Harrier GR7s having begun to use old-style bombs in their attacks on Serbian targets in Kosovo. As I understand it, on 10 April, jets were sent out for the first from their base in southern Italy carrying free-fall 1,000-lb bombs. Unlike the Paveway 2 laser-guided bombs used on previous missions against buildings, free-fall bombs rely on tail-fins.
I asked the Secretary of State for Defence how many free-fall bombs have been dropped in Yugoslavia in the past month, and what assessment he has made of the reliability of tail-fin guided direction. Today, he replied:
"A total of about 142 unguided bombs have been dropped by British aircraft in support of Operation Allied Force up to 22 April. They are assessed to have performed reliably and within designed specifications."
That is not the story I get from Kenneth Aitcheson of Rescue—the archaeological organisation—which combed the websites for me and made various inquiries.
Those free-fall bombs have created havoc with the Serbian heritage. They have damaged the 14th-century monastery church at Gracanica, near Pristina. The monastery church has been damaged by several consecutive NATO bombings in the vicinity. During the most recent senseless attack, on the morning of 10 April, the village of Gracanica was bombed again. The monastery is one of the highest achievements of late Byzantine architecture, and is the masterpiece of the best painters, from the beginning of the 14th century, in the whole of the Byzantine empire.
Gracanica has existed over centuries, up to today. In 1993, it was inscribed on the tentative "List of the World Cultural and Natural Heritage", using the UNESCO criteria for cultural property. So much for the bombs accuracy.
What do those free-fall bombs do to the 13th–14th century monastery of the patriarchate of Pec, which was badly damaged? Repeated NATO bombing has destroyed the old city centre of Pec, and the log cabin complex at Locane, near Decane. It has destroyed the old trade centre of Djakovica, and Djakovica's Hadum mosque and Tabaks bridge, and the 16th-century church at Drsnik.
NATO bombing has damaged Kragujevac. On the night of 8–9 April, the centre of Kragujevac was severely bombed by NATO, and the 19th-century church was
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damaged. So much for the accuracy of those smart weapons. Other 19th-century buildings—the Amidza Konak and the Prince Mihailo Konak—were also damaged. On the night of 15 April, the centre of Kragujevac was bombed by NATO again, and the old Parliament—where the first meeting of the Serbian Parliament was held, in 1859—was damaged.
Also damaged were the 14th-century fortress at Krusevac; the 12th-century St. Nicholas monastery, at Kursumlija; and the Virgin church, of the 6th and 12th centuries, at Kursumlija. Also damaged was the Markova Crkva archaeological site, dating from the 4th–7th centuries. The site was bombed by NATO on the night of 1–2 April, and the early Byzantine church was damaged. Damage was done to St. Procopius church, dating from the 9th–10th century, at Prokuplje; the Kopaonik mausoleum of Josip Pancic; the Vojlovica monastery at Pancevo—
Mr. Deputy Speaker: Order. The hon. Gentleman is an experienced Member of the House. I think that he should come back now to the subject of defence equipment.
Mr. Dalyell: I was really pointing out that defence equipment that is supposed to be accurate is in fact inaccurate unless it is decided that the targets are monasteries and churches. It has not been explained to the House of Commons or to anyone else—it is the effect of bombs that are supposedly accurate, but in fact are not. So anyone who drops tailfin bombs from a great height will get into all sorts of difficulty.
Let us take as an example what happened at Nis, the second largest city in Serbia and one of the oldest prehistoric settlements. The centre of the town and the western surroundings were damaged during the third immense and violent bombing of the city of Nis on 5 and 6 April. Severe damage was inflicted on the Chevaliers barracks and the entire complex of the old Nis fortress, and the centre of the city. The ramparts and the objects within them were badly damaged. I take your guidance, Mr. Deputy Speaker, but I am entitled to ask the people who launched the attack what was their intention. Of course, that was not their intention, but it is the effect of their action. People had better not make claims that they cannot substantiate for bombs and equipment.
I do not blame the pilot as it is in the very nature of affairs that people flying planes at great speed and at great height have all sorts of concerns about being locked on to by lasers and cannot always be as accurate as they might wish. The so-called collateral damage is in the very nature of this kind of war—and we should be forgiven a bit of a horse laugh at the words "collateral damage".
A fortnight ago, the Secretary of State for Defence claimed that all bombing targets were approved by him and the Prime Minister. The Americans must have found that laughable. Why has the Defence Secretary not been challenged on that? Who has the say of life and death over the workers in the Zastava car factory? NATO was warned that 10,000 people were in the plant, yet it went ahead and bombed it. The people of the mining town of Aleksinac had nothing to do with Kosovo, yet they were bombed. We glimpsed the body of an old woman, her legs protruding from the rubble of her home. Who was responsible, or was her life merely collateral? Why did a

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NATO pilot fire his missiles at a railway bridge while a civilian train was crossing? We know that terrible things have happened in Kosovo, but the whole story is a matter of Balkan cruelty and there are two sides to it.
Mr. Wilkinson: Of course there are two sides to the story. Does the hon. Gentleman not realise that the weapon that destroyed the bridge and the train had to be launched at some distance from the target? When the pilot began his run and launched the weapons there was probably no train on the bridge. The train may have steamed on to the bridge and was hit. I do not know, but that could well have been the case, so please will the hon. Gentleman recognise the very extreme difficulties within which our aircrew have to operate and the limitations of war? They have no intention of causing collateral damage; they do their best and they should be supported.
Mr. Dalyell: I emphasised the difficulties faced by pilots flying planes at high speeds. I agree that certain things are inevitable, but what does that do other than strengthen the people who are parading in support of Milosevic—the very people who 18 months ago were parading against him? We have snuffed out the fragile seeds of some kind of democracy that were sprouting in the ground in Serbia. What does the bombing do other than make the Serbs more determined, just as the citizens of this city were determined during the Blitz?
Finally, I should like to ask a question about depleted uranium. I interrupted my hon. Friend the Minister in his opening speech and, understandably, he referred me to the report produced by the MOD in March. The summary of that report states that
"there are two types of hazard posed by the use of DU: a radiation hazard, although DU is a low specific activity material (as defined by the International Atomic Energy Agency); and a chemical toxicity hazard, which is similar to that posed by other heavy metals, such as lead. There are a number of ways in which some UK troops could have been exposed to DU during the Gulf conflict. However, it is judged that any radiation effects from these possible exposures are extremely unlikely to be a contributory factor to the illnesses currently being experienced by some Gulf veterans."
Leaving the Gulf out of it, may we have a statement, either in writing or tonight, on whether the armour-piercing equipment which is related to DU specifications is being used and what account has been taken of the feeling among many Gulf veterans and many others that Gulf syndrome had something to do with the use of DU ammunition?
Finally, there is always the question, "What would you do?" I shall quote how Professor Sir Michael Howard, writing in The Times, ended his powerful lead letter. He wrote:
"The alternative is a negotiated settlement that Serbia can live with"—
Mr. Deputy Speaker: Order. The hon. Gentleman is really trying my patience now. This is not a general debate on the conflict in Kosovo; it is about defence equipment. He has listened to most of the debate and heard what kind of debate it is supposed to be. It is not about the conflict in Kosovo.
Mr. Dalyell: I end by begging my right hon. Friends to rethink their policy of "capitulation or else", because that will get us nowhere.
8.35 pm
Mr. Ken Maginnis: It was said earlier that this was not an appropriate time for this debate, given that the Secretary of State and Ministers were preoccupied with Kosovo. I think that the present conflict in Kosovo and the recent events in Iraq mean that the debate is not untimely. I welcome the opportunity to contribute to this debate and to talk about how best to defend the United Kingdom's security interests and further the cause of peace around the globe.
Over the years, British armed forces have demonstrated their adaptability and flexibility. We in Northern Ireland have witnessed daily the courage and tenacity of our service men and women in support of the Royal Ulster Constabulary, which has prevented chaos and anarchy taking hold of the Province. We were reminded of that only a few weeks ago, when newspaper reports recounted how the IRA's most notorious sniper unit was finally captured in south Armagh, thanks to the bravery and skill of the Special Air Services.
Our service men and women have served Northern Ireland well. In turn, as hon. Members interested in British industrial history will acknowledge, Northern Ireland's shipyards and aerospace industry have made important contributions to the national economy in peacetime, and to national security in times of war.
However, neither the armed forces nor the defence and aerospace industries can afford to be complacent. Technology moves forward at a breathless pace. As we have noted, military campaigns are being conducted in different ways, and defence chiefs are utilising technological advances more effectively. The strategic defence review, and the Government's commitment to implement its proposals, together amount to an explicit recognition of that, as does smart procurement, the new shibboleth of Ministry of Defence policy.
Similarly, the aerospace industry has had to change and rationalise to compete. In Northern Ireland, Short Brothers has evolved from manufacturing complete aircraft to specialising in the production of major composite components—nacelle systems, missile systems and fuselages. Specialisation in those areas has brought renewed recognition of excellence. Shorts remains the largest manufacturing employer in Northern Ireland, with a work force of about 7,000 men and women.
In the light of the technological advances and the ways in which modern warfare is conducted, the Ministry of Defence announced plans to provide the British armed forces with an airborne stand-off radar capability—ASTOR. Few can doubt the efficacy of such equipment, which would have been of immense benefit to our forces in Iraq during the Gulf war. Given that the region remains unstable, it may well be a necessary asset in the future.
Let me digress for a moment. About a month ago, I accompanied an all-party group to the United States to look at the question of weapons of mass destruction. I was startled, to put it mildly, to discover that the Americans, after the futile experiment of star wars technology, were thinking in terms of an anti-missile defence system. That was stand-off in its worst possible form.
To my knowledge, weapons of mass destruction have not been mentioned tonight. We are in an age in which such weapons—nuclear, biological or chemical—need not necessarily be delivered by missile, but can be delivered covertly, in ordinary transport. There therefore seems little

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to be said for adopting an ultimate defence stand-off. There will be increasing pressure on democratic countries to ensure that production of weapons of mass destruction in those states referred to as rogue states are dealt with at source. More and more, I believe, the western world will have to police rogue countries close to the source of the danger.
I disagree largely with the way in which the hon. Member for Linlithgow (Mr. Dalyell) presented his case, but I have some concern that, as a member of NATO along with our American allies, we are moving towards a point that is morally hard to sustain as regards the intensity of bombing in Kosovo. I do not fail to recognise that we must disable the anti-aircraft defences of the Serbs, create logistical problems for them and deal with their fuel reserves before we commit troops on the ground. However, we face the problem that people on the ground in Kosovo, who are not yet benefiting from our intervention—
Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will not follow the same line as the hon. Member for Linlithgow (Mr. Dalyell).
Mr. Maginnis: Be assured, Mr. Deputy Speaker, that I have no intention of doing so. I am making this point as a basis for what I want to say about ASTOR. As a European nation, we are beginning to recognise that we shall, sooner or later, have to put ground troops into Kosovo. That situation will face us again and again in forthcoming decades if we continue to assume the role of policing the world. The importance of ASTOR capability is further underlined every day by television reports of what is happening in Kosovo. Ultimately, we may have to put in ground troops if we are to resolve the problems faced by the Kosovars.
Should ground troops eventually be deployed, an ASTOR system would offer long-range surveillance of enemy troop movements and facilitate the targeting of precision weapons, missiles and ground attack aircraft. ASTOR would also provide data that would enable more efficient management of refugee movements. Had ASTOR been operational now, accounting for refugees would have been more straightforward. Losing literally thousands of those refugees would have been avoided and, on that basis, humanitarian aid could have been distributed more effectively.
In Northern Ireland, we have a particular interest in the project. Shorts Bombardier, alongside Raytheon, is among the bidders for the programme. Raytheon has selected the Bombardier Global Express business jet as the platform for the radar. The Global Express is an all-new design. It was designed specifically for high-altitude, long-range travel. As it is a new aircraft, it has built-in growth potential, which will enable it to incorporate more functions as required. Moreover, when compared with its competitors, the Global Express has a longer range, superior take-off and landing performance and lower direct operating costs at higher cruise speeds. Significantly, the Global Express also has a higher mission reliability based on performance comparisons with its main rivals.
Global Express is a key programme for Northern Ireland. Shorts alone makes 25 per cent. of the aircraft, including the forward fuselage, engine nacelles, horizontal
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stabiliser and other components. About 700 jobs at Shorts depend on Global Express at full production. If the aircraft were selected for the ASTOR programme, 130 new jobs would be created in a three-year period, 30 of them in engineering design, thereby helping to retain a key capability.
The success of the Raytheon bid would also enhance manufacturing industry in other parts of the United Kingdom where help is most needed. More than 350 jobs in Scotland and 400 jobs in Wales depend on the success of the bid. Seventy five per cent. of the ASTOR radar would be designed and manufactured in Edinburgh and Glenrothes, thus creating a new radar technology axis in Scotland, which will provide a new long-term capability. The mission system will be integrated into the Global Express at Broughton in north Wales. The "Celtic fringes" have always been at the forefront of British technology and intellectual expansion. The Raytheon project helps to recreate that dynamic.
Of course, there is a significant English constituency too. Motorola in Basingstoke and RSL in Harlow will provide the ground stations where the information produced by ASTOR will be analysed and passed to the commanders. Data links, which provide the sophisticated communications in ASTOR, will be produced by Ultra Electronics in Greenford, Middlesex.
The hon. Member for Alyn and Deeside (Mr. Jones) pointed out—I do not apologise for endorsing and reiterating the argument—that if Raytheon, which is transferring to the UK technology in radar, systems integration, communications, aircraft modification and manufacture, is awarded the contract, it will have repercussions to the benefit of the United Kingdom as a whole for decades to come. It will give the UK ownership of the entire Raytheon system and that augurs well for the future.
Our policy towards Iraq, which has been reiterated by defence chiefs in the past few weeks in relation to Kosovo, has demonstrated that Britain's security interests are, perhaps more than ever before, tied to the fortunes of the Royal Air Force. Increasingly, military intervention involves air strikes to diminish the capacity of aggressors to wreak war on defenceless civilians. Hence, it is scarcely an exaggeration to say that future British security interests are dependent on the success of the Eurofighter 2000. The United Kingdom is making a £16 billion investment in the EF2000, a massive commitment. It is essential that the aircraft is equipped with the best possible missile. Again, we in Northern Ireland have a special interest in the project. We believe that the Raytheon future medium-range air-to-air missile—FMRAAM—package offers the MOD the best possible solution.
It has been rumoured, and it was repeated tonight by the hon. Members for Somerton and Frome (Mr. Heath) and for Chorley (Mr. Hoyle), that if the Raytheon FMRAAM is selected to arm the aircraft, the United States will use it as a veto on Eurofighter exports. That argument neglects to acknowledge that the United States Secretary of State for Defence has assured the Secretary of State for Defence that that will not happen. He has promised that FMRAAM will not be used as a lever in any future competition between Eurofighter and rival US aircraft. The advanced medium-range air-to-air missile—AMRAAM—on which the Raytheon Shorts FMRAAM is based, has been exported to more than 20 countries

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throughout the world. Furthermore, the Eurofighter was designed at the outset to carry AMRAAM. The case for the FMRAAM solution is overwhelming, particularly as the rival missile has yet to be developed. In Northern Ireland, we hope that it will be chosen and that the MOD will show common sense when the time comes to award the contract.
The debate was inevitably overshadowed by events in Kosovo. We have been given an insight, if we needed it, of what future war will look like. It is therefore appropriate that we arm our service men and women with the best equipment possible. In coming weeks, as contracts are awarded, we hope that that will be borne in mind and that the MOD will select the Raytheon FMRAAM and the ASTOR solutions. As they are developments of existing technologically proven systems and offer a firm basis for the incorporation of future technological advances, we are convinced that both packages will enhance our defence capabilities and effectively meet future operational requirements.
8.53 pm
Mr. Harry Cohen: It is a pleasure to follow the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis). I hope that he will excuse me for not taking up the issues that he raised, although I associate myself with his tribute to the workers of Northern Ireland, including those in the defence industry.
Defence procurement forms a large proportion of defence spending and is intimately linked with the roles that the armed forces are asked to fulfil. I agree with the hon. Member for Somerton and Frome (Mr. Heath) that it must be increasingly aimed at peacekeeping and peace support operations as well as war fighting. The armed forces have an important role in humanitarian aid and assistance and equipment procurement must reflect that.
I do not wish to focus on Kosovo, except to say that having British forces involved in fighting helps to focus the mind on what we should equip them with. Although I am not yet convinced that an invasion is the right idea, it is significant that the Government are purchasing 386 Challenger 2 tanks, but the British Army has no easy way of transporting to the Balkans tanks of that size. The Government recently announced that there will be four new roll on/roll off ferries, and that will do something to improve the results of years of Tory mismanagement of that issue. Furthermore, we need to consider a proper heavy lift capability. I agree with the comment made by an earlier speaker that we should not rule out the Antonov even as a partial solution to the heavy lift matter.
Year after year, billions of pounds have been spent on defence equipment by this country and other NATO countries, but NATO's military cannot perform its job in Serbia as quickly as we would like. We are told that the problem is the weather or the topography and that we cannot deal with the killers on the ground. In that respect, it seems to me that we have been slow to put the Apache helicopters into action.
I realise that all those matters will be reviewed. The Chairman of the Select Committee on Defence — of which I am a member — has said that all aspects of the war will be reviewed when it is over. However, in the past, there have been inefficiencies, wrong priorities and — in some cases —rip-offs on the part of the defence industry. That must change, and the Government are making a start to ensure that it does change.
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One of the largest areas of procurement is Britain's nuclear weapons programme. What use is the fact that we have nuclear weapons in relation to the fighting in Kosovo? We could never use nuclear weapons against Serbia, or in any similar war. What is the point in keeping them? That is an example of wrong priorities. Procurement for the Trident programme is still taking place, and that money could be saved immediately.
During the Minister's speech, I raised the matter of cruise missiles. I understand from a Press Association report that we bought 65 Tomahawk cruise missiles from the United States for £190 million. On 15 April, The Herald reported that:
"The Royal Navy's only Tomahawk-capable nuclear submarine, HMS Splendid, has fired off six missiles. The tally for that burst of hi-tech fireworks alone is £4.5m."
The BBC's website recently stated that:
"Each of the 100 cruise missiles already launched at Serb military targets by Nato costs more than £835,000."
That is the cost of each one, and more than 100 have already been launched.
This is mainly an air war, so the military might consider it appropriate to fire cruise missiles. However, as my hon. Friend the Minister said, this country's cruise missiles have only recently completed the test procedures, and I think that it would be unwise to make heavy use of them in the Federal Republic of Yugoslavia. First, there must be some uncertainty about their reliability and, secondly, it would be a matter for concern if we used up all our stock quickly. There would be heavy replacement costs. We should exercise some caution in the use of cruise missiles, even if they seem to be appropriate.
Mr. Blunt: The hon. Gentleman might not be aware that US Secretary Cohen was reported to have criticised the Europeans today for the level and quality of their contribution to the Kosovo business. As I know that the hon. Gentleman is a great believer in the North Atlantic alliance and a member of the North Atlantic Assembly, he must surely believe in burden sharing. Does he not think that the United Kingdom should be doing its bit with cruise missiles, and that we should be reordering cruise missiles so that there are more of them in our inventory and we can take up our fair share of the burden?
Mr. Cohen: Our service men and pilots are putting their lives at risk. They are certainly doing their bit, and I would refute any suggestion to the contrary. For reasons that I have explained, I am not in favour of using up immediately our entire supply of cruise missiles, for which we have paid heavily and which we have only just tested, and having to order more, which would place a large financial burden on our defence budget.
Sometimes, insufficient attention is paid to rectifying faults that appear in defence equipment, an example of which is deficiencies in the safety release mechanisms on the turret cage in the Warrior armoured fighting vehicle. The cage is designed to prevent soldiers in the Warrior from becoming entangled in equipment when the turret turns. Last year, in a tragic accident, a young soldier, Private Craig Mason, drowned while on a night exercise on Salisbury plain. His Warrior overturned into a puddle, trapping him upside-down in the vehicle, and his colleagues were unable to operate the safety mechanisms to release the cage and allow him to escape.

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I do not specifically blame those who designed the cage—it is not possible to foresee every eventuality and all conditions. However, it is important that, when such defects are discovered, they should be corrected at the first possible opportunity. I understand that a redesigned cage has been developed, but that no decision has been taken in respect of fitting it throughout the Warrior fleet. The Wiltshire Times of 16 April carried an article about Private Mason's inquest, the final paragraph of which stated:
"Following the incident, a prototype mesh harness system has been developed by Army technicians at Warminster to replace the cage in the Warriors. If it is successful, the Army's entire Warrior fleet could be refitted with them."
However, as I said, it appears that the Ministry of Defence is dragging its feet in making a decision on that matter. I hope that it will stop doing so and fit the redesigned safety feature. British Army Warriors might be in combat soon and, if this country is to send troops into battle, it is vital that they have safe equipment.
Another reason for my concern about such problems is the emphasis in smart procurement on getting equipment into service early and updating it while it is in service. That sounds good and I support the principle, but, as the example of the Warrior illustrates, the record in practice is not good. Smart procurement was a change introduced by the Labour Government and it is hoped that it will increase the value for money obtained by the Government when purchasing defence equipment. However, there is a complicating factor that might make it harder to tell whether better value for money has been obtained.
The traditional means of calculating Government expenditure is to be changed. The new resource-based accounting system will be introduced for Government spending over the next few years and, in many respects, it will be an improvement on the existing cash-based estimates system. With the new system will come new rules and, for most Departments, a clear distinction for capital expenditure, which is welcome. However, for the Ministry of Defence, it is not clear exactly where that distinction will lie: a building refurbishment will clearly be capital expenditure, but the purchase of a Eurofighter appears to be counted differently.
There has to be more information from the MOD and the Treasury to make the accounts clearer, not only to Members of Parliament, but to the media and the public. There has to be clarity in defence expenditure, because every pound spent on defence is a pound that cannot be spent on health or education. That makes it extremely important that every pound spent on defence equipment can be justified.
I do not agree with the hon. Member for Salisbury (Mr. Key), who made the case for additional defence spending. My right hon. Friend the Secretary of State for Defence has pointed out that spending by the European members of NATO is 70 per cent. of United States spending on defence equipment, but they do not obtain anywhere near 70 per cent. of the worth—the bang —that the United States obtains from its spending. It is not a matter of increasing spending: our priority must be to ensure better value for money. We should look to doing that before we look to spending more money.
I pay tribute to the Government for initiating the strategic defence review, which was a remarkable effort. However, the review, which examined the defence of
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this country, should not be considered a one-off exercise. The world is changing quickly and we must keep our defence and defence procurement policies under constant review. We must ensure that our defence equipment is relevant to current requirements. Our policies should not be based on overkill, the last war or the cold war, as that would result in wrong priorities and wasted money.
9.6 pm
Mr. Gerald Howarth: I think I bring a unique quality to the debate this evening, in that I am the only hon. Member to declare openly that I once worked for the Russians. I worked for a Russian combat aircraft designer, Sukhoi Design Bureau, in Moscow, and I hope that that experience has helped to inform my understanding of these important issues.
This has been an interesting debate, in that it has provided an opportunity to consider some very serious procurement issues. The Minister will be aware that many claims have been made on behalf of individual companies and contractors. It is entirely right and proper for hon. Members to make such claims. I join those who have praised the hon. Member for Alyn and Deeside (Mr. Jones)—who is not in his place—for the assiduity with which he prosecutes his case on behalf of his constituents every time he has the opportunity. He is probably more assiduous than most other hon. Members in that regard—although I do not wish to detract from their efforts tonight.
The headquarters of British Aerospace is located in my constituency of Aldershot. It will become the third largest defence contractor in the world if the merger with GEC-Marconi goes through. There is also the headquarters of the Defence Evaluation and Research Agency and many other small and medium-sized enterprises that contribute significantly to Britain's defence manufacturing capability, such as St. Bernard Composites—which makes the fan case linings for Rolls-Royce engines—Air Log, Cam-Lok, Weston Aerospace and IBM.
Defence equipment is a fantastic success story in this country. Although I welcome Labour's conversion to the importance of strong defence, I wish that Labour Members would give greater recognition to the contribution of Conservative Governments from 1979 to 1997. Thanks to them, Labour was able to promote its foreign policy objectives when it came to office. The Labour Government had at their disposal a sophisticated, state-of-the-art and capable defence force that they could deploy in time of trouble—as they are doing now.
I shall not advance tonight the case for any particular programme, but I think Ministers should consider carefully the lessons of the past. Their procurement decisions should not be informed only by the need to generate jobs in the United Kingdom; the equipment must be capable of performing the task and it must he available at a competitive price. I also urge Ministers to take into account security of supply so that, when the Government have procured the equipment, there will not stand between them and its deployment a foreign Government or company that is withholding supply, thereby limiting the United Kingdom's ability to deploy its forces.
It is important that Ministers take into account the continuing development of technological capability in this country. I well remember the late 1980s, when we were considering a new anti-radar missile. On offer were

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the HARM, high-speed anti-radar missile, from the United States and the ALARM. air-launched anti-radar missile, which was promoted by British Aerospace. I then had no constituency interest in defence, but I was in favour of the ALARM project simply because, if we had bought HARM, we would not have had access to the head technology. By developing our own technology, we made sure that we would later be in a position to keep up with the rest of the world and provide our Government with a British-made option.
The only specific reference that I shall make is to the BVRAAM—beyond-visual-range air-to-air missile—Meteor programme, in which British Aerospace is involved, and to which the same principle applies. If that weapon is procured, the technology will remain in the United Kingdom and we shall not then be subject to a potential veto from the US Congress.
My next point relates to the consolidation of the defence manufacturing base. I mentioned earlier that, if British Aerospace merges with GEC-Marconi, it will be the third largest contractor in the world. I am delighted that British Aerospace has chosen that option, rather than prosecuting the proposal to merge with DASA of Germany, because the arrangements proposed in the latter case would have transferred substantial ownership overseas. It is to the advantage of the United Kingdom that British Aerospace should merge with another British company to create the formidable power that the new, enlarged company will become. I hope that the Minister will comment on the progress in that merger, and state what part the Government are playing in ensuring that the competition authorities on the continent are supportive of it.
I do not support that merger for any chauvinist or jingoistic reason. Collaborative programmes were mentioned earlier in the debate and, although there is clearly an advantage in collaboration—indeed, it is, in many cases, a necessity—it carries costs. In a collaborative project, attempts must continually be made to keep all parties on side and stop the project running into the sand. The Typhoon Eurofighter project is an example of such a project. Ministers, particularly under the previous Government, had to go to Munich several times to stiffen the Germans' resolve, keep participants on board and keep the project alive. It is therefore to our advantage to maintain collaboration within the United Kingdom.
Collaboration between UK companies is advantageous also because our defence industry does not look only across the channel, but looks to neutral Sweden, where British Aerospace has teamed up with Saab, and to the United States. I shall turn later to the United States and the Defence Evaluation and Research Agency. The two-way street is extremely important, and the sharing of technology between us and the US is beneficial to the United Kingdom and our defence industrial base. That collaboration arises because we have a common interest and because the two nations that can be best relied on to defend freedom around the world are the United Kingdom and the United States of America.
I give the Minister a word of warning, which arises from a particular case. When Dowty, which is part of the TI Group, sought to acquire the Messier undercarriage business in France, it found it extremely difficult to do so. In the end, Snecma bid for Dowty in the United Kingdom. I am told that it offered such a ridiculous price that the
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TI Group accepted it, and so that capability could be transferred to France. We might therefore find that a specific capability was no longer available in the United Kingdom, and we might become dependent on the whim of the French Government.
I intervened in the matter, and I understand that the assurances that I suggested should be given by the French company and the French Government were secured. That nevertheless illustrates the argument by my right hon. Friend the Member for Bridgwater (Mr. King) that security of supply is important, and that we shall defeat our own purposes unless we are prepared to strive to ensure that security of supply.
My next point is a brief one about exports. When the Labour party came to office, much was said about a new ethical foreign policy and ethics in defence exports. That wrongly presupposed that there were no such ethics before. The previous Conservative Government were very strongly driven by ethical considerations in defence export capability. I emphasise, however, that defence exports are vital to our defence manufacturing base in this country.
If we were not to rely on defence exports, the unit cost of producing sophisticated kit in this country, solely for our own consumption, would be astronomical; we simply could not afford it. The extended production runs that are afforded by export orders enable us to reduce the unit cost of the equipment that is purchased by the British Government. That is beneficial to the British taxpayer and to industry, and the Defence Committee's analysis reveals that it saves about £350 million in amortising the costs of project overheads.
Defence exports have another benefit, which the House should take into account. They enhance the United Kingdom's influence overseas and provide us with that handle on overseas Governments which I wish to prevent their having on us. In the event that a change of Government happens in a country to which we have supplied equipment, we shall be in a position to influence that Government for the better.
We have been extremely lucky in the series of distinguished heads of the Defence Exports Services Organisation. Sir Charles Masefield was absolutely brilliant—an outstanding man—and I am delighted that Tony Edwards has succeeded him. The Defence Committee has investigated the latter and found him to have a totally clean bill of health, and I am sure that he will do a splendid job.
The Defence Evaluation and Research Agency has genuine difficulties. The hon. Member for Dunfermline, West (Ms Squire) mentioned some issues surrounding DERA; slightly unfairly, I challenged her, asking about the problems that it faces. I am sorry that she has not talked to the management of DERA, because I think that she should.
I have spoken to Sir John Chisholm, chief executive of DERA. He told me that, first, the Government are running down the amount of money made available to DERA; secondly, although there is some spin-off from defence research into the commercial world, a great deal of business is spun in from the commercial world and is adapted to the military world; and, thirdly, DERA is obliged to compete with commercial companies for Government defence grants and studies. The agency therefore has real problems.

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I believe that there is unanimity across the Floor of the Chamber—it is important that there should be—that DERA provides the British Government with that independent, high-quality scientific evaluative capacity by which to judge all the competitive projects that are presented to Government. I agree with Kevin Smith of British Aerospace that DERA's second purpose is to engage in that sky blue research that shows no immediate likelihood of producing a payback—for, if it did, the commercial world would be doing it—thus ensuring that we have the capability to stay at the forefront.
I cannot stress too strongly what has already been said about the link with the United States of America. I have said in the House before—I apologise for repeating it, but it is important—that we have access to United States technology and shared information in large measure because the Americans trust us. For some reason, they trust us because DERA is a Government agency. That is a fact of life. There is plenty of evidence to show that, rightly or wrongly, the United States is not happy in undertaking collaborative work with countries other than the United Kingdom. I therefore make a strong plea that, in the new public-private partnership arrangement that the Americans come to with DERA, those two key areas must remain within the public sector and under the aegis of the Ministry of Defence. To do otherwise would betray a vital British national asset.
9.21 pm
Mr. Keith Simpson: This has been an interesting, but foreshortened, debate. Eleven Back Benchers have contributed to it. As several have said, the debate has been held against the background of a war in the Balkans. On these occasions, we usually have a discussion about the United Kingdom defence industry and employment, but that becomes very much second order against the military realities.
I welcome the first of the functional debates that will replace the single-service debates. I understand the point made by my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) that the single-service debates enabled us to discuss aspects of the Royal Navy, the Army and the Royal Air Force, but I believe that we are likely to get far more out of debates on defence policy, procurement and personnel.
It is unfortunate that we were not able to begin this series of debates without a debate on defence policy. One of the consequences has been that many hon. Members have ranged somewhat widely over many topics. With your indulgence, Mr. Deputy Speaker, I will probably follow suit. Unlike the spokesman for the Liberal Democrats, the hon. Member for Somerton and Frome (Mr. Heath), I believe that defence policy is crucial to our understanding what the Government are doing with their equipment policy.
The strategic defence review, which was published in July 1998, was already beginning to look a little frayed at the edges even before the current conflict against Serbia began. The strategic baseline has been challenged by events and by evolving Government spin. I remind the House that in paragraph 15 the SDR stated that it was to consider
"our defence requirements in the period to 2015."
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That is futurology indeed.
I remind the House also of the scale of effort that was laid down in the SDR. Basically, the armed forces of the United Kingdom could cope with one Gulf-style commitment or Bosnia commitment plus a second substantial deployment, but could not expect both deployments to involve war fighting or maintain them simultaneously for longer than six months. A resource constraint—money, manpower and equipment—on the number of operations in which we might get involved was therefore acknowledged in the SDR last July.
I suspect that that consideration is at the back of Ministers' minds when considering whether to deploy ground forces.
Mr. Ian Bruce: My hon. Friend is touching on funding in the context of the strategic defence review. He will be aware of the disposals that the Ministry of Defence intends to undertake. He will know also that £700 million has been found in defence disposals to pay for the equipment that the Ministry wants to buy. Has he noted places such as the air station at Portland, where disposal is moving at a snail's pace? I suspect that that establishment will not provide any funding for the MOD, and that that will be the position throughout the country.
Mr. Simpson: My hon. Friend makes a good point. The Ministry of Defence is getting increasingly desperate about disposing of lands and properties, many of which are difficult to dispose of on the open market.
I remind the House that, in a written answer to me on 4 March, the Ministry of Defence said that 85.9 per cent. of the Army's Land Command had been committed to deployment on operations, or warned that it should he so deployed. A written answer to me on 22 April says that that figure has gone up to 89.8 per cent. Our land forces have already made an enormous commitment to overseas operations—not only in manpower, but in equipment. It would be helpful if the Minister would assure the House that the armed forces and their equipment, established by the SDR on those scales, are sufficient to meet not only current commitments, but future commitments that might arise as a consequence of committing ground forces in Kosovo.
The SDR also emphasised that
"membership of NATO will continue to provide the UK with its best insurance against all these risks."
Most of us would agree fundamentally with that, but I remind the House that, even as the SDR was being debated on 20 October 1998, the Prime Minister was contradicting Defence Ministers by emphasising a European common foreign and security policy, which they were at pains to deny that night.
The Government emphasis on Franco-British defence co-operation in the St. Malo agreement of December 1998 and the statement arising from this weekend's NATO summit envisaging the European Union taking on a greater defence role stretch our defence policy at the margins, but the real question is, "What is the British defence industry's view on such co-operation?" I talk to people in the defence industry—they are ambivalent about our furthering relationships with European defence industries, and I do not blame them. They are primarily concerned not with political considerations, but with economic ones.

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The December decision by British Aerospace and Marconi to go ahead with a merger achieves vertical rather than horizontal integration, despite what many people consider to be the Prime Minister's pressure for the latter. Perhaps the Minister can confirm whether the United Kingdom or EU Governments have any objections to the merger's going ahead.
The Government are sending mixed signals to the UK defence industry. Is the integration of European defence industries still a key Government policy and is it still Government policy that international collaboration should be the basis for 40 per cent. of all future defence programmes? One obvious indicator was to have been whether contracts were placed for project Horizon.
Many hon. Members—including, I suspect, some on the Government Benches—were surprised and disappointed by the Minister's opening. statement, and it seems that we have the worst of all possible worlds: we will have the PAAMS missile system, but we may not get the hulls of the frigates on board which it is to he fitted. That is an odd decision, to say the least, and it does not sit well with Government policy on the European defence initiative. [Interruption.] The Minister dismisses that, but he should talk to people in the Royal Navy, not just to people in the defence industry. So far, there has been a stunning silence from the Royal Navy on whether it is fully behind the decision and believes that it will meet the Royal Navy's commitments in the future.
Mr. Wilkinson: Is not the situation even worse inasmuch as the French, not ourselves, lead on the missile system? The programme is led by Aerospatiale, so were are playing second fiddle in what should be an area of particular excellence for us. As my hon. Friend says, we do not yet know what vessel—a type 23 perhaps—will carry the missiles.
Mr. Simpson: My hon. Friend makes a good point; the Under-Secretary skated over it, but perhaps the Minister for the Armed Forces will give us some details.
It would be helpful—a number of hon. Members touched on this—if the Government published a balance sheet—not only of the value of two-way street defence contracts with the United States of America, but of defence contracts, either way, with our European partners. In that way, the House could assess the true value of defence co-operation, both across the Atlantic and with Europe.
Finally, we must consider the impact of the Prime Minister's Chicago speech this weekend—-the so-called "Blair doctrine"—outlining rules governing justified international intervention in humanitarian crises. Apart from whether our allies have agreed to that doctrine, the fact that Parliament has not even debated it—indeed, we have not fully debated the Government's foreign policy since they came to office in May 1997—and its impact on our resources, I want to consider one obvious procurement consequence. Such international interventionism in the internal affairs of sovereign states will persuade many countries to acquire weapons of mass destruction, particularly ballistic missiles.
Anti-missile defence was a notable omission from the SDR, as hon. Members have pointed out. Given the United States' decision to increase funding for missile defence and
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the likely consequences of the Blair doctrine, are Ministers in a position to tell us whether they will now consider anti-missile defence for the United Kingdom?
Mr. Spellar: What would the hon. Gentleman cut in the programme to pay for his proposal?
Mr. Simpson: I am amazed to see the Minister playing that rather fatuous game. Although I may wish that I were the Minister, he is the Minister. There is nothing in the strategic defence review. He is in a position to tell us whether he regards it as a priority. He does not appear to be taking the question seriously. Perhaps the Prime Minister did not consult him before making the Chicago speech. They talk about joined-up government, but one part of the Government does not refer to another.
Mr. Spellarrose—
Mr. Simpson: I am sorry, but the Minister obviously does not have an answer.
Having discussed cuts, let us consider resources. I thank the junior Minister for leading me into this subject. As we said before and during the publication of the SDR, the level of defence spending is crucial to the Government's defence policy. In July last year, it was obvious that £1 billion had been taken out of the defence budget. As my hon. Friends have pointed out, the Chief of the Defence Staff has said that meeting the efficiency savings required would be "challenging". I suggest that, for "challenging", we should read "virtually impossible to achieve".
Like other hon. Members, I welcome the undertaking that the MOD's chief finance officer made before the Select Committee, which has now been confirmed by the Minister for the Armed Forces, that the MOD will publish regularly details of efficiency savings related to budgets so that the House can see whether they really are savings, rather than cuts. It is extremely difficult for the House, the defence industry or even MOD insiders to gain an accurate assessment of the constraints on the MOD budget or the long-term costing.
Given the real-terms cut in the defence budget, as outlined in the SDR, serious doubts have been expressed on both sides of the House about the MOD's ability to achieve 3 per cent. efficiency savings. Given the impact of the current military operations, the defence industry is rightly concerned about the equipment programme outlined in the SDR. As my hon. Friend the Member for Romsey (Mr. Colvin) said, the percentage increase in terms of defence procurement has been as much to do with inflation as anything else.
Can the Minister confirm whether any of the service equipment budgets are already overspent? Rumours have been going around the MOD that they are. If so, I am afraid that the weapons equipment budget will just not succeed.
Finally, may I touch on a point raised by my hon. Friend the Member for Salisbury (Mr. Key) and the hon. Member for Somerton and Frome concerning the cost of the operation in Kosovo? We should not be accountants or bean counters in terms of looking at the moneys to be saved when British armed forces are putting themselves in the line of fire. I have great sympathy for Defence Ministers in trying to square a budget and negotiate with

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the Treasury. I received a reply just now from the Chief Secretary to a question that I asked the Chancellor of the Exchequer. I asked:
"what representations he has received from the Secretary of State for Defence in respect of an increase in the defence budget."
The Chief Secretary replied:
"My right hon. Friend, the Secretary of State for Defence, and I are keeping the additional costs of the Kosovo operation under close scrutiny."
That is fair enough up to a point, Lord Copper, but the armed forces and, to be fair, Defence Ministers would like a proper answer from the Treasury.
As the Minister explained, smart procurement is the key enabler by which the strategic defence review intends equipment to be delivered on time and in budget. The Government announced smart procurement as if it were some philosopher's stone of defence policy. Will the Minister tell the House who within the Ministry of Defence is the customer envisaged by smart procurement? What is his appointment in particular?
Smart procurement, integrated project teams and battlefield contractor support mean that the defence industry is moving from being just a supplier to an active participant and stakeholder in defence policy. What will that do for competition policy, and who is ultimately responsible for its delivery?
Smart procurement, as Ministers have explained, needs high-class, high-quality personnel. Many of those people can be found inside the MOD, but others will be recruited, chiefly in competition with the defence industry. What action are Ministers taking to assess the necessary increase in pay structure of personnel involved in smart procurement?
The Government have over-hyped smart procurement. Efficient defence procurement has been a Government priority since my right hon. Friend the Member for Henley (Mr. Heseltine) was Secretary of State. Some of my more distinguished and older colleagues will remember the Labour party's fierce opposition when that policy was introduced. Few Labour Members, if any, spoke up in favour of it.
Ultimately, smart procurement will depend on overall Government policy, on the defence budget and on a changing MOD culture, which the Minister acknowledged. The Secretary of State is relying on the character and determination of the newly appointed chief of defence logistics, General Sam Cowan, to change the culture not only in the new Defence Logistics Organisation, but across the board in the Ministry of Defence.
I do not think that any of us are able or would wish to question either the patriotism or the determination of Ministers to deliver the equipment that they have planned. However, we suspect that the strategic defence review avoided difficult decisions on commitments and capabilities and was underfunded. It was certainly oversold in hype—good heavens, one would think that they were Richard Burdon Haldane. We want to consider the short and long-term issues involved in delivering equipment.
The war in the Balkans is testing current generations—or more accurately previous generations—of equipment. The previous and the present Government have rightly
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emphasised the need for equipment to be integrated, joint and multinational. Indeed, the criticism of the air campaign against Serbia made by the hon. Member for Linlithgow (Mr. Dalyell) has less to do with the equipment of the Royal Air Force and the skill of its pilots and more to do with the political constraints and a failure to recognise that it is rare for one service to be able to deliver the political objective on its own. The full thrust of the strategic defence review was about joint operations and joint procurement policy. If we have a single service policy, it is hardly surprising that it fails to deliver the political objective. I am sure that Ministers are aware of that.
I shall ask three brief questions on current operations in Kosovo. First, will Ministers reconsider the strategic defence review assumptions about security of supply as it relates to war maintenance reserves and stocks? My right hon. Friend the Member for Bridgwater (Mr. King) and my hon. Friend the Member for Aldershot (Mr. Howarth) raised that issue.
Secondly, given that the Army's expeditionary force logistical capability depends on savings made by cutting the Territorial Army, are Ministers confident that the logistical supply chain for the British element of the Allied Command Europe Rapid Reaction Corps is robust enough for any future ground operations? Thirdly, given the continuing role of the Royal Engineers —of whom I know Ministers think highly—are Ministers satisfied that the balance of equipment is sufficient for them to meet their operational role?
There are many unresolved questions regarding defence equipment. We have made our criticisms; I hope that Ministers will be able to answer to our questions, and prove to our armed forces that they take those questions seriously.
9.40 pm
The Minister for the Armed Forces (Mr. Doug Henderson): We have had what could be described as a thin attendance in the House. The upside is that hon. Members on both sides of the House have had much more time to make detailed speeches. I suppose that, for the Minister responding, the downside is that so many questions have been asked that I shall probably fail to answer them all tonight, but I shall endeavour to answer as many as possible, and commit myself to writing to those whose questions I shall not be able to answer.
I endorse what has been said by all hon. Members: we praise the skill, dedication and courage of our armed forces who are currently deployed in the Balkans. People—our soldiers, sailors and airmen and women, and the civilians who support them—are the most. valuable resource that the Ministry of Defence has. I do not think that anyone in the Chamber would disagree with that.
Before I say anything else, let me make an announcement. This evening I awarded a contract to help the welfare of those serving in Macedonia, which will enable British service men and women deployed there to stay in touch with their loved ones at home. The contract will allow all 4,500 of our personnel in Macedonia to make one free 10-minute satellite call per week from one of the nine sites there, and will come into effect

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immediately. I have been keen to do something about that, and I am pleased to be able to make that announcement now.
Mr. Wilkinson: Will the Minister give way?
Mr. Henderson: I promise to give way after I have made a little more progress.
The job that British service men and women are doing in the Balkans throws a spotlight on them, and on the impressive professional qualities that they bring to the difficult and dangerous job that they are there to do. They are making a major contribution to NATO operations in the former Yugoslavia, providing forces at sea, on the ground and in the air. The current operation, however, also throws a spotlight on us. We must ensure that the skill and dedication of our forces are matched by the quality of the equipment that we give them with which to do their job. That equipment must be capable, to give us a technological edge over our opponents; it must be robust, to stand up to the extraordinary rigours of combat operations; and it must be flexible, to provide for the variety of demands that we ask our forces to meet. We must remember that they are involved in three different types of operation in the Balkans: conducting air operations from bases in Italy and from on board HMS Invincible, preparing in Macedonia for the difficult and dangerous task of peacekeeping in Kosovo, and providing compassionate and caring support for thousands of refugees in Albania.
Mr. Wilkinson: I am grateful for the Minister's statement about the telephone calls, which I am sure will be widely appreciated. Even more appreciated, however—especially by service men deployed to the Balkans from Germany—would be an upward adjustment of their overseas living allowance, which is budgeted for. Those service men were not to know that they would be sent to the Balkans, and their families could be in some difficulty. Will the Minister ensure that equity prevails in that regard as well?
Mr. Henderson: I assure the hon. Gentleman that I want to make certain that our troops are looked after properly, and that their conditions are comparable with any others in the Balkans—as they are. Much has been made of the overseas living allowance. That is related to the cost of living, not to the job that our troops are doing in any part of the world. There has been no change in that.
The fact is that 12 per cent. of service men and women's salary is intended to be used to deal with the unusual conditions in which they have to serve. The cost of living allowance is a quite separate matter. It is based on the cost of living in a country in which people are deployed and determined by comparing that cost with costs in the United Kingdom. If people are coming from the United Kingdom and our costs are lower, an adjustment will be made.
The hon. Member for Salisbury (Mr. Key) made some points on defence budgets. I should like to reassure him that the defence budget based on the strategic defence review will be shown to be a good deal when compared with any other deal struck between any other Defence Ministry and Government in the world. Admittedly, over a three-year period, the Budget sets a 1 per cent. reduction
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in real terms, but that is tied to a commitment that—when efficiency gains of 3 per cent. are made annually—any extra resources that are freed will be made available for investment in the priorities set by the Ministry of Defence and will not be taken back by the Treasury.
When we make the gains that we anticipate that we shall make—I am confident that we shall make such gains—additional real resources will be available to meet the demands placed on us in a changing world. That is the background against which any charges on Kosovo must be assessed.
There are standard procedures for dealing with additional costs accruing to the Ministry of Defence when forces are deployed, and the current procedures and regulations under the current Government are no different from those under the previous one. Procedures will have to be assessed in each Department incurring additional costs, and subsequent negotiations with the Treasury will determine how the costs will be met. In some cases, some of the costs will have to be dealt with under departmental budgets—including that of the Ministry of Defence—whereas, in other cases, there will be a charge on the reserve fund. The formula, which I believe is a reasonable one, has not changed.
Mr. Blunt: On international comparisons, the United States's defence budget is rising by 10 per cent., and the President has asked for the equivalent of an extra £6 billion for Kosovo. Therefore, the deal in the United Kingdom is not the best that could be struck anywhere in the world. The Minister said that the efficiency savings programme is not necessary to sustain the programme decided by the strategic defence review, and that those efficiency savings will be translated into extra investment in our defence programme. That is a significant comment. I do not believe that that is the case. I should therefore be grateful if the hon. Gentleman made absolutely clear the position on the £2 billion-worth of efficiency savings targets to be achieved, and if he will reconfirm now that all the efficiency savings—down to the smallest ones—will be listed and given to the House and the Defence Committee.
Mr. Henderson: I do not think that the hon. Gentleman was listening to what I said. I said that we anticipate that, annually, for three years, there will be 3 per cent. efficiency savings; that those have been taken into account in the budget agreed between the Ministry of Defence and the Treasury; and that gains above 3 per cent. will accrue to the Ministry of Defence. That is what I said. If there was any doubt about it, I have repeated it.
The hon. Member for Salisbury made much in his speech about the United States, as if, compared with other countries, it has dramatically increased the resources for defence. However, in the past four years—comprising two years under the previous Government, and two years under the current Government—the United States has not made such increases. In those four years, Britain has reduced spending by about 8.5 per cent., which has been the average reduction made by our European and NATO allies. In the same period, the United States has made a

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17 per cent. reduction. Therefore, from 1994, the United States has been rebuilding from a much lower base—which makes a big difference in the calculations.
Mr. Ian Bruce rose—
Mr. Menzies Campbell: Will the Minister give way?
Mr. Henderson: I said that only to put the situation in context. I am not saying whether the United States' actions were right or wrong. However, one has to bear in mind the context.
Several hon. Members rose—
Mr. Henderson: I shall not take any more interventions on the matter. I want to move on, as many questions have been asked.
We were asked whether our current commitments were consistent with the assumptions in the strategic defence review. The answer is that they are. We are committed to the proposals in the strategic defence review and we are implementing them. In some respects, their implementation is absolutely consistent with what is happening in Kosovo. The principles that we enunciated in that document anticipated the situation that unfortunately has arisen in Kosovo. There are no closed minds and there never should be, but we are firmly committed to that review. The total numbers deployed in Bosnia and in Kosovo and those that may be deployed in a peacekeeping force are absolutely consistent with what was envisaged in the strategic defence review. In fact, they are fewer than we estimated.
I hope that Conservative Members who doubt the wisdom of the agreement between the Ministry of Defence and the Treasury in respect of efficiency are not suggesting that we should not strive for efficiency and look for better and more modern approaches to defence. If they are, we want to know about it.
Mr. Campbell: There is an important point about the relationship between the money provided for defence and the Government's commitments. I hope that we can avoid being partisan about the issue. A senior budget holder told me that a large part of his budget was already allocated through contract as a result of the privatisation of so much of what previously had been provided in-house. Therefore, he must find 3 per cent. efficiency savings on his overall budget out of about 40 per cent. of that budget. How is that individual supposed to fulfil the Government's commitments against the background of having to find 3 per cent. efficiency savings every year?
Mr. Henderson: I am pleased that the right hon. and learned Gentleman said that we should try to deal with such matters in a non-partisan way. I know that he endeavours to do just that and to consider the interests of the nation. I attempt to do the same, but sometimes I am denied the opportunity because of the way in which issues are raised.
On efficiency, I am absolutely confident that with a tough, systematic approach, we shall be able to achieve the goals that we have set ourselves. In some areas it will be possible to make much greater gains than 3 per cent.,
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but in others it will be extremely difficult to make any gains at all. However, I am confident that we will be able to make the overall efficiency gains to which we are committed.
Mr. Bruce: Will the Minister give way?
Mr. Henderson: I really have to press on, although I may take interventions on other issues.
The hon. Member for Salisbury also mentioned the Western European Union. Let me make it clear that the concordat that was concluded in Washington related to capability, not institutions, within Europe. A number of signatories to NATO said that we must look at how things are done in Europe and at how to achieve the capability that we need. The decision did not relate to the institutions. The hon. Gentleman said that it was a failure that a decision had not been reached as to how the WEU would relate to NATO. the North Atlantic Council and the European Union. In my opinion that was not a failure but a strength. We must get the political principle and the military resource assessment right before deciding how the bureaucratic structures should relate to each other. I think that we got our priorities right. At a meeting that I attended in Washington about six weeks ago, there were still differences in NATO about emphasis, but this weekend there was unanimity and that is a major step forward.
My hon. Friend the Member for Dunfermline, West (Ms Squire) and the hon. Members for Romsey (Mr. Colvin) and for Aldershot (Mr. Howarth) mentioned the Defence Evaluation and Research Agency. There was some expectation that an announcement would be made about it, but there is still work to be done.
Mr. Bruce: Will the Minister give way on that point?
Mr. Henderson: No. There is no point in the hon. Gentleman pressing me. There is work to be done, and the House will be first to know of any decisions taken when it is complete.
I want to move on to questions raised by hon. Members who have attended the whole debate. My hon. Friend the Member for Alyn and Deeside (Mr. Jones) was as indomitable, brief and comprehensive as ever. He raised three important points relating to his constituency, but I believe that they are of major significance for the nation's defence. I shall try to pick up some of the other points raised as I deal with my hon. Friend's questions.
My hon. Friend the Member for Alyn and Deeside asked about RAF Sealand, and we all value the work that that important unit performs on behalf of the nation. My hon. Friend also asked about the ASTOR ground surveillance system, in which there is a great deal of interest. That system featured in points raised by the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis), by my hon. Friend the Member for Dunfermline, West, and by several other hon. Members.
I can tell the House that the facility in the constituency of my hon. Friend the Member for Alyn and Deeside is renowned as a centre for excellence. No decision has yet been made, but it is a great tribute to our defence industries that there is a choice in the matter, as the relevant capabilities exist in different parts of the country and therefore are able to bring different excellences to the decision.

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The third point raised by my hon. Friend the Member for Alyn and Deeside concerned large carrier aircraft. The matter was raised also by my hon. Friends the Members for Leyton and Wanstead (Mr. Cohen) and for Chorley (Mr. Hoyle), and by the hon. Member for Ruislip-Northwood (Mr. Wilkinson). The point brings to the House's attention the essential role that air lift plays in the modern deployment of our armed forces. Anyone who did not believe that that was important six weeks ago certainly now knows that it is a crucial factor, as air lift capability has been required in a number of different ways.
We need to renew our present fleet of large carriers to maintain our air lift capability. We will therefore need four C17s, or their equivalents, in the period ahead. Bids are being considered, and I hope that the decision will be made by 2000. However, other, more long-term decisions will have to be made in relation to large aircraft. They will have to be made in the context of the needs in the Ministry and of the ability of British industry to meet those needs, and the requirements of a wider export market in the future. That big and crucial decision will have to be faced in due course.
My hon. Friend the Member for Dunfermline, West has a long record of participation in these important debates, whether we are debating matters on a single-service basis or in the more modern framework. She drew to the House's attention the importance of Rosyth dockyard, and the crucial work that it is doing as part of the allocated programme. I thank her for her kind words in that regard. It is absolutely important, for the needs of Scotland and of Britain, that the Rosyth yard should be able to carry out that crucial defence work.
My hon. Friend the Member for Dunfermline, West also asked whether Kosovo would lead to a delay in procurement. The answer is no: we are determined to modernise as we have proposed in the strategic defence review, and we shall press on with that, our additional commitments at the moment notwithstanding.
The hon. Member for Somerton and Frome (Mr. Heath) asked about ordnance stocks. I am running out of time, so I shall write to him in more detail, but I can tell him that we must make sure that we have the necessary stocks. The hon. Member for Romsey asked about the future security of supply, and I can say that we must also make sure that the supply is secure. We must be sure that we can always supply what we need, whether it be a replacement for ammunition stock or a major item of equipment.
The hon. Member for Somerton and Frome also asked about the air-to-air missile, which I agree is crucial for the Eurofighter. My hon. Friend the Member for Chorley was also interested in that matter, on which, as they may know, a decision will be reached later in the year.
My hon. Friend the Member for Linlithgow (Mr. Dalyell) once again referred to Russian shipping. In the short time available, I can give only the same reply that the Prime Minister gave earlier, but should be happy to discuss the matter with my hon. Friend.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Assisted Area Status (Wisbech)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
10 pm
Mr. Malcolm Moss: I am grateful for this opportunity to put to the Minister for Small Firms, Trade and Industry an important case on behalf of my constituents and those of the hon. Member for North-West Norfolk (Dr. Turner). This is my sixth time of asking for the debate, and I am glad finally to have come up trumps in the ballot. I thank the Minister and his team for their co-operation, particularly in answering letters and in meeting a deputation from my local authority, Fenland district council.
I do not want to belittle the difficulties that the Minister and his team face. There have been parallel submissions from many other local authorities for objective 2 status under the structural fund budget. Those bids are not coterminous with bids for assisted area status, but the core criteria are, in many cases, coupled. The shared criteria include having 100 people per square kilometre, having a percentage share of agricultural employment equal to or higher than twice the European Union average in any year since 1985, and having an average unemployment rate over the past three years above the EU average.
When those stringent criteria are taken together, the present is not the most auspicious time at which to plead for my area. The major issue facing the fens is the fight against the perception that East Anglia is uniformly prosperous—a perception reinforced by the allocation of regional budgets. The east of England, containing a population of 5.3 million, will receive £28.8 million, but the south-east of England, where the population is 7.8 million, will receive £60 million. On a pro rata basis, the money for the south-east would be £45 million.
In August 1993, the Government designated the Wisbech travel-to-work area as an assisted area with intermediate status. The reasons were higher than average unemployment, measurable deprivation, staple industries that were mainly in declining sectors, and problems of isolation and peripherality. The same factors applied to the successful application by local authorities in North-East Cambridgeshire and North-West Norfolk for European objective 5b structural funds. We were also successful, under the same deprivation criteria, in applying for rural development area status.
I am not talking only of the Wisbech travel-to-work area, of course, because the submission made to the Minister by Fenland district council offered a twin-track approach. It included the idea of moving from wards upwards, aggregating areas across county boundaries and involving a large area in the constituency of my neighbour, the hon. Member for North-West Norfolk.
Having got assisted area status, what is the track record of my local district councils? We would say that we have been the most successful area in the eastern region. We have had about 60 offers of regional selective assistance, totalling almost £5 million, compared with just over £2 million in the Great Yarmouth assisted area, £750,000 in Harwich and £1.3 million in Tendring. So, the fenlands area has been by far the most successful in attracting Government grant and, as a result, in levering in

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substantial amounts of private sector investment. About £25 million of such investment has come in under that leverage.
The investment has safeguarded 1,015 jobs in the Wisbech travel-to-work area and has created 922 new jobs. It has also been successful in lowering unemployment, which stood at 11.5 per cent. in 1992 and was below 4 per cent. earlier this year.
Those figures do not take into account recent job losses in the area. A few months ago, Hazelwood Foods announced the loss of 420 jobs at one factory alone. Within several weeks of that announcement, Carnaud Metal Box announced 90 job losses at its plant, which makes cans for the canning industry. The company has since changed the figure to 75 job losses. None the less, that is a significant number for the travel-to-work area, given its size and population. With the losses in smaller firms, we will be facing more than 500 job losses in the next few months.
What are the employment prospects for that area of Cambridgeshire—a prosperous county, within a seemingly prosperous East Anglia? How is that pocket of deprivation likely to get out of the trough? A jobs deficit of about 9,800 is predicted by 2006, yet 6,300 jobs will be required merely to bring male and female activity rates up to the Great Britain average. On top of that, 3,500 will be needed to provide employment for the projected 7,300 growth in population by that year.
The area has a problem of structural decline. The Henley industrial structure index predicts that it will be one of the worst local authority areas for employment in Britain. The index ranks the fenlands 433rd out of a total of 459, so it is at the bottom end of that structural index.
Of course, it is an agricultural area, and we have uncertainty over reform of the common agricultural policy. Last year alone, we saw a 45 per cent. reduction in farm incomes and the National Farmers Union predicts a 50 per cent. reduction in farm holdings in the next five years. Therefore, it is unlikely that the base industry of agriculture will be able to take up any slack in unemployment in the next few years.
The capacity to create new jobs or to travel to such jobs in other parts of East Anglia is constrained by a number of factors. First, there is a concentration of businesses in declining sectors that risk rundown or closure. Some 60 per cent. of industries are in mature or declining sectors, and only 40 per cent. in growth sectors. Secondly, there are poor prospects for investment, particularly with the non-viability of commercial property. My constituency cannot attract speculative industrial build, certainly in the north, because when the factory or building is constructed, its value on the open market is three quarters of what was paid to put it up. There is, therefore, a problem in sale and lease-back arrangements, for example, and only with the intervention of the local authority or English Estates can the gap be made up so that we can have a viable commercial industrial sector.
There are constraints on water supply and disposal. We are talking about the fens of East Anglia and parts of my constituency that are below sea level. Getting the water off the land is a problem, but so is getting the water that industry uses into the rivers and out to sea. Unfortunately, while considerably more investment is going into water
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treatment and sewage systems—Anglian Water has a substantial investment programme —our relatively sparsely populated area is towards the back end of development. To my knowledge, we have lost the investment of two major European food processing firms who wanted to come to Fenland, but did not because Anglian Water could not cope with their water requirements.
The third factor is the uncompetitiveness of the work force, which is manifested by low educational attainment, skills in declining sectors, low pay and low entrepreneurial capacity. Educationally, 69 per cent. of 16-year-olds obtain fewer than five GCSEs or national vocational qualifications at grades A to C, against the national average of 55 per cent. On training, 23 per cent. of the work force do not have a nationally recognised qualification and only 19 per cent. have NVQI.
Low pay means average earnings of £321 against a Great Britain average of £354. Those figures relate to pre-minimum wage days, so I do not know the current figures. They reflect low added value and a low skill profile. On entrepreneurial capacity, between 1993 and 1996, VAT registrations fell by 13 per cent. That shows a decline in the business start-ups that we hoped would grow into companies that could take up the slack of unemployment.
Fourthly, we have a poor strategic transport infrastructure. We are outside the key north-south routes and have poor east-west routes. I single out the A47 trunk road, which comes across from the midlands, goes round Peterborough and then disintegrates into a very poor road through Wisbech. There is now some dual carriageway between Wisbech and King's Lynn, but there are problems further east towards Norwich. We do not have a decent east-west route to take our business and products quickly to the main north-south line of communication, the A1.
We suffer from peripherality. The area's lack of communication links is highlighted by a Henley hub index of 0 and a contiguity index of 0.8. Those are technical points, but I am sure that the Minister understands what they mean.
Dr. George Turner: The hon. Gentleman will know, although the House may not, that the western part of my constituency is similar to the description that he gives of his area. Does he agree that, although there has been some success in acquiring support, our communities are extremely precarious at present? He has realistically described the threats faced by those communities. Does he agree that this would be almost the worst possible time to remove the support that they have enjoyed during recent years?
Mr. Moss: I am grateful for that intervention. The hon. Gentleman and I share the same problems in our communities. For six years, those communities have enjoyed and made good use of that support, which they will continue to receive until January 2000. The point of our submission to Ministers at the Department of Trade and Industry, of the meetings that we have held and even of the debate tonight is to impress on the Minister that to snatch that facility away from our community is the worst possible thing that could happen at this juncture.
I emphasise that we do not have any natural advantages to attract inward investment to the area. There has been no credible offer in the inward investment market and none of

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the inward investments secured by the East of England investment agency in its first 18 months of operation have located in our fenland area. That underlines the point made by the hon. Member for North-West Norfolk.
There has been a good response from my local authorities. Redesignation of regional selective assistance will be the centrepiece of the fenland partnership that has been set up. That partnership of local authorities, local businesses, the local chamber of commerce and the training and enterprise council has a four-point regeneration strategy. It aims to retain and enhance the competitiveness of existing industry—most notably, the fenlands food cluster, which is marketing under the name of Foodfen.
Through Cambridgeshire county council and the local education authority, we intend to raise levels of educational attainment. We shall address the barriers to investment created by infrastructure constraints. One aspect of the partnership's work is to hold on-going discussions with Anglian Water, the Government office of the eastern region and the Rural Development Commission.
In conclusion, the fundamental question, and the problem facing my constituents and their local authorities, is how they can meet the new criteria that have been laid down by the European Union and which the Minister and his Department have to implement. That is not only a problem for my constituents, but for representatives from about 51 other areas in the UK who have beaten a path to the Minister's door during the past few months.
The problems of pockets of local deprivation and disadvantage are often masked by selecting large geographical units. I hope that the Department will not go down the road of designating according to NUTS3 criteria. The criteria that the Government choose should reflect localised areas of deprivation, and take into account the endemic problems of industrial development that mitigate against self-help and free-market solutions. Fenland district council has mounted a twin-track approach in its submission; either starting with the local authority, which is a NUTS4 unit, or at grass roots, building up from the individual wards to create a sensible area that cuts across county boundaries, but shares the problems referred to by the hon. Member for North-West Norfolk.
10.19 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Wills): I congratulate the hon. Member for North-East Cambridgeshire (Mr. Moss) on securing the debate on assisted area status for Wisbech. I know that that is important to him and to his constituents. Indeed, the review is also important to many other areas of the country. The hon. Gentleman has eloquently put the case for his area—as, indeed, did my hon. Friend the Member for North-West Norfolk (Dr. Turner). I welcome the opportunity to reply to the points that have been made.
In recent years, Wisbech has been successful in attracting investment and, as the hon. Member for North-East Cambridgeshire described, assisted area status has played an important part in achieving that success. Since 1993, there have been 62 offers of regional selective assistance totalling more than £4.6 million, which has led to total investment of £29.6 million and the creation of 1,000 jobs; in addition, a further 1,000 jobs have been
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safeguarded. Fenland district council has put the case for continuing assisted area status under the current review, and the hon. Gentleman has written to Ministers and assiduously pressed that case on behalf of his area. It is true that the new assisted area map will be reduced from current levels, and there are some hard choices to be made when designating areas. We have yet to make final decisions, but I can assure the hon. Gentleman that his points about the claims of Wisbech will be, and are being, carefully considered in the review.
Let me set out where matters stand in respect of the review. Following new European Commission guidelines on regional aid, all member states must propose new assisted areas to operate from 1 January next year, so the Government announced on 30 July last year a review of the assisted areas in Great Britain. Because of its special problems, Northern Ireland retains special status under the guidelines and will be covered in its entirety. A great deal of work has been done since then: my officials have been working closely with their counterparts in other Departments, especially the Scottish Office, the Welsh Office and the Department of the Environment, Transport and the Regions; we have held a public consultation; and, since assuming ministerial responsibility for the matter in January, I have met about 50 Members of Parliament who wanted to discuss the case for their own areas.
The Government are now considering what proposals they will make for new assisted areas, and we shall put those to the Commission as soon as possible. We are carefully considering the needs of all areas, including Wisbech, but the task we have been set is not an easy one. The Commission's guidelines are part of its effort to reduce the overall level of state aids in Europe, and the UK, like the EU as a whole, faces a reduction in the population coverage of its map. The figure for the UK is about three quarters of current levels, so there are hard choices to be made and there will be some pain. However, we must bear in mind the wider picture: the UK is one of the lowest providers of state aids, so the removal of distortions to competition by lowering overall EU state aids will be beneficial to UK firms both inside and outside the assisted areas. The lower aid limits are expected to bear down especially heavily on other EU states, which should improve the UK's ability to attract inward investment.
We do not have an entirely free hand in drawing up our proposals. Areas measured at NUTS2 under the European system of units for regional statistics will automatically qualify for assisted area status if their gross domestic product per head is less than 75 per cent. of the EU average. However, in choosing other areas, the Commission guidelines require us to use up to five social or economic indicators and one common unit of geography for the country as a whole. There is also a penalty for proposing areas with a population of fewer than 100,000, as those will be counted as 100,000 against our population total, which would result in a further reduction in the coverage of the map.
In the review, we are trying to combine areas of need with opportunities for employment creation, investment and regeneration—in other words, we are targeting areas where regional industrial assistance is a sensible policy response to need. We are considering indicators for

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selection and designation of areas, and we have not made final decisions. However, in line with the outcome of the public consultation, we expect measures of labour market weakness —high unemployment or low employment rates—to be an important factor. Using a smaller, rather than a larger, geographical unit for the map will offer the most scope for targeting areas effectively within our overall population ceiling. Again, that is in line with the outcome of our consultation. It showed that there was most public support for the use of wards—which is the smallest unit—as the building block of the map. We are currently working on how we can achieve that effectively within the various rules set down by the Commission.
I shall conclude by saying a few words about the timetable from now on. The Commission asked originally for proposals to be submitted by 31 March. That was always going to be an ambitious date, and we are not alone in not having submitted them by the end of last month: we think about half of member states have not yet submitted their proposals to the Commission. We are working to complete the map as soon as possible. However, seeking the best outcome for Great Britain must be the key objective and we are not ready to submit our proposals. We do not want to rush this task. We could draw up a map easily and quickly that is based on five indicators and a unit of geography. However, the challenge is to draw up a map that is right for Britain and which provides coverage that most effectively meets our reduced population ceiling.
124
As to when we will be in a position to announce our proposals, we must work on them further. We must respect the purdah periods imposed before the local elections, the elections in Scotland and Wales and the European elections. As the hon. Gentleman said, in the early summer we shall develop our proposals for the European structural funds—the objective 2 areas—for the period from 1 January 2000. Public consultation is now under way. The Berlin Council decided—rightly in the Government's view—that there will not be an enforced link between the assisted areas and the structural funds maps. Those instruments have different purposes and are aimed at different goals. They do not need to be identical, but they should clearly make sense when they are put together. Announcements about our proposals for the structural funds map and for the assisted areas will be taken together to provide an effective strategy for tackling need through regional development.
As a result of various factors, we do not think any announcement is likely before mid-June. However, I assure the House that we will continue to move as quickly as we can towards finalising our proposals. In the meantime, I hope that my remarks this evening will provide comfort to the hon. Gentleman, my hon. Friend the Member for North-West Norfolk and to their constituents. We want very much to achieve the best result for this country, and I believe that we are moving in the right direction.
Question put and agreed to.
Adjourned accordingly at twenty-eight minutes past Ten o'clock.

ATTRONEY-GENERAL

  Departmental Legal Business
  Mr. Dismore
  To ask the Attorney-General if he will make a statement on his Department's policy when(a) conducting legal proceedings and (b) seeking legal advice as to the circumstances in which Queen's Counsel should be instructed; and for each of the last three years (i) on how many occasions his Department instructed Queen's Counsel and (ii) what was the total cost of instructing Queen's Counsel. [81771]

  The Solicitor-General
  The Crown Prosecution Service, the Treasury Solicitor's Department, the Serious Fraud Office and the Legal Secretariat to the Law Officers predominantly use junior counsel when it is necessary to instruct counsel to provide legal advice or to conduct legal proceedings

  In civil cases, the two First Treasury Counsel are both junior counsel and they will advise and represent the Government without a Queen's Counsel in many of their important cases. In addition, the Attorney-General maintains four panels of junior counsel whom Departments are expected to use for the majority of the Government's civil litigation. The Attorney-General's approval, or mine, is required before a Queen's Counsel can be instructed to appear for any Department in civil litigation.

  A panel of Senior Treasury Counsel and Junior Treasury Counsel, who are all junior counsel, exists in London to provide advice in more significant criminal case work, and to handle the most serious and complex work at the Central Criminal Court. More generally, the Crown Prosecution Service maintains circuit-based lists of junior counsel to conduct almost all its criminal case work in the Crown Court in England and Wales. Outside London, Queen's Counsel are instructed in all contested murder cases, and occasionally in other very serious or complex case work prosecuted by the Crown Prosecution Service.

  Given the complexity and seriousness of its cases, the Serious Fraud Office usually instructs Queen's Counsel to advise and conduct its prosecutions.

  In determining the level of counsel to use, the Department will consider the individual circumstances of each case. It will take into account, inter alia, the importance and sensitivity of the case, the complexity of
  2
  the law, the weight and complexity of the evidence, and the degree of experience and expertise required before deciding whether to instruct Queen's Counsel or junior counsel.

  However, records are not maintained in a form which would enable the number of occasions on which the Attorney-General's Department instructed Queen's Counsel in the last three years, and the cost of doing so, to be given without incurring disproportionate cost.

HOUSE OF COMMONS

  Line of Route
  Mrs. Gordon
  To ask the Chairman of the Administration Committee when she expects the Committee's proposals for re-opening the Line of Route during the Summer Adjournment to be made available to the House. [81905]

  Mrs. Roe
  I am pleased to advise the hon. Lady that the First Report from the Administration Committee, "Proposal to re-open the Line of Route during the Summer Adjournment", which details the Committee's findings and recommendations on this matter, was published by the Stationery Office at 3.30 pm today. The Report, HC(1998–99) 394 is available to hon. Members from the Vote Office; in view of her interest in this matter, I have arranged for a copy to be sent to the hon. Lady.

  Early-day Motions
  Mr. Jenkin
  To ask the President of the Council how many early-day motions have been debated since 1 May 1997. [81386]

  Mrs. Beckett
  The information is set out below:

  EDM number and title

  Date debated

  Session 1997–98

  590 Food (S.I., 1997, No. 2959)

  10 February 1998

  1661 Terms and Conditions of Employment

  (S.I., 1998, No. 1833)

  27 October 1998

  1729 Income Tax (S.I., 1998, No. 1869)

  10 November 1998

  Session 1998–99

  56 Pensioners and Dividend Tax Credits

  18 January 1999

  362 Income Tax (S.I., 1998, No. 3175)

  1 March 1999

SCOTLAND

  Consultations (Postal Costs)
  Mr. Keetch
  To ask the Secretary of State for Scotland if he will pay the postal costs of voluntary bodies and registered charities requested to respond to Government consultation documents; and if he will make a statement. [80917]

  Mr. Dewar
  [holding answer 22 April 1999]: Policy on the payment of grants to voluntary organisations will, from 1 July 1999, be a matter for the Scottish Parliament.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Railtrack
  Mr. Corbyn
  To ask the Secretary of State for the Environment, Transport and the Regions what estimate he has made of the cost of the development plan produced by Railtrack to public funds; and if he will make a statement. [81973]

  Dr. Reid
  Railtrack's 1999 Network Management Statement, published on 25 March, announced their plans for investment in the network totalling some £27 billion over the next ten years. That figure includes some £11 billion of investment on enhancements to the network. Not all of that £11 billion is Railtrack money: it includes proposed Government and other third-party funded schemes. Some £6 billion of it is shown as being either new "partnership" schemes or new "contractor" schemes, both of which would appear to involve at least some public sector funding, but no breakdown of funding sources is given.

  Urban Trees
  Mr. Laurence Robertson
  To ask the Secretary of State for the Environment, Transport and the Regions what is his Department's policy towards planting and protecting urban trees; and if he will make a statement. [82044]

  Mr. Meale
  My Department encourages local authorities to develop long-term strategies to promote the planting, maintenance, conservation and replacement of all trees in their areas.

  Local authorities have powers to protect selected trees and woodlands under the tree preservation order system. Our proposals for reforming that system were set out in a consultation paper issued last July.

  Professional Statisticians
  Mr. Menzies Campbell
  To ask the Secretary of State for the Environment, Transport and the Regions (1) how many staff by grade are employed as professional statisticians in his Department; how many of these staff have been accepted as fast stream by the Civil Service Selection Board; and how many have been granted chartered statistician status by the Royal Statistical Society; [81201]

  (2) how many staff who have worked as professional statisticians in his Department and its predecessors have left on early retirement in each of the past 10 years. [81181]

  Mr. Prescott
  Statistical work is undertaken by a range of specialisms such as Research Officers, Social Survey Officers and Economists. Within this Department there are 6 Senior Civil Servants, 1 Grade 6 Statistician, 37 Grade 7 Statisticians, 13 Assistant Statisticians employed as "professional" Statisticians, all of whom have been recruited via CSSB. In addition our Department employs 4 Statistical Officers.

  The number of "professional statisticians" who have left on early retirement in the last ten years is 6.

  Vessel Registration
  Mr. Mitchell
  To ask the Secretary of State for the Environment, Transport and the Regions in each of the last five years, what proportion of vessels travelling coastwise between ports and harbours in the United Kingdom were(a) registered in the United Kingdom, (b) registered in member states of the (i) European Community and (ii) European Economic Area and (c) registered under flags of convenience; and what weight of cargo was so carried. [81429]

  Ms Glenda Jackson
  Information is not available in the form requested. However, Table 2.15 of Waterborne Freight in the United Kingdom 1996, and a similar table in earlier issues of this annual publication, which are all available in the Library, contains information on the flag shares of vessels engaged in the United Kingdom's coastwise traffic in terms of tonnes lifted and tonne-kilometres moved. The tonnages of coastwise cargo carried by UK registered vessels and by all vessels for years 1993 to 1997 are as follows:

  million tonnes

  Coastwise cargo carried by UK registered vessels

  Total coastwise cargo

  1993

  20.8

  60.2

  1994

  19.5

  61.2

  1995

  18.7

  67.7

  1996

  17.3

  70.9

  1997

  not available

  71.1

  Mr. Mitchell
  To ask the Secretary of State for the Environment, Transport and the Regions what proportion of cargo vessels, not carrying passengers, travelled between members states of(a) the European Economic Area and (b) the European Union in each of the last five years which were not registered in one of the members states; and what (i) formal and (ii) informal agreements exist between those states prohibiting use of their (1) ports and (2) harbours by vessels registered under flags of convenience with inferior safety standards to those set by the member states. [81435]

  Ms Glenda Jackson
  Data on cargo vessel movements between member states of the European Economic area and the European Union are not held by the Department, and no formal or informal agreements exist between those states that prohibit the use of their ports and harbours by vessels registered under flags of convenience.

  Ships flying flags with poor safety records in the European port state control region (as measured by an above average detention rate) are targeted for inspection by the UK and its European partners. Individual ships can be banned if they fail to comply with release conditions following detention or if they do not carry certification required under the International Safety Management Code.

DEFENCE

  CR Gas
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence, pursuant to his answer of 8 March 1999,Official Report, column 38, on CR gas, when the prescribed rules of engagement of the use of CR gas by the armed forces were formulated. [80828]

  Mr. Doug Henderson
  Rules of engagement are considered and approved for specific operations. Their formulation varies according to the particular circumstances of an operation. The precise rules of engagement that govern the use of CR gas are thus approved on each occasion that its use is authorised. Rules of engagement for the use of CR are consistent with the provisions of the Chemical Weapons Convention, which explicitly permits the use of toxic chemicals for law enforcement purposes.

  Professional Statisticians
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence how many staff who have worked as professional statisticians in his Department have left on early retirement in each of the past 10 years. [81189]

  Mr. Spellar
  Early retirement for professional statisticians from the Ministry of Defence in the last 10 years has been as follows:

  1989: 0

  1990: 0

  1991: 0

  1992: 0

  1993: 1

  1994: 1

  1995: 2

  1996: 0

  1997: 0

  1998: 0.

  There have been no early retirements in 1999. The early retirement figures include those professional statisticians who retired early on medical grounds.

  Mr. Menzies Campbell
  To ask the Secretary of State for Defence how many staff by grade are employed as professional statisticians in his Department; how many of these staff have been accepted as fast stream by the Civil Service Selection Board; and how many have been granted chartered statistician status by the Royal Statistical Society. [81194]

  Mr. Spellar
  The Ministry of Defence employs a total of 20 professional statisticians in the following grades:

  Senior Civil Service: 4

  Grade 6: 2

  Grade 7: 12

  Assistant Statistician: 2.

  All were accepted as fast streamers by the Civil Service Selection Board.
  6
  Two of the four in the Senior Civil Service, including the Chief Executive of the Defence Analytical Statistical Agency, have been granted chartered statistician status by the Royal Statistical Society. Four other statisticians are Fellows of the Royal Statistical Society.

  Notes

  1. The definition of professional statisticians used to produce the figures is those staff who were recruited through the fast stream to the Statistician Group. These figures include professional statisticians who may currently be working in administrative posts.

  2. These figures do not include any staff not in post, on career breaks secondment etc.

  3. It is increasingly difficult to define what is a professional statistician. Departments recruit survey experts, research officers, social survey officers and others whose work has an input to Statistical work.

  Defence Estates Organisation
  Mr. Hancock
  To ask the Secretary of State for Defence for what reasons the Defence Estates Organisation was relaunched on 29 March. [81630]

  Mr. Spellar
  The Strategic Defence Review considered how it might improve the management of the defence estate. The review made a number of important recommendations over the Defence Estate Organisation's role. These were that the Chief Executive be made accountable to Ministers, for working with users to ensure the defence estate is managed efficiently and effectively as a whole to support the delivery of defence capability; that DEO should assume responsibility for all aspects of the disposal of surplus property programme and that the DEO should develop proposals for a new model for construction and procurement.

  This places an increased burden, and a greatly enhanced role, on an organisation created in 1995 and launched as an Agency in April 1997. Following a fundamental review, in which I have been closely involved, major changes are taking place in DE to enable it to take on these new tasks, placing it at the centre of my Department's estate management matters. Most significantly, the Agency will play a key role in carrying forward the Deputy Prime Minister's rethinking construction initiative, in which the MOD will play a major part.

  The programme I have endorsed will bring out major process changes that will focus the Agency on the services that it delivers to customers elsewhere in the MOD, in the process setting the Agency challenging objectives and outputs. This will provide the necessary impetus for initiatives on estate management to be developed and implemented across the MOD, with enhanced value for money from the Department's substantial investment in its estate, as a primary goal. Savings will undoubtedly accrue from this process, but at this early stage it would be imprudent to set a figure upon achievable levels. This will become more apparent as DE leads MOD through this transition period and will be reported to Parliament, year by year, as a series of targets and achievements.

  We attach great importance to sending out a strong message to the MOD, the industry and others across Government, and outside, that the nature of the Agency has changed. To this end it was believed appropriate to

  7
  mark this evolution by relaunching as Defence Estates, supported by a new Framework Document and Corporate Plan.

  Yugoslavia
  Mr. Maclean
  To ask the Secretary of State for Defence what measures he is taking to prioritise the targeting of Serbian units engaged in war crimes over other Yugoslav National Army units; and if he will make a statement on the prospects for a policy distinguishing between the two. [81453]

  Mr. George Robertson
  It is for the Chief Prosecutor of the International Criminal Tribunal for the Former Yugoslavia in The Hague to seek indictments against individuals she believes have been responsible for serious violations of international humanitarian law during the Kosovo crisis. NATO's military campaign is explicitly designed to damage and disrupt the capability of the government in Belgrade to carry out repressive operations in Kosovo. Yugoslav decision-makers and commanders have been put on notice that their conduct is being scrutinised, and that information linking them to atrocities committed in Kosovo will be forwarded to the Tribunal.

  Mr. Llew Smith
  To ask the Secretary of State for Defence what assessment has been made of the environmental damage done to(a) Serbia, (b) Montenegro and (c) Kosovo as a result of the bombing conducted by NATO forces; and what assessment has been made of the environmental destruction perpetrated by Yugoslav forces. [81580]

  Mr. George Robertson
  Environmental considerations are taken fully into account when targeting decisions are made; and the United Kingdom will comply with its obligations under the First Geneva Protocol, including Article 55, which concerns the protection of the natural environment. It is not currently possible to undertake an assessment of the environmental impact of NATO air strikes or the actions of Yugoslav forces.

  Mr. Llew Smith
  To ask the Secretary of State for Defence what steps have been taken by NATO military planners to ensure no bombs hit the RA Research Nuclear Reactor at Vinca near Belgrade; and what quantities of(a) nuclear fuel and (b) radioactive waste are held at the Vinca site. [81581]

  Mr. George Robertson
  The need to avoid dangerous emissions from plants such as Vinca is taken fully into account in making decisions on targeting; and the UK will comply with its obligations under the First Geneva Protocol 1977.

  Questions about the quantity of fuel and waste at Vinca are a matter for the International Atomic Energy Agency (IAEA).

  Mr. Llew Smith
  To ask the Secretary of State for Defence if he will place in the Library copies of(a) his daily press briefing in London, (b) the daily battle damage assessment and (c) the daily NATO briefing in Brussels in respect of the military action against Yugoslavia, (i) for each day since the action began and (ii) for each day until the military conflict ends. [81570]

  Mr. George Robertson
  Copies of my daily press briefing, which includes declassified information on battle damage, will be placed in the Library of the House as 8
  requested. The daily NATO briefing from Brussels is available on the internet at http\\ www.nato.int\kosovo\speeches.htm.

  Mr. Dalyell
  To ask the Secretary of State for Defence how many free-fall bombs have been dropped on Yugoslavia in the last month; and what assessment he has made of the reliability of tail-fin guided direction. [81971]

  Mr. George Robertson
  A total of 242 unguided bombs have been dropped by British aircraft in support of Operation Allied Force up to 22 April. They are assessed to have performed reliably and within design specifications.

  NATO Headquarters
  Mr. Key
  To ask the Secretary of State for Defence if he will list the locations of the following NATO headquarters(a) Headquarters Allied Forces North Western Europe, (b) Headquarters Allied Forces Air North Western Europe, (c)Headquarters Allied Naval Forces North Western Europe, (d) Headquarters Maritime Air Forces North West, (e) Head quarters Submarine Forces North West, (f) Headquarters Allied Forces Eastern Atlantic Area, (g) Headquarters Maritime Air Forces Eastern Atlantic Area, (h) Headquarters Submarine Forces Eastern Atlantic Area, (i) Headquarters United Kingdom-Netherlands Amphibious Force, (j) Headquarters United Kingdom-Netherlands Landing Force, (k) the NATO Airborne Early Warning Force Headquarters and (l) the NATO E-3A Component. [81926]

  Mr. Doug Henderson
  [holding answer 23 April 1999]:

  (a) and (b) High Wycombe, United Kingdom

  (c) to (h) Northwood, United Kingdom

  (i) and (j) Plymouth, United kingdom

  (k) Mons, Belgium

  (l) Geilenkirchen, Germany.

  Gulf War Veterans
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Defence when he expects the external audit of the Gulf Veterans' Medical Assessment Programme to be completed; and if he intends to publish the audit report. [82471]

  Mr. Doug Henderson
  My Department has now received the final report of the audit of the Gulf Veterans' Medical Assessment Programme (MAP) undertaken by the King's Fund Health Quality Service. I am pleased to report that the auditors were impressed with the organisation of the Medical Assessment Programme and the enthusiasm and commitment of the staff to the provision of a high-quality service. Nevertheless, the auditors also made a number of specific recommendations for improving the service and, because of the importance which we attach to the MAP, these have been accepted in full and work has already begun to implement them. The process of implementation is expected to be completed by November of this year. A copy of the report will be placed in the Library of the House and it will also be published on the Ministry of Defence Gulf Veterans' Illnesses website.

  Basra (Bombing)
  Mr. Dalyell
  To ask the Secretary of State for Defence (1) what assessment he has made of(a) the damage inflicted on the Basra Pumping Station and (b) the effect it has had on the pumping station; [81932]

  (2) what the purpose was of dropping the bombs which fell on date palm trees in Abu Al-Kasib, south of Basra; and what military installation was intended as the target of the bombs. [81933]

  Mr. George Robertson
  UK aircraft have not been involved in any attack on a Basra pumping station. I am not aware of any bombs falling on palm trees in Abu Al-Kasib.

  Iraq
  Mr. Mackinlay
  To ask the Secretary of State for Defence if he will make a statement on the military situation in relation to Iraq since 24 March, with particular reference to the allies' capability in the region of Iraq and Iraqi military action. [82030]

  Mr. George Robertson
  We remain fully committed to our policy of containing the threat posed by Iraq. We are continuing to enforce the Iraqi no-fly zones and maintain an appropriate military capability to ensure that Saddam Hussein does not rebuild his WMD capability or otherwise threaten his neighbours. Our naval forces continue to participate in multi-national efforts to enforce sanctions. We will continue to take appropriate defensive measures against Iraqi threats to coalition forces.

  Atomic Weapons Establishment Sites
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence what progress has been made in selecting the contractor to manage the Atomic Weapons Establishment sites from April 2000; and what is the timetable for selecting the contractor. [80825]

  Mr. Spellar
  This is a matter for the Chief Executive of the Defence Procurement Agency. I have asked the Chief Executive to write to the hon. Member.

  Letter from Sir Robert Walmsley to Mr. Matthew Taylor, dated 26 April 1999:
  I am replying to your question to the Secretary of State for Defence about the progress that has been made in selecting the contractor to manage the Atomic Weapons Establishment sites from April 2000, and the timetable for selecting the contractor. This matter falls within my area of responsibility as Chief of Defence Procurement and Chief Executive of the Defence Procurement Agency.
  As you may be aware, the Atomic Weapons Establishment is a Government Owned, Contractor Operated facility—a "GOCO". The present operator is Hunting-BRAE Ltd. whose 7 year Term Contract started on 1 April 1993. A further competition for the management and operation of the Atomic Weapons Establishment from 1 April 2000 is underway and progressing to schedule.
  Initial interest has now consolidated into three consortia. A bidders' conference was held on 19 October 1998, and a Request for Quotations was issued on 30 November. Responses are due in by 1 June 1999 and we aim to award a contract by the end of November 1999, thereby providing a four month lead-in for the new operating contractor.

  Departmental Contractors
  Mr. Hancock
  To ask the Secretary of State for Defence what requirements he places on(a) contractors and (b) sub-contractors regarding ISO 9002 certificates. [81642]

  Mr. Spellar
  The requirement for Quality Management System certification is dependent on the nature of the contractual requirement. Where the requirement is for a product or service of a non-technical nature, and acceptability can be confirmed by a non-technical customer on receipt, no certification is required as a condition of contract. In all other cases, the Department's policy is to award contracts only to suppliers whose Quality Management System aligns with the appropriate ISO 9000 series standard. Prime contractors are responsible for the selection and management of sub-contractors.

  Mr. Hancock
  To ask the Secretary of State for Defence how many contractors currently employed by his Department do not have ISO 9002 certification. [81643]

  Mr. Spellar
  This information is not held centrally and could be provided only at a disproportionate cost.

  Kosovo
  Mr. Keetch
  To ask the Secretary of State for Defence if he will list the units of British armed forces deployed around the former Yugoslavia; and if he will make a statement. [80927]

  Mr. George Robertson
  The following units, or elements thereof, are currently deployed around the former Yugoslavia:

  Royal Navy

  HMS Invincible

  HMS Newcastle

  HMS Iron Duke

  HMS Grafton

  HMS Splendid

  RFA Fort Austin

  RFA Fort Grange

  845 NAS

  Army (in Bosnia/Croatia)

  Headquarters 1 Mechanised Brigade

  Queen's Royal Lancers

  1st Battalion Worcestershire and Sherwood Foresters Regiment

  Light Dragoons

  Gurkha Coy 2 Para

  3rd Regiment Royal Horse Artillery

  21st Regiment Royal Engineers

  215 Signal Squadron

  669 Squadron Army Air Corps

  10th Transport Regiment Royal Logistic Corps

  4th Field Ambulance

  5th Battalion Royal Electrical and Mechanical Engineers

  Royal Military Police

  34 Field Hospital

  21 Sig. Regt.

  30 Sig. Regt.

  11

  Army (in Macedonia/Greece)

  Headquarters Allied Rapid Reaction Force

  1st Signals Brigade

  16th Signals Regiment

  2 Signals Regiment

  7 Signals Regiment

  3rd Armoured Division Signals Regiment

  30 Signals Regiment

  14th Topographical Squadron Royal Engineers

  659 Squadron Army Air Corps

  Headquarters 4th Armoured Brigade

  21st Regiment Royal Engineers

  2nd Armoured Field Ambulance

  King's Own Royal Border Regiment

  King's Royal Hussars

  4th Regiment Royal Artillery

  Headquarters (UK) Combat Service Support Group

  17 Port and Maritime Regiment

  29th Regiment Royal Logistics Corps

  28th Regiment Royal Engineers

  27th Regiment Royal Logistics Corps

  Royal Military Police

  Irish Guards

  Royal Air Force

  12 Harrier GR7s from No. 1 Squadron

  5 Chinook Helicopters from No. 7 Squadron

  3 E3s from No. 8 Squadron

  2 Puma Helicopters from No. 33 Squadron

  1 Nimrod R from No. 51 Squadron

  3 Tristars from No. 216 Squadron

  In addition, although not deployed to the region, 8 Tornado GR1 s and 3 VC1Os are participating in NATO's air campaign, operating from their home bases of RAF Bruggen and RAF Brize Norton respectively.

PRIME MINISTER

  Foreign Media (Articles)
  Mr. Maclean
  To ask the Prime Minister (1) if he will list the sources which enabled him to identify articles he had written for publication by the foreign media; and if he will make a statement on the means by which the use of these sources could be expanded; [81235]

  (2) what is his estimate of the cost of keeping a record of articles written in his capacity as Prime Minister for publication by the foreign media; [81233]

  (3) if he will estimate the man hours required by (a) his office and (b) the Foreign and Commonwealth Office (i) to write articles for placement in the foreign media and (ii) to place those articles; and if he will estimate the time required for future recording of those articles for reference purposes; [81228]

  (4) if he will list those points in his office at which records of where authorship and distribution of articles produced by him for publication by the foreign media could be maintained. [81234]

  Mr. Bercow
  To ask the Prime Minister, pursuant to his answer to the right hon. Member for Penrith and The Border (Mr. Maclean) of 8 March 1999,Official Report, column 14, for what reason it would not be practicable to make systematic arrangements to place in the Library copies of articles which he writes for publication in overseas journals and newspapers. [80181]
  12
  The Prime Minister
  I refer the right hon. Member and the hon. Member to the answers I gave on 3 February 1999,Official Report, columns 642-43; 26 February 1999, Official Report, column 474; 8 March 1999, Official Report, column 14; 22 March 1999, Official Report, column 8; and 31 March 1999, Official Report, column 718. It would involve disproportionate cost to identify, translate where necessary and record every such article that is published in the foreign media.

  EU Joint Statements
  Mr. Maclean
  To ask the Prime Minister if the will make a statement on progress made at EU level on(a) the Joint British-German statement on EU taxation, (b) the Joint British-Swedish statement on social inclusion and opportunity in Europe and (c) the Joint Anglo-Spanish statement on employment; and for what reasons each country was selected as the partner for a joint statement in this field. [80046]

  The Prime Minister
  The Government seek actively to build alliances with other Member States on a range of issues under discussion in the EU. The European Defence initiative with France, and our joint statements with Germany on tax, Sweden on social inclusion and opportunity, and Spain on employment and economic reform are recent examples. This approach both deepens our bilateral relations with EU partners, and influences the wider EU debate.

  EU Funding
  Mr. Bercow
  To ask the Prime Minister if he will list those areas for which EU funding has been reduced as a consequence of the Berlin Summit. [81042]

  The Prime Minister
  Berlin set ceilings for spending commitments on each main policy category for the period 2000–06. The ceiling for the existing EU for 2006 is nearly 7 per cent. lower in real terms than the EC Budget for 1999. For comparison, in 1992, an increase in spending of over 30 per cent. was agreed for the period to 1999.

  Berlin Summit
  Mr. Maclean
  To ask the Prime Minister, pursuant to his answer of 31 March 1999,Official Report, columns 716-17, if he will indicate those sections of his oral statement of 29 March 1999, Official Report, columns 732-47, which answered the questions tabled by (a) the right hon. Member for Penrith and the Border, (b) the hon. Member for Gordon (Mr. Bruce), and (c) the hon. Member for Christchurch (Mr. Chope), with regard to the EU budget negotiations at Berlin. [81385]

  The Prime Minister
  In my Statement to the House on 29 March 1999,Official Report, columns 732-33, I said:
  "On the abatement, I am delighted to report that the presidency conclusions say in terms that the UK abatement will remain. In line with the 1988 and 1992 European Council conclusions, the UK accepted that we should not make a windfall gain out of changes to the method of EU financing … The result is that there will be no reduction in the United Kingdom's rebate."
  13
  In response to subsequent questions on the Statement, at column 746, I said:
  "In respect of contributions, yes, as a result of our settlement, for the first time, although we will remain the second-largest net contributors, we will be closer to France and Italy than we have been at any time in the European Community."

  And, at column 747:
  "The 220 million figure is the windfall gain that we would have made if issues that are presently unabated were subject to abatement. In reaching agreement, we did precisely what was acceded to in 1988 and 1992. However, the difference with this Government is that we have not only kept the rebate intact so that there will be no reduction but managed to agree that there should be no increase in the own resources ceiling. That was something that the previous Conservative Government signally failed to do" [Official Report, 29 March 1999, Vol. 328, c. 732-33].

  As is always the case following EU budgetary reform, the final effects on the UK's net contribution of the complex changes to the Common Agricultural Policy, the Structural Funds and the financial framework will of course depend on the completion of discussions with the European Parliament, and on the final decisions to be taken by the Commission about the details allocation of the Funds.

  KPMG
  Mr. Maclean
  To ask the Prime Minister if he will list the contracts offered by the Government to KPMG since 1 May 1997. [81452]

  The Prime Minister
  Contracts for Government work are awarded within a policy and legal framework which requires the process to be fair and objective and deliver value for money. However, responsibility for any contract rests with the individual Department concerned. Information for the Government as a whole is therefore not held centrally. However, 14 Government Departments have made information available about KPMG contracts to the hon. Member for Bury St. Edmunds (Mr. Ruffley), and the hon. Member for North Essex (Mr. Jenkin) in previous written answers.

  Kosovo
  Mr. Maclean
  To ask the Prime Minister what is his estimate of the total number of deaths of(a) Albanians due to war crimes and (b) combatants since NATO bombing began. [81654]

  The Prime Minister
  It is not possible to put a precise figure on the number of deaths sustained by the Kosovar Albanians as a result of President Milosevic's campaign of brutality, both before and after the NATO air campaign began. However, it is clear from eye witness accounts that these are likely to be considerable and a stain on humanity. We are of course providing relevant information on the brutality of Milosevic's forces to the International Criminal Tribunal for the Former Yugoslavia.

  Mr. Maclean
  To ask the Prime Minister what requests the Government have received for the systematic identification of specific Yugoslav units perpetrating war crimes. [81656]
  14
  The Prime Minister
  The International Criminal Tribunal for the former Yugoslavia has asked the Government for any material they may have concerning, among other things, the role of individuals in atrocities committed in Kosovo, and concerning police or military units in areas where atrocities are being committed. The Government will hand over as much information as they can that will be relevant to the Tribunal's investigations.

  Mr. Dalyell
  To ask the Prime Minister what discussions on Kosovo he has had with(a) the Prime Minister of, and (b) other political figures in Greece. [82222]

  The Prime Minister
  Kosovo was discussed at the European Heads of Government meeting on 14 April. As a member of NATO, Greece is fully involved in consultation on all matters relating to the military action taken by the North Atlantic Council.

CULTURE, MEDIA AND SPORT

  British Tourist Authority (Overseas Offices)
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport how many awards have been won by the British Tourist Authority's overseas offices in the last 12 months; and if he will provide details in each case. [77998]

  Janet Anderson
  [holding answer 22 March 1999]:
  The British Tourist Authority inform me that their overseas offices have won the following awards in the last 12 months:

  USA
  Convention Bureau Gold Service Award for "professionalism, dedication and service to the Meetings Industry"
  Incentive Platinum Partners Award, for its incentive travel programme
  Travel Holiday Insider Award and HSMAI, Golden Bell Public Relations Competition Bronze Award for its "Best Kept Travel Secrets of the Year" articles
  Pewter Award Certificate in the National Gold Ink Competition for its "Jewels of Britain" brochure
  Crystal Communicators Award for its "BTA/On Travel-Jewels" radio show

  Australia
  Australian Capital Territory Best Tourist Office
  Western Australia Best Tourist Office
  Communicator of the Year (Donna Wales)
  Tasmania Best Tourism Office
  Victoria Best Tourism Office
  New South Wales Best Tourism Office
  South Australia Best National or State Tourism Office

  New Zealand
  "Tabs on Travel" Best National Tourist Office

  South Africa
  Travel Trade Gazette Best Foreign Tourist Office
  Association of South African Travel Agents (ASATA) Diners Club Award for the Best Tourist Office

  Spain
  AGENTRAVEL Best National Tourist Office

  Netherlands
  Best National Tourist Office
  Silver Echo and Gold Mail Box Award from the Dutch Marketing
  Association (DMA) for its Dutch Direct Marketing Campaign
  15
  Sweden
  Best National Tourist Office
  Second Prize for "Best Tourist Brochure in Sweden" from the
  Swedish Travel Writers Association

  Europe
  Travel Trade Gazette Europa Silver Award (second place) Best
  National Tourist Office in Europe
  and in addition to the above:

  Britain
  Voted Europe's Leading Tourist and Convention Bureau at the
  fifth Annual World Travel Awards
  Enter award for Best National Tourist Board website
  Best Use of Broadcast Campaign Commendation for its Rock and
  Pop Video News Release at the PR Week Awards

  Ministerial Meetings
  Mr. Matthew Taylor
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his answer of 22 March 1999,Official Report, columns 19-21, 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. [80822]

  Mr. Chris Smith
  Under the US political system, there are no exact counterparts for DCMS Ministers. However, between the period 1 January to 1 June 1998 neither myself nor any of my Ministers met the equivalents of their counterparts in the US administration.

  Digital Television (East Lancashire)
  Mr. Gordon Prentice
  To ask the Secretary of State for Culture, Media and Sport when he expects all parts of east Lancashire to be able to receive digital terrestrial television. [81912]

  Janet Anderson
  Responsibility for the delivery of digital terrestrial television (DTT) services in the UK rests with the BBC and ITC. Under plans for the launch phase, which comprises 81 transmitter sites, the Commission predicts that DTT services will be available to 250,000 people from the Pendle Forest transmitter, which covers a large proportion of east Lancashire. In addition, the Winter Hill main transmitter, of which Pendle Forest is a relay, also provides a service into parts of the region.

INTERNATIONAL DEVELOPMENT

  Kosovo
  Mrs. Curtis-Thomas
  To ask the Secretary of State for International Development what financial assistance the United Kingdom Government have provided to(a) Albania, (b) Macedonia and (c) Montenegro since 24 March. [82062]

  Clare Short
  Since 24 March, the British Government has allocated £20 million for the provision of humanitarian assistance for the refugees from Kosovo. This funding has been used to support the work of the United Nations, the Red Cross, and Non-Governmental Organisations. A detailed country-by-country breakdown of expenditure is not currently available—many of the programmes supported cover more than one country. We 16
  are currently considering, in concert with the International Financial Institutions and other key partners, the provision of broader macro-economic assistance to countries hosting the refugees. The EU has committed £100 million to Macedonia and Albania. The UK share of the EU commitment is approximately £15 million.

  Mr. Streeter
  To ask the Secretary of State for International Development what assessment she has made of the (i) need and (ii) estimated costs of providing water, electricity and sanitation to the refugee camps in(a) Albania and (b) Macedonia; and if she will make a statement. [82160]

  Clare Short
  We are not, of course, responsible for running the camps in Macedonia and Albania, but we obviously recognise the vital importance of providing adequate water, sanitation, electricity and other services to the refugee camps. Our military and civilian personnel have been actively involved in planning and establishing, and ensured adequate provision. Detailed information about the costs of providing these utilities is not currently available.

  Mr. Streeter
  To ask the Secretary of State for International Development how support for refugees in Macedonia and Albania is being co-ordinated amongst EU member states. [82157]

  Clare Short
  There have been meetings in Brussels, Geneva, and London, over the last three weeks, to co-ordinate international action to provide humanitarian assistance for the refugees. In particular, an extraordinary meeting of the EU Humanitarian Aid Committee was called to discuss Kosovo on 9 April.

  Mr. Streeter
  To ask the Secretary of State for International Development what plans she has to provide basic education for child refugees in Albania and Macedonia. [82158]

  Clare Short
  We are not, of course, running the refugee camps in Macedonia or Albania, but our programme of assistance for the refugees includes funding for education projects. We have, for example, contributed £300,000 to the Save the Children Fund appeal, which includes plans for non-formal educational activities in Macedonia and Albania.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for International Development if she will list the countries which have received refugees as a result of the Kosovo crisis. [82064]

  Clare Short
  According to the Office of the United Nations High Commissioner for Refugees, the following countries or states have received refugees from Kosovo in recent weeks: Albania, Macedonia, Montenegro, Bosnia and Herzegovina, Turkey, France, Poland, Israel, Norway, Belgium, Croatia, Germany, Iceland, Switzerland and Austria. The UK has agreed to UNHCR's request to grant temporary protection to Kosovar refugees—the first group are expected to arrive in the UK on 25 April.

  Mr. Streeter
  To ask the Secretary of State for International Development if she will make a statement about the ways in which the £20 million of financial help from her Department for Kosovar refugees is being spent. [82161]
  17
  Clare short
  The UK has made a major contribution to trying to increase the effectiveness of the UN-lead on humanitarian effort. We are funding airlifts and the necessary logistical support to overcome the constraints on delivering international assistance to those in need. So far, we have funded 32 flights, a truck convoy in Albania, personnel, and aircraft handling equipment for Tirana and Skopje airports. Our offices in Tirana and Skopje are working with NATO and UNHCR to establish refugee centres in Albania and Macedonia. We are strengthening agency capacity through the provision of key personnel, and making cash grants to international agencies and NGOs.

  Mr. Streeter
  To ask the Secretary of State for International Development what assessment her Department has made of the medical needs of the refugees in Macedonia and Albania; and what provisions her Department has made to meet these needs. [82159]

  Clare Short
  We are in close touch with the World Health Organisation (WHO), who are taking the lead responsibility for the medical needs of the refugees. At present, the health status of refugees in both Macedonia and Albania is judged to be reasonably good, with no major epidemics, though recent arrivals have been in poorer condition as a result of spending several days on the road.

  We have placed health experts in our offices in Tirana and Skopje. We are also providing a public health expert for WHO in Tirana. We have funded the purchase and transportation of 14 WHO emergency health kits to Macedonia, and seven kits for Albania—these will cover the needs of 210,000 people for 3 months.

  Mr. Streeter
  To ask the Secretary of State for International Development what plans she has prepared to maintain support for refugees in Macedonia and Albania over the next few months. [82156]

  Clare Short
  Our overriding aim is to enable the refugees to return to their homes as soon as possible. We recognise, however, that the refugees will require continuing support for some time to come, and are planning accordingly. We have established field offices in Tirana and Skopje, with experts in areas such as health and camp planning, to identify and respond to needs, both immediate and long term. We are strengthening the capacity of the humanitarian agencies themselves through secondment of expert personnel; and a DFID liaison officer is working with General Reith, the Commander of the British forces in Albania, to maximise the effectiveness of the humanitarian assistance they can provide. We have also begun, with the US, Germany, France and Italy, the planning for refugee returns to Kosovo.

  Arms Exports
  Dr. Tonge
  To ask the Secretary of State for International Development how many arms export licence applications her Department(a) has examined and (b) advised against granting since September 1997; and how many arms export licence applications have been granted by the Department for Trade and Industry since September 1997 against the advice of her Department. [71055]
  18
  Clare Short
  [holding answer 16 February 1999]:
  Licences to export arms and other goods controlled for strategic reasons are issued by the Secretary of State for Trade and Industry. All relevant licence applications are circulated by DTI to other Departments with an interest. These include the Foreign and Commonwealth Office, the Ministry of Defence and, since August 1997, the Department for International Development. Since August 1997, DFID has been consulted on 2,609 individual licence applications circulated to DFID by DTI. I am advised that views expressed by my Department fall under the description of "internal discussion and advice", the disclosure of which would, in this case, harm the frankness and candour of internal discussion. The information is therefore being withheld on the basis of Exemption 2 of Part II of Code of Practice on Access to Government Information.

SOCIAL SECURITY

  Consultations (Postal Costs)
  Mr. Keetch
  To ask the Secretary of State for Social Security if he will pay the postal costs of voluntary bodies and registered charities requested to respond to Government consultation documents; and if he will make a statement. [80919]

  Mr. Timms
  We have received numerous responses to our consultation documents and we are grateful to the many organisations and individuals who have taken the time to let us have their views. We have no plans to pay postal costs incurred by organisations who responded.

  PRIME Contract
  Mrs. Fyfe
  To ask the Secretary of State for Social Security when the Accommodation and Office Services project authorised the PRIME contract in 1997; how many bidders were allowed, after the time limit had expired, to modify their bids; if the successful bidder's modified bid was significantly different from his original bid; and what assessment was made of the prospects for the successful bidder's first bid. [81602]

  Angela Eagle
  Accommodation and Office Services (AOS) consists of post opening and post dispatch, messenger services, stationery, typing, secretarial, reprographics, fleet administration, switchboard, and shuttle bus services.

  These services, previously supplied to the Benefits Agency under 48 separate contracts and service level agreements, were tendered in eight large geographical lots. Invitations to tender for AOS were issued on 20 February 1998 to five bidders.

  The deadline for bids was 20 March 1998 and five bids were received within this deadline. No bids were received or accepted outside this deadline. The bids were valid for a period of 90 days from date of receipt.

  Owing to the complexity and range of the services, the evaluation of bids was not completed until after the 90-day period. This meant that bidders were able to reconsider their bids for specific, identified reasons. One bidder exercised their right to do so. Whilst all other bidders had the same opportunity, none did so.

  19
  There were two successful bidders for the services. Three lots were awarded to one bidder and two lots to the other; the remaining three lots were retained in-house on grounds of best value for money. Neither of the two successful bidders modified their bids.

  It would not be proper to comment on the hypothetical status of a bid at any stage of the evaluation process other than the final decision.

  Contracts
  Mrs. Fyfe
  To ask the Secretary of State for Social Security what steps he takes to ensure that contracts for work formerly carried out in the public sector are awarded fairly. [81603]

  Angela Eagle
  All Departmental Procurement is conducted under Government Procurement Policy guidelines and in accordance with the EC Public Procurement Directives (the Directives). The Directives were developed to ensure that: all potential tenderers get the opportunity to bid; there are clear and common evaluation criteria (the criteria); and the criteria are applied to all suppliers with impartiality.

  Where the Directives apply, all contracts are advertised in the Official Journal of the European Community and the business is competitively tendered. Where the Directives do not apply, the rules of competitive tendering are nevertheless followed as this is recognised as best practice.

  The criterion adopted for evaluation of tenders for Government business is "the most economically advantageous". This is decided upon using value for money criteria, incorporating quality, delivery and price criteria. Recommendations by evaluation panels for award of contract are subject to scrutiny, validation and audit by independent tender boards.

  Benefit Integrity Project
  Mr. Rendel
  To ask the Secretary of State for Social Security what additional financial resources his Department has provided to the Independent Tribunal Service to handle the appeals resulting from the Benefit Integrity Project. [82020]

  postal

  Per cent. of Postal appeals

  Visit

  Per cent. of visit appeals

  Total

  Per cent. of total appeals

  Total appeal decisions

  1,223

  —

  331

  —

  1,554

  —

  Increased from original award

  58

  4·74

  0

  0

  58

  3·73

  Original award extended

  288

  23·54

  99

  29·90

  387

  24·90

  Increased from BIP decision

  637

  52·08

  193

  58·30

  830

  53·41

  BIP award extended

  22

  1·79

  10

  3·02

  32

  2·05

  Increased from 2nd tier review decision

  627

  51·26

  185

  55·89

  812

  52·25

  2nd tier review award extended

  37

  3·02

  18

  5·43

  55

  3·53

  Notes:

  1. The figures are up to and including 28 February 1999.

  2. The "total" figures include unchanged and decreased awards, so are not the sum of the figures listed below them.

  3. Figures provided by the Benefits Agency.

  Mr. Rendel
  To ask the Secretary of State for Social Security (1) what has been the average clearance time for appeals arising from the Benefit Integrity Project since its commencement; [82021]
  20
  Angela Eagle
  The Department has not provided any additional financial resources to the Independent Tribunal Service (ITS) specifically to handle appeals resulting from the Benefit Integrity Project. However, additional funding, both this year and in previous years, has been provided in-year on the basis of workload and performance trends, and to a level of maximum productivity in terms of ITS' s ability to clear appeals.

  Mr. Rendel
  To ask the Secretary of State for Social Security what is the expected date by which all appeals arising from the Benefit Integrity Project will have been heard. [82024]

  Angela Eagle
  It is not possible for the Independent Tribunal Service (ITS) to give an expected date by which all appeals arising from the Benefit Integrity Project will have been heard, as these appeals are still being received by ITS. ITS is, however, committed to reducing the time which all appellants must wait for their appeals to be heard.

  Mr. Rendel
  To ask the Secretary of State for Social Security since the commencement of the Benefit Integrity Project,(a) how many people have requested an expedited appeal hearing on the grounds of hardship, (b) how many of these requests have been accepted by the Independent Tribunal Service and (c) what steps have been taken to inform people that they may request an expedited appeal hearing. [82023]

  Angela Eagle
  The information could be obtained only at disproportionate cost.

  The Independent Tribunal Service does not routinely advise people that they may request an expedited appeal hearing but will consider any written requests received.

  Mr. Rendel
  To ask the Secretary of State for Social Security what proportion of appeals decisions made under the Benefit Integrity Project based on(a) postal questionnaires and (b) home visits, have led to benefit being increased or extended for a longer period. [82067]

  Angela Eagle
  The information is not available in the format requested as the Independent Tribunal Service does not separately identify Benefit Integrity Project (BIP) appeals cases. Such information as is available is in the table.

  (2) what progress his Department has made in reducing the average clearance time for appeals arising from the Benefit Integrity Project through speeding up the preparation of appeals. [82022]
  21
  Angela Eagle
  The action taken to reduce average clearance time for appeals arising from the Benefit Integrity Project (BIP) falls into two areas: the preparation of appeals submissions by the Benefits Agency and the processing of the appeal by the Independent Tribunal Service (ITS).

  The Independent Tribunal Service (ITS) does not separately measure clearance times for appeals arising from the Benefit Integrity Project and so the information cannot be provided in the format requested.

  Benefits Agency statistics indicate that the average clearance time for appeals arising from the Benefit Integrity Project since its commencement is 163.5 days, from receipt of the appeal in the Agency to determination of the appeal by the ITS.

  The Independent Tribunal Service (ITS) has raised awareness of BIP appeals among its staff and tribunal members and procedures are in place to expedite these appeals where necessary. ITS is committed to reducing waiting times for all appellants and has a clear strategy for this. An increase in average clearance times will be seen, however, as older cases are resolved although within this, individual appellants will be receiving an improved service. During the second half of 1999, we will introduce changes to the appeals process which are designed to streamline the process and provide a more efficient and speedier service.

  War Widows Pensions
  Mrs. Fyfe
  To ask the Secretary of State for Social Security if he will estimate the amount paid annually in war widows pensions(a) on average to each war widow and (b) in total to all recipients living in Scotland. [81276]

  Mr. Bayley
  Questions on operational matters concerning the War Pensions Agency are for the Chief Executive, Mr. Gordon Hextall. I have asked him to write to the hon. Member.

  Letter from Peter Hulme to Mrs. Maria Fyfe dated 23 April 1999:
  The Secretary of State for Social Security has asked Gordon Hextall to reply to your recent Parliamentary Question about the average amount paid annually in War Widows Pensions to each War Widow and the total amount paid to all recipients living in Scotland. Gordon Hextall is overseas at the moment and has therefore asked me to reply on his behalf.
  I have use the most up to date figures available. Regarding the average annual payment made to a War Widow in the UK, the latest figures relate to August 1998, when the average amount paid was £8,261.14. Regarding the number of War Widows living in Scotland, the latest figures relate to March 1998 when there were an estimated 4,564 War Widows resident in Scotland. Therefore, the estimated amount paid to all recipients of War Widows Pension in Scotland is £37,703,842.
  I hope this is helpful and if you need any further information, I will be happy to assist.

HEALTH

  Passported Benefits
  Ms Buck
  To ask the Secretary of State for Health what would be the cost of designating recipients of tax credits 22
  and their families as people entitled to passported benefits under the National Health Service (Travelling Expenses and Remission of Charges) Regulations 1988. [69748]

  Mr. Denham
  The additional costs (compared with the current passporting of Family Credit and Disability Working Allowance) are (for England) estimated to be £48 million in 1999–2000, £113 million in 2000–01 and £125 million in 2001–02 in total in respect of National Health Service prescriptions, NHS dental treatment, NHS sight tests and optical vouchers. Costs in respect of wigs and fabric supports and patients' travel hospital expenses would also be incurred by NHS trusts.

  Lamotrigine
  Mr. Lock
  To ask the Secretary of State for Health, pursuant to his answer of 30 March 1999,Official Report, columns 656-57, on Lamotrigine, if he will list for each of the 35 inquiries referred to (a) the incident or event which gave rise to the inquiry, (b) the name and address of the person who generated the inquiry, (c) details of the nature of the inquiry and (d) the steps which (i) his Department and (ii) the Medicines Control Agency have taken in response to the inquiry. [80231]

  Mr. Denham
  [holding answer 13 April 1999]: Details of the 35 inquiries received by the Medicines Control Agency relating to lamotrigine from health professionals and members of the public since the marketing authorisation was granted are shown in the table. In many cases, the incident or event which gave rise to the inquiry is not known. Under the Data Protection Act the names and addresses of the inquirers have been withheld and cannot be provided without the written permission of the individuals concerned. In most cases, the nature of the inquiries was to seek information on adverse drug reactions to lamotrigine, which is routinely provided on request to health professionals and members of the public by the Medicines Control Agency.

  Inquiries relating to lamotrigine received by the Medicines Control Agency up to April 1999

  Reason for inquiry

  Inquirer

  Nature of inquiry (information requested)

  Response

  Not known

  Doctor

  Information on reduced white blood cell count with carbamazepine and lamotrigine

  Drug Analysis Prints1 (DAPs) provided

  A patient with hair loss

  Doctor

  Information on hair loss with lamotrigine

  DAP and details of reports of hair loss provided

  An ADR reporting study

  Doctor

  Information on ADR reports in the Grampian Region for citalopram, gabapentin, lamotrigine, moclobemide, nefazodone, tramadol, venlafazine, topiramate and fentanyl patches

  Details of reports provided

  23

  Inquiries relating to lamotrigine received by the Medicines Control Agency up to April 1999

  Reason for inquiry

  Inquirer

  Nature of inquiry (information requested)

  Response

  A Pathologist had carried out an autopsy on patient who had taken lamotrigine

  Doctor

  Information on deaths reported in association with lamotrigine

  DAP and details of fatal reports provided

  Not Known

  Doctor

  Information on ADRs with lamotrigine (Particularly aggression)

  DAP provided

  Not Known

  Pharmacist

  Information ADRs to lamotrigine (Particularly liver reactions)

  DAP provided

  The doctor was reporting a patient with dizziness and vomiting on lamotrigine

  Doctor

  Information on ADRs to lamotrigine

  DAP provided

  The inquirer was editing a textbook

  Doctor

  Information related to psychiatric ADRs with gabapentin, lamotrigine, vigabatrin, topiramate, clobazam and felbamate

  DAP provided

  Not Known

  Doctor

  Information on ADRs with lamotrigine

  DAP provided

  Not Known

  Doctor

  Information on ADRs with lamotrigine

  DAP Provided

  The inquirer was carrying our research on ADRs with antiepileptics

  Doctor

  Information on ADRs with lamotrigine, vigabatrin, gabapentin

  DAPs provided

  The inquirer needed information for a court report

  Doctor

  Information on cases of aggression, agitation, confusion, personality change and restlessness

  Information on reports provided

  Not Known

  Pharmacist

  Information on ADRs with lamotrigine

  DAP provided

  Not Known

  Doctor

  Information on yellow macular pigment with carbamazepine and lamotrigine

  DAPs provided

  Not known

  Doctor

  Information on uveitis with lamotrigine and sodium valproate

  DAPs provided

  Not known

  Pharmacist

  Information on lamotrigine and carbamazepine and ecchymoses and capillary fragility

  DAPs provided

  Not Known

  Doctor

  Information on ADRs with lamotrigine

  DAP provided

  24

  Inquiries relating to lamotrigine received by the Medicines Control Agency up to April 1999

  Reason for inquiry

  Inquirer

  Nature of inquiry (information requested)

  Response

  Not known

  Pharmacist

  Information on lamotrigine and hormone replacement therapy when used together

  DAPs provided

  Concern over press coverage of lamotrigine and skin reactions

  Doctor

  Further information requested

  Information provided over telephone

  Not known

  Pharmacist

  Information on pruritus and rashes with lamotrigine

  DAP provided

  Not known

  Pharmacist

  Information on gastrointestinal blockage vigabatrin, carbamazepine and lamotrigine

  DAPs provided

  Two patients on sodium valproate developed thrombocytopenia when lamotrigine was added

  Pharmacist

  Information on any other reports involving sodium valproate and lamotrigine

  Details of relevant reports provided

  Not known

  Pharmacist

  Information on visual hallucinations with lamotrigine

  DAP and details of reports provided

  Not known

  Doctor

  Information on hypogammaglobinaemia with lamotrigine and vigabatrin

  DAPs provided

  Not known

  Pharmacist

  Information on urinary incontinence with lamotrigine

  DAPs provided

  Not known

  Pharmacist

  Information on ADRs with lamotrigine

  DAP provided

  Not known

  Doctor

  Information on ADRs with gabapentin, vigabatrin and lamotrigine

  DAPs provided

  Not known

  Pharmacist

  Information on raised liver enzymes with lamotrigine

  DAP provided

  Not known

  Pharmacist

  Information on ADRs with lamotrigine and haloperidol

  DAPs provided

  Not known

  Pharmacist

  Information on ADRs indomethacin and diclofenac

  DAPs provided

  Not known

  Doctor

  Information on psychiatric ADRs with lamotrigine

  DAP provided

  Issue of skin reactions

  Regulatory authority

  Information on serious skin reactions with amotrigine

  Details of reports provided

  25

  Inquiries relating to lamotrigine received by the Medicines Control Agency up to April 1999

  Reason for inquiry

  Inquirer

  Nature of inquiry (information requested)

  Response

  Not known

  Member of the public

  Information on ADRs with lamotrigine

  DAP provided

  Confusion over the brand names Lamicta and Lamasil

  GP Practice Manager

  Inquiry as to whether there was a list of drugs with similar names which could cause confusion

  No such list was known

  Parliamentary question

  Martin Redmond MP

  What research his Department has carried out into a comparison of lamotrigine and valproate monotherapy in patients with primary generalised seizures; with what findings

  Hansard reference 263 c922-3W

  1A Drug Analysis Print (DAP) gives a complete list of all suspected adverse reactions reported through the Yellow Card Scheme to the Committee on Safety of Medicines (CSM)/Medicines Control Agency (MCA) in association with the named drug substance.

  NHS Pay
  Mr. Laurence Robertson
  To ask the Secretary of State for Health what estimate he has made of the cost to the Gloucestershire Health Authority of the pay award to all NHS employees for 1999–2000. [80401]

  Mr. Denham
  [holding answer 13 April 1999]: Gloucestershire Health Authority, working closely with local National Health Service trusts, estimate that £6.6 million will be required to meet the costs of the pay award for NHS employees for 1999–2000. Pay awards for certain staff groups have yet to be announced.

  Biggleswade and Steppingley Hospitals
  Mr. Sayeed
  To ask the Secretary of State for Health what proportion of the patient base at Biggleswade and Steppingley hospitals is comprised of people originating outside Mid-Bedfordshire. [80476]

  Mr. Denham
  The information requested is not normally available centrally; however, I am informed by the health authority that at Biggleswade Hospital, of the 20 admissions over the past two months 10 have been for patients outside the Mid-Bedfordshire area. At Steppingley Hospital, 8 out of the 27 patients admitted within the last two months were from out of the Mid-Bedfordshire area.

  Speech Therapists
  Mr. Cotter
  To ask the Secretary of State for Health what has been the salary increase for speech therapists in the NHS in each of the last five years(a) in real terms and (b) as a percentage. [81065]
  26
  Mr. Denham
  [holding answer 16 April 1999]: The information requested is in the table.

  Speech and language therapists' pay settlements 1994–98

  Year

  Total increase per cent.

  1994–95

  2·4

  Paid in full from 1 April: 0.1 per cent. in real terms.

  1995–96

  3·0

  Paid as 1 per cent. national from 1 April 1995. Further 2 per cent. paid as local settlement: 0.4 per cent. in real terms.

  1996–97

  2·8

  Paid as 2 per cent. national from 1 April 1996 and further 0.8 per cent. as average local pay settlement:—0.1 per cent. in real terms.

  1997–98

  3·3

  Paid as 2 per cent. from 1 April 1997 and further 1.3 per cent. from 1 December: 0.8 per cent. in real terms.

  1998–99

  3·8

  Paid as 2 per cent. from 1 April 1998 and further 1.8 per cent. from I December: 0.8 per cent. in real terms.

  Source:

  Pay Increase:—Advance Letters (increase to basic salary for all grades). RPI(X): Office for National Statistics (rate, excluding mortgage rates, in April each year, starting in April 1994 and ending in April 1998).

  Mental Health
  Mr. Pike
  To ask the Secretary of State for Health what assessment he has made of the provision of mental health treatment for members of the(a) black and (b) ethnic minority communities; and if he will make a statement. [81409]

  Mr. Hutton
  Our assessment is that, in common with other client groups suffering from mental health problems, the concerns and needs of people from black and ethnic minority communities have not been met under the system of care we inherited. That is why we have taken a fresh look at the provision of mental health services and produced a new strategy document entitled Modernising Mental Health Services: safe, sound and supportive, which was distributed to every Health Authority in December 1998, and backed it up with an additional investment of £700 million over three years for better treatment and care. This new strategy makes clear the Government's commitment to ensuring that everyone with mental health problems is treated fairly, on the basis of need, in a manner which preserves their autonomy, and which promotes opportunity for choice, and this includes people from black and ethnic minority communities.

  National Institute for Clinical Excellence
  Mr. Gordon Prentice
  To ask the Secretary of State for Health if he will make a statement about the appraisal process for the National Institute for Clinical Excellence following the consultation on the document, "Faster Access to Modern Treatment". [81229]

  Mr. Denham
  Ministers are considering the response to the discussion document "Faster Access to Modern Treatment: how NICE appraisal will work" and further announcements will be made shortly.

  The National Institute for Clinical Excellence will carry out 30 to 50 appraisals each year. My right hon. Friends the Secretaries of State for Health and for Wales, along

  27
  with the board of NICE, are responsible for deciding which appraisals NICE will commission each year. This year's work programme for NICE has yet to be finalised.

  Liver Disease
  Mr. Hancock
  To ask the Secretary of State for Health what money his Department has provided for research into the study of liver disease in each of the last three years; what assessment he has made of the need for further research into liver disease; and if he will make a statement. [81631]

  Ms Jowell
  The Government fund health and medical research in a number of ways. The Department funds research and development to support its work on policy development and evaluation in health and social care. The Department also manages the National Health Service research and development levy, which is used to support research and development of relevance to the National Health Service in hospitals, general practice and other health care settings, and to fund the NHS research and development programme. In addition, the Medical Research Council (MRC)—which receives most of its income via grant-in-aid from the office of my right hon. Friend the Secretary of State for Trade and Industry—funds medical research as part of the Government's funding of the science and engineering base.

  Priorities for departmental research and development support for the development of policy are determined through discussion with policy colleagues, the Departmental Research Committee and Ministers. In the NHS R&D programme, priorities take account of widespread consultation with those using, delivering and managing services, within a framework overseen by the Central Research and Development Committee for the NHS. In all cases, priorities for our budgets reflect analysis of the burden of disease, potential benefits, and Government priorities, and take account of the responsibilities and work of other funders.

  The Department's policy research programme spent £285,000 on research into liver disease in 1996–97; £506,000 in 1997–98; and £662,000 in 1998–99.

  A further £500,000 has been made available for a Hepatitis C research initiative, and commissioning will take place towards the end of this year.

  Management of much of the research supported by the NHS R&D Levy is devolved and details of expenditure at project level are not collected routinely by the Department.

  Project details of work directly funded by the Department or supported through the NHS R&D Levy can be found on the National Research Register (NRR). This is available in the Library and most medical libraries on CD Rom, and on the Internet: http://www.doh.gov.uk/nrr.htm. The NRR also contains many details of projects/trials funded by the MRC and other funders.

  The MRC spent approximately £3.1 million on research on liver disease and liver function in 1995–96; and £3 million in both 1996–97 and 1997–98.

  The MRC also funds basic research including the study of molecules and cells, genetics and infections and immunity, which will inform research in this area.

  NHS Treatment (Age Discrimination)
  Mr. Waterson
  To ask the Secretary of State for Health what research he has commissioned into(a) refusal and (b) delay of treatment for patients aged over 50 years in the NHS on grounds of their age; and if he will make a statement. [81658]

  Mr. Hutton
  The Department has not commissioned any formal research into age discrimination in the provision of health services.

  The fundamental principle of the National Health Service is to provide services for everybody on the basis of clinical need. We are putting in place a number of measures which should improve fair access to services, including national service frameworks, the Commission for Health Improvement, local clinical governance, and a new performance assessment framework.

  We are taking a number of steps specifically to improve the health of older people. For example, this year, for the first time, all people over 75 have been targeted for influenza vaccination. We are also in the process of developing the national service framework (NSF) for the care of older people. It is anticipated that emerging findings will be published in the autumn, and that the NSF will be published in April 2000. The NSF will enable us to drive up the quality of and reduce variations in the care older people receive from the NHS and its partners.

  NHS Superannuation
  Miss Widdecombe
  To ask the Secretary of State for Health if he will list the extra costs per annum of implementing the report on NHS superannuation for(a) 2000–01 and (b) 2000–02, indicating when these costs were first known. [81797]

  Mr. Denham
  [holding answer 23 April 1999]: Increases in the employer contribution rate to the National Health Service Pension Scheme are expected to cost £165 million in 2000–2001 and £495 million in 2001–2002. These costs were anticipated and fully taken into account in the Department's comprehensive spending review settlement, in the light of findings emerging from the Government Actuary's actuarial investigation into the NHS Pension Scheme. Publication of the Government Actuary's Report has now been announced and I refer the right hon. Member to my reply to my hon. Friend the Member for Heywood and Middleton (Mr. Dobbin), 9 March 1999, Official Report, column 204.

  National Radiological Protection Board
  Mr. Dalyell
  To ask the Secretary of State for Health when he expects to receive the report of the panel set up by the National Radiological Protection Board to examine the health effects of mobile phones. [81972]

  Ms Jowell
  The Chairman, members, terms of reference and time-scale for reporting will be announced shortly.

  Health Authority and Trust Financial Plans
  Mr. Lansley
  To ask the Secretary of State for Health if he will list, for each health authority and NHS trust, the projected budget surplus or deficit planned by that authority or trust for the financial year 1999–2000. [82069]
  29
  Mr. Denham
  The financial plans of health authorities and trusts for financial year 1999–2000 have not yet been finalised.

  Carers
  Mrs. May
  To ask the Secretary of State for Health if he will list the sums available to the unitary authorities in Berkshire this year and in each of the next two financial years as part of the £140 million available under the Government's strategy for carers. [82018]

  Mr. Hutton
  A Special Grant Report (No. 44) giving details of the allocation for 1999–2000 was approved by Parliament on 20 April 1999. Copies are available in the Library. The allocations to individual local authorities of the funding of £50 million for 2000–01 and £70 million for 2001–02 will be determined according to a formula, using the most recent data available at the time the grants are calculated. It is therefore not possible to confirm detailed final allocations for future years at this stage. Allocations for subsequent years will also be subject to Parliamentary approval at the relevant time.

  Medicines Control Agency
  Mr. Tredinnick
  To ask the Secretary of State for Health if he will establish an independent panel to inform the deliberations of the Medicines Control Agency under the procedures set out in the consultation document MLX 249; and if he will make a statement. [82046]

  Ms Jowell
  How the review panel is constituted, and its terms of reference, form an important part of the proposals. We will consider carefully all responses on this and other issues before deciding whether and what legislation should be brought before Parliament.

  Oesophageal Cancer
  Mr. Kidney
  To ask the Secretary of State for Health if he will report the current progress of the clinical trials regarding the treatment of oesophageal cancer relating to chemotherapy (0E02). [81750]

  Mr. Battle
  I have been asked to reply.

  The clinical trial on pre-operative chemotherapy for oesophageal cancer conducted by the Medical Research Council closed to new patients in June 1998. The trial recruited 800 patients across a large number of centres.

  The data from the trial are currently being analysed and validated. It is anticipated that the research results will be published next year.

FOREIGN AND COMMONWEALTH AFFAIRS

  Visas (China)
  Mr. Sanders
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many visa applications from Chinese nationals for one-year study courses were made in each year since 1989; and what were the numbers(a) approved, (b) rejected and (c) subject to appeal in each year. [80784]

  Mr. Fatchett
  The figures requested are not collected by my Department and could be obtained only at disproportionate cost.

  Libya (Trade Mission)
  Mr. Austin
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he intends to open a trade mission in Libya; and if he will make a statement. [80808]

  Mr. Fatchett
  [holding answer 16 April 1999]: We offer limited trade services to UK companies. But the resumption of more normal relations with Libya, including the expansion of our presence in Tripoli, depends in the first instance on satisfactory co-operation from Libya over the WPC Fletcher case.

  Professional Statisticians
  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many staff by grade are employed as professional statisticians in his Department; how many of these staff have been accepted as fast stream by the Civil Service Selection Board; and how many have been granted chartered statistician status by the Royal Statistical Society. [81203]

  Mr. Fatchett
  There is one Home Civil Service Grade 7 statistician in the FCO. The person concerned joined the Civil Service as a fast stream entrant. Although not having chartered statistician status, the statistician is a Fellow of the Royal Statistical Society and has an MSc in Statistics.

  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many staff who have worked as professional statisticians in his Department have left on early retirement in each of the past 10 years. [81183]

  Mr. Fatchett
  One statistician left the FCO in 1997 on early retirement.

  Police Training
  Ms Julie Morgan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the countries(a) from which police officers have visited the UK and (b) have been visited by UK military or police personnel to receive training under the assistance for in-service training scheme since 1 April 1998. [81376]

  Mr. Tony Lloyd
  The countries from which police officers have visited the United Kingdom to receive training under the Assistance to Support Stability with In-Service Training (ASSIST) scheme since 1 April 1998 are: Argentine, Bahamas, Bangladesh, Belize, Bermuda, Chile, Cyprus, Fiji, Ghana, Gibraltar, Hong Kong, India, Indonesia, Jamaica, Lebanon, Lesotho, Malawi, Mauritius, Mozambique, Pakistan, Papua New Guinea, St. Lucia, Singapore, Solomon Islands, South Africa, Sri Lanka, Swaziland, Tanzania, Tonga, Trinidad and Tobago, Turks and Caicos Islands, Uganda, Vanuatu, Zambia and Zimbabwe.

  The countries whose police officers have been visited by UK military or police personnel to receive training under ASSIST since 1 April 1998 are: Brazil, China, El Salvador, Fiji, Kenya, Philippines, Turkey and Zimbabwe.

  Ms Julie Morgan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the countries from which police officers(a) have visited the United Kingdom and (b) have been visited by United

  31
  Kingdom military or police personnel to receive training under the United Kingdom military training assistance scheme in the financial year 1997–98. [81377]

  Mr. Tony Lloyd
  The countries from which police officers have visited the United Kingdom to receive training under the United Kingdom Military Training Assistance Scheme (UKMTAS) in the financial year 1997–98 are: Anguilla, Antigua, Bahamas, Bangladesh, Barbados, Belize, Botswana, Bulgaria, Chile, China, Costa Rica, Croatia, Cyprus, Estonia, Fiji, Gibraltar, Grenada, Hungary, India, Jamaica, Kenya, Lebanon, Lesotho, Malaysia, Malta, Mauritius, Montserrat, Mozambique, Namibia, Pakistan, Papua New Guinea, Paraguay, Peru, Philippines, St. Christopher and Nevis, St. Vincent, Seychelles, Sierra Leone, Solomon Islands, South Africa, Sri Lanka, Tanzania, Trinidad and Tobago, Turks and Caicos Islands, Uganda, Vanuatu, Virgin Islands, Zambia and Zimbabwe.

  The countries from which police officers have been visited by United Kingdom police or military personnel to receive training under UKMTAS in financial year 1997–98 are: Bosnia, Czech Republic, Fiji and Mongolia.

  East Timor
  Mr. Fabricant
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will meet his counterpart in the Government of the Commonwealth of Australia to discuss the situation in East Timor. [81709]

  Mr. Fatchett
  We are in regular contact with the Australian government about East Timor. I will be doing so again following my visit to Indonesia and East Timor this week.

  Mr. Fabricant
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement concerning reports of a massacre of Timorese people by armed civilians on 16 and 17 April. [81710]

  Mr. Fatchett
  We are appalled at the recent killings in East Timor. We have called on the Indonesian government to rein in the militias. My right hon. Friend the Prime Minister sent a strong message to President Habibie on 19 April. The violence must not be allowed to derail the UN process at this crucial time.

  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations his Department has made to the Indonesian Government following the recent killing of people in East Timor by soldiers of the Indonesian Government. [81896]

  Mr. Fatchett
  [holding answer 23 April 1999]: We are appalled at the recent killings in East Timor. My right hon. Friend the Prime Minister sent a strong message to President Habibie on 19 April.

  Kosovo
  Mr. Maclean
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the(a) nature, (b) length, (c)location, (d) means and (e) time of his communication with Hashim Thaqi of the Kosovo Liberation Army urging restraint. [81653]

  Mr. Tony Lloyd
  In a letter addressed to Mr. Thaqi, jointly signed by the French Foreign Minister and my right hon. Friend the Foreign Secretary on the 32
  adjournment of the talks on Kosovo at the Kleber Centre in Paris on 19 March, they emphasised the importance of the Kosovo Albanian side avoiding provocations and respecting the commitment they had made to a peaceful solution. The letter was delivered to the Kosovo Albanian delegation in Paris on 19 March. We believe that Mr. Thaqi has indeed shown commendable restraint, despite the worsening situation in Kosovo.

  French Fishing Vessel (Guernsey)
  Mr. Maclean
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the state of relations with the French Government over the Guernsey court case involving the French vessel La Confiance 2; what representations he has received; and what is his policy on the jurisdiction over the waters concerned. [81652]

  Mr. Tony Lloyd
  The Master of La Confiance 2 was arrested on 26 August last year on suspicion of fishing illegally within Guernsey's fishing limits. He was convicted on 7 April by a Guernsey court. Our Ambassador in Paris discussed the case with the French authorities on 19 April. Sir M. Jay made clear that we considered the arrest had been made in accordance with UK and international law.

  Visitor Visas
  Fiona Mactaggart
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list, for each British post abroad which operates a pre-sift system for people applying for visit visas, how many people(a) were advised to withdraw their applications and (b) followed that advice, in (i) 1998 and (ii) 1999 to the latest convenient date.[81688]

  Mr. Tony Lloyd
  During 1998, a total of 44,031 applicants withdrew their application at the Preliminary Assessment Stage. 52 posts operated a pre-sift system in 1998. They were as follows:

  Post

  Applications withdrawn

  Abuja

  1,862

  Accra

  1,038

  Abu Dhabi

  28

  Addis Ababa

  1,179

  Amman

  1,507

  Amsterdam

  790

  Ankara

  4

  Bahrain

  7

  Baku

  13

  Bangkok

  66

  Banjul

  545

  Beirut

  3

  Belgrade

  532

  Bombay

  4,302

  Calcutta

  20

  Cairo

  1,422

  Casablanca

  421

  Colombo

  80

  Copenhagen

  44

  Damascus

  92

  Dar es Salaam

  9

  Dhaka

  1,158

  Dubai

  3

  Dublin

  177

  Dusseldorf

  312

  Geneva

  29

  33

  Post

  Applications withdrawn

  Hanoi

  12

  Islamabad

  12,350

  Istanbul

  123

  Kiev

  3

  Kingston

  780

  Kinshasa

  41

  Lagos

  2,060

  Los Angeles

  925

  Madras

  1,076

  Madrid

  5

  Manila

  126

  Nairobi

  139

  New Delhi

  5,549

  Oslo

  133

  Peking

  35

  Paris

  1,917

  Quito

  338

  Rome

  236

  Sana'a

  348

  Sarajevo

  8

  Stockholm

  47

  Tashkent

  2

  Tehran

  1,639

  Tunis

  245

  Washington

  111

  Wellington

  140

  The number of applicants who choose not to withdraw their application is not separately recorded.

  Figures for 1999 will not be available until posts complete their 1999 Annual Statistical Return early in the year 2000. These figures are not collected monthly.

  Fiona Mactaggart
  To ask the Secretary of State for Foreign and Commonwealth Affairs what factors underlie the decisions on which posts abroad operate a pre-sift system in dealing with applications for visit visas. [81689]

  Mr. Tony Lloyd
  The decision to introduce a "sift" at any post can be taken only with the agreement of Migration and Visa Division. The factors taken into account will include overall numbers of applicants and the time each has to wait. Where a post experiences a large number of inadequately documented applications or visit visa applicants who have no connection with the UK or who are unclear about what they intend to do there, a "sift" may be introduced. The benefits of the "sift" procedure are that it prevents unnecessary work for the Entry Clearance Officer (ECO) and saves time, money and the disappointment of a refusal for the applicant. In addition, it shortens the waiting time for the well-prepared and well-supported applicant.

  Any decision not to proceed is the applicant's. If he/she wishes to pursue the application it will be accepted on payment of the appropriate fee.

  Falkland Islands
  Mr. Keetch
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Governments of Uruguay and Brazil about their decision to withdraw diversion rights for RAF Tristars flying to the Falkland Islands; and if he will make a statement. [81869]
  34
  Mr. Tony Lloyd
  There has been no withdrawal of diversion rights by the Governments of Uruguay or Brazil for RAF Tristars flying to the Falkland Islands.

  Pakistan
  Mr. Gordon Prentice
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Pakistan concerning reports of infringement of the rights of workers and trade unionists. [81857]

  Mr. Fatchett
  We have noted the concerns expressed by the International Confederation of Free Trade Unions about the position of trade unions in Pakistan. In association with international labour organisations, we will continue to monitor carefully the rights of workers and trade unionists in Pakistan.

  Missile Tests (India and Pakistan)
  Mr. Gordon Prentice
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Governments of India and Pakistan following the missile tests on 11 and 14 April; what progress he has made in persuading both Governments to sign up to the Comprehensive Test Ban Treaty; and if he will make a statement. [81855]

  Mr. Fatchett
  We have expressed regret that India and Pakistan have chosen to conduct missile tests and continue to believe that restraint in developing nuclear weapons and delivery systems is in both countries' long-term interests. We welcome positive indications by both India and Pakistan that they will sign the Comprehensive Test Ban Treaty in time to allow entry into force by September this year.

  International War Crimes Tribunal
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his policy on the public release of intelligence reports on atrocities committed by foreign Governments; and if information provided to the International War Crimes Tribunal in the Hague will be released to Parliament. [81942]

  Mr. Tony Lloyd
  It is not the Government's practice to publish intelligence material. Given the exceptional circumstances in Kosovo, the decision was made to release classified information to the International Criminal Tribunal for the former Yugoslavia, in order to assist the investigation. It would not be appropriate to make this classified information more widely available.

  Iraq
  Mr. Mackinlay
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on political and diplomatic developments in relation to Iraq since 24 March.[82029]

  Mr. Fatchett
  Three panels established by the Security Council issued their reports on 30 March. We have now tabled a draft Security Council resolution, with the Netherlands as co-sponsors, which attempts to translate the work of the panels into action.
  35
  On disarmament, it would establish a new body, the UN Commission on Investigation, Inspection and Monitoring, to continue UNSCOM' s efforts to answer outstanding disarmament questions, primarily through a reinforced monitoring and verification system as recommended by the panel. On the humanitarian side, our resolution draws together a range of measures which should make significant improvements to the humanitarian situation in Iraq, while remaining faithful to the Council's obligation to uphold its resolutions. Finally, the draft picks up the panel's recommendations on dealing with Iraq's continued failure to meet its obligations over Kuwaitis and others missing since 1991. Discussion of our draft continues in New York.

  Gibraltar
  Dr. Marek
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy that opt-in proposals by Her Majesty's Government into parts of the Schengen Agreement will only be made on the basis that Gibraltar will also have the same opportunity.
  [82036]

  Ms Quin
  At this stage, details of which aspects of the Schengen Agreement Gibraltar would wish to participate in are still under discussion with the Government of Gibraltar.

  Chagos Islands
  Dr. Marek
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what reasons the White Paper on Overseas Territories did not propose the granting of full British passports to those Chagossiens who had British citizenship before being resettled. [82035]

  Mr. Tony Lloyd
  British citizenship did not come into being until 1 January 1983. The Ilois ( who were at that time citizens of the United Kingdom and Colonies) left the Territory 30 years ago. We have to deal with the situation now; the vast majority of the Ilois are citizens of other sovereign states, (either Mauritius or the Seychelles), in addition to holding British Dependent Territory citizenship, and have been for a generation. This is in contrast to other British Dependent Territories citizens who are solely British.

  Serbia
  Mr. Viggers
  To ask the Secretary of State for Foreign and Commonwealth Affairs what advice he has received about the basis in international law for the military action by the United Kingdom and its NATO allies against Serbia. [82068]

  Mr. Tony Lloyd
  The action being taken is an exceptional measure to halt an overwhelming humanitarian catastrophe.

  Every means short of force was tried to avert this situation. In these circumstances, and as an exceptional measure on grounds of overwhelming humanitarian necessity, military intervention is legally justifiable under international law.

  China and Tibet
  Mr. Wilkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he discussed with 36
  the Secretary of State of the United States of America United Kingdom support for the USA's draft resolution on China and Tibet at the 55 United Nations Commission on Human Rights. [82182]

  Mr. Fatchett
  We remain in close contact with our main partners, including the United States, in furthering the common objective of achieving concrete improvements in the human rights situation in China. Along with our European Union partners, we voted against a Chinese no-action motion at the UNCHR on 23 April which sought to prevent a vote on the US-tabled resolution.

  Mr. Wilkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs on what grounds the United Kingdom decided at the General Affairs Council of the European Union not to co-sponsor a joint resolution with its partners on Chinese suppression of human rights in Tibet for the 55 United Nations Commission on Human Rights. [82181]

  Mr. Stevenson
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) for what reasons he did not table or co-sponsor during the recent General Affairs Council of the European Union a resolution on human rights in China for the 55 UN Commission for Human Rights; and if he will make a statement; [82147]

  (2) if he intends to support the draft resolution on China and Tibet tabled by the United States at the 55 UNCHR; [82146]

  Mr. Fatchett
  We believe, as do our European Union partners, that continued dialogue and co-operation with China on human rights is more likely to bring about concrete improvement than repeated UN resolutions, all of which have failed to be adopted in the past. This dialogue-based approach has made limited progress in some areas and we will be pressing China for further concrete steps. The General Affairs Council therefore decided on 22 March not to table or co-sponsor a resolution on China at this year's Commission on Human Rights.

  Royal Turks and Caicos Islands Police
  Dr. Kumar
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish the(a) date of advertisement, (b) closing date of applications, (c) the names of (i) short-listed and (ii) all other candidates, (d) the interview date of candidates and (e) the date of appointment for the post of the Deputy Commissioner of the Royal Turks and Caicos Islands Police. [81852]

  Mr. Foulkes
  I have been asked to reply.

  The post was advertised in the Police Review on Friday 6 November 1998. The closing date for applications was Friday 4 December 1998. As regards the names of candidates, all applications to the Department for International Development (DFID) are treated in confidence and therefore we should not disclose these details. Of the 17 people who responded to the advertisement, only 4 formally applied for the appointment. Three of these 4 applicants were short-listed for interview. Candidates for this and another police post in the Turks and Caicos Islands were interviewed on Monday 18 and Tuesday 19 January. Robert Turnbull was

  37
  interviewed on Tuesday 19 January. Mr. Turnbull was informed that he had been selected for the position on 3 February 1999, and his contract with DFID commenced on 20 March 1999.

NORTHERN IRELAND

  Ministerial Meetings
  Mr. Matthew Taylor
  To ask the Secretary of State for Northern Ireland how many times Ministers in her

  Dates

  Location

  Minister

  US Representatives

  7 June 1998

  Belfast

  Dr. Mowlam

  Mr. W. Daley—US Secretary of State for Commerce

  8 June 1998

  Belfast

  Mr. Ingram

  Mr. W. Daley—US Secretary of State for Commerce

  Ms M. Hanley—Director Public Affairs, US Department of Commerce

  Mr. J. Lyons—Special Adviser to President Clinton and Secretary of State for Economic Initiatives in Ireland

  Mr. E. Mottur—Acting Assistant Secretary for Trade and Development, US Department of Commerce

  Ms L. Naphin—Director Office of Business Liaison, US Department of Commerce

  Ms M. Searing—Acting Assistant Secretary and Director, General Commercial Service, US Department of Commerce

  22 July 1998

  Washington

  Dr. Mowlam

  Mrs. H. Clinton—The First Lady

  Mr. L. Butler—Director, European Directorate, National Security Council

  Ms Theresa Loar—State Department

  Mr. J. Lyons—Special Adviser to President Clinton and Secretary of State for Economic Initiatives in Ireland

  Ms M. Albright—Secretary of State, State Department

  The Hon. T. Pickering—Under Secretary for Political Affairs, State Department

  Mr. L. Butler—Director, European Directorate, National Security Council

  Mr. S. Berger (and Mr. J. Steinberg) Deputy National Security Adviser

  7 August 1998

  Belfast

  Dr. Mowlam

  Mr. J. Lyons—Special Adviser to President Clinton and Secretary of State for Economic Initiatives in Ireland

  2 September 1998

  Belfast

  Mr. McFall

  Ms K. Higgins—Deputy Secretary, US Department of Labor

  7 to 9 October 1998

  Newyork

  Dr. Mowlam

  Ms K. Higgins—Deputy Secretary, US Department of Labor

  Mr. Ingram

  Mr. P. Mulloy—Assistant Secretary for Market Access and Compliance

  15 to 16 October 1998

  Denver

  Mr. Ingram

  Mr. J. Lyons—Special Adviser to President Clinton and Secretary of State for Economic Initiatives in Ireland

  25 to 27 October 1998

  Atlanta

  Mr. McFall

  Mr. S. P. Troy—Director Commercial Service, US Department of Commerce

  28 to 29 October 1998

  San Jose

  Mr. McFall

  Mr. W. Daley—US Secretary of State for Commerce

  4 December 1998

  London

  Dr. Mowlam

  Mr. J. Steinberg—Deputy National Security Adviser

  8 to 9 December 1998

  Washington

  Mr. Murphy

  Mr. J. Lyons—Special Adviser to President Clinton and Secretary of State for Economic Initiatives in Ireland

  Mr. L. Butler—Director, European Directorate, National Security Council

  14 January 1999

  Washington

  Dr. Mowlam

  Mrs. H. Clinton—First Lady

  Ms D Shalala—US Secretary of State for Health

  Mr. S. Berger—Deputy National Security Adviser

  Mr. J. Steinberg—Deputy National Security Adviser

  Mr. L. Butler—Director, European Directorate, National Security Council

  2 March 1999

  Washington

  Mr. Murphy

  Ambassador W. Sherman and Mr. J. O'Brien, Under Secretary for Global

  Affairs and Senior Adviser to Ms Albright

  Mr. J. Steinberg—Deputy National Security Adviser

  16 March 1999

  Washington

  Dr. Mowlam

  President Clinton and Mrs. Hilary Clinton

  Ms M. Albright—Secretary of State, State Department

  Ms D. Shalala—US Secretary of State for Health

  Messrs Berger and Steinberg—Deputy National Security Advisers

  Mr. J. Lyons—Special Adviser to President Clinton and Secretary of State for Economic Initiatives in Ireland

  Hospitals (Long-stay Patients)
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what is for each Trust in Northern Ireland the number of beds in each of their hospitals dedicated as long-stay for elderly people; and how many this represents per 100,000 population in(a) each Trust area and (b) the area served by each hospital. [80873]
  38
  Department have held meetings with members and officials in the US Administration since 1 June 1998, indicating the dates and locations of each meeting, the Ministers involved at each meeting and the US Department involved in each meeting. [80868]

  Marjorie Mowlam
  NIO Ministers meet members of the US Administration, up to and including President Clinton, both in the United States and in the United Kingdom on a regular basis to discuss a wide range of issues.

  Since 1 June 1998, my Ministerial colleagues and I have had the following formal meetings:

  Mr. McFall
  Beds are not designated specifically as long stay in Northern Ireland. However, Table 1 shows the number of long-stay patients in the geriatric medicine speciality who were resident in acute hospitals in Northern Ireland on 31 March 1998. Table 2 shows the number of long-stay patients aged 65 or over resident in mental illness and learning disability hospitals in Northern
  39
  Ireland on 17 February 1998. Long-stay patients are classified as those with a length of stay in hospital of at least one year.

  Table 1: Patients in the geriatric medicine speciality resident in acute hospital in Northern Ireland on 31 March 1998.

  Trust/Hospital

  Long Stay (>-365 days)

  Royal Group of Hospitals HSS Trust

  51

  Royal Victoria Hospital

  51

  Belfast City Hospitals HSS Trust

  28

  Belfast City Hospital

  28

  Greenpark HSS Trust

  20

  Musgrave Park Hospital

  11

  Forster Green Hospital

  9

  Ulster Community & Hospitals Trust

  18

  Ards Hospital

  4

  Ulster Hospital

  13

  Bangor Hospital

  1

  Craigavon Area Hospital Group HSS Trust

  113

  Lurgan Hospital

  108

  Craigavon Area Hospital

  5

  Down & Lisburn HSS Trust

  26

  Lagan Valley Hospital

  10

  Downe Hospital

  16

  Newry & Mourne HSS Trust

  38

  Daisy Hill Hospital

  25

  Mourne Hospital

  13

  United Hospitals Group HSS Trust

  197

  Moyle Hospital

  2

  Whiteabbey Hospital

  12

  Antrim Hospital

  13

  Braid Valley Hospital

  170

  Armagh & Dunganon HSS Trust

  126

  South Tyrone Hospital

  59

  Mullinure Hospital

  67

  Altnagelvin Group HSS Trust

  72

  Altnagelvin Hospital

  13

  Waterside Hospital

  50

  Roe Valley Hospital

  9

  Sperrin Lakeland HSS Trust

  37

  Erne Hospital

  15

  Tyrone County Hospital

  3

  Omagh General Hospital

  12

  Derg Valley Hospital

  7

  Northern Ireland

  726

  Source:

  Hospital Inpatients System

  Table 2: Patients aged 65 and over resident in mental illness and learning disability hospitals on 17 February 1998.

  Trust/Hospital

  Long Stay (>=365 days)

  Foyle Community HSS Trust

  41

  Gransha Hospital

  36

  Stradreagh Hospital

  5

  Sperrin Lakeland HSS Trust

  50

  Tyrone & Fermanagh Hospital

  50

  North & West Belfast HSS Trust

  45

  Muckamore Abbey Hospital

  45

  40

  Table 2: Patients aged 65 and over resident in mental illness and learning disability hospitals on 17 February 1998.

  Trust/Hospital

  Long Stay (>=365 days)

  Ulster Community & Hospitals HSS Trust

  0

  Ards PNU

  0

  Down Lisburn HSS Trust

  53

  Downshire Hospital

  53

  Lagan Valley PNU

  0

  Belfast City Hospital HSS Trust

  0

  Windsor House

  0

  Homefirst Community HSS Trust

  70

  Holywell Hospital

  70

  Whiteabbey PNU

  0

  Armagh & Dungannon HSS Trust

  69

  St Lukes Hospital

  63

  Longstone Hospital

  6

  Causeway HSS Trust

  0

  Ross Thompson Hospital

  0

  South & East Belfast HSS Trust

  123

  Knockbracken Hospital

  123

  Mater Infirmorum Hospital HSS Trust

  0

  Mater Infirmorum Hospital

  0

  Craigavon & Bambridge Community HSS Trust

  0

  Craigavon PNU

  0

  Northern Ireland

  451

  Source:

  Mental Illness & Learning Disability Census

  Northern Ireland Housing Executive
  Mr. Walker
  To ask the Secretary of State for Northern Ireland what role she plans for the Northern Ireland Housing Executive following the transfer of responsibility for social housing to the Northern Ireland Assembly; and if she will make a statement. [81212]

  Mr. Paul Murphy
  Following the transfer of responsibility for social housing to the Northern Ireland Assembly, it will be for the Assembly to decide on future housing policies and legislation, and on the structures and roles required to deliver them.

  Peace and Reconciliation Funding
  Mr. Donaldson
  To ask the Secretary of State for Northern Ireland how much has been paid in grants from peace and reconciliation funding by district partnerships to(a) victims groups, by district council area and (b) prisoners groups, by district council area.[81256]

  Mr. Paul Murphy
  [holding answer 19 April 1999]: The information requested has been placed in the Library of the House.

  HIV
  Dr. Strang
  To ask the Secretary of State for Northern Ireland if she will make a statement on the anonymised programme of HIV surveillance in Northern Ireland, setting out for each survey currently in operation or planned(a) the location, (b) the targeted populations, (c) the clinical reasons for initial collection

  41
  of specimens, (d) the number of specimen collection venues, (e) the annual specimen numbers, (f) the most recent prevalence data, (g) whether the consent of those tested was sought for entry into the survey and (h) whether those tested were informed that they were to be entered into the survey. [81615]

  Mr. McFall

  (a) and (d) The anonymised programme of HIV surveillance in Northern Ireland is carried out exclusively at the Genito-urinary Medicine Clinic, Royal Victoria Hospital, Belfast.

  (b) The targeted population is all new attendees at the clinic.

  (c) Genito-urinary clinic attendees have a syphilis serology test or presenting with a new sexually transmitted disease for the first time in a calender quarter are eligible for entry into the survey.

  (c) and (f) The data requested are set out in the table.

  (g) and (h) The programme of unlinked anonymous testing for HIV as introduced in the UK in accordance with World Health Organisation guidelines for its global programme on AIDS on the basis that specific informed consent is not required. However, attendees are given an explanatory leaflet which makes it clear that all identification will be removed from the sample and they can elect not to have their sample tested. Posters explaining the position are also displayed in the clinic.

  Sexual orientation

  1995

  1996

  1997

  No

  %+ve

  No

  %+ve

  No

  %+ve

  Homo/Bisexual (Male)

  137

  2·92

  125

  4·80

  144

  4·17

  Heterosexual (Male)

  1,921

  0·05

  1,973

  0·10

  2,108

  0·09

  Heterosexual (Female)

  1,677

  0·00

  1,833

  0·05

  1,707

  0·06

AGRICULTURE, FISHERIES AND FOOD

  Genetically Modified Foods
  Mr. Maclean
  To ask the Minister of Agriculture, Fisheries and Food how much has been spent by the Government on researching genetically modified foods in each of the last 10 years; and if he will list the projects undertaken. [81923]

  Mr. Rooker
  [holding answer 23 April 1999]: The Government have spent the amounts listed in the table in each of the last 10 years on research to underpin the safety assessment of genetically modified foods.

  Year

  £000

  1989–90

  0

  1990–91

  0

  1991–92

  0

  1992–93

  23

  1993–94

  95

  1994–95

  361

  1995–96

  646

  1996–97

  569

  1997–98

  709

  1998–99

  814

  42
  The project titles are as follows.
  Tagging genetically engineered organisms.
  Development of new methods for safety evaluation of transgenic crops.
  Honey from genetically modified plants: integrity of pollen DNA, and expression of promoters in floral organs.
  Genetically modified organisms in food-evaluation of in vitro and in vivo models for assessing DNA transfer in gut.
  Detection of genetically modified organisms in foods.
  A model system for the quantitative analysis of horizontal spread of DNA from genetically engineered microorganisms GIT.
  Potential for gene transfer between manipulated bacteria and the resident microflora of the human gut.
  A model system for the quantitative analysis of horizontal spread of DNA from genetically engineered microorganisms.
  Regulation and targeting of transgene expression in fruit crops.
  Causes of instability in transgenic plants.
  Safety of recombinant DNA technology: gene location, marker elimination and secondary effect.
  A database of novel foods and food products cleared in countries other than the UK.
  Genes that have been introduced by genetic modification into crop plants intended for food use.
  The effect of agriculturally-relevant environmental factors on the expression and stability of genes affecting wheat lip.
  Survival of DNA in the gut and the potential for genetic transformation of resident bacteria.
  Evaluating the risks associated with using GMOs in human foods. Impact of transformation methods, construct and gene cassette architecture on the stability and expression of transgenes.
  Assessment of the risks of transferring antibiotic resistance—determinants from transgenic plants to micro-organisms.
  Dissemination of GM DNA and antibiotic resistance genes via rumen microorganisms.
  Risk of gene transfer from genetically modified crop plants to gut bacteria.
  Causes and consequences of pathogen induced transgene instability.
  Analytical methods for the detection of genetically modified foods—current and future developments.
  Implications of secondary metabolites produced in response to biotic and abiotic stress by GM potatoes.
  Survey of analytical techniques available and under development for long term monitoring of FS of GMOs and their products.
  Gene expression in anthers and nectaries of transgenic plants.
  The stability of expression and inheritance of transgenes in brassica.
  Development of methods to predict the allergenic potential of genetically modified foods.
  Development an in vitro screening method for allergens in novel foods.
  Adverse reactions to food.

  Mr. Gale
  To ask the Minister of Agriculture, Fisheries and Food what assessment his Department has made of the safety of imported genetically modified ingredients reportedly used in the production of(a) pot noodles and (b) other food products on sale in the United Kingdom; and if he will make a statement. [72001]

  Mr. Rooker
  [holding answer 22 February 1999]: The safety of all GM food ingredients permitted for use in foods on sale in the UK has been thoroughly assessed by the Advisory Committee on Novel Foods and Processes and judged to be as safe as those from their non GM equivalents.

  Novel Foods
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food what steps he takes to ensure that novel foods for which patents are granted cannot then be classified as substantially equivalent, and vice versa. [72569]

  Mr. Rooker
  [holding answer 22 February 1999]: Substantial equivalence is a concept related to the safety assessment of novel foods and has no link to the patenting of such foods.

  Mr. Mitchell
  To ask the Minister of Agriculture, Fisheries and Food when he received the first draft of the Novel Foods Directive from the Commission of the European Community; what response he made and what interests he consulted; when signed explanatory memoranda were placed in the Vote Office; and what plans he has to make representations to the Commission of the European Union concerning the terms of the Directive. [72205]

  Mr. Rooker
  [holding answer 22 February 1999]: I assume my hon. Friend is referring to the EC Novel Foods and Novel Food Ingredients Regulation 258/97 adopted on 27 January 1997. The proposed regulation was received, negotiated and adopted by the previous Administration and I have no access to the related papers. The regulation is due for review in 2002.

  Milk Purchasers
  Mrs. Browning
  To ask the Minister of Agriculture, Fisheries and Food if he will publish the 1998–99 figures for milk purchasers notified by the Intervention Board. [81965]

  Mr. Rooker
  [holding answer 23 April 1999]: The Intervention Board published provisional milk purchase figures for 1998–99 in its Notice to Traders No. MQ 12/98 dated 9 April 1999. Provisional cumulative butterfat-adjusted purchases totalled 13,951.6 million litres. This figure is subject to verification and subsequent confirmation.

  Mrs. Browning
  To ask the Minister of Agriculture, Fisheries and Food what representations he has received about overstated milk purchasers notified to the Intervention Board for 1998–99. [81966]

  Mr. Rooker
  [holding answer 23 April 1999]: The Intervention Board has received a number of representations from producers and their representatives about milk production statistics and is in discussion with the industry through the Milk Quotas Experts Group. The Intervention Board relies on over 100 milk purchasers to supply production figures. As has been explained to the industry, these figures are provisional and subject to confirmation. They are not a proxy for the calculation of the 1998–99 milk levy which will be based on annual returns to be submitted by purchasers.

  Pig Farmers
  Mr. Coaker
  To ask the Minister of Agriculture, Fisheries and Food what progress is being made with efforts to support British pig farmers; and if he will make a statement. [82205]
  44
  Mr. Rooker
  The present situation remains serious for pig farmers, with prices still unstable and below the costs of production. Nevertheless, the average all-pigs price has shown a 26 per cent. improvement since its low point in January. European Commission figures indicate that current UK pig prices are 20 per cent. higher than the EU average, and higher than in any member state except Luxembourg. Whether the present gap between UK and EU prices will be sustainable is difficult to judge, but the fact that it exists at all is due, at least in part, to the emphasis on high animal welfare and other standards.

  In recent months, the Government have done an enormous amount of work to assist the British pig industry. This includes lobbying the Commission in Brussels to use the existing mechanisms of export refunds and private storage aid to their best effect, encouraging retailers, caterers and public procurement bodies to take account of quality and welfare factors when making their purchases, writing to all MPs and UK MEPs encouraging them to support the pig industry in its endeavours to meet consumer demands, and continuing to invest considerable sums of public money in pig related R&D.

  Lindane
  Dr. Gibson
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to ban the insecticide Lindane following the EU Advisory Committee on Pesticides meeting on 15 April. [81743]

  Mr. Rooker
  [holding answer 23 April 1999]: With my right hon. Friends the Secretaries of State for the Environment, Transport and the Regions, for Health, for Scotland and for Wales, I am considering the advice of our Advisory Committee on Pesticides regarding the use of the insecticide Lindane. The Committee considered a draft evaluation, prepared by the Austrian authorities, of the data submitted by the notifying companies in the course of the EU review for the Commission.

  Correspondence
  Mr. McLoughlin
  To ask the Minister of Agriculture, Fisheries and Food when the hon. Member for West Derbyshire can expect a reply to his letter of 12 February, acknowledged on 4 March (ref. 124890), concerning the non-payment of the 1998 sheep farm annual premium scheme and the hill livestock compensatory allowances to Mr. S. Allen of Beech Farm, Taddington, Derbyshire. [81904]

  Mr. Rooker
  [holding answer 23 April 1999]: We recently completed our deliberations on the case referred to by the hon. Member and a reply was sent to him on 22 April 1999 by my noble Friend the Parliamentary Secretary.

  Rabies
  Mr. Flynn
  To ask the Minister of Agriculture, Fisheries and Food if he will list the countries which are outside the European Union and which are not islands which are currently considered to be free from rabies by the World Health Organisation. [81927]

  Mr. Rooker
  The World Health Organisation does not publish a list of countries which are considered to be free from rabies. However, the World Survey of Rabies No. 32 for the year 1996 (the latest available), which is
  45
  published by the World Health Organisation, lists the following countries and territories where no rabies was reported in 1996.

  Africa

  Cape Verde

  Libyan Arab Jamahiriya

  Mauritius

  Reunion

  Seychelles

  America

  Antigua and Barbuda

  Bahamas

  Barbados

  Costa Rica

  Saint Kitts and Nevis

  Uruguay

  Asia

  Bahrain

  Brunei Darussalam

  Cyprus

  Hong Kong

  Japan

  Kuwait

  Malaysia (Sabah)

  Maldives

  Qatar

  Singapore

  Europe

  Albania

  Denmark

  Finland

  Gibraltar

  Greece

  Iceland

  Ireland

  Isle of Man

  Italy

  Jersey (Channel Islands)

  Malta

  Norway (except Svalbards Islands)

  Portugal

  Spain (except Ceuta)

  Sweden

  United Kingdom

  Oceania

  Australia

  Cook Island

  Fiji

  French Polynesia

  Guam

  New Caledonia

  New Zealand

  Papua New Guinea

  Vanuatu.

  Quarantine Kennels
  Mr. Flynn
  To ask the Minister of Agriculture, Fisheries and Food what steps his Department takes to ensure that quarantine kennels meet acceptable standards of animal welfare. [81930]

  Mr. Rooker
  There are arrangements for MAFF Veterinary Officers to inspect quarantine premises four times a year. The inspections are carried out to check on compliance with the standards set with regard to the physical and disease security of the premises and also to check on compliance with the Voluntary Code of Practice for the Welfare of Dogs and Cats in Quarantine Premises in respect of those premises that have agreed to comply with the Code. Premises which do not comply with this Code can be removed from the published list of premises which do comply. The Animal Health (Amendment) Act 1998 gives Ministers powers to set welfare conditions in quarantine kennels on a statutory basis.

  Mr. Flynn
  To ask the Minister of Agriculture, Fisheries and Food how many quarantine kennels have indicated that they will be unable or unwilling to comply with the Animal Health (Amendment) Act 1998; and if he will list them. [81931]

  Mr. Rooker
  The Animal Health (Amendment) Act 1998 gives Ministers the power to make secondary legislation setting welfare conditions for animals kept in quarantine premises. The Government will hold a full public consultation involving all parties with an interest in the welfare of animals in quarantine, including quarantine kennels. It is at that stage that the position of individual kennels—who will have to comply with the legislation—will become clearer.

  Hygiene Inspections
  Mr. Andrew George
  To ask the Minister of Agriculture, Fisheries and Food which is the competent authority to implement Articles 3 and 4 of Council Directive 64/433/EEC. [81720]

  Mr. Rooker
  In Great Britain, Articles 3 and 4 of Directive 64/433/EEC (as amended) have been implemented by means of the Fresh Meat (Hygiene and Inspection) Regulations 1995 (S.I.1995/539, as amended). At present, these Regulations are enforced in England by the Minister of Agriculture, Fisheries and Food and in Scotland and Wales by the appropriate Secretary of State. In practical terms, enforcement of the Regulations in GB is carried out by the Meat Hygiene Service (an Executive Agency of the Ministry of Agriculture, Fisheries and Food).

  Mr. Andrew George
  To ask the Minister of Agriculture, Fisheries and Food (1) if he will make a statement on(a) the frequency of veterinary inspections and (b) the exemptions for abattoirs and cutting plants which apply under Article 4(e) of Directive 64/433/EEC with regard to Chapter VIII of Annexe 1; [81719]

  (2) what derogations apply to the exemption of small abattoirs and cutting plants from the requirements of Chapter VIII of Annexe 1 of Directive 64/433/EEC; and if he will make a statement. [81721]

  Mr. Rooker
  Directive 64/433/EEC (as amended) requires all fresh meat intended for sale for human consumption to be produced in licensed premises under
  47
  the supervision of an Official Veterinary Surgeon. The level and frequency of veterinary supervision is set out in Article 9 of the Directive.

  Article 4 of the Directive provides a derogation from certain provisions in the case of certain small (low throughput) abattoirs and cutting plants. However, my Department's lawyers have confirmed that this derogation is in respect only of the structural requirements of the premises concerned and does not extend to the conditions applying to the hygienic operation of the premises or to the level and frequency of veterinary supervision required. Nevertheless, following representations from the industry, we have now asked the European Commission to give a view on the applicability of the specific veterinary supervision requirements to low-throughout premises.

  There are no derogations from the requirements of Chapter VIII of Annexe 1 of Directive 64/433/EEC (as amended) in the case of low-throughout abattoirs. The Directive requires all fresh meat intended for sale for human consumption to undergo post-mortem inspection in accordance with Annexe 1, Chapter VIII.

  Mr. Andrew George
  To ask the Minister of Agriculture, Fisheries and Food if he has implemented Annexe 4 Chapter I (paragraph 6c) of Directive 96/43. [81722]

  Mr. Rooker
  Yes. This administrative provision, which provides for a composite invoice to be issued to an individual premises carrying out a number of functions (i.e. slaughtering, cutting or storing), is applied by the Meat Hygiene Service when invoicing plant operators for the costs of hygiene inspections.

  Beef Exports
  Mr. Tredinnick
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of progress towards the lifting of the ban on the export of British beef; and if he will make a statement. [82223]

  Mr. Rooker
  The European Commission inspected our procedures for operating the Date-based Export Scheme from 12 to 16 April. The Commission are now writing a report of their inspection for presentation to the Standing Veterinary Committee (SVC). After the SVC have seen the inspection report, the Commission should set a date from which exports of UK beef produced under the DBES can start.

  Farmers (Administration Costs)
  Mr. Tredinnick
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the costs in real terms of administration for farmers in each of the last four years. [82180]

  Mr. Rooker
  Costs vary, depending upon the number of schemes participated in. The 1996 efficiency scrutiny on simplifying paperwork estimated that a livestock farmer involved with cattle and sheep and participating in a voluntary conservation scheme, possibly therefore with a heavier paperwork requirement than an average farmer, would spend £2,700 of his time dealing with paperwork. Implementation of scrutiny recommendations, where possible, should now be saving the equivalent of £6.5 million of farmers' time each 48
  year. Our aim is to keep the paperwork burden to a minimum, consistent with safeguarding public health, funds and the environment.

EDUCATION AND EMPLOYMENT

  Pre-schools
  Mrs. May
  To ask the Secretary of State for Education and Employment how many four year-olds are currently attending(a) maintained nursery schools, (b) nursery classes in maintained primary schools, (c) reception classes, (d) voluntary sector pre-school provision and (e) private sector pre-school provision. [82017]

  Ms Hodge
  The available information is shown in the following table.

  Number of four-year-olds in early years provision in maintained nursery schools, nursery and infant classes in maintained primary schools and the private, voluntary and independent sectors in England, January 1998:

  January 1998

  Number of four-year-olds in maintained nursery schools

  17,991

  Number of four-year-olds in nursery classes in maintained primary schools

  129,497

  Number of four-year-olds in infant classes1 in maintained primary schools

  350,959

  Number of four-year-olds in private and voluntary providers and independent schools

  82,599

  1Includes reception and other classes (i.e. non nursery classes)

  Mrs. May
  To ask the Secretary of State for Education and Employment (1) if he will estimate how many pre-schools have closed since May 1997; and if he will set out the basis of the Government's calculation; [82016]

  (2) what assessment he has made of the basis for the difference in figures produced by his Department and by the Pre-School Learning Alliance on the number of pre-schools that have closed since May 1997. [82019]

  Ms Hodge
  The Department's annual survey of day-care facilities in England, using data submitted by local authorities, shows a small fall in the number of registered playgroups at March 1998 compared with a year earlier. Officials have arranged to discuss with the Pre-School Learning Alliance differences between their figures and the latest survey data.

  Education (Expenditure)
  Mr. Wilshire
  To ask the Secretary of State for Education and Employment how much central Government money was spent per capita in 1998 in England on helping schools meet special educational needs. [82211]

  Mr. Charles Clarke
  Most funding for school education is allocated to local authorities by way of unhypothecated grant. Information on total actual spending by local education authorities and schools in meeting special educational needs is not collected centrally. The 1997 Green Paper "Excellence for all children: meeting special educational needs" estimated
  49
  that some £2.5 billion per year is spent meeting special educational needs, representing on average some £1,600 per child identified as having such needs.

  Mr. Wilshire
  To ask the Secretary of State for Education and Employment how much central Government money was spent per capita in 1998 in England on grants to(a) voluntary aided schools and (b) voluntary controlled schools. [82208]

  Mr. Charles Clarke
  Capital grants totalling £138,184,240 were allocated to voluntary-aided schools in the financial year 1998–99. This equates to £132 per pupil in this sector.

  Capital grants totalling £18,513,446 were allocated to voluntary-controlled schools in the financial year 1998–99. This equates to £34 per pupil in this sector.

  Mr. Wilshire
  To ask the Secretary of State for Education and Employment how much central Government money was spent per capita in 1998 in England on (i) primary schools, (ii) secondary schools, (iii) further education colleges and (iv) universities. [82210]

  Mr. Mudie
  Unit costs for primary and secondary pupils and for full-time equivalent students in FE colleges and HE institutions are set out in the DfEE Departmental Report, Cm 4202, published on 24 March 1999, a copy of which was placed in the Library.

  The unit costs for primary and secondary pupils in 1997–98 include a provisional central government element of £127 and £35 respectively. Neither the total unit costs nor the central government element include capital spending.

  The unit costs for FE and HE students include both recurrent spending and support for capital expenditure. The HE unit costs exclude central Government spending on grants and loans.

  Mr. Wilshire
  To ask the Secretary of State for Education and Employment how much central Government money was spent per capita in 1998 in England on books and stationery in(a) primary schools and (b) secondary schools. [82209]

  Ms Estelle Morris
  In the 1998 calendar year, primary schools received three grants for reading books, averaging £1,000 per grant. During the same period, secondary schools received two £1,000 grants for reading books. Schools with less than 100 pupils received £10 per capita for each grant allocation. These grants represent

  Numbers of nursery, primary, secondary, pupil referral units and independent schools by percentage of pupils with special educational needs1,3 by local education authority area in England, January 1998

  Schools in England2

  10 per cent. and over

  20 per cent. and over

  30 per cent. and over

  40 per cent. and over

  50 per cent. and over

  60 per cent. and over

  England

  18,148

  8,178

  2,613

  903

  366

  209

  North East

  961

  379

  110

  39

  16

  13

  Hartlepool

  32

  8

  3

  2

  1

  0

  Middlesbrough

  44

  17

  7

  2

  1

  1

  Redcar and Cleveland

  54

  15

  1

  1

  1

  1

  Stockton-on-Tees

  57

  17

  4

  1

  1

  1

  Darlington

  36

  18

  4

  2

  0

  0

  Durham

  242

  105

  25

  4

  2

  2

  Northumberland

  126

  30

  7

  4

  0

  0

  Gateshead

  69

  26

  11

  5

  2

  2

  Newcastle-upon-Tyne

  82

  52

  27

  12

  3

  2

  50
  substantial new funding and are in addition to funding made available to schools through the Local Management of Schools (LMS) arrangements.

  Grant-maintained Schools
  Mr. Collins
  To ask the Secretary of State for Education and Employment what steps he is taking to ensure that pupils at former grant maintained schools secure the same increases in funding per individual as those in other state schools in(a) Cumbria and (b) England.[82183]

  Ms Estelle Morris
  Grant-maintained schools have previously enjoyed preferential funding, whereas the Government are committed to fair funding for all schools, continuing the process of phasing out unfair funding which the previous Government began in 1995–96. For 1999–2000, we have guaranteed that grant-maintained schools will be funded at the same level per pupil in cash terms as they were in 1998–99. Many will be funded at a higher level than that, where LEAs pass on the extra resources we have obtained for education directly to their schools, as my right hon. Friend the Secretary of State has urged them to do.

  Correspondence
  Mr. Collins
  To ask the Secretary of State for Education and Employment when he will reply to the letter sent to him by Mr. T. A. Schofield, Bursar to Kirkbie Kendal school, Kendal, Cumbria on 16 April. [82185]

  Ms Estelle Morris
  The letter from the Bursar of Kirkbie Kendal School has been acknowledged by the Department, which is taking up the points made in the letter with Cumbria Local Education Authority. A full reply will be sent to Mr. Schofield as soon as possible.

  Special Educational Needs
  Mr. Soley
  To ask the Secretary of State for Education and Employment how many schools in England and Wales, broken down by local education authority, there are where special educational needs children exceeded(a) 10 per cent., (b) 20 per cent., (c) 30 per cent., (d) 40 per cent., (e) 50 per cent. and (f) 60 per cent. of the total school population in the last year for which figures are available. [81608]

  Ms Estelle Morris
  The information requested for England is shown in the table.

  For information for Wales, 1 refer my hon. Friend to my right hon. Friend the Secretary of State for Wales.
  51

  Numbers of nursery, primary, secondary, pupil referral units and independent schools by percentage of pupils with special educational needs1,3 by local education authority area in England, January 1998

  Schools in England2

  10 per cent. and over

  20 per cent. and over

  30 per cent. and over

  40 per cent. and over

  50 per cent. and over

  60 per cent. and over

  North Tyneside

  58

  22

  4

  2

  2

  2

  South Tyneside

  57

  25

  7

  1

  1

  1

  Sunderland

  104

  44

  10

  3

  2

  1

  North West and Merseyside

  2,466

  977

  242

  78

  31

  14

  North West

  2,005

  765

  176

  51

  22

  8

  Cheshire

  359

  125

  29

  8

  3

  0

  Cumbria

  244

  84

  16

  4

  3

  2

  Bolton

  106

  58

  15

  3

  2

  2

  Bury

  60

  17

  2

  0

  0

  0

  Manchester

  134

  51

  15

  5

  1

  0

  Oldham

  69

  20

  3

  0

  0

  0

  Rochdale

  79

  33

  7

  2

  0

  0

  Salford

  91

  42

  16

  3

  1

  0

  Stockport

  102

  45

  14

  5

  2

  1

  Tameside

  67

  21

  2

  0

  0

  0

  Trafford

  58

  20

  3

  1

  1

  0

  Wigan

  106

  40

  6

  0

  0

  0

  Lancashire

  530

  209

  48

  20

  9

  3

  Merseyside

  461

  212

  66

  27

  9

  6

  Knowsley

  64

  26

  8

  4

  2

  1

  Liverpool

  183

  102

  37

  15

  5

  4

  St. Helens

  38

  14

  3

  1

  0

  0

  Sefton

  78

  33

  8

  2

  0

  0

  Wirral

  98

  37

  10

  5

  2

  1

  Yorkshire and Humber

  1,729

  624

  184

  52

  21

  9

  East Riding of Yorkshire

  89

  18

  1

  0

  0

  0

  City of Kingston-upon-Hull

  93

  55

  21

  5

  2

  1

  North East Lincolnshire

  73

  48

  25

  8

  4

  3

  North Lincolnshire

  67

  30

  7

  1

  0

  0

  York

  63

  27

  8

  4

  2

  1

  North Yorkshire

  270

  74

  13

  0

  0

  0

  Barnsley

  38

  7

  1

  0

  0

  0

  Doncaster

  99

  33

  8

  3

  1

  0

  Rotherham

  87

  23

  4

  1

  1

  1

  Sheffield

  149

  73

  30

  11

  4

  0

  Bradford

  197

  71

  22

  5

  3

  1

  Calderdale

  73

  16

  5

  2

  0

  0

  Kirklees

  125

  37

  5

  0

  0

  0

  Leeds

  209

  87

  28

  10

  2

  0

  Wakefield

  97

  25

  6

  2

  2

  2

  East Midlands

  1,661

  659

  208

  53

  16

  11

  Derby

  69

  18

  5

  1

  0

  0

  Derbyshire

  239

  41

  6

  1

  0

  0

  Leicester City

  99

  54

  23

  8

  2

  1

  Rutland

  19

  4

  2

  0

  0

  0

  Leicestershire

  238

  72

  14

  2

  0

  0

  Lincolnshire

  280

  95

  20

  5

  3

  2

  Northamptonshire

  311

  179

  75

  18

  3

  1

  Nottinghamshire

  406

  196

  63

  18

  8

  7

  West Midlands

  1,899

  843

  285

  108

  43

  30

  Hereford and Worcester

  296

  97

  33

  14

  9

  8

  Shropshire

  228

  94

  15

  4

  1

  1

  Stoke

  57

  11

  2

  1

  1

  1

  Staffordshire

  143

  26

  8

  5

  3

  3

  Warwickshire

  234

  153

  58

  21

  6

  3

  Birmingham

  364

  170

  52

  14

  6

  4

  Coventry

  94

  41

  11

  5

  2

  2

  Dudley

  87

  31

  10

  4

  3

  2

  Sandwell

  130

  93

  31

  14

  4

  3

  Solihull

  70

  23

  3

  1

  0

  0

  Walsall

  85

  23

  12

  1

  0

  0

  Wolverhampton

  111

  81

  50

  24

  8

  3

  Eastern

  2,134

  866

  265

  75

  35

  21

  Luton

  64

  28

  6

  2

  0

  0

  Bedfordshire

  148

  48

  6

  0

  0

  0

  Cambridgeshire

  297

  151

  51

  15

  7

  3

  Essex

  554

  170

  36

  10

  3

  2

  Hertfordshire

  458

  238

  86

  18

  6

  3

  52 53

  Numbers of nursery, primary, secondary, pupil referral units and independent schools by percentage of pupils with special educational needs1,3 by local education authority area in England, January 1998

  Schools in England2

  10 per cent. and over

  20 per cent. and over

  30 per cent. and over

  40 per cent. and over

  50 per cent. and over

  60 per cent. and over

  Norfolk

  361

  155

  62

  23

  12

  7

  Suffolk

  252

  76

  18

  7

  7

  6

  Greater London

  2,205

  1,161

  356

  122

  58

  33

  Inner London

  888

  474

  144

  47

  27

  13

  City of London

  1

  1

  0

  0

  0

  0

  Camden

  55

  33

  10

  6

  3

  1

  Hackney

  68

  40

  11

  2

  2

  1

  Hammersmith and Fulham

  49

  29

  7

  3

  1

  1

  Haringey

  81

  36

  8

  2

  2

  1

  Islington

  68

  42

  15

  8

  5

  3

  Kensington and Chelsea

  38

  16

  4

  1

  1

  1

  Lambeth

  86

  46

  19

  4

  1

  0

  Lewisham

  84

  57

  19

  4

  3

  0

  Newham

  66

  22

  4

  1

  1

  1

  Southwark

  82

  45

  10

  1

  0

  0

  Tower Hamlets

  88

  40

  8

  4

  1

  1

  Wandsworth

  75

  47

  24

  9

  5

  1

  Westminster

  47

  20

  5

  2

  2

  2

  Outer London

  1,317

  687

  212

  75

  31

  20

  Barking and Dagenham

  45

  13

  2

  0

  0

  0

  Barnet

  116

  81

  30

  14

  3

  2

  Bexley

  69

  37

  14

  10

  6

  3

  Brent

  64

  39

  14

  2

  0

  0

  Bromley

  77

  37

  8

  1

  0

  0

  Croydon

  99

  46

  11

  6

  4

  4

  Ealing

  77

  34

  10

  5

  3

  3

  Enfield

  78

  53

  27

  11

  4

  2

  Greenwich

  83

  56

  23

  5

  0

  0

  Harrow

  59

  23

  0

  0

  0

  0

  Havering

  71

  22

  3

  1

  1

  0

  Hillingdon

  81

  45

  12

  3

  1

  1

  Hounslow

  73

  44

  19

  4

  3

  2

  Kingston-upon-Thames

  43

  14

  5

  2

  2

  0

  Merton

  54

  26

  5

  2

  1

  1

  Redbridge

  55

  12

  1

  1

  1

  1

  Richmond-upon-Thames

  44

  21

  3

  0

  0

  0

  Sutton

  48

  25

  4

  1

  1

  1

  Waltham Forest

  81

  59

  21

  7

  1

  0

  South East

  3,070

  1,757

  709

  304

  122

  66

  Berkshire

  293

  126

  32

  6

  4

  4

  Milton Keynes

  87

  51

  14

  4

  1

  1

  Buckinghamshire

  183

  69

  21

  7

  4

  3

  Brighton and Hove

  73

  48

  22

  4

  2

  0

  East Sussex

  187

  98

  18

  9

  4

  3

  Portsmouth

  58

  46

  21

  12

  7

  2

  Southampton

  87

  68

  44

  25

  6

  1

  Hampshire

  497

  308

  114

  52

  18

  11

  Isle of Wight

  62

  38

  13

  3

  1

  1

  Kent

  685

  526

  287

  144

  52

  21

  Oxfordshire

  264

  112

  32

  13

  8

  8

  Surrey

  319

  135

  52

  18

  11

  8

  West Sussex

  275

  132

  39

  7

  4

  3

  South West

  2,023

  912

  254

  72

  24

  12

  Bath and North East Somerset

  70

  26

  7

  1

  0

  0

  City of Bristol

  155

  97

  40

  12

  4

  2

  North Somerset

  61

  19

  3

  1

  0

  0

  South Gloucesterhire

  95

  34

  3

  0

  0

  0

  Cornwall

  225

  78

  12

  3

  0

  0

  Isles of Scilly

  2

  0

  0

  0

  0

  0

  Devon

  414

  162

  31

  7

  3

  1

  Bournemouth

  36

  21

  6

  3

  1

  0

  Poole

  39

  25

  7

  4

  2

  2

  Dorset

  180

  125

  43

  12

  4

  2

  Gloucestershire

  256

  113

  34

  11

  5

  1

  Somerset

  238

  100

  29

  6

  2

  2

  Swindon

  72

  35

  14

  6

  2

  1

  Wiltshire

  180

  77

  25

  6

  1

  1

  1Number of pupils with special educational needs (SEN) expressed as a percentage of all pupils in each school.

  2Excludes Maintained and Non-Maintained Special Schools.

  3Excludes dually registered pupils.

  New Deal (Young People)
  Mr. Willetts
  To ask the Secretary of State for Education and Employment what proportion of all participants finding subsidised or unsubsidised work through the New Deal for Young People have found employment with(a) public sector employers and (b) private sector employers; and if he will make a statement on the relationship between these figures and Government targets. [79824]

  Mr. Andrew Smith
  To the end of January 1999, 14,000 clients had entered Subsidised Employment. The split of the jobs was 12 private sector jobs for each public sector job.

  A comparable split cannot be provided for the 62,300 unsubsidised job starts as categorisation is available only by standard industrial classification, and then only for ES placings.

  We have not set targets for the numbers of young people placed in the public or private sector, but have indicated that we would not expect the proportion moving into public sector jobs to exceed the share of public sector jobs available for the work force as a whole.

  School Inspectors
  Mr. Kidney
  To ask the Secretary of State for Education and Employment what action he has taken to(a) increase the accountability of Ofsted school inspectors and (b) reduce unnecessary apprehension by teachers about inspections since 1 May 1997. [81651]

  Ms Estelle Morris
  We have agreed a number of changes with HM Chief Inspector of Schools since 1 May 1997 to improve the quality, consistency and value for money of the school inspection system. Those changes are contributing to increased accountability of school inspectors and should enable teachers to approach inspections with greater confidence. The changes include a reduction in the notice given for inspections from two terms to 6-10 weeks and short inspections for the most effective schools. The changes were widely welcomed in consultation. I have asked the Chief Inspector, Chris Woodhead, to write to my hon. Friend with further details of the changes and to place a copy of his letter in the Library.

TREASURY

  Company Cars (Mileage)
  Mr. Baker
  To ask the Chancellor of the Exchequer how many company cars travelled(a) more and (b) less than 18,500 miles in the last year for which figures are available.[81266]

  Ms Hewitt
  [holding answer 19 April 1999]: Annual mileage data are collected only for drivers whose company cars are available for private use. According to the latest National Travel Survey, there were an estimated 925,000 company car drivers whose total mileage was at least 18,500 miles per annum. This compares to 675,000 company car drivers whose total annual mileage was less than 18,500 miles per annum.

  Disabled Persons Tax Credit
  Mr. Sutcliffe
  To ask the Chancellor of the Exch equer if he will make a statement about the proposed arrangements for transferring people from disability working allowance to the disabled persons tax credit. [79767]

  Dawn Primarolo
  [holding answer 19 April 1999]: Recipients of Disability Working Allowance whose awards run out after the introduction of the Disabled Persons Tax Credit will be sent claim packs for the new tax credit in the same way that they would formerly have been sent a claim pack for renewal of their benefit.

  Defence Budget
  Mr. Keith Simpson
  To ask the Chancellor of the Exchequer what representations he has received from the Secretary of State for Defence in respect of an increase in the defence budget. [81659]

  Mr. Milburn
  [holding answer 22 April 1999]: My right hon. Friend the Secretary of State for Defence and I are keeping the additional costs of the Kosovo operation under close scrutiny.

  Drugs Investigations
  Mr. Hawkins
  To ask the Chancellor of the Exchequer what changes there have been to numbers of HM Customs and Excise staff at Heathrow Airport since 1 May 1997 involved in investigations relating to drugs or other illegal items. [80986]

  Dawn Primarolo
  In May 1997, the number of HM Customs and Excise investigators based at Heathrow was 65. Since then, including a number of transfers of staff resulting from the closure of an office in Reading, the number has risen to 99. These staff deal with investigations relating to drugs, other prohibited goods and other customs and VAT frauds.

  Fuel Duty (Northern Ireland)
  Mr. William Ross
  To ask the Chancellor of the Exchequer on how many litres of (i) petrol and (ii) diesel oil duty was paid in each quarter in each of the last three years and the current year up to 31 March, in respect of such fuels sold in Northern Ireland by(a) retailers and (b) wholesalers. [82196]

  Ms Hewitt
  Figures are shown in the table for total deliveries of petrol and diesel into Northern Ireland. There are no separate figures available for retailers and wholesalers. Figures for the first quarter of 1999 will not be available until towards the end of May.

  Thousand litres of product

  Petrol (motor spirit)

  Diesel (DERV fuel)

  1996

  Q1

  169,927

  112,645

  Q2

  176,020

  110,162

  Q3

  170,604

  104,134

  Q4

  170,875

  115,127

  1997

  Q1

  168,167

  108,153

  Q2

  170,875

  113,590

  Q3

  145,690

  90,305

  Q4

  146,774

  87,468

  57

  Thousand litres of product

  Petrol (motor spirit)

  Diesel (DERV fuel)

  1998

  Q1

  135,806

  91,841

  Q2

  142,035

  71,629

  Q3

  147,586

  76,239

  Q4

  138,650

  83,922

  Source:

  Department of Trade and Industry

  VAT Registration Threshold
  Mr. Gibb
  To ask the Chancellor of the Exchequer what is the real terms percentage increase in the VAT registration threshold since 1 May 1997. [81702]

  Dawn Primarolo
  The percentage increase in the VAT registration threshold in real terms since 1 May 1997 is 2 per cent.

  Public Sector Cash Requirement
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will estimate the public sector net cash requirement for(a) 1998–99, (b) 1999–2000, (c) 2000– (d) 2001–02, (e) 2002–03 and (f) 2003–04. [81703]

  Mr. Milburn
  Figures published by the Office for National Statistics on 20 April showed a public sector net cash repayment of £7.4 billion in 1998–99. Forecasts of the public sector net cash requirement were published in table B26 of the Financial Statement and Budget Report.

  EU Tobacco Taxes
  Mr. MacShane
  To ask the Chancellor of the Exchequer if he will list in euros the value of the tax and duty imposed on(a) 100 grammes of rolling tobacco and (b) 200 cigarettes in each EU member state. [81723]

  Dawn Primarolo
  The information is shown in the table.

  It is not possible to provide a single figure for the duty and tax on hand-rolling tobacco because comparable data on the retail selling price, from which the VAT and advalorem excise duty is calculated, are not available.

  100 grammes of rolling tobacco

  200 cigarettes

  Member state

  Specific excise duty(euros)

  Ad valorem excise and VAT as per cent. of retail selling price, all taxes included (%)

  Tax and duty(euros)

  Austria

  0·0

  63·7

  17·1

  Belgium

  0·0

  54·9

  19·4

  Denmark

  5·3

  20·0

  32·7

  Finland

  0·2

  68·0

  28·5

  France

  0·0

  68·1

  22·1

  Germany

  1·5

  31·9

  18·9

  Greece

  0·0

  74·3

  14·0

  Ireland

  11·2

  17·4

  31·2

  Italy

  0·0

  70·7

  14·3

  Luxembourg

  0·0

  42·2

  12·4

  Netherlands

  1·9

  30·1

  17·4

  Portugal

  0·0

  44·5

  13·9

  Spain

  0·0

  51·3

  8·4

  58

  100 grammes of rolling tobacco

  200 cigarettes

  Member state

  Specific excise duty(euros)

  Ad valorem excise and VAT as per cent. of retail selling price, all taxes included (%)

  Tax and duty(euros)

  Sweden

  7·5

  20·0

  30·1

  UK

  12·8

  14·9

  41·0

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

  Income Tax
  Mr. MacShane
  To ask the Chancellor of the Exchequer in what circumstances families with children and earnings of less than £235 a week will pay net income tax. [81724]

  Dawn Primarolo
  The Chancellor announced in his Budget Statement that the minimum income guarantee under the WFTC to every family with children and with full-time earnings would increase to £200 a week. He also said that no such family earning less than £235 a week would pay any net income tax from October 1999.

  Family Incomes
  Mr. MacShane
  To ask the Chancellor of the Exchequer if he will list the weekly family disposable income, after tax, national insurance, child benefit and maintenance payments are taken into account of (i) a lone parent with two children under 11 in receipt of maintenance payments of £40 a week, (ii) a lone parent with two children under 11 not in receipt of maintenance payments, (iii) a single-earner married couple with two children under 11 and (iv) a two earner married couple with two children under 11 earning in each case(a) £150 a week and (b) £250 a week and where the incomes of the two-earner couple are split in the ratio 80:20. [81726]

  Dawn Primarolo
  The available information, which shows weekly disposable (net) income after tax (including Child Benefit and Working Families Tax Credit), National Insurance Contributions and maintenance payments at the specified levels of earnings, is given in the table. The figures are shown for 1999–2000 and take account of all changes announced in the 1998 and 1999 Budgets which come into force in 1999–2000.

  From October 1999 the WFTC will provide help with child care costs. The child care tax credit will be worth 70 per cent. of eligible child care costs, subject to maximum child care costs of £100 a week for families with one child and £150 a week for families with two or more children. To ensure that parents with older and disabled children also benefit, the age limits on children for whom parents can claim help with child care costs will be raised to 14, and for disabled children up to age 16.

  59

  £ per week

  Gross income

  Net income

  Lone Parent with 2 children under 11 in receipt of £40 pw maintenance payments

  150.00

  276.77

  250.00

  306.92

  Lone Parent with 2 children under 11 not in receipt of maintenance payments

  150.00

  236.77

  250.00

  266.92

  Single Earner Married Couple with 2 children under 11

  150.00

  236.77

  250.00

  266.92

  Two Earner Married Couple with 2 children under 11 (income split 80:20)

  150.00

  241.22

  250.00

  274.34

  Notes:

  1. Income tax payments are calculated on the basis that the households receive no tax reliefs other than the standard allowances and have income only from employment. All earners, including wives, are assumed to pay Class 1 national insurance contributions at the contracted-in rate.

  2. Child Benefit is treated as negative income tax.

  3. WFTC calculations assume no child care costs.

  4. Lone parents are assumed to be new claimants after April 1998.

  Charrington Case
  Mr. Stuart Bell
  To ask the Chancellor of the Exchequer when he expects to announce the findings and recommendations of the inquiry under the chairmanship of Sir Gerald Hosker into the Charrington case; and if he will make a statement. [82148]

  Dawn Primarolo
  Sir Gerald Hosker is still working on his Inquiry. I will announce the findings as soon as possible after he has presented his report to the Chairman of the Commissioners of HM Customs and Excise.

  Debt Relief
  Ms Drown
  To ask the Chancellor of the Exchequer what response his Department has given to the proposal of Jubilee 2000 for a concordat on levels of debt cancellation and how funds released should be spent; and if the Government will discuss this proposal with other creditors to secure agreement for substantial debt cancellation by the end of 1999. [82003]

  Ms Hewitt
  Departmental officials have attended several discussions of Jubilee 2000's proposals, including a round-table seminar organised by Jubilee 2000 and a HIPC Review Consultation Meeting held by the World Bank. We shall certainly take part in any future discussions with other creditors on these proposals.

  Ms Drown
  To ask the Chancellor of the Exchequer if he will make a statement on the progress of the Commonwealth debt initiative, set out in his Mauritius speech, indicating which countries have received debt relief and the level of that relief. [82005]

  Ms Hewitt
  Seven countries have qualified for debt relief packages under the World Bank/IMF's Heavily Indebted Poor Countries (HIPC) initiative and three countries—Ethiopia, Guinea-Bissau and Mauritania—would be expected to qualify based on preliminary discussions. Uganda and Bolivia have received assistance at completion point, of $347 million and $448 million respectively. Assistance has been committed for Burkina 60
  Faso ($115 million), Guyana ($253 million), Cote d'Ivoire ($345 million), Mozambique ($1,442 million), and Mali ($128 million), and is predicted for Guinea-Bissau ($300 million), Ethiopia ($636 million) and Mauritania ($271 million).

  Tax and Spending Leaflets
  Mr. Gibb
  To ask the Chancellor of the Exchequer, pursuant to his answer of 21 April 1999,Official Report, column 588, on household leaflets, if he will break down the £1.5 million cost referred to between (a) printing and (b) postage. [82203]

  Dawn Primarolo
  Printing costs would be approximately £0.5 million. Other costs, including distribution and postage would account for the remainder of the cost.

  Red Book
  Mr. Gibb
  To ask the Chancellor of the Exchequer, pursuant to his answer of 21 April 1999,Official Report, column 588, if civil servants reviewed the Red Book to ensure objectivity.[82188]

  Dawn Primarolo
  I refer the hon. Member back to the reply I gave on 21 April.

  Unpaid Taxes
  Mr. Denzil Davies
  To ask the Chancellor of the Exchequer what response the Government have made to the European Commission's proposal to extend the provisions of Directive 76/308/EEC to allow the recovery between member states of unpaid taxes on income and capital. [81789]

  Dawn Primarolo
  An Explanatory memorandum on the European Commission's proposal to extend the provisions of Directive 76/308/EEC was laid before Parliament on 24 July 1998. European Council working group meetings, at which the proposal would be discussed, have not yet commenced.

  Public Expenditure (Scotland and Wales)
  Mr. Heathcoat-Amory
  To ask the Chancellor of the Exchequer if he will list the additional public expenditure items which the Government have announced for(a) Scotland and (b) Wales since January 1998. [80884]

  Mr. Milburn
  Public expenditure allocations were made to Scotland and Wales for 1999–2000 to 2001–02 in the Comprehensive Spending Review and published in "Modern Public Services for Britain: Investing in Reform" (Cm 4011), a copy of which is available in the Library.

  Further increases to the Departmental Expenditure Limits for Scotland and Wales have been made following successful bids to the Invest to Save Budget (ISB) and the Capital Modernisation Fund (CMF). A breakdown of ISB and CMF awards to Departments can be found in tables 1.8 and 1.9 respectively of Public Expenditure Statistical Analyses 1999–2000 (Cm 4201).

  Census Returns
  Mr. John M. Taylor
  To ask the Chancellor of the Exchequer if that part of section 9.21 of the Open
  61
  Government White Paper of 1993 (Cm 2290) relating to the closure of census returns for England and Wales represents current Government policy. [81791]

  Ms Hewitt
  The legislation covering the closure of census returns represents current Government policy. Census Returns form 1901 and 1911 are closed to the public for 100 years by virtue of Instrument 12 dated 1966 of the Public Records Act 1958. Censuses from 1921 onwards were taken under the terms of the Census Act 1920 as amended by the Census (Confidentiality) Act 1991 which gives protection to personal census information given by the public.

  The Open Government White Paper section 9.21 accurately describes the position with respect to those census returns in the custody of the Public Record Office.

  Taxes (Inquiry Notices)
  Mr. Gibb
  To ask the Chancellor of the Exchequer (1) how many section 9A Taxes Management Act 1970 inquiry notices relating to 1996–97 dated prior to 31 January were sent to taxpayers on or after 31 January; [80251]

  (2) what proportion of section 9A Taxes Management Act 1970 inquiry notices relating to 1996–97 were issued in January. [80252]

  Dawn Primarolo
  Approximately 20 per cent. of all inquiries into 1996/97 self-assessment tax returns were taken up during January 1999. The Inland Revenue do not record the actual dates on which notices are posted to taxpayers and it is therefore not possible to say whether any notices dated before 31 January 1999 were sent on or after that day. However, notices are normally posted on the date which they bear.

  Small Businesses
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will estimate the number of businesses with fewer than 17 employees. [81706]

  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. Nick Gibb, dated 26 April 1999:
  As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent parliamentary question on employment.
  There are 1.75 million VAT and PAYE based businesses in the UK with less than 17 employees, as at April 1999. It is estimated that there are a further 1.8 million smaller businesses without employees and with low turnovers.
  Information is provided from the Inter Departmental Business Register (IDBR), which is administered by the ONS. The register contains details for all businesses in the UK that are traders registered for VAT and/or employers with PAYE schemes.
  The ONS annual employment survey is the main source for the number of employees. For businesses that are not selected for this inquiry, employee estimates are obtained through employer PAYE returns. If the business is registered only for VAT, the business will generally have no employees. Such businesses without employees are included in the above counts. Smaller businesses without employees and not registered for VAT are excluded from these counts.
  62
  More detailed information on businesses registered for VAT is published annually by the ONS in Size Analysis of UK Businesses -(PA1003), most recently for 1998. Broad estimates for all businesses are published by the Department of Trade and Industry, based on the IDBR, in Small and Medium Enterprise (SME) Statistics for the UK, latest version for 1997. Both publications are available in the House of Commons Library.

CABINET OFFICE

  Business Regulation (Compliance Costs)
  Mr. Bercow
  To ask the Minister for the Cabinet Office if he will publish an annual estimate of the total costs of compliance with statutory regulations to(a) all United Kingdom businesses and (b) United Kingdom businesses with fewer than 100 employees. [81645]

  Mr. Kilfoyle
  No. The Government do not, and do not intend to, publish estimates in the form requested. Individual Regulatory Impact Assessments are already placed in the Libraries of the House.

  Costs in isolation are misleading and they should not be aggregated. Regulations bring benefits as well as costs. The Government's approach is designed to ensure that regulations are introduced only where necessary and that they follow the principles of transparency, accountability, targeting, consistency and proportionality.

  The approach also includes a specific assessment of the impact on small businesses. In addition, my right hon. Friend the Secretary of State for Trade and Industry recently announced the introduction of the Small Business service to be a strong voice for small business and to provide practical assistance to cut the burdens of compliance.

TRADE AND INDUSTRY

  Professional Statisticians
  Mr. Menzies Campbell
  To ask the Secretary of State for Trade and Industry how many staff by grade are employed as professional statisticians in his Department; how many of these staff have been accepted as fast stream by the Civil Service Selection Board; and how many have been granted chartered statistician status by the Royal Statistical Society. [81193]

  Mr. Byers
  Statistical work is undertaken by a range of specialisms such as Research Officers, Social Survey Officers and Economists. Within this Department there are1

  3 Senior Civil Servants

  4 Grade 6s

  25 Grade 7s

  13 Assistant Statisticians employed as "professional" Statisticians all of whom have been recruited via CSSB.

  In addition our Department employs:

  7 Statistical Officers

  1 Grade 7 undertaking statistical duties.

  These figures do not include staff on loan, secondment, career break or unpaid special leave.
  63
  Three of our "professional" Statisticians have been granted Chartered Statistician Status by the Royal Statistical Society.

  1 For the purposes of fair comparison DTI's original grading system has been used in this answer.

  EU Structural Funds
  Mr. Chope
  To ask the Secretary of State for Trade and Industry when the assisted areas map was submitted to the European Commission; and if he will make a statement. [80589]

  Mr. Wills
  [holding answer 13 April 1999]: Further to the reply I gave the hon. Member and the hon. Member for Torbay (Mr. Sanders) on 16 April 1999, Official Report, column 367, proposals for the assisted areas map have not yet been sent to the Commission. The Government are considering the proposals they will make. They will submit these as soon as it is ready to do so.

  Miss McIntosh
  To ask the Secretary of State for Trade and Industry what were the results of his Department's August 1998 consultation exercise on the criteria to be applied in the designation of Objective 2 areas. [81914]

  Mr. Wills
  As part of the on-going consultation process throughout the Structural Fund negotiations, the Government asked regions and local areas informally, in July 1998, for an indication of their priorities for Objective 2 eligibility. Over fifty local and regional partnership organisations provided information, as well as national bodies and interested Departments.

  Two broad conclusions emerged from the responses to the consultation exercise. First, for areas of real need to be targeted, the provisions covering Objective 2 in the Structural Funds regulation must be sufficiently flexible to encompass a wide variety of circumstances. Secondly, there was a degree of similarity in the broad priorities put forward, including employment and labour market measures, the degree of social cohesion, geographical issues, and measures of poverty.

  Miss McIntosh
  To ask the Secretary of State for Trade and Industry by what means he plans to achieve a target population in compliance with the four strands within Objective 2. [81918]

  Mr. Wills
  The UK population for Objective 2 is set by the safety net which maintains two-thirds of the existing Objective 2 and 5b coverage. Within the safety net, the Government will seek to target Objective 2 on the basis of need.

  A maximum of 18 per cent. of the European Union's population will be covered by the new Objective 2. The breakdown by strand for Objective 2 of 10 per cent. to industrial areas, 5 per cent. to rural, 2 per cent. to urban and 1 per cent. to fisheries is indicative at EU level, not Member State level.

  Miss McIntosh
  To ask the Secretary of State for Trade and Industry for what reasons the consultation paper issued by his Department on 30 March, on the criteria to be applied in the designation of Objective 2 areas, asks the same questions as the consultation exercise in August 1998. [81919]
  64
  Mr. Wills
  The informal consultation launched in July 1998 was to gain local and regional views to assist the Government in developing their policy for negotiations for Objective 2 funding.

  The consultation paper issued on the 30 March seeks views from interested parties on the designation of eligible UK areas under Objective 2. These should include comments on the geographical area; the NUTS level; and the criteria that might be used. This consultation is to assist the Government in determining a list of eligible areas for objective 2 funding post—1999.

  Miss McIntosh
  To ask the Secretary of State for Trade and Industry (1) if he will list the areas submitted to the EU Commission at the end of March for consideration as assisted areas;[81917]

  (2) what differences there will be between the Assisted Areas map and the Objective 2 map in the UK for 1999 to 2004. [81916]

  Mr. Wills
  Proposals for the Assisted Areas map have not yet been sent to the Commission. The Government are considering the proposals they will make. They will submit these as soon as it is ready to do so.

  A consultation paper on the review of the Structural Funds was issued on 30 March, seeking views from interested parties on the designation of eligible UK areas under Objective 2. The final date for comments is 25 May. Ministers will then have to decide on the proposed areas to be submitted to the Commission. Until this time we are not in a position to say what the final Objective 2 Structural Funds map will be, and therefore what differences there will be between the Assisted Areas and Objective 2 maps.

  Export Credits Guarantee Department
  Ms Drown
  To ask the Secretary of State for Trade and Industry how much debt was owed to the Export Credits Guarantee Department by each individual debtor country on 31 December 1998. [82004]

  Mr. Wilson
  As at 31 December 1998, the amounts, including arrears, owed to ECGD under Bilateral Debt Agreements stemming from Paris Club reschedulings were:

  £ million

  Country

  Nigeria

  3,445·1

  Poland

  896·4

  Russia

  602·7

  Brazil

  523·7

  Jordan

  337·5

  Sudan

  326·2

  Zambia

  238·3

  Egypt

  184·5

  Serbia

  180

  Algeria

  164·6

  Peru

  155·4

  Congo

  138·8

  D·R·C·

  138·6

  Gabon

  130·2

  Tanzania

  117·3

  Angola

  105·6

  Mozambique

  90·1

  Cuba

  76·9

  Croatia

  80

  Cameroon

  69·6

  65

  £ million

  Country

  Mexico

  65·5

  Ecuador

  54·7

  Argentina

  62·6

  Morocco

  55·3

  Guyana

  43·9

  Indonesia

  42·5

  Kenya

  35·3

  Somali

  27·3

  Madagascar

  27·2

  Philippines

  23·8

  C· d'Ivoire

  22·3

  Liberia

  14·6

  Togo

  14·8

  Bulgaria

  13·5

  Ethiopia

  11·7

  Bolivia

  11·5

  Niger

  10·8

  Vietnam

  10·4

  Mauritania

  6·7

  Uganda

  5·6

  Guinea

  5·3

  Macedonia

  4·5

  Bosnia

  5·1

  Mali

  4·1

  Sierra Leone

  3·6

  Trinidad

  3·1

  Yemen

  3·1

  Benin

  2·7

  Jamaica

  2·9

  Ghana

  2·1

  Senegal

  1·5

  Nicaragua

  1

  Bur· Faso

  0·97

  Malawi

  0·69

  C·A· Rep

  0·36

  Costa Rica

  0·12

  Thorne Lighting Plants
  Mr. Keetch
  To ask the Secretary of State for Trade and Industry what(a) grants and (b) subsidies are available to the two current Thorne Lighting plants, at Hereford and Spennymore; and if he will make a statement. [81563]

  Mr. Wills
  The main DTI programme for supporting companies is Regional Selective Assistance, under the Industrial Development Act 1982. The plant in Spennymoor is in a Development Area and is eligible to receive such assistance. The Hereford plant is not in an Assisted Area, and is therefore not eligible for support under the Regional Selective Assistance Scheme.

  Motor Vehicle Fuel
  Dr. Ladyman
  To ask the Secretary of State for Trade and Industry what estimate he has made of the quantity of(a) petrol and (b) diesel fuel used in the UK by all motor vehicles in each of the last 10 years. [82437]

  Mr. Battle
  The data are given in the table.

  Total deliveries into consumption in the UK

  Thousand tonnes

  Year

  Motor spirit

  Diesel (DERV) fuel

  1989

  23,924

  10,118

  1990

  24,313

  10,652

  66

  Total deliveries into consumption in the UK

  Thousand tonnes

  Year

  Motor spirit

  Diesel (DERV) fuel

  1991

  24,022

  10,694

  1992

  24,044

  11,132

  1993

  23,766

  11,806

  1994

  22,843

  12,914

  1995

  21,953

  13,457

  1996

  22,409

  14,365

  1997

  22,252

  14,976

  1998

  21,848

  15,129

  Telecommunications Council
  Mr. Maclean
  To ask the Secretary of State for Trade and Industry if he will publish the agenda for the EU Telecommunications Council of 22 April. [79573]

  Mr. Wills
  The agenda read as follows:

  Proposal for a European Parliament and Council Directive on a common framework for electronic signatures: Common Position.
  "Year 2000 Computer Problem": Council Resolution.
  State of the EU Telecommunications Market: Debate.
  Commission Communication on Convergence of Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation—Results of Public Consultation and Proposed Actions: Commission presentation and Council Conclusions.
  Commission Green Paper on Radio Spectrum Policy: Information from Commission on Public Consultation.
  Commission Green Paper on Access to Public Sector Information: Commission presentation.
  Globalisation and the Information Society: Information from the Commission.
  Internet Domain Names: Information from the Commission.

  Renewable Energy
  Mr. Maclean
  To ask the Secretary of State for Trade and Industry (1) what factors underlay the setting of a renewable energy target of 10 per cent; [81783]

  (2) what is his estimate of the potential contribution of each renewable energy source to meeting a target of 10 per cent. of total energy supply from renewable sources. [81782]

  Mr. Battle
  The Government published a consultation paper "New and Renewable Energy—Prospects for the 21st Century" on 30 March 1999, which outlines the Government's policy. Key factors underlying that policy include putting the environment at the heart of their decision making. Climate change is recognised as one of the greatest environmental threats facing the world today. Prudent use of natural resources, including renewable energy sources, is one of the Government's objectives. Energy from renewable energy sources is clearly an important element in securing both the diversity and sustainability objectives and has the potential to be supplied on an increasing scale at competitive prices. In line with their Manifesto commitment to "a new and
  67
  strong drive for new and renewable sources of energy", the Government are working towards a target of renewable energy providing 10 per cent. of UK electricity supplies as soon as possible. They hope to achieve this by 2010. It would require of the order of 3-4 GW (Declared Net Capacity) of new plant in addition to that already contracted to achieve that.

  The technologies expected to contribute by 2010 are wastes (municipal, industrial and agricultural), wind (onshore and offshore), hydro, landfill gas and energy crops. The proportions of each will depend upon a number of factors including the extent of technical development and future fuel prices.

  Other technologies such as photovoltaics have the potential to make major contributions to world energy needs in the longer term if their development continues and energy companies announce their intention of moving into this market on a significant scale.

  Multilateral Agreement on Investment
  Ms Walley
  To ask the Secretary of State for Trade and Industry what progress has been made towards negotiating an agreement on investment since the ending of negotiations on the Multilateral Agreement on Investment. [81616]

  Mr. Wilson
  The UK, and the EU as a whole, have called for investment to be on the agenda of a future round of negotiations in the World Trade Organisation (WTO). Decisions on the content of that agenda will be taken at the WTO ministerial meeting in Seattle later this year. In the meantime, the UK is participating in the analytical work of the WTO Trade and Investment Working Group and the parallel work in the UNCTAD Expert Meetings on International Investment Agreements.

  Ms Walley
  To ask the Secretary of State for Trade and Industry if he will make it his policy to ensure that social, environmental and development issues are given high priority in future discussions on developing an international agreement on investment. [81617]

  Mr. Wilson
  The Government are committed to ensuring that, within any new framework for international investment, full account is taken of social, environmental and development concerns.

  World Trade Organisation
  Ms Walley
  To ask the Secretary of State for Trade and Industry what assessment he has made of the European Commission document I.G 1/98 prepared by DG1 for a meeting of the EU Council's Article 113 Committee; and if he will make a statement. [81627]

  Mr. Wilson
  I refer my hon. Friend to the response I gave on 23 February 1999,Official Report, column 201, to my hon. Friend the Member for Bury, North (Mr. Chaytor).

  Inward Investment
  Mr. Wigley
  To ask the Secretary of State for Trade and Industry if a concordat has been agreed between his Department, the Scottish Office, Welsh Office and Northern Ireland Office, concerning inward investment. [81925]
  68
  Mr. Wills
  [holding answer 23 April 1999]: The concordat on financial assistance is one of a number of concordats which will be discussed and concluded between United Kingdom Departments and the devolved Administrations in Scotland, Wales and Northern Ireland once they are established.

  Knitting Machine Mechanics and Technicians
  Mr. Woolas
  To ask the Secretary of State for Trade and Industry what assessment he has made of the impact on the clothing and textile industry of the proposed closure of the National Training Centre for Knitting Machine Mechanics and Technicians. [81739]

  Mr. Battle
  I assume that the National Training Centre referred to by my hon. Friend is the knitting facility at the North Warwickshire college in Hinckley, Leicestershire, which I understand has taken the decision to close its textile faculty based on the lack of support from the industry.

  News of closure is never welcome, particularly when the industry itself is under such pressure. However, there are many other educational institutions in the region who provide a high level of training in this area. DeMontfort, Derby and Nottingham Trent universities all offer various forms of technical training in knitting and a centre of excellence has been set up in North Nottinghamshire by West Notts College and New College Nottingham. The impact on the industry of the Hinckley closure is therefore likely to be negligible.

HOME DEPARTMENT

  Asylum Seekers
  Mr. Randall
  To ask the Secretary of State for the Home Department what estimate he has made of the number of people likely to seek asylum in Britain over the next 12 months. [80955]

  Mr. Mike O'Brien
  For a number of reasons, including the situation in Kosovo, it is very difficult to estimate the numbers likely to claim asylum in the next year. The figure could be in the range of 52,000 to 62,000, if we take into account all the potential applicants from countries where there may be upheavals.

  Mr. Robathan
  To ask the Secretary of State for the Home Department what estimate he has made of the number of asylum seekers, refused asylum by his Department, who have remained illegally in the United Kingdom over the last five years. [80962]

  Mr. Mike O'Brien
  At the end of November 1998, the number of failed asylum seekers who had either not appealed against the refusal of asylum or who had exhausted their rights of appeal and who were the subject of port or enforcement action was estimated to be 24,000. This figure does not include applicants whose claims had been refused, but who were not yet subject to enforcement action.
  69
  Mr. Corbyn
  To ask the Secretary of State for the Home Department how many asylum seekers entered the United Kingdom for each month since January 1998; and of those how many were(a) granted asylum, (b) granted leave to remain and (c) refused the right to remain. [81981]

  Total asylum applications1 received in the United Kingdom, excluding dependants, and initial decisions on applications2, January 1998—February 1999.

  Principal applicants

  Year

  Total applications

  Total decisions

  Grants of asylum

  Grants of ELR

  Total refusals

  Backlog clearance ELR3

  Backlog clearance Refusals3

  January 1998

  2,860

  3,065

  705

  230

  2,130

  —

  —

  February 1998

  2,650

  3,035

  405

  390

  2,240

  —

  —

  March 1998

  3,200

  3,070

  375

  425

  2,270

  —

  —

  April 1998

  3,135

  2,520

  350

  320

  1,850

  —

  —

  May 1998

  3,110

  2,360

  420

  250

  1,690

  —

  —

  June 1998

  3,575

  2,675

  580

  305

  1,790

  —

  —

  July 1998

  4,215

  2,710

  435

  435

  1,840

  —

  —

  August 1998

  4,420

  2,480

  505

  380

  1,595

  —

  —

  September 1998

  4,455

  2,825

  480

  460

  1,885

  —

  —

  October 1998

  5,010

  3,255

  630

  340

  2,290

  —

  —

  November 1998

  4,620

  2,780

  415

  265

  2,100

  —

  —

  December 1998

  4,770

  800

  50

  110

  645

  —

  —

  January 1999

  4,700

  575

  15

  135

  425

  420

  —

  February 1999

  4,185

  740

  35

  110

  600

  535

  —

  Total

  54,900

  32,885

  5,395

  4,155

  23,340

  955

  —

  1Provisional figures rounded to nearest 5, with "*"=1 or 2

  2Decisions on asylum applications may not relate to the same cases within each period

  3Cases decided under pragmatic measures aimed at reducing the pre '93 act asylum backlog

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department what admittance criteria are applied to those seeking asylum in the United Kingdom as result of the Kosovo crisis. [82065]

  Mr. Mike O'Brien
  We have agreed with the United Nations High Commissioner for Refugees (UNHCR) that any recommendations for evacuation from the region should be co-ordinated through the office of the UNHCR. They will give priority to medical cases, other vulnerable persons, and the support of family unity, and make recommendations to the Home Office for consideration.

  Asylum seekers from Kosovo who arrive in the United Kingdom independently will be admitted pending consideration of their claims in accordance with the 1951 Geneva Convention, in the usual way.

  Police Manpower
  Mrs. Laing
  To ask the Secretary of State for the Home Department when he last met the President of the Association of Chief Police Officers to discuss police manpower. [80961]

  Kate Hoey
  My right hon. Friend the Home Secretary meets the President of the Association of Chief Police Officers regularly both at the Home Office and at police events when a range of issues are discussed, including police resources.

  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department how many police officers in(a) England and (b) Wales he expects to be in post at the end of the current financial year. [80959]
  70
  Mr. Mike O'Brien
  The available information is given in the table. Decisions on asylum applications may not relate to the same cases within each period.

  Kate Hoey
  The number of police officers in each force is entirely a matter for local determination on the basis of available resources and spending priorities. In 1999–2000, police authority budgets in England and Wales will increase on average by 3.1 per cent. over last year. These increases, along with the 2 per cent. efficiency improvement targets that have been set, should be sufficient to maintain existing levels of service.

  Young Offender Institutions
  Dr. Cable
  To ask the Secretary of State for the Home Department if he will make a statement on conditions in young offender institutions in England and Wales. [80974]

  Mr. George Howarth
  Conditions in young offender institutions in England and Wales vary greatly between, and even within, some establishments. Some are of a high standard while others are in need of considerable improvement. The Government have demonstrated their commitment to improve conditions by, for example, the provision of an additional £51 million over three years for the under-18 estate and its regimes, and through the inclusion of 12 young offender institutions in the welfare-to-work initiative.

  Volunteers (Criminal Records)
  Dr. Julian Lewis
  To ask the Secretary of State for the Home Department if he will make a statement about the cost to voluntary organisations of obtaining access to criminal records of applicants to work with young people. [80975]

  Mr. Boateng
  We have received representations on this issue from a number of voluntary organisations. We considered very carefully whether there was any way in
  71
  which free checks could be provided for volunteers. Whilst we acknowledge the very valuable contribution volunteers make, we have concluded that it will not be practicable to provide any free checks from the Criminal Records Bureau for volunteers or for any other groups. We realise that this is unwelcome news, but providing free checks would prove an unsustainable burden on the public purse and may increase demand for certificates from the Bureau to an uncontrollable extent. In addition, we do not consider it would be fair to allow volunteers to have free certificates when there are other equally deserving groups such as school leavers, the unemployed and disabled people. The level of fees for certificates from the Bureau will be kept to the minimum necessary to recoup costs.

  Equal Opportunities
  Dr. Harris
  To ask the Secretary of State for the Home Department what assessment he has made of the effect on equal opportunities and racial equality at work of his proposal to make employers liable for the immigration status of their employees. [80977]

  Mr. Mike O'Brien
  There have been reports that some employers may be adopting discriminatory practices when seeking to secure a defence under section 8 of the Asylum and Immigration Act 1996. The Government share the concern of the Commission for Racial Equality and others at the substance of the reports, whilst recognising that such action may not be directly attributable to section 8.

  Proposals at Clause 13 of the Immigration and Asylum Bill, currently before Parliament, are designed to strengthen the safeguards against possible discriminatory practices. They re-emphasise to employers their statutory duty to avoid racial discrimination in their recruitment practices when seeking to secure the statutory defence.

  Scout Movement
  Mr. Colvin
  To ask the Secretary of State for the Home Department what estimate he has made of the additional costs which will have to be borne by the Scout movement as a result of his proposal to establish and fund a criminal records bureau for England and Wales. [80978]

  Mr. Boateng
  I have not made an estimate of any additional costs which might accrue to the Scout movement as a result of checks which may be carried out with the Criminal Records Bureau. I understand that the Scout Association has estimated that additional costs of £750,000 per year will accrue to them, but I have no knowledge of the basis on which they have reached this estimate.

  Probation Service
  Mr. David Heath
  To ask the Secretary of State for the Home Department if he will make a statement on his plans to reform the Probation Service. [80979]

  Kate Hoey
  Following a public consultation, we have decided to create a new, unified Probation Service for England and Wales, comprising 42 local operational areas that will match the police force area boundaries. The new Service will include the following key elements:The day-to-day running and management of the service in each area will be, as now, in the hands of chief probation officers, but they will be employed and appointed by the Home Office; and
  72
  led by a Director;
  A local Probation Board will supervise the work of the service in each area within the national framework;
  The Chairman of each Board will be appointed and paid by the Home Office, and the appointment of individual members of Boards will be approved by the Home Office;
  Chief Probation Officers will be members of these Boards;
  The Boards will have a more strategic role and a more diverse composition, and will be more representative of the wider criminal justice system and the wider community;
  The Boards will employ, as probation committees do now, the remainder of the probation service staff.
  There will be a light regional touch, which the Prison Service is also planning to reflect in its future management structure, enabling that Service to match groups of police force areas;
  The new Probation Service will be entirely funded by central Government, ending the current arrangements whereby local authorities make a contribution of 20 per cent.;
  The Home Secretary of the day will take full responsibility for the performance of the service and be accountable to Parliament for it; and
  The Home Secretary of the day will take greater powers to direct necessary outcomes and standards of service delivery.

  Some elements of these proposals require primary legislation which will be introduced when Parliamentary time permits. With the Lord Chancellor and the Secretaries of State for Health and for Wales, I have also been considering the future organisation of court welfare services, including work that is currently undertaken by the probation services for the family courts. We expect to announce decisions on the way forward shortly.

  Referendum Campaigns
  Mr. Day
  To ask the Secretary of State for the Home Department when he intends to implement the recommendations of the Neill committee on the conduct of referendum campaigns. [80980]

  Mr. Straw
  We intend to publish our response to the Committee's report in the form of a draft Bill before the Summer Recess; and we hope to have new arrangements in place by the time of the next general election.

  Community-oriented Sentences
  Mr. Bennett
  To ask the Secretary of State for the Home Department what measures he is taking to encourage the use of community-oriented sentences. [80981]

  Mr. Boateng
  Community sentences have a role to play in preventing crime and tackling offending behaviour. They are a crucial part of the Government's sentencing strategy.

  We are developing a portfolio of supervision programmes evidentially proven to be effective, which can be implemented nationwide, and, jointly with the Prison Service, systems for accrediting programmes and assessing offenders' risks and needs.

  It is important that community penalties are rigorously enforced. We have therefore issued further guidance to probation services and will look to tighten enforcement requirements in Probation Service National Standards, which are currently being reviewed.

  Electoral Registration
  Mr. Barnes
  To ask the Secretary of State for the Home Department if he will make a statement concerning the reform of electoral registration procedures and practices. [80982]

  Mr. Straw
  Electoral registration procedures, including encouragement of registration, public access to the register, and a proposed new system of rolling registration, are being considered by my Working Party on Electoral Procedures. The Working Party will present its final report later this year.

  Millennium (Liquor Licensing Hours)
  Mr. Illsley
  To ask the Secretary of State for the Home Department what proposals he has for amending liquor licensing hours on 31 December 1999; and if he will make a statement.[80983]

  Mr. George Howarth
  A proposed order was laid on 13 April. If approved by Parliament, this will extend normal licensing hours overnight each New Year's Eve until normal opening time on each New Year's Day, beginning with the millennium. There would be no requirement on operators to open at any particular time; it would be for them to judge whether or not to stay open and for how long.

  The legislation would allow licensing authorities to impose appropriate restrictions on opening hours where it is shown that later opening is likely to lead to nuisance or disturbance. Applications for such restrictions could be made by the police, a local authority or an individual resident, or someone acting on their behalf.

  Subject to Parliamentary approval, this change would come into force this summer, so that businesses could complete their planning for the coming New Year.

  Crime and Disorder Strategies
  Mr. Bill O'Brien
  To ask the Secretary of State for the Home Department if he will make a statement on progress in establishing local crime and disorder strategies. [80985]

  Mr. Casale
  To ask the Secretary of State for the Home Department if he will make a statement on progress in establishing local crime and disorder strategies. [80987]

  Mr. Boateng
  The Crime and Disorder Act 1998 required the local authority and police in every area to formulate, by 1 April 1999, a strategy for the reduction of crime and disorder over the next three years. Therefore, all local crime and disorder reduction partnerships—over 400 of them in England and Wales—should now have strategies in place and be starting to implement them.

  Police Funding
  Mr. Sutcliffe
  To ask the Secretary of State for the Home Department what discussions he has had with police authorities on the funding of policing in the poorest neighbourhoods. [80988]

  Mr. Boateng
  In discussions with Ministers on funding issues, police authorities have recognised that the allocation of resources and the deployment of officers within the force area are matters for determination locally 74
  within the overall budget. Police authority budgets are set to increase on average by 3.1 per cent. in 1999/2000. In addition, local authorities can make grants to police authorities for additional policing services in particular neighbourhoods.

  In addition, we recently announced the shortlist of the first eleven targeted policing projects under the crime reduction programme. These projects are worth about £5 million in total out of the £32 million which will be made available for targeted policing over the next three years as part of the programme. Ministers recognise the importance of ensuring that deprived and disadvantaged neighbourhoods are amongst those who benefit from these and other crime reduction initiatives.

  Mr. Todd
  To ask the Secretary of State for the Home Department what assessment he has made of the relationship between funding of police forces, the number of officers directly serving the public and a force's performance. [80984]

  Mr. Boateng
  The Annual Audit Commission report on Police Performance, published in January, found that there is no direct link between increased spending and improved performance in police forces. The report also showed that success in detecting crime does not depend solely on the numbers of police officers available.

  Partnerships between the police and other agencies, targeted policing, better use of information technology, and the efficient and effective use of available resources all have an important part to play in improving police performance. As part of the drive towards Best Value, we are working with the police service to strengthen the link between increased spending and improved performance.

  Anti-social Behaviour Orders
  Mr. Jenkins
  To ask the Secretary of State for the Home Department what response he has received from local crime and disorder partnerships to the introduction of anti-social behaviour orders. [80956]

  Kate Hoey
  The provisions relating to anti-social behaviour orders came into effect on 1 April 1999. It is therefore too early to know what use local crime and disorder partnerships will make of them. I understand, however, that a number of partnerships are actively considering them as tools in their crime strategies.

  Bail Support
  Dr. Cable
  To ask the Secretary of State for the Home Department what funding allocation his Department has made for the development of local bail support provision for 1999–2000 and the following two years. [81636]

  Mr. George Howarth
  The Youth Justice Board for England and Wales, established under section 41 of the Crime and Disorder Act 1998, is responsible for administering a fund of £85 million over three years from April 1999 for the development by local authorities and other bodies of good practice in the operation of the youth justice system, the provision of youth justice services and other work to prevent offending by children and young people. It is expected that £35 million of the fund will be used to develop bail support and supervision schemes and other remand-related initiatives.

  Coroners
  Dr. Lynne Jones
  To ask the Secretary of State for the Home Department when he expects the model charter for coroners courts to be made available. [82175]

  Mr. George Howarth
  We expect to be in a position to issue the model charter as a framework guide to coroners and their Councils later in the summer.

  Dr. Lynne Jones
  To ask the Secretary of State for the Home Department what is the average age of(a) full-time and (b) part-time coroners. [82177]

  Mr. George Howarth
  According to the survey of the coroner service conducted by the Home Office in 1996, the average age of all coroners was then 58. Such information is not collected or updated routinely.

  Dr. Lynne Jones
  To ask the Secretary of State for the Home Department if he will list the relevant qualifications held by coroners and their job descriptions. [82176]

  Mr. George Howarth
  Coroners must have a five year general qualification within the meaning of section 71 of the Courts and Legal Services Act 1990, or be a legally qualified practitioner of not less than five years' standing.

  Probation Service resources

  £million1

  1993–94 outturn

  1994–95 outturn

  1995–96 outturn

  1996–97 outturn

  1997–98 outturn

  1998–99 estimated outturn

  1999–2000 plans

  2000–01 plans

  2001–02 plans

  Expenditure2

  381·6

  405·3

  420·2

  435·7

  428·9

  435·1

  453·4

  480·2

  502·7

  (420·8)

  (440·7)

  (443·9)

  (446·6)

  (423·5)

  (430·5)

  (444·8)

  (454·3)

  Central government

  308·1

  328·1

  339·9

  352·4

  346·3

  352·2

  363·1

  384·6

  402·6

  support3

  (339·8)

  (356·8)

  (359·1)

  (361·2)

  (342·8)

  (344·8)

  (356·2)

  (363·8)

  Capital grant and

  19·6

  18·5

  17·2

  17·2

  13·6

  13·6

  (17·1

  13·6

  13·6

  credit approvals4

  (21·6)

  (20·1)

  (18·1)

  (17·6)

  (13·2)

  (16·2)

  (12·6)

  (12·3)

  Capital

  3·1

  4·1

  3

  2·4

  3·4

  2·4

  2·4

  2·4

  2·4

  expenditure—

  (3·4)

  (4·5)

  (3·1)

  (2·5)

  (2·3)

  (2·3)

  (2·2)

  (2·2)

  hostels5

  Current

  26·2

  23·7

  26

  23·9

  24·5

  25·7

  26·5

  30·7

  30·7

  expenditure—

  (28·9)

  (25·8)

  (27·5)

  (24·5

  (25)

  (25·1)

  (28·4)

  (27·7)

  hostels

  1Figures in brackets at 1997–98 prices

  2Local Government expenditure (current and capital only) excludes local authority contribution for probation and bail hostels

  3Current and capital grants and credit approvals to local authorities. Figures from 1995–96 include devolved moneys from supervision and accommodation grants provision

  4Disaggregated from Central Government support from the start of the new capital financing system

  5Net Central Government provision. The Home Office pays 100 per cent. grant on hostel capital expenditure and 80 per cent. grant on running costs. The remaining 20 per cent. of running costs is provided by, and 20 per cent. of capital expenditure recouped from, local authorities which make flat payments for each hostel resident.

  Curfew Responsibility
  Mr. Clappison
  To ask the Secretary of State for the Home Department what is the average time between a request for a curfew home circumstances report being signed by a prison governor and being received by the Probation Service. [81952]

  Mr. George Howarth
  The signature or authorisation of a prison governor is not necessary before a request for a contribution to the risk assessment from the Probation Service can be made. Such requests, either on form HDC3 or form PD1, are made following the initial sift of cases 76
  Coroners are appointed by the relevant local Councils. Details of the actual qualifications held by coroners, and their job descriptions, are not recorded centrally.

  Dr. Lynne Jones
  To ask the Secretary of State for the Home Department what plans he has for(a) compulsory and (b) voluntary training programmes for coroners. [82201]

  Mr. George Howarth
  We have no plans to require coroners to undergo training either before or after their appointment. There is an existing programme of training courses organised by the Home Office for coroners. In addition, coroners are encouraged to attend appropriate training events organised by other agencies and professional bodies.

  Probation Services (Funding)
  Mr. Beith
  To ask the Secretary of State for the Home Department what was the total level of funding for each probation service in each of the last three years and the real terms change in funding levels over that period; and what is the planned real terms change in funding for 1999–2000. [81559]

  Mr. George Howarth
  The table shows the total revenue cash limit available to each probation area in this and the last three financial years; the real terms value of the last three years' cash limits at 1999–2000 prices using the latest Treasury deflators, and year on year changes.

  and are usually sent by fax to ensure that the Probation Service receives them as soon as possible. No central records are kept of the time it takes for the forms to reach the home Probation Service.

  Departmental Legal Business
  Mr. Dismore
  To ask the Secretary of State for the Home Department if he will make a statement on his Department's policy when(a) conducting legal proceedings and (b) seeking legal advice as to the circumstances in which Queen's Counsel should be instructed; and for each of the last three years (i) on how

  77
  many occasions his Department instructed Queen's Counsel and (ii) what was the total cost of instructing Queen's Counsel. [81756]

  Mr. Straw
  The Home Office predominately uses junior counsel when it is necessary to instruct counsel to provide legal advice or to conduct legal proceedings.

  The two First Treasury Counsel are both junior counsel and they will advise and represent the Government without a Queen's Counsel in many of its important cases. In addition, the Attorney-General maintains four panels of junior Counsel whom Departments are expected to use for the majority of the Government's civil litigation. The Law Officers' approval is required before a Queen's Counsel can be instructed to appear.

  In determining the level of counsel to use, the Department considers the individual circumstances of each case. It takes into account, inter alia, the importance and sensitivity of the case, the complexity of the law, the weight and complexity of the evidence, and the degree of experience and expertise required, before deciding whether to instruct Queen' s Counsel or junior counsel.

  The number of occasions on which the Home Office instructed Queen's Counsel in the last three years, and the cost of doing so, cannot be given without incurring disproportionate cost.

  Cleveland Police
  Dr. Kumar
  To ask the Secretary of State for the Home Department what is the amount of money paid by Cleveland Police to each of the three Cleveland police officers relating to the libel case involving allegations of sexual harassment; and if he will make a statement. [81850]

  Mr. Boateng
  On counsel's advice, the case was settled out of court and agreement was reached to pay each of the male officers £15,000.

  Dr. Kumar
  To ask the Secretary of State for the Home Department if he will publish the legal costs of Cleveland Police in the recent libel case relating to allegations of sexual harassment against three Cleveland police officers; and if he will make a statement. [81851]

  Mr. Boateng
  The total legal costs for this case are not yet available.

  Dangerous Dogs
  Mr. Maclean
  To ask the Secretary of State for the Home Department (1) if he will introduce measures to prohibit dogs with a history of aggression which have been deposited in an animal welfare centre from being rehoused with members of the public; [81780]

  (2) if he will assess the risks to members of the public from animal rescue charities and organisations finding new homes for dangerous dogs. [81772]

  Mr. George Howarth
  It is not in the interests of animal welfare organisations, or the animal for which they are custodians, to attempt to re-house an unsuitable dog. We would expect such organisations to operate responsibly and carry out a behavioural assessment of the dog and the suitability of the intended home before re-housing.
  78
  Mr. Maclean
  To ask the Secretary of State for the Home Department what discussions he has had with ACPO on the workings of legislation relating to the control of dogs. [81773]

  Mr. Boateng
  There have been no discussions with the Association of Chief Police Officers (ACPO) about the workings of dangerous dogs legislation. ACPO is consulted about the terms of any guidance which may be issued about dangerous dogs, most recently in 1997 and 1998.

  Refugees
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department how many refugees have been admitted into the United Kingdom since 24 March; and in which local authority areas they have been accommodated. [82063]

  Mr. Mike O'Brien
  It is not possible to identify the number of genuine refugees who have been admitted to the United Kingdom. Those seeking asylum are granted temporary admission to the country while their application is considered. Only after consideration of their claim can a decision be made to recognise the applicant as a refugee.

  Information on the number of asylum seekers arriving since 24 March is not available. But in the whole of March a total of 5,060 applications were received of which 3,150 were lodged in-country and 1,910 were made at the port of entry. Information on the local authority areas in which they are accommodated is not held centrally.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department if the United Kingdom has placed a limit on the number of refugees it is prepared to accept as a result of the Kosovo crisis. [82084]

  Mr. Straw
  No.

  Firearms Compensation Scheme
  Mr. Rendel
  To ask the Secretary of State for the Home Department (1) if he will announce a date by which all outstanding payments under the compensation for handguns scheme will be completed; [82026]

  (2) how many people who have handed in large or small calibre hand-guns to the police are still waiting to receive final payments under the two firearms compensation schemes; [82025]

  (3) what action he is taking to reduce the time it is taking to process compensation payments for people who have handed in handguns to the police. [82027]

  Mr. Boateng
  Payment offers have been made on all, but around 250 claims, mainly under Option C of the compensation schemes, cannot yet be fully processed. This is principally because the required evidence of value of the surrendered guns and ancillary equipment has not yet been provided. There are around 2,600 outstanding offers of payment, mainly where the claimant has not yet responded, or where the amount of the offer is in dispute. It is not possible to give a firm date for the completion of all payments, as this depends in part on the claimant's response to the payment offer.

  Immigration (Marriages of Convenience)
  Mr. Stringer
  To ask the Secretary of State for the Home Department if he will make a statement on his Department's policy on unannounced visits to check if a marriage is one of convenience for immigration purposes. [82013]

  Mr. Mike O'Brien
  The Department's policy is to make unannounced visits in cases where caseworking staff consider, from the evidence available and from prior checks, that there are strong grounds to suspect that the couple are not living together or that the marriage is otherwise not genuine.

  Millennium Compliance
  Mr. Best
  To ask the Secretary of State for the Home Department what provisions have been made by his Department in respect of emergency planning for the millennium bug. [80968]

  Mr. Straw
  There are comprehensive and well-developed inter-agency arrangements for dealing with emergencies in the United Kingdom, whatever their cause. Because the millennium bug and large-scale millennium celebrations present additional risks, these

  Number of pupils aged 15 or over leaving school without any A level, AS level, O level, CSE or GCSE qualifications

  Maintained schools in local authority area

  1986–87

  1987–88

  1988–89

  1989–90

  1990–91

  1991–92

  1992–93

  1993–94

  1994–95

  1995–96

  Clwyd

  455

  565

  445

  355

  335

  450

  380

  310

  335

  315

  Dyfed

  720

  750

  470

  565

  570

  335

  405

  350

  360

  365

  Gwent

  1,105

  1,130

  935

  815

  900

  645

  635

  620

  750

  660

  Gwynedd

  465

  490

  305

  325

  280

  235

  205

  145

  220

  190

  Mid Glamorgan

  2,325

  2,030

  1,770

  1,570

  1,280

  1,100

  915

  950

  1,050

  1,160

  Powys

  135

  145

  80

  105

  45

  75

  65

  70

  85

  130

  South Glamorgan

  1,065

  970

  700

  680

  560

  645

  575

  555

  715

  580

  West Glamorgan

  765

  945

  620

  650

  385

  500

  470

  375

  435

  420

  Wales (including Independent schools)

  7,130

  7,090

  5,345

  5,080

  4,400

  4,030

  3,695

  3,395

  3,975

  3,855

  Sources

  For years up to and including 1990–91: the School Examinations Survey, a 10 per cent. Sample of school lavers from maintained and independent schools.

  For 1991–92 onwards, the RD1 (Intended Destinations of Pupils) Survey of all maintained schools and independent schools. The survey typically recorded the destination and examination achievements of over 98 per cent. of pupils

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

  Education (Expenditure)
  Mr. Wilshire
  To ask the Secretary of State for Wales how much central Government money was spent per capita in 1998 in Wales on(a) primary schools, (b) secondary schools, (c) further education colleges and (d) universities. [82200]

  Mr. Hain
  The majority of central Government money for education in schools is provided to local authorities by the unhypothecated revenue support settlement, and in 1997–98 (on the latest information available) the local authority unit costs per pupil are:

  £

  Nursery and primary

  1,902

  Secondary

  2,609

  Nursery, primary and secondary

  2,187

  80
  arrangements have been enhanced. Initiatives include assessments of local authorities' emergency planning arrangements and a series of inter-agency events and seminars, delivered in central London, at the Emergency Planning College and in regional centres.

WALES

  Unqualified School Leavers
  Mr. Ruane
  To ask the Secretary of State for Wales how many young adults left school without a basic qualification in each local authority area in Wales in each of the past 10 years. [81335]

  Mr. Hain
  Information on the examination achievements of school leavers is unfortunately available only for years up to and including the 1995–96 academic year. It relates to those pupils aged 15 or over leaving school with no A level, AS level, O level, CSE or GCSE qualifications in each local authority area before local government reorganisation in Wales in 1996. Some of these pupils may have gained other qualifications such as the Certificate of Education. This information, covering the 10 years up to and including 1995–96, is contained in the following table.

  The largest specified grant provided to local authorities by central Government for schools is the Grants for Education Support and Training (GEST) and it is set out along with other specified grants for schools in table 5.01 of the 1999 Departmental Report, copies of which are available in the Library of the House. Information is not yet available centrally on how much of these grants is spent separately in primary or secondary schools.

  Per capita funding for full-time equivalent students in further education institutions in Wales in 1998–99 (the latest outturn year available) was £2,790. The equivalent figure for higher education was £3,406.

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

  Mr. Wilshire
  To ask the Secretary of State for Wales how much central Government money was spent per capita in 1998 in Wales on books and stationery in(a) primary schools and (b) secondary schools. [82199]
  81
  Mr. Hain
  Expenditure on educational equipment, furniture and materials, which covers books and stationery, in 1996–97, the latest year for which figures are available, was £61.50 per pupil in nursery and primary schools and £109.20 per pupil in secondary schools.

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

  Mr. Wilshire
  To ask the Secretary of State for Wales how much central Government money was spent per capita in 1998 in Wales on grants to(a) voluntary aided schools and (b) voluntary controlled schools. [82197]

  Mr. Hain
  Capital grants to voluntary-aided schools in Wales in 1997–98 equated to £399 per pupil. The revenue costs of voluntary-aided schools and the revenue and capital costs of voluntary-controlled schools are funded by local authorities.

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

  Wind Farms
  Dr. Marek
  To ask the Secretary of State for Wales when the letter from the hon. Member for Wrexham to him of 5 April about the Mynydd y Cemmaes wind farm extension planning application was brought to his attention; and when he expects to reply. [82037]

  Mr. Michael
  I have replied to the hon. Member and have placed a copy in the Library of the House.

  Dr. Marek
  To ask the Secretary of State for Wales (1) if he will list the procedures which he follows when he is minded to overturn a planning decision made by one of his inspectors; [82038]

  (2) what procedures he followed in his consideration of the planning inspector's report on the application for an extension to the wind farm at Mynydd y Cemmaes; [82040]
  82
  (3) if he will rescind his decision to allow the application for an extension to the wind farm at Mynydd y Cemmaes and pay all appropriate compensation; [82066]

  (4) what discussions he had with ministerial colleagues prior to his decision to overturn his inspector's decision not to grant planning permission for an extension to the wind farm at Mynydd y Cemmaes. [82041]

  Mr. Jon Owen Jones
  Under the provisions of the Town and Country Planning Act 1990 the decision is final. It is not open to Ministers to comment on the merits of the decision or the reasoning behind it. The decision was reached taking account of all relevant considerations, one of which was the Inspector's recommendation.

  The conclusions reached by a planning inspector, following a public inquiry, are put to the Welsh Office as recommendations not reasons. The decision is final whether taken directly by the Secretary of State or under delegated powers.

  I am satisfied that the handling and determination of this application was carried out having proper regard to all relevant requirements including the Town and Country Planning (Inquiries Procedure) Rules 1992. It is not open to the Department to rescind the decision.

  I had no conversations with Ministerial colleagues on this application. The inspector's recommendations were available to me alongside advice from officials.

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

  Dr. Marek
  To ask the Secretary of State for Wales if he will list the visits to wind farms by his Department's Ministers in the last year, indicating upon whose invitation each visit was made. [82039]

  Mr. Jon Owen Jones
  The Under-Secretary of State, my hon. Friend the Member for Bridgend (Mr. Griffiths) toured Bryn Titli and Carno wind farms, Mid Wales, with National Wind Power and Bonus Energy UK on 1 May 1998. I toured Carno Wind farm, Mid Wales, with National Wind Power and Bonus Energy UK on 1 October 1998.

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

Turkey: Progress towards EU Membership
Lord Avebury Lord Avebury asked Her Majesty's Government:
What developments they perceive to have taken place since December 1997 to bring Turkey into alignment with the conditions set for entry into the European Union accession process by the European Council's declaration, A European strategy for Turkey.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, we share the analysis in the Commission's November 1998 report on Turkey's progress towards European Union membership. The report noted that Turkey had most of the hallmarks of a market economy but still needed to address shortcomings in the areas of human rights, treatment of minorities and the lack of civilian control over the army. The report stressed also the need for a peaceful solution to the problems in south-east Turkey.
Lord Avebury: My Lords, does the noble Baroness recall that in the Luxembourg Declaration, one of the most important conditions was the alignment of human rights practices and standards in Turkey with those in force in the European Union? In the light of the reports on the missions of the UN rapporteur on torture and the working group on disappearances, does the Minister agree that Turkey is still a long way short of meeting those standards? Does she agree with the opinion expressed in the working group's report that until a
2
solution is found to the conflict in the south east, we can never expect that Turkey will attain the standards required for accession to the European Union?
Baroness Symons of Vernham Dean: My Lords, the noble Lord is quite right that that is what was said at Luxembourg. But quite a lot has happened since then and it behoves the noble Lord to consider also what else has been said. The Cardiff European Council endorsed the European strategy for Turkey. That strategy is extremely important because it aims to prepare Turkey for membership of the European Union. That agreed to annual reports on Turkey's progress towards a readiness for European Union membership.
It is important to remember that Turkey receives MEDA funding which is worth some 375 million ecus for projects in the areas of human rights, democracy and civil society. Therefore, I believe that the European strategy has moved us on from Luxembourg and that considerable effort is being made to ensure that Turkey meets international standards on human rights.
Lord Pilkington of Oxenford: My Lords, does the Minister accept that Turkey faces a problem, which we know, only too sadly, is common in the world, in that a large section of its population refuses to accept the legitimacy of the government? Therefore, does she not feel that the European Union could help to mediate and persuade the Kurdish population to accept the legitimacy of the Turkish state and persuade the Turkish state to face its responsibilities? Rather than attacking the Turkish state, we should try to help it.
Baroness Symons of Vernham Dean: My Lords, the two strategies are not mutually exclusive. As the noble Lord, Lord Avebury, reminded us, we have a duty to point out to Turkey where it is falling short of standards on human rights. But the noble Lord, Lord Pilkington, is right that Turkey suffers from a good deal of terrorism within its boundaries. We know about the threats of the PKK. I make a distinction between that and the difficulties with the Kurds. But the European Union is doing all it can, both in relation to the funding, to which

3
I referred, and the plans which we are trying to discuss now on ways to take forward Turkey's candidature for EU membership.
Lord Hylton: My Lords, will the Minister confirm that since 1982 no fewer than 14 political parties have been disbanded by the state? Is that not nearly 1 per year? Does that not make rather a mockery of normal political life and parliamentary institutions as we understand them?
Baroness Symons of Vernham Dean: My Lords, the problems as regards organising political parties in Turkey are matters of record. But it is the case also that Turkey has recently held an election. Questions have been raised about that election. We last discussed that matter in your Lordships' House on 22nd February when we discussed the role of the OSCE in monitoring that election. The Government now look forward to working with the Turkish Government on the important questions that we have been discussing in relation to European enlargement and the important question of human rights.
Lord Rea: My Lords, now that the Turkish elections are over and the PKK leader, Abdullah Ocalan, is facing trial, will the Government urge Turkey to release the leaders of the legitimate HADEP party who are facing charges at present? It seems that the charges may not withstand legal scrutiny.
Baroness Symons of Vernham Dean: My Lords, the noble Lord is right that the difficulties of the HADEP party are great. We are aware of the reports of 500 HADEP supporters and officials being arrested in the wake of the detention of Mr. Ocalan. Our embassy in Ankara is in regular contact with HADEP officials. We are extremely concerned by the reports of continuing raids on HADEP offices and the detention of its officials. Our ambassador in Turkey raised with the Prime Minister's office the report that 3,000 HADEP members and officials were detained in November. We condemn strongly the systematic attacks on a legal and democratic party.
Lord Dholakia: My Lords, I welcome the Minister's statement. Will she accept that HADEP, which is a pro-Kurdish party, does not preach violence; that it denies any connection with the PKK; but that there is an unprecedented level of harassment of that political party in terms of arrests, detention, police harassment, buses not being able to reach rallies and so on? Therefore, will the Minister make it clear that unless the record of the Turkish state and government improves in relation to human rights, Turkey will have no place in Europe?
Baroness Symons of Vernham Dean: My Lords, I hope that I have made clear the views of Her Majesty's Government on the arrest of the HADEP members, both those who were arrested last year and those arrested more recently. We repeatedly raised the
4
question of the imprisonment of the four Kurdish former democracy members with the Turkish Government. We stressed that the conviction of elected politicians for the non-violent expression of their opinions can only damage Turkey's international standing. Therefore, I believe that we have raised these issues both as they affect a number of HADEP members in general and where they affect the individual members of HADEP who are also in parliament.
Baroness Chalker of Wallasey: My Lords, will the Minister encourage her colleagues to give support to those trying to promote and train in civil society a real sense of democracy in Turkey? This matter has never been tackled properly. It could be done well by both this country and our partners in the European Union. Will the Minister support that?
Baroness Symons of Vernham Dean: My Lords, I hoped that I had already made that quite clear. The money which I referred to a moment or two ago—the MEDA funding from the European Union—is to be used not only for projects on human rights; the noble Baroness will be pleased to know that it will also be used for projects on democracy and civil society. Therefore, EU money is already going in that direction. I hope also that some of the European strategy money, which will be worth some 50 million euros over a three-year period, will be used to strengthen such institutions within Turkey.

Civil Justice Reforms
2.44 p.m.
Lord Hunt of Wirral Lord Hunt of Wirral asked Her Majesty's Government:
Whether they consider that all necessary systems and resources are in place for the introduction today of Lord Woolf's civil justice reforms.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, through new unified Civil Procedure Rules which come into force today throughout all our courts, civil justice will be transformed. There will be a major shift in the control of litigation from lawyers to the courts through a system of hands-on case management by judges, and by bearing down on excessive delay, cost and over-manning by lawyers. From today there are systems and resources in place to ensure immediate benefits for court users. The development of fuller IT systems over time will benefit from developing experience in the new working methods and processes which start today.
Lord Hunt of Wirral: My Lords, is the noble and learned Lord the Lord Chancellor aware that although there is widespread support for the way in which he has continued the crusade started by my noble and learned friend Lord Mackay of Clashfern, and spearheaded by the noble and learned Lord, Lord Woolf, for these tremendous reforms, the most important for over 100 years, there are some continuing concerns? The

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complicated IT system is not yet in place. There are a number of deputy district judges not yet trained in the new rules, and last week some further amendments to the rules—69 altogether—were announced, including six new practice directions. Bearing that in mind, and the desire to achieve fairer and faster justice, will the noble and learned Lord the Lord Chancellor institute a careful system of monitoring so that we can ensure that such rules and changes will produce the desired effect?
The Lord Chancellor: My Lords, the noble Lord's interest in and valuable contributions to this subject are well known. From today there will be in place administrative systems plus an enhancement of the existing Caseman IT system in courts. There will be a new IT system to support diary managers in case progression and an upgrading of the IT system in the County Court Bulk Centre. I expect a full administrative IT system to be in place during 2000, but there will, with immediate effect, be vital experience and great benefits for court users to be gained. I certainly bear in mind what the noble Lord said about the need for evaluation. We are currently working on evaluation plans which will bolster the qualitative and quantative element. I will keep him informed of the development of such plans. In the shorter term, on 16th July there will be a review conference of designated civil judges, court service staff and court users. I will report to him on the outcome of that conference too.
Lord Borrie: My Lords, does my noble and learned friend agree with me that among the beneficiaries of the new reforms will be those who are seeking to recover unpaid debts, and that small businesses will particularly benefit? Has he any plans for ensuring that the enforcement of judgments is made more effective than at present so that judgments are not mere pieces of paper?
The Lord Chancellor: My Lords, I entirely agree with the noble Lord that all is not satisfactory with the system of enforcement of judgments. There is not much point in winning in the court if you do not recover the money to which you are entitled. Within my department there is an ongoing investigation and consultation exercise aimed at modernising the enforcement process.
Viscount Bridgeman: My Lords, is the noble and learned Lord the Lord Chancellor happy with the timing of this change in view of the published concerns of the Law Society about the impact of the early introduction of such reforms; its concerns at the lack of resources available for IT; the fact that no further judges will be appointed and the court staff are to be reduced by 800 over the next three years?
The Lord Chancellor: My Lords, there has been the fullest of consultations. We have listened to all the concerns. The House debated these changes in July last year and further amendments were laid before Parliament on 30th March. Every full-time judge in England has been fully trained and the court staff are trained. I have visited courts up and down the country
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including the Mayor's Court in London on Friday. Everybody is brimful of confidence and enthusiastic. I have to say to the noble Lord that he should take what comes from the Law Society with a pinch of salt.
Lord Monkswell: My Lords, am I right in believing the newspaper reports that one of the changes being instituted is the modernisation of legal jargon? If so, what steps are being taken to ensure that Acts of Parliament on which the courts base their judgments are similarly modified?
The Lord Chancellor: My Lords, no one is more in favour than I of a simpler statute book. But the principle benefit for court rules arising from these reforms is that the Latin language is to be expunged. Lawyers therefore will have to talk to one another in Latin in private from now on. However, of the many vices from which the statute book suffers, Latin is not one.
Lord Mackay of Clashfern: My Lords, will the noble and learned Lord accept my hearty congratulations to him and his colleagues on reaching this stage in these important reforms? Notwithstanding his heavy commitment this morning on the "Today" programme in debate with the Law Society, has the noble and learned Lord had an opportunity to read Professor Scott's letter in The Times? If so, does he have: any comment on it?
The Lord Chancellor: My Lords, I confess that: I have not read it. However, as soon as I leave the Woolsack I shall do so because I take my guidance on reading from my noble and learned predecessor. Perhaps I may take this opportunity of saying that great credit is due to the noble and learned Lords, Lord Woolf and my predecessor, for taking important initiatives in this area which this Government are now carrying through to success.
Lord Brookman: My Lords, my question has already been partly answered. But will the noble and learned Lord inform the House whether the courts are ready to cope with the new system? Also, is he satisfied?
The Lord Chancellor: My Lords, we put an extra £1.5 million into the pay bill recently to help clear the backlog of cases; there were an extra 2, 400 sitting days in the last financial year; and despite a falling workload and additional computer support for family work, staffing levels have not only been maintained but 124 new posts have been allocated with 60 assigned to support case tracking. The circuit administrators assure me that the courts are ready. As I said earlier, I visited the Mayor's Court in the City on Friday. Everything that I have heard is encouraging and the reports coming back from the courts today throughout the country are extremely good.
Baroness Gardner of Parkes: My Lords, following the question of the noble Lord, Lord Borrie, who said it would help small businesses, will the noble and learned Lord tell us how ordinary people will find out how to

7
use the simplified procedure at the very bottom of the scale where in the past they would simply have applied for a county court summons for the debt?
The Lord Chancellor: My Lords, I do not know whether ordinary people, as the noble Baroness refers to them, have access to websites. All the new rules, protocols and guidelines—I encourage the noble Baroness to follow my advice—are available on my department's website and can be accessed free of charge.

Slaughterhouses: EU Regulations
2.53 p.m.
Lord Beaumont of Whitley Lord Beaumont of Whitley asked Her Majesty's Government:
What steps they propose to take to protect small, efficient, hygienic slaughterhouses from bankruptcy as a result of certain European regulations.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue): My Lords, the Government recognise the valuable contribution which small slaughterhouses make to the economy. But they cannot be exempt from the requirements of European Union law.
Lord Beaumont of Whitley: My Lords, I thank the noble Lord for that reply, but not as much as I thank the Government for the statement made by Mr. Brown on 21st April at col.993 of the Commons Hansard, which went considerably further to announce the Government's intention to ensure that small specialist slaughterhouses did not suffer. He announced that there would be an interim period during which the Government would carry the costs. I am surprised the Minister did not refer to that in his Answer. He also said that there would be a review. Will the Minister say when the review will start and when it is expected to report?
Lord Donoughue: My Lords, my right honourable friend announced that the proposed charges on specified risk materials were to be deferred for a year, and that the increased charges for meat hygiene inspection were being deferred while a review was undertaken on the impact of charges on that industry and on the ways in which we can rightly impose the requirements of the European Union, but not over-implement them. I did not refer to that statement because I was confident that the noble Lord would take the opportunity so graciously to thank us. We hope that the review will be completed within two months.
Baroness Trumpington: My Lords, will the review look into the case of fallen animals and, in that regard, the provision of slaughterhouses on a purely geographical basis? For instance, if there is a fallen
8
animal on the Isle of Wight, I do not believe there is a slaughterhouse on that island. That produces great difficulties for both farmers and fallen animals.
Lord Donoughue: My Lords, I agree with the noble Baroness. That issue does not arise specifically within the remit of the inquiry, but I shall certainly draw it to the attention of the department for consideration.
Lord Davies of Coity: My Lords, having in the past represented the interests of those employed in slaughterhouses, I am of course concerned with the security of employment. At the same time, the question of closures and bankruptcies in slaughterhouses ought to be kept in proportion. Therefore can my noble friend advise the House on how many slaughterhouses were closed under the previous administration and how many have been closed under Labour?
Lord Donoughue: My Lords, I thank my noble friend for that question. If we take England and red meat slaughterhouses, which are the heart of the industry, under this Government some 30 slaughterhouses have closed—not been closed; the number has gone down from around 380 to 350. Under the previous administration, 600 were closed: down from 980 to 380; that is roughly two-thirds of all slaughterhouses.
Lord Marsh: My Lords, will the Minister help the House by explaining which of those numbers he describes as "efficient management"?
Lord Donoughue: My Lords, I do not have a definition for "efficient management". However, we now have a hygiene assessment system which assesses all slaughterhouses according to their hygiene efficiency. This Government put that in place.
Baroness Miller of Chilthorne Domer: My Lords—
Lady Kinloss: My Lords—
Lord Peyton of Yeovil: My Lords—
The Minister of State, Home Office (Lord Williams of Mostyn): My Lords, there is plenty of time because the fourth Starred Question has scratched.
Lord Peyton of Yeovil: My Lords, will the Minister be good enough to explain in clear terms who exactly is expected to benefit from this absurd legislation? It will not be the animals; it will not be the customers; it will not be the owners. If he cannot answer the question, perhaps he will go to the authors and get them to do so in clear, intelligible terms. It will make quite a change.
Lord Donoughue: My Lords, I shall do my best to meet the high standards that the noble Lord always expects. In fact, the European Union directive derives from way back in 1964 and has been in place since that time to ensure that we have proper standards of meat hygiene. It has been amended and was last amended in 1991. The identity of the beneficiaries is quite clear. The

9
beneficiaries are public health and, therefore, the public. Animal producers are also beneficiaries in the sense that the legislation helps to maintain—and, in our case, helps to restore—the confidence of consumers in meat. I believe that the legislation is perfectly well justified.
Baroness Miller of Chilthorne Domer: My Lords, does the Minister agree that, when the Government have undertaken this welcome and detailed examination during the next few months, questions of animal welfare where abattoirs are very distant from the communities that they serve and questions about rural employment could open the possibility, if it were necessary, for a derogation?
Lord Donoughue: My Lords, we certainly bear in mind most closely questions of animal welfare. We are well aware that it is not always in the interests of an animal for it to be shipped a long distance. Rural employment concerns us considerably; indeed, we have in operation a major consultation exercise to help ensure the prosperity of rural society. As regards derogations, that is not a matter for us. There is a derogation in relation to small abattoirs. Our legal advice is that that applies only to structures and not to the level of charging. The department has written to the European Commission to ask for advice on the matter and to ascertain whether it would in any way allow less onerous terms about levels of inspection.
Lord Hoyle: My Lords, does my noble friend the Minister agree that the announcements made today, especially in relation to SRM, will be greatly welcomed by the industry?
Lord Donoughue: Yes, my Lords. Indeed, I can assure my noble friend that the announcements were most welcome. The delay on SRM charges alone is worth £20 million to the industry. I believe that the review we are undertaking will encourage those concerned because, although we will abide by European Union rules, as we must, we shall also ensure that we do not accidentally over-implement. Both of those factors will be most welcome to the industry.
Lady Kinloss: My Lords, can the Minister say why the veterinary hourly fee is not the same throughout local hygienic abattoirs, at least in North Yorkshire? Further, can he say why there is no uniform tariff? Does the Minister agree that the increasing fees charged to small. hygienic abattoirs will eventually force many more to close, with the inevitable loss of jobs? I should declare an interest here in that my elder daughter uses one of the small abattoirs and fears that, if it closes, she will have to take her animals much further and, therefore, cause them much more stress.
Lord Donoughue: My Lords, I agree with the points made about the role of abattoirs, and especially about the importance of small abattoirs. We are well aware that the imposition of a higher level of fees impacts
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disproportionately on small abattoirs. That is why we have delayed the introduction of the new charges and why we are undertaking this review.
Lord Luke: My Lords, we welcome the review on this side of the House as we do the other parts of Mr. Rooker's announcement with regard to specified risk material. However, if the review shows that the overall burdens on small abattoirs in this country are greater than on their equivalents in Europe, will the Government pay for that excess? Alternatively, how else will they be able to relieve the burden?
Lord Donoughue: My Lords, we must await the results of the review. As regards comparisons with other countries, the department has carried out its own review with such information as is available. I also understand that the Meat and Livestock Commission is undertaking a more thorough review, although we do not have the results as yet. The general indications are that our continental neighbours do in general impose the levels of inspection and the standards of charges as are required. For example, our impression is that Belgium and Denmark impose higher standards, while Germany imposes standards which are equivalent to ours.
It is possible that one or two other countries, such as Spain—the noble Baroness mentioned Portugal during an earlier discussion—and Ireland may have differences within the system. We are looking further into the matter in that respect. However, if we receive any evidence, or if the noble Lord can give us any, to show that countries within the European Union are not properly imposing the European directive on charges, we shall certainly go straight to the Commission and demand action.

Business
3.6 p.m.
Lord Carter: My Lords, as soon as possible after Amendment No.1 of the Committee stage of the Tax Credits Bill has been dealt with, my noble friend Lady Symons of Vernham Dean will, with the leave of the House, repeat a Statement which is to be made in another place on the NATO summit. Thereafter, my noble friend Lord Williams of Mostyn will, again with the leave of the House, repeat a Statement on the London bombings which is also to be made in another place.
Lord Henley: My Lords, I thank the noble Lord for making that announcement. However, bearing in mind the fact that the Government have known for some considerable time that a Statement would be made by the Prime Minister in the other place on the NATO summit, would it not have been possible for the noble Baroness the Leader of the House to have rearranged her business in Northern Ireland, as Minister for Women, in order to make the Statement herself, as I believe the House would expect?
Lord Carter: My Lords, my noble friend the Leader of the House very much regrets that she is unable to be

11
here in person to repeat the Prime Minister's Statement to your Lordships' House today. However, she is unavoidably absent from the House as a result of a longstanding and important ministerial commitment in Belfast in her role as Minister for Women. The visit was arranged as long ago as October last. My noble friend Lady Symons, as Foreign Office Minister in your Lordships' House, has been asked, and has agreed, to repeat the Statement this afternoon.
As I said, my noble friend the Leader of the House is performing an important public engagement in Belfast. It was arranged in October and was publicly announced in February. It is an important initiative. I am sure that noble Lords on the Conservative and Unionist Benches would be outraged were that particular part of the United Kingdom to be treated any less favourably in that regard than other parts of the country. This is only the second occasion since my noble friend became Leader of your Lordships' House that the Prime Minister has made a Statement in the other place and my noble friend has not herself repeated it in this House. It seems to me that the Opposition Chief Whip is straining at a rather odd procedural point.

Tax Credits Bill
3.8 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): 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 Hollis of Heigham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES (Lord Tordoff) in the Chair.]
Clause 1 [Certain benefits to be known as tax credits.]:
Lord Higgins Lord Higgins moved Amendment No.1:
Page I. line 7. leave out first ("tax")
The noble Lord said: In moving Amendment No.1 I believe that it would be for the convenience of the Committee if I were to speak also to Amendments Nos.2, 3, 7 and 8, including discussion on Schedule 1 stand part. If ever there was a pure Alice in Wonderland piece of legislation, then it is Clause 1 of this Bill, which we seek to amend. Your Lordships will recall that in Lewis Carroll's book Alice's Adventures in Wonderland there is a semantic exchange between Alice and the other members of the tea party. The following quotation illustrates the point I wish to make about this clause. The March Hare asked,
"'Do you mean that you think you can find out the answer to it?' said the March Hare. 'Exactly so, ' said Alice. 'Then you should say what you mean, ' the March Hare went on. 'I do, ' Alice hastily
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replied; 'at least—at least I mean what I say—that's the same thing, you know.'"
The heading of Clause 1—the clause which we seek to amend— reads:
"Certain benefits to be known as tax credits".
The clause seeks to change the meaning of words which are extremely clear. This is not a tax credit Bill and we are not dealing with the concept of a tax credit. If one needs further support for such an argument, one has only to read the official publication of the Office for National Statistics entitled, The UK National Accounts Concepts, Sources and Methods which makes it absolutely clear that,
"If a refund or allowance can be calculated independently of a procedure for calculating the tax payable and uses different criteria and does not depend on the actual amount of tax to be paid or the marginal rate of tax it is not integral to the tax assessment".
In other words, if it is not integral to the tax system, it is not, and should not be construed as, a tax credit.
That brings us to the matter of why the Government should be engaged in this extraordinary semantic operation. Before the general election the Prime Minister made it absolutely clear that it was the Government's intention to cut the social security bill and to spend the money saved on education and health. They have failed to do that. The Bill now before us increases the already large bill for family credit by about £1.5 billion. By calling that increase and the change in the structure a tax credit, the Government seek to suggest that this is a tax reduction rather than an increase in public expenditure. No doubt we shall return to these points later.
The Department of Social Security is increasingly being taken over by the Treasury. The Contributions Agency has already been moved from the DSS to the Treasury. The whole trend is in that direction. Changes will be implemented but, as the Child Poverty Action Group has pointed out, what is really involved is a means tested wage subsidy. Rather than the Inland Revenue fulfilling its traditional role of collecting money, it will find itself in the unusual role of giving people money. However, it will not give them money as part of the tax system. This provision will not constitute a tax credit; it will be a straight hand-out, whatever the wording of the clause. Amendment No.1 and the amendments grouped with it seek to call the provision what it really is. I am glad that we have deferred the question of the title of the Bill. No doubt at a later stage we shall alter that too.
I wish to make a number of substantive points. An extra £1.5 billion is to be given to a particular group of people. It is therefore not surprising that many of those who represent that group—many of whom carry out extremely valuable work—do not object to the increase in expenditure which will take place. However, nearly all of them have serious doubts about the way in which the system will operate. If it were to operate as a tax credit system, we on this side of the Committee might well be in favour of it. However, the method of its implementation is not only alien to the ethos of the Inland Revenue; it also puts a serious burden on business. It has serious administrative costs and it increases rather than reduces dependency on the welfare

13
system. It creates more problems with regard to fraud and is likely to increase the stigma of drawing benefits. Above all, it is an extremely complex arrangement. Why, therefore, have the Government decided to go ahead with what is not a tax credit scheme but something different?
I refer to the examination of Mr. Martin Taylor of some of these issues on behalf of the Government. That suggests that the Government wished to make it a genuine tax credit system. However, as we all know, they have decided that that is not possible. This, again, is something we shall need to probe. The CBI has made a number of points as regards the feasibility of the system. It has said that the Inland Revenue discovered a number of intractable problems with regard to making this a genuine tax credit system. I refer, for example, to dealing with changes in the level of the award. As I understand the matter, the award will be stable for a period of 26 weeks. There will be different tax rate bands, particularly when the lop band is introduced. There is no mention of the fact that the 20p rate is to be removed. It is said that it is difficult to adjust codes after a period of unemployment. Finally, there is reference to the unstable wages of many of the employees who will receive the credit. If the system can cope—at any rate on a six-monthly if not on an annual basis—with changes of that kind, it surely should be able to cope with changes which take place only every six months or so. These again are matters we shall need to probe. Those are the reasons given for not having a real tax credit system and for deciding to keep the curious change of name in the clause which we seek to amend.
The Chartered Institute of Taxation has stated that there is to be no direct link between the PAYE tax period or the pay on which it is based and the amount of credit paid out to the employee. One is bound to ask why, as the only difference being introduced concerns the method of payment and the Government are arguing that the problems involved in introducing a real tax credit system are insuperable, they did not abandon the measure? The answer lies with the public relations connected with a working families' tax credit. This was announced by the Chancellor of the Exchequer, Mr. Gordon Brown, as very much the flagship of the welfare reform programme which the Government are introducing and as an important component of the so-called "welfare to work" programme.
In that context it is not irrelevant to consider what the Bank of England has stated. It says that the impact of this change on the labour market—that is, the increase in numbers employed—will be "very small". If the Bank of England takes that view of this flagship measure in encouraging people into work, it will 'be interesting to find out in the course of our proceedings exactly why the Government are going ahead in this way despite all the disadvantages I have mentioned. It might well have been more sensible to abandon the idea and not face this curious matter of the title of the Bill and the purpose of this clause.
The Government argue that it is important to call the measure a tax credit as it will then appear on pay slips and without that knowledge people who are seeking employment will not realise they receive extra money
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for taking up a job. I find that a remarkably paternalistic approach to the problem. If the only advantage is that it is paid through the wage packet, there are, as we know. an increasing number of exceptions—for example the self-employed—who are not paid through the wage: packet. While that is a semantic point in terms of presentation, it is certainly not unimportant. One is well aware from the massive number of representations received on the disadvantages of the proposal that bodies as widely disparate as the CBI and the Institute of Directors on the one hand, the TUC on the other, and a large number of groups in between ranging from the Child Poverty Action Group and the Low Pay Unit to the Federation of Small Businesses, believe that the change is a bad change and that serious problems could have been avoided either by pursuing the case for a real tax credit scheme or, alternatively, paying through the existing arrangements.
Finally, we are told that insuperable difficulties are involved in making it a real tax credit, which would make the clause unnecessary. At the same time we are told at paragraph 5.13 of the Budget report, an extremely glossy document, that,
"The Government sees a case for improving the transparency …It is examining, for the longer term, the case for integrating the new Children's Tax Credit with the child premia in Income Support and the Working Families Tax Credit",
and so on. If that is the long term aim, why are we told that it cannot be done at the present time? Acting as the Government propose will have disadvantages. The only advantage—a doubtful advantage, in my view—is that it will be paid through the pay packet.
We shall return to all these points. The Bill starts off on the wrong foot. The first clause seeks to represent what the Government are doing as something which, quite clearly, they are not doing. For that reason I have much pleasure in proposing Amendment. No.1 and the related amendments. I beg to move.
Lord Goodhart: We on these Benches have not tabled an amendment to the same effect as that of the noble Lord, Lord Higgins. That is because, on the whole, we feel that if the Government wish to give a benefit an inaccurate name that is their affair and we are not in the business of correcting them. Nevertheless, having said that, I believe that the noble Lord, Lord Higgins, is absolutely right to say that this is not a tax credit but a benefit. We take up the matter in a number of places, starting with our intention to challenge the Question that Clause 2 stand part of the Bill.
What is the difference between a tax credit and a benefit? The purpose of a tax is to raise money to meet government expenditure. Income tax starts with the taxpayer's gross income. But it is recognised that simply basing the tax on the gross income could be unfair to those with lower incomes, so one cuts their tax liabilities by treating their taxable income as less than their actual income. This applies not only to those on low incomes but throughout the income scale. It is done by means of reliefs and allowances against tax—the personal allowance, the first £5,000 or so of income, the married couple's allowance, now rightly about to be abolished,

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and relief on pension contributions. A similar result could be achieved by a genuine tax credit. One calculates the tax liability on someone's full income but one then says "You do not have to pay the first x pounds"—whatever the figure may be—"of your nominal liability. " One can go beyond that to negative income tax by saying that if a taxpayer's liability is less than the notional figure of x pounds the Inland Revenue will pay the difference to the taxpayer.
By contrast, the purpose of a benefit is to provide financial assistance out of public funds. In the case of means-tested benefits, the amount of those benefits is based not on the needs of an individual but of a household. For years people have been saying, "Let us have a single integrated tax and benefits system based on the idea of negative income tax. " That is the philosopher's stone. Like the stone, it never actually works. From a distance it looks like a marvellous idea, but the more one looks at the details the more one sees the obstacles. That is my experience. It is an issue on which I have changed my mind over the years. That also seems to have been the experience of the committee set up by the Labour Party before the last election, chaired by the noble Lord, Lord Borne, to study the reform of the welfare system.
The same thing has happened with the working families' tax credit. The Government originally considered trying to deal with the working families' tax credit through the PAYE coding system. They found that it could not be done. The main reason for not being able to integrate tax and benefits is that tax is based on the income of the individual and benefits are based on the needs of the household. It might have been different in the days when the income of husband and wife were aggregated for tax purposes and when couples rarely lived together without being married. Nowadays, that is simply impossible. One needs to know who is in the household for the purposes of calculating the working families' tax credit, as indeed one does for any other type of benefit. Is it a single parent family or is it a couple? If it is a couple and both are earning, then the income of both has to be taken into account for the working families' tax credit but not for tax. Taking it into account for the purposes of income tax liabilities would be inconsistent with the principle of separate taxation of husband and wife, which is now well established and politically irreversible. In the case of a couple where only one of them is earning, one still needs to know that they are a couple because one cannot claim child care credit if one has a non-working partner.
There are other aspects of the working families' tax credit which cannot be reconciled with the principle of a tax credit, as properly so called. For example, a claimant with a certain amount of capital is disqualified from receiving the working families' tax credit even if such capital produces no income. Assets not producing income would be irrelevant for the purposes of income tax. The working families' tax credit does not reduce the tax liability of employed claimants in the way a genuine tax credit would. Employees are still liable for tax through PAYE and national insurance contributions just as before. The employee or his partner receives
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benefit just as before. The only difference is that the employer, who until now has been the collecting agent for the Inland Revenue through PAYE, will now become the paying agent for benefits. In the case of the self-employed, where there is no employer, the payments will continue to be made as they are now, tax being taken with one hand and working families' tax credit being handed back with the other. As the noble Lord, Lord Higgins, with his long and detailed experience of public finance, pointed out, working families' tax credit is, for accounting purposes, a benefit and not a credit. The Government, as I understand their position, have accepted that European accounting principles require them to show the working families' tax credit as public expenditure. What we have here is window dressing. The noble Lord, Lord Higgins, was telling no more than the truth.
3.30 p.m.
Lord Skelmersdale: My Lords, the noble Lord, Lord Goodhart, revealed all sorts of things. I blush to say this because my noble friend Lord Lawson was a former boss of mine. The noble Lord explained, as did my noble friend Lord Higgins, the reasons that this is not a tax credit. However, he started from the most extraordinary position. As the spokesman for an opposition party, he said in effect, "We are not in the position of correcting the Government". What on earth are oppositions for?
To me, a tax is either a levy on income or a charge on potential income. In this case, there is absolutely no relationship between the tax system and the credit. Of course it is a credit, and later amendments deal with how we as parliamentarians can identify that credit in various government accounts, such as the Red Book. One thing is absolutely certain. By no stretch of the imagination is this a tax credit. The arrangement that the Government are putting in place will, where tax is due, tax the individual, then give a lump sum. It bears no relationship to the tax that the individual has paid. It simply bears a relationship to the original wages. I cannot see that as logical.
Baroness Carnegy of Lour: The amendments seem to go far beyond the terminology that the Government used when they describe publicly funded earnings supplements as tax credits. I cannot agree with the noble Lord, Lord Goodhart, any more than can my noble friend Lord Skelmersdale, that this is not our business. It seems very much Parliament's business.
We are discussing another example of the Government's growing habit of saying one thing and doing another. At the outset of the Government's term of office that habit was more or less accepted by the public as intelligent public relations and the spin that goes with modern politics. But developing now is something that is not public relations. It is not all that far from public deception—letting people think that one thing is happening while something different and perhaps less popular is being done. That will have a serious effect as time goes on, because it will lead to greater cynicism than that which the public feels already

17
about politics and politicians. That should concern us all because it is dangerous for democracy. The amendment poi nts up that danger.
The Government want, rightly, to reduce the evil of the poverty trap and for people to experience that families with children and disabled people, if they work, can be better off, not worse off. That is a wholly laudable objective. It is clear that the Government would like to achieve that through the tax system but they failed to find a way for a number of reasons—some of which we know, although perhaps we do not know all of them. Instead of the Government doing as they said, they are pretending by continuing with enhanced benefits—which is a good thing—but paying them via the Inland Revenue and calling them tax credits.
Likewise, there is no honest admission of increased spending on social security in the Chancellor's account to the nation. That would have been tactless. He had promised to reduce it. Instead, the increase appears as part of the tax system in one place and as an increase in Government expenditure in another.
The Government's reason for those discrepancies and misdescriptions were helpfully explained by the Minister on Second Reading and on pages 2 and 3 of her subsequent detailed letter. Those reasons are doubtless the case. People who receive the credit in their wage packet will, whether or not they pay tax, tend to see it as part of their take-home pay. That is a wholly good objective, but should it be called a tax credit when it is not? I think not and for the sake of the nation, I suggest that the Minister should think not. The amendments would render the Bill a lot more honest and I support them.
Baroness Turner of Camden: I simply cannot accept the amendments. I do not support them at all. I support the Bill, which is founded on the assumption that something must be done about poverty—particularly family poverty. That is the Bill's objective, and for that reason a number of organisations to which the noble Lord, Lord Higgins, referred—such as Child Poverty Action Group—have supported the Bill as it stands. It would not be a good idea to remove the word "tax" from the Bill. The idea that people will receive the extra amount through their wage packets, via the Inland Revenue, is a good one. It is entirely appropriate that the Bill should be worded in the way that it is. I urge the Committee not to support the amendments.
Baroness Hollis of Heigham: When the noble Lord, Lord. Higgins, began I was not sure whether we were going to hear a speech on semantics or a Second Reading speech. I believe that his speech moved between the two. The amendments seek to change the title of "tax credit" and to remove Schedule 1. The noble Lord said that the Bill starts off on the wrong foot. On the contrary. The change in title states exactly what the Bill seeks to do. The noble Baroness, Lady Carnegy of Lour. made the point for me very well, and that was reinforced by my noble friend Lady Turner of Camden.
The Bill will give, via the Inland Revenue and the pay packet, support for low wages or low hours to those in work and will therefore make more attractive entering
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into work and staying in work. It allows people to overcome the unemployment trap of moving off benefit and into work—and, within work, it will allow people to keep more of every pound that they earn. As the credit will be run by the Inland Revenue and paid through the pay packet, it is proper, appropriate arid transparent to call it a tax credit. The change to WFIC and DPTC asserts their new character and puts them in the context of work and as a reward for work.
Baroness Carnegy of Lour: The noble Baroness felt that I was in agreement with her; indeed I was on one aspect of what the government are trying do. She said that it is appropriate to call this a tax credit. Does she really believe it appropriate for the Government of this country deliberately to call this provision something which it is not? It is not a credit against tax. Pay, tax and net pay are shown on the payslip; then this benefit is added. It is simply recorded on the same piece of paper. Why does the Minister feel that it is legitimate to call it a tax credit?
Baroness Hollis: I hoped that I had made the point that it is being run by the Inland Revenue and will come through the pay packet. Therefore it is not a benefit being run by DSS and paid to the person at home as income support. There is all the difference in the world between benefits such as income support and JSA, which are paid by the DSS to someone who is out of work and at home, and a benefit which then becomes a tax credit, run by the Inland Revenue and paid through the pay packet, making the perception of the value of work, particularly entry wages, that much more obvious to people. In other words, to address the first point made by the noble Lord, Lord Higgins, this is not merely a re-badging exercise.
Lord Swinfen: The noble Baroness says that this is not a benefit, but a tax credit. It is a benefit to the person who receives it. It is not strictly a tax credit; it is a benefit. It has to be shown under EU rules and regulations as government expenditure. What will it be shown as? Surely it is a social security benefit.
Baroness Hollis of Heigham: Of course this is a benefit to people in the same way as wonderful music is a benefit to people. But if the noble Lord means by "benefit"that it is a social security benefit, no, it is not. It is an Inland Revenue tax credit being paid through the wage packet.
Lord Peston: Perhaps I may interrupt my noble friend so that she can help to clarify this point to all of us. Am I right in assuming that the putative take-home pay form will include a calculation stating the tax that a person would have paid without the credit, that a figure is deducted, and the result is the net income? It clearly leaves a person with a different net income, and the reason is clearly stated. It is not added as benefit. Is that correct? It is a tax credit, in precisely the form stated by my noble friend.
Baroness Carnegy of Lour: Will the Minister explain that point carefully? My understanding was

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different from that of the noble Lord, Lord Peston. I thought that a person's gross pay would be on the payslip, as would his or her tax contribution and net pay, and below that would be this benefit. Is that correct?
Baroness Hollis of Heigham: As at present, gross and net pay will appear on the payslip, as will deductions for national insurance, pensions and so on, together with the addition of the tax credit. So the payslip will include the deductions and the addition, and the pay going to the individual will be the sum total. But because that transaction cannot be done through PAYE, it will appear as a separate entry on the payslip. I hope that the point is now clear.
I return to the point made by the noble Lord, Lord Higgins. Basically, the noble Lord suggested that this is a re-badging exercise without substance. I want to challenge him on that point. This provision begins the process of bringing together some of the taxes and benefits in our system to ensure that work pays. It will reduce the marginal tax rates for over 70 per cent of families concerned—that is, 500,000. Two-thirds of people will, for the first time, see their marginal tax rates fall below 70 per cent. This measure reduces the absurdity that presently exists; namely, that 45 per cent. of families presently have to be in receipt of family credit to receive income support; and we then proceed to tax part of the value of that amount away; whereas in future 97 per cent of people on working families tax credit will not be liable to income tax.
As the noble Baroness, Lady Carnegy, and my noble friend Lady Turner said, this provision reduces—
Lord Goodhart: Will the Minister explain how it is that 97 per cent will not be liable to income tax when there will be a perfectly clear figure on their payslips for the PAYE deduction?
3.45 p.m.
Baroness Hollis of Heigham: The increased generosity of WFTC and DPTC means that 97 per cent. of claimants will not now pay income tax as a result of this measure. If I have any additional information I will provide it for the noble Lord, but that is my understanding. At present, 45 per cent. of those on family credit have part of the value of that credit taxed away. That will not be the case in future.
The change of title is not re-badging. It indicates that we are approaching the issue of making work pay and that once people are in work they will be able to keep more of their pay through a different system and a different approach. We are no longer talking about income support, but about support for low-paid work and low wages and families and lone parents in those work situations.
It seems that behind these amendments is the suggestion by noble Lords opposite that tax credit should not be introduced but should remain as benefits. In other words, their intention is to undermine the aim of producing a clear link with work, so that those who move into relatively low-paid jobs with relatively low
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entry wages will nonetheless see a clear advantage from moving into work. The amendments would achieve nothing, certainly not in terms of the many people on low to middle income who will benefit from tax credits. We are determined to provide them with essential support by making sure that work pays.
The other amendment linked with these proposals proposes that Schedule 1 should not be included in the Bill. It may be helpful if I explain the purpose of Schedule 1. This schedule has its references in primary legislation where the replacement of family credit by WFTC and disability working allowance with DPTC will take place. The tax credits build on the existing benefits. The most efficient way of doing that in legislation is to build on the current social security provisions for these benefits. Contrary to the noble Lord's assertion, this was indeed how Martin Taylor recommended that the Government should proceed. Clause 1 of the Bill effectively converts the benefits into tax credits. Schedule 1 provides guidance for the reader of the legislation. It is not strictly necessary but it will make the matter much clearer to those concerned.
The first point raised was that this was merely a re-badging exercise. I have tried to show that, on the contrary, not only in a mechanical sense is it being run by the Inland Revenue and paid through the pay packet, but, more substantially, it will help to overcome the unemployment and poverty traps which have hung like albatrosses round the necks of those who struggle to survive on low wages.
The second point raised by the noble Lord, Lord Goodhart, related to public accountancy and public expenditure. The noble Lord argued that because the amount is quoted as public expenditure from the point of view of European conventions, that indicates that it remains a benefit rather than a tax credit.
We discussed this point to some extent at Second Reading. I remind the noble Lord that we are treating this matter, in terms of accountancy. presentation and the Red Book, and European standard terms, in exactly the same way as MIRAS. I do not think that many noble Lords would regard MIRAS as a social benefit; they would regard it as effectively tax credit support for housing costs. These benefits will be treated in exactly the same way.
Thirdly, noble Lords opposite seemed to imply that if, however, the tax credit had been paid not as an additional entry on the payslip but through PAYE itself, that would have reinforced the argument that it was indeed a tax credit, and some of the opposition to the proposal might have been withdrawn, as the position would have been more obvious. That may be so. It is an honourable question to ask. It is one that puzzled me when I first came to this matter. The point was discussed at considerable length in consultation with employers. If it could have been done, it would have been a more attractive approach—not in terms of meaning and whether or not it is a tax credit, but in terms of presentation to the people concerned. It would have been more obviously attractive.
The simple answer is that tax credits are not being handled this way because PAYE coding cannot deliver everything that we currently want to achieve with

21
WFTC and DPTC. The Treasury and the Inland Revenue understood this from the outset. It may be helpful if I share their reasoning with the Committee.
Noble Lords will appreciate that, building as it does on family credit, as Martin Taylor recommended, the tax credits will be set in advance, using a snapshot of family circumstances at, and just prior to, the date of claim. That helps set tax credits for the next 26 weeks. In order to deliver the same certainty of income that was so valued in family credit, the tax credit awards will be for a fixed amount for a set period running from the date of claim.
But PAYE operates through the tax year constantly to adjust to changing circumstances, so that at the end of the tax year (by 5th April) the right amount of tax has been paid. The technical term is "cumulation". It works in the following way. The system looks in each pay period at how much has been earned from the beginning of the tax year; it allocates the correct fraction of the taxpayer's allowances for the entire year; it calculates the net taxable income from the beginning of the tax year and calculates the tax that should be paid on that. The payroll system then compares what ought to have been deducted from that income by the end of the pay period in question with how much has been deducted, and deducts or repays the difference.
It is also obviously the case that such a system is clearly unworkable for the lower paid who are entitled to working families' tax credit but do not pay tax because they are below the lower earnings limit but are, with 16 hours of minimum wage per week, entitled to claim working families' tax credit. We could not pay them a tax credit through PAYE if there were no PAYE system for that employee.
1 suppose that, alternatively, the amendment proposes that 80,000 employers who are currently exempt because they employ someone for fewer than 16 hours a week in their household, perhaps as a cleaner or a gardener, who works for several employers and therefore works for more than 16 hours a week and is entitled to WFTC as a result, would come within the system, which they currently do not.
There is thus a real problem in applying this system either to employers who individually employ someone for fewer than 16 hours a week or to people who currently do not pay tax because they are below the lower earnings limit.
Lord Higgins: Is it not the case that the very lowest paid do not gain at all under these proposals?
Baroness Hollis of Heigham: I am sorry, I do not understand what the noble Lord means. A person who works 16 hours a week and is paid whatever sum—but obviously, with the minimum wage, at least £3.60 an hour—-will be entitled, if the family is a couple with children or qualifies for DPTC, to access to the working families' tax credit. In certain circumstances, some of which I have described, that person may not be paying tax, which is the reason for saying that the payment could not be handled through the PAYE system but has to be included as a separate item on the pay-slip. I hope that that is clear to the noble Lord.
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The Inland Revenue is confident that it could design a new enhancement to the PAYE system which could cope with providing regular support and even paying money out as long as pay remains stable. When pay changes, so does the amount of tax withheld. If pay fluctuates greatly, then the PAYE system reacts In response and will not deliver the even flow of reliable money that the policy envisages. It will sometimes deliver too much, sometimes too little. The over-payment or under-payment in each pay period could be quite marked, sometimes even taking back tax credits that had already been given.
The inconsistencies are particularly marked where taxpayers are not firmly in one rate band, where there are gaps in entitlement or where the level of the award changes during the tax year because the awards last for only six months. We know that there is considerable change in circumstances between each six months' award of family credit. Family credit seldom remains constant between one award period and another.
In the end, it was generally concluded in discussion with employers, firms, businesses and the federations that the PAYE system could not deliver these tax credits. That was the conclusion not just of the Inland Revenue but also of the consultative group, including business and payroll specialists, which looked at the issue in detail.
I have gone into the matter in detail because I know from previous meetings that Members of the Committee are concerned about the issue. I therefore thought it might be useful to put the detail on the record.
Lord Goodhart: I am most grateful to the noble Baroness for giving way. Is it not a fact that the noble Baroness has just explained very clearly why both the aims and the mechanisms of the working families' tax credit are so different from the system of taxation that the working families' tax credit cannot be treated as a tax credit at all? That is the whole point.
Lord Skelmersdale: Before the noble Baroness answers, perhaps I may add a point. If there were a genuine tax credit system, surely all that would be necessary would he to have a minus amount of PAYE before one started?
Baroness Hollis of Heigham: If we follow the argument of the noble Lord, Lord Goodhart, I think he is taking us down to a basic citizen's income, in which we pay either pluses or minuses. We know that a basic citizen's income requires a tax rate of something like 50 per cent and even then does not satisfactorily cover housing costs. It may be that his party no longer espouses that system. That would be the only way that the system he proposes could deliver what he is suggesting.
I have tried to address what I believe to be the three arguments brought to the Committee this afternoon from the Opposition benches. It was suggested that this was merely a re-badging exercise. I have tried to argue that, far from being a re-badging exercise, it represents a new but profoundly held commitment by this Government. Under the previous government giro cheques for income

23
support, and so on, were handed out and people were told, "Go away and come back in 16 years' time". The whole thrust of the Government's policy, in terms of the New Deal, the single gateway for work and the pilot schemes for young people, disabled people, lone parents and older people is that the best pathway out of poverty and out of bumping along at the bottom of society is to have access to work.
We know that one of the reasons why people are sometimes reluctant to seek work, over and beyond issues of childcare and skills and training, is the relatively low entry wages compared to the level of benefit they may currently enjoy by virtue of the number of children they have, their disability or their housing support. We are seeking to overcome the perception in people's minds that the best way of helping them is simply to give them more income support. Instead, we are trying to make obvious, transparent and attractive the move from being on benefit to being in work. In so doing, the in-work support which we currently give them will be reshaped and refocused to become a tax credit, such that it pays to work and that it pays when in work to work more, to gain more and to keep more. This is not a re-badging exercise; it is the basis of the entire philosophy of this Government. Shame on the previous administration for leaving so many people for so long in the twilight unnecessarily. I hope that the noble Lord will withdraw his amendment.
Baroness Carnegy of Lour: Before the noble Baroness sits down, she has not addressed the precise point of the amendment, which is that the Government are calling something a tax credit when it has nothing to do with tax. It is a misnomer, and a misleading one. It may well be that, now he realises that, which I do not believe he did before—and I can understand that—the noble Lord, Lord Peston, will think of a way round this problem to help the Government. Will the noble Baroness reconsider the name of this credit? It is not a good thing for the Government to mislead people. They should not call something by a name which does not apply.
Lord Peston: Before my noble friend replies, and before the noble Lord, Lord Higgins, tells us what he intends to do about the amendment, perhaps I may put on my old-fogey hat and say that I wrote an article 35 years ago in which I said that the distinction between public expenditure and taxation was entirely arbitrary and that any clever person could dress something up one way or the other. I do not believe that the noble Lord, Lord Higgins, is saying anything different. He does not seem to be claiming that anything substantial follows from his amendment; he just prefers one set of words to another.
My noble friend is saying—and this is the substantial issue—that someone who goes to work will now end up in a better net position as a result of going to work than would otherwise be the case. That is the substantial issue; it is what the policy is about. It seems to me that that net improvement could quite reasonably be called a tax credit. I do not believe that the words matter. What
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matters is what my noble friend the Minister is saying, which is that it is hoped that there will be a substantive improvement in policy that will make people both more employable and more willing to work. That is, I assume, what most Members of the Committee want. I did not understand the noble Lord, Lord Higgins, to be saying that his amendment was about anything other than words. I am never one to denigrate the use of words, but it is not what the policy is about, as my noble friend pointed out.
Lord Skelmersdale: What I want, and what I believe everyone wants, is a credit for working paid through the wage packet. I have no argument with the Minister on that. The only question I would ask her is the following: if the Government had chosen to use a different agency to pay this credit, would it still be known as a tax credit? That is the issue.
Baroness Hollis of Heigham: If it is to be paid through the wage packet by whom is it to be paid except by the Inland Revenue?
Lord Skelmersdale: The Government can give instructions to the Department of Social Security or any other agency to make the payment through the wage packet. As under the Bill, the Government can give instructions for employers to pay it through the wage packet. It does not have to be done by the Inland Revenue. I accept that the Government have chosen this route for very good reasons. Nonetheless, if they had chosen some other route there would have been no possible justification for calling it a tax credit.
Baroness Hollis of Heigham: The noble Lord advances an extremely interesting proposition. Are the Opposition Benches now entirely happy that this should be paid through the wage packet and that it should be a subsidy, as it were, for people who are marginal to the labour market and therefore need this support in order to move from benefit into work? It is not proposed in most of the remaining amendments that payment should be made through the pay packet. However, I am sure that we shall argue that point when we reach it.
Lord Skelmersdale: Before the Minister goes too far, I should remind her that I have very limited or no connection with my own Front Bench. Therefore, she cannot possibly cast as Conservative policy anything that I say.
Baroness Hollis of Heigham: One was aware of divisions of opinion within the Opposition Front Benches at the other end of the corridor. I had not realised that such divisions extended to the first and second Benches on the other side of the Chamber. But if that provides for a variety of views and not simply a monolithic recitation of briefs provided by the CBI or anyone else in the course of our debates, I am sure that we shall all be the wiser—if not wiser, certainly enriched—by the division of views. However, the noble Lord, Lord Higgins, may like to have words with his colleague afterwards. As I understand it, the proposition

25
of the noble Lord is that this money should be paid through the DSS. Therefore, in future employers will work with the Inland Revenue in regard to their tax and national insurance contributions but 'when it comes to this other item the DSS must know about their pay roll, the amount of pay and the number of employees. The DSS would have to check for fraud and possible collusion, carry out the inspection and handle that information.
Does the noble Lord seriously suggest that employers would welcome the DSS bringing to bear all its traditional forces of investigation so that the same small businessman would have to give information to the Inland Revenue for one reason and similar information to the DSS? Does he suggest that there should be two sets of bodies to supervise what goes on, two sets of investigations, two lots of inspection and two lots of penalties?
Lord Skelmersdale: I thought that we started with family credit.
Lord Higgins: A number of unexpected developments have occurred during this debate, starting with the announcement of the noble Lord, Lord Goodhart, that it was not the function of his party to correct the Government. I am sure that that view will not prevail for long I find myself very much in agreement with everything he said, as I did with very nearly everything he said at Second Reading. I look forward to his support in the course of subsequent debates.
I pick up first the point made by my noble friend Lady Carnegy. It is crucial that the scheme should be honest. The description in the Bill and its title are not honest. They are misleading. I gave the reasons earlier, in particular the presentation of something as a tax cut when it is in reality an increase in public expenditure. As the noble Lord, Lord Peston, pointed out, it is possible very often—not always—to define something as a tax or expenditure change. The important point is consistency. For that reason I quoted the publication of the Office for National Statistics, UK National Accounts Concepts, Sources and Methods, which came down very clearly on this side of the Chamber and not the Government's side in defining whether this was or was not a tax credit. I believe that to be an important point. At the margin these matters may be rather arbitrary but it is important that the definitions given in the document to which I have referred should be adhered to. I shall turn to a number of the noble Lord's other points in a moment.
I agree very much with the noble Baroness, Lady Turner. I do not say for one moment that it is unfortunate that the Government have decided to help the particular group of people affected by the Bill. But there are much simpler ways of doing so than the unbelievably convoluted method chosen by the Government. If there were no disadvantages I would wholly agree with her. The reality is that there are very substantial disadvantages. I enumerated a few earlier. No doubt we shall discuss many other reasons why the system proposed by the Government is not sensible.
26
The Minister was anxious to say that this was not simply a re-badging exercise. If it were just a re-badging exercise all the arguments about semantics would still hold but it would perhaps not be a matter of enormous significance. But, alas, the noble Baroness as correct: this is not a simple re-badging exercise. The Bill seeks to put into law a far less efficient and more objectionable method. I agree therefore with the Minister that it is not a re-badging exercise; it is more than that. What is more, it is objectionable. We shall wish to pursue the matter.
The noble Lord, Lord Peston, asked a very straight question to which he received absolutely no answer from the Minister. I believe that the answer [hat he should have received was no. He had misunderstood the way in which the Government's proposed scheme is to operate. I hope that he will consider whether the point should be pursued at later stages. Perhaps the Minister can reply to her noble friend. The answer to the question posed by the noble Lord, Lord Peston, is no.
I turn next to a particular point raised by the Minister. I thought at first that it was a slip of the tongue, but I believe on reflection that the Minister was reading a passage stating, "This will enable people to keep more of every pound they earn". It does not do that at all. Perhaps the Minister will admit that she was wrong to say that. What it does is to give people extra money on top of what they earn. As the Child Poverty Action Group rightly points out, it is a straight wage subsidy.
Lord Peston: Perhaps the noble Lord will give way. There is no difference. Essentially, if a person goes out to work—it is some time since I had the pleasure of doing that—what matters is what he takes home. What does the person end up with as a result of going to work? As I understand it, a person will end up with more. I believe that to be the beginning and end of it. Other than the noble Lord's desire to be very precise in semantics—which we can also argue about—the substance is exactly as I and the Minister have described it. Now if one goes out to work one's net position is better than it would otherwise have been.
Baroness Hollis of Heigham: Perhaps 1 may help the noble Lord still further and provide information on the matter. At the moment, if one is on family credit, housing benefit and council tax benefit and one is perhaps within the PAYE system, for every pound one earns there is a deduction. One's other benefits are taken away at different rates. Under the system that we inherited from the previous administration 5,000 people paid 100 per cent MDRs. For every pound they earned they were not a penny better off. Every penny was clawed back in NICs or tax but in particular in housing benefit, council tax benefit and the loss of family credit.
Under the previous administration 130,000 people suffered a 90 per cent. withdrawal rate; 300,000 people suffered an 80 per cent. withdrawal rate; and 750,000 people suffered a 70 per cent. withdrawal rate. If this applied to the better off there would be protests against the disincentive to further effort, entrepreneurship arid all the rest of it. Yet people who are poorly paid are expected to seek to improve their hours and working

27
conditions but suffer deduction rates at this level. Under this Government the 750,000 people inherited from the previous administration who suffer a deduction of over 70 per cent. on every pound that they earn will fall by one third. As a result, about 500,000 people will take home more and keep more at the end of the day. I would have thought that noble Lords all around the Chamber would have welcomed that.
Lord Higgins: We will come to the taper when we discuss later amendments. If the Government simply wanted people to keep more of what they earned, they would have reduced tax rates.
Baroness Hollis of Heigham: I am sure the noble Lord knows perfectly well that the interplay of tax rates and NICs rates, with housing benefit, council tax benefit and family credit, produces a marginal tax rate at the worst extreme of 100 per cent.
Lord Higgins: We can return to the issue of the taper and marginal tax rates later. The noble Baroness is saying that at the moment they would keep more of what they are earning. They are in fact getting a straight wave subsidy which is added to it, which may or may not be as much as the tax which is being deducted and, as I understand it, could be more; otherwise there would be no point in the exercise. We can return to the issue later, but I maintain my position.
The noble Baroness spoke of whether there are advantages or disadvantages to the system she is proposing and whether or not it will be possible to introduce a real tax credit scheme. To some extent she revealed her feelings on the matter when she pointed out that if it were a real tax credit scheme, then it would not appear in the pay packet in the way she described.
Baroness Hollis of Heigham: I did not say that it would be a real tax credit if only it was paid through PAYE. I said that it seemed that the Opposition were arguing that if only it were paid through PAYE, then it would be a real tax credit. I pointed out that although that may seem an attractive proposition, it cannot be easily achieved.
Lord Higgins: If it could be done as a real tax credit scheme, as originally intended, meaning that it would not appear in the pay packet in the way the Government wish, would the noble Baroness be in favour of that? I am not clear about their position. I suspect that those who are enthusiastic about the pay packet argument are less enthusiastic about a real tax credit scheme. I understand that the 26-week system has not been considered by the Government, but it may be possible to introduce a real tax credit scheme. We can discuss these matters later. But the position of the noble Baroness is not precisely that set out by the Government. It is a little unclear.
Baroness Horns of Heigham: I take issue with the noble Lord attributing views to me that I do not hold and have not expressed. Clearly, it would be attractive
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if this could be seen as an addition to people's wages and be paid through PAYE. The two big obstacles are that PAYE is cumulative and that it affects people who are not in the tax system. It would therefore particularly disadvantage the low-paid. That is why I stated that businesses and the consultative group had agreed with the Inland Revenue that PAYE was not the appropriate vehicle and that, therefore, we are doing it this way. It is still being done through the pay packet by the Inland Revenue but as a separate item rather than through PAYE.
Lord Higgins: The noble Baroness has just made the point: she is saying that if it were through PAYE, it would not then appear on the pay slip as she described it, and to that extent she would regard it as a disadvantage. It is the contrary reason, with respect.
One has some suspicion that because the Government are wedded to the idea of it being done through the pay packet, although as far as the self-employed and couples are concerned that principle is undermined, they are less enthusiastic than they ought to have been, in my view, about it being a genuine PAYE tax credit scheme. The position is not clear.
The proposal of the Chancellor of the Exchequer in the Red Book at paragraph 5.13 is that it will all be integrated and the pay slip at that point will not appear in the form which the noble Baroness is enthusiastic about. Once the major reform comes through, it will be a genuine tax credit scheme, as far as one can gather from the Budget Statement. Can the noble Baroness say whether she thinks that is right?
Baroness Hollis of Heigham: I cannot possibly anticipate what forms or slips or pay packets might look like several years down the line when children's tax credits and others may have been fully introduced. That is, if I may say so, a rather silly question.
Lord Higgins: We have now heard an interesting statement that paragraph 5.13 does not say that this is not going to happen for seven years, which perhaps it should have done because then we would be clearer about the Government's objectives. It would be helpful to receive an answer to the original question of the noble Lord, Lord Peston. We can discuss the other matters on later amendments.
Baroness Hollis of Heigham: The noble Lord, Lord Peston, says he believes he had an answer. If he is satisfied, I do not see why the noble Lord should be dissatisfied.
Lord Higgins: The only difference is that the noble Lord received the answer from me and not from the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey: My Lords, I beg to move that the House be now resumed.
Moved accordingly and, on Question, Motion agreed to.
House resumed.
Lord McIntosh of Haringey: My Lords, before we move to the Statement on the NATO summit, I should like to take this opportunity to remind noble Lords that the Companion indicates that discussion on the statement should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

NATO Summit
4.15 p.m.
Baroness Symons of Vernham Dean: My Lords, with the leave of the House, I shall now repeat a statement being made in another Place by my right honourable friend the Prime Minister.
"With your permission, Madam Speaker, I will make a statement on the NATO Summit in Washington on 23–25 April. I was accompanied by the Foreign and Defence Secretaries and the Chief of the Defence Staff. Copies of the Washington Declaration, the alliance's new strategic concept, the summit communiqué, our separate statement on Kosovo and other summit documents, are being placed in the Library of the House.
"The summit was naturally dominated by Kosovo. NATO reaffirmed its basic and unalterable demands: Milosevic must withdraw his troops and paramilitaries; an international military force must be deployed and the refugees returned in peace and security to their homeland. The communiqué on Kosovo made it clear these demands will not be compromised.
NATO decided that the air campaign should be intensified; that the number of aircraft and targets should be expanded; and that the economic measures against Belgrade should be increased. In particular, we greed an embargo on oil, to be made effective by the measures necessary, including maritime operations.
"There was also discussion of the circumstances in which ground troops would be deployed. As I said to the House of Commons last week, the difficulties of a land force invasion of Kosovo against undegraded Serb resistance remain. But Milosevic has no veto over NATO's actions. It was agreed at the summit that the Secretary General of NATO and the military planners should now update their assessments of all contingencies. Meanwhile, the build-up of forces in the region continues.
"In addition, we agreed to provide all assistance to the International War Crimes Tribunal in respect of the atrocities committed against Kosovar Albanians. We also warned Belgrade against any move to undermine the democratically elected government of President Djukanovic in Montenegro.
"NATO's military commanders, General Clark and General Naumann, briefed the summit on the progress of the air campaign. NATO has largely isolated the Kosovo battlefield and built what General Naumann
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described as a ring of steel around the FRY. Six hundred and ninety aircraft and 20 ships are now deployed—more than double the force at the outset of this campaign. Half the Serb fighter planes are now destroyed. FRY air defences are ineffective, with over 70 aircraft and some 40 per cent. of the SAM 3s and 25 per cent. of the SAM 6s destroyed. Oil refining and distribution have been massively disrupted, already leading to Serb operations in Kosovo being halted on several occasions in the past two weeks. The day before the summit meeting, six tanks, 27 military vehicles and an infantry column had all been destroyed in Kosovo. These operations continue and as the weather clears and more attack weapons arrive, that type of action will become a daily occurrence.
"Russian efforts to find a diplomatic solution to thi. crisis are welcome. But there can be no alteration to our fundamental demands.
"NATO will also continue its efforts to relieve the humanitarian crisis that Milosevic has cynically provoked in and around Kosovo. NATO troops have helped deliver 11,000 tonnes of aid, and provided food and shelter to some 85,000 refugees. I met the Presidents of Albania and Macedonia and pledged Britain's support for them in dealing with the refugee crisis Milosevic's repression has created.
"The full extent of the horrific repression by Serb forces in Kosovo is only emerging now. There has been organised systematic rape of women, usually in front of husbands and children. Young men have been forced to dig graves, then shot. Whole villages have been razed to the ground. Some of the stories of the cruelty and barbarity practised by Serb militia are evil beyond belief. We have heard reports of Kosovars hiding in the hills for weeks and having to walk for days to escape Serb repression. Some, particularly children and the elderly, have died as they tried to escape. Some who have escaped, including children, have reached safety with bullet or shrapnel wounds inflicted by Serb forces. The UNHCR today has substantiated reports that women and children are being used as human shields, including in a building used to store ammunition.
"In the meeting with the leaders of the seven non-NATO countries neighbouring Serbia, we were united in our resolve to strengthen efforts to promote stability and development in south-east Europe.
"For their part what was remarkable was the view of the front line states that the NATO action was just, and that NATO must win. Milosevic is now a pariah in his own region.
"We also looked ahead at means of contributing to the long-term stability of all the Balkan states. At our initiative, NATO leaders agreed to establish a regional security forum for south-east Europe between NATO and the countries of the region. It was agreed that NATO should work together with the United Nations, the Organisation for Security and Co-operation in Europe, the European Union and the international financial institutions in this endeavour.

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"Madam Speaker, this summit had an important agenda before it, quite apart from the Kosovo crisis. It was the occasion to adapt the Alliance to meet future needs and challenges. While NATO's fundamental role will remain the defence and security of the allies, there was an equally strong consensus on the need for a more capable and flexible Alliance, able to contribute to security throughout the Euro-Atlantic area and to promote the values of democracy, human rights and the rule of law for which it has stood since its foundation. In doing so, member states reaffirmed their commitment to the Washington Treaty and the United Nations Charter.
"We approved an updated strategic concept which set out the fundamental security tasks of the Alliance and how we intend to fulfil them. Common defence and the transatlantic link will of course remain the bedrock of the Alliance. But the new strategic concept recognises that in today's world the ability to respond to crises and develop partnership with countries which were once our adversaries are crucial to our interests and the promotion of our values. The strategic concept also provides top level guidance for the restructuring of Alliance military forces. The defence capabilities initiative agreed at the summit will give effect to this by adapting and modernising NATO's capabilities along similar lines to our own Strategic Defence Review.
"The strong partnership between the European and North American members of the Alliance is the key to the success of NATO and to our security. The summit unanimously welcomed and endorsed the initiative which I and President Chirac launched at our summit last December in St. Malo, to develop a European defence capability for crisis management operations where the Alliance as a whole is not engaged.
"A stronger European capability will strengthen NATO and is fully compatible with our commitment to NATO. Making NATO a more balanced partnership will strengthen the essential transatlantic link. The Alliance stands ready, as the EU defines its defence arrangements, to make NATO force planning, NATO assets, and NATO headquarters available for EU-led crisis management operations, subject to the necessary approval by the North Atlantic Council. We emphasised the importance of fully involving those allies who are not members of the EU in this process. These decisions will ensure that NATO and European capabilities develop in a fully compatible manner.
"Madam Speaker, in Washington we welcomed for the first time at a NATO summit the leaders of Poland, Hungary and the Czech Republic, the Alliance's new members. We reaffirmed the Alliance's continuing openness to new members and agreed a new membership action plan for countries that aspire to join the Alliance.
"We met the Heads of Government of 23 non-NATO nations in a summit meeting of the Euro-Atlantic Partnership Council which showed the breadth of support of the Alliance's efforts to spread security and stability throughout the Euro-Atlantic area.
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"Regrettably, Russia was not represented at this meeting. However, throughout our discussions and in the communiqué we made clear our wish to work co-operatively with Russia on a wide range of security issues and to resume regular NATO consultation and co-operation with Russia in the Permanent Joint Council.
"Madam Speaker, there were two key outcomes of the summit. A new vision for the future of NATO was set out, of new roles for NATO, new capability, new partnership with the nations of central and eastern Europe and beyond in central Asia. And, secondly, there was the total and unified commitment by all the members of the Alliance to defeat and reverse the policy of ethnic cleansing in Kosovo. Each leader began his statement by saying NATO will and must prevail. It is our collective task now to make that victory, of justice over evil, a reality for Kosovo's long suffering people".
My Lords, that concludes the Statement.
4.28 p.m.
Lord Strathclyde: My Lords, first, I thank the Minister for repeating the Statement by the Prime Minister. This is a Statement of supreme importance at a time of enormous doubt over the future course of events in the Balkans. We thank the Minister at least for having the courtesy to be here to report to the House today and for putting her undoubted expertise at our disposal.
NATO's resolute defensive alliance is one of the greatest influences for peace in world history. It preserved the peace in Europe for 50 years. It kept at bay the threat of totalitarianism. It kept the interests of the free nations of Europe and North America bound as one. It played the major part in winning the Cold War and dismantling the horror of the nuclear threat that had lain over Europe throughout my childhood.
The future role of NATO is as crucial as its past, and it deserves the same care and caution now as governments over 50 years have given it.
We reiterate our support and admiration for the men and women of the UK's Armed Forces. We believe it is vital for the future credibility of NATO that the tasks which have been, and will be, set for them are clear and can be seen through to a successful conclusion. Do the Government agree that what our forces, our allies, and indeed our enemies, and those nations not involved most need is clarity? So will the Government understand my concerns that despite consistent questioning from my colleagues and myself since the crisis began we have yet to receive clear, consistent and unequivocal political and military objectives from the Government?
I have four sets of questions to clarify matters in the light of the NATO summit. The first relates to ground troops. Last week, the Prime Minister signalled a change in policy on ground troops. He envisaged the active deployment of NATO forces against what he called a "degraded" Serb military machine.

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On 13th April in this House, the noble Baroness the Leader of the House said:
"of course there may well he British and NATO ground troops involved, but that would be a peacekeeping force rather than a force intent on fighting its way into a difficult situation, which … against Serbian refusal to accept any intervention on a legal basis would he very difficult'. —[Official Report, 13/4/99; col.639.]
What is government policy on ground troops? Is it being made up as we go along? Where is the clarity? Is the use of ground forces, other than as a peacekeeping force, now one of our strategic options? If so, what success did the Prime Minister have in convincing our NATO allies of the need to change policy? Will the Minister accept that if this policy is to be carried out it requires a fuller explanation than has so far been given to Parliament? The country will not wish to be led into a ground war by stealth.
I turn to the serious question of an oil embargo. Are the citizens of any NATO countries believed to be involved in the supply of oil to Yugoslavia? If so, what representations have been made by Her Majesty's Government? I understand that NATO has now decided to board and inspect all ships. What is the legal basis for that in maritime law or under the UN Charter? Are Her Majesty's Government now officially at war with Yugoslavia?
What does NATO plan to do if ships plying trade with Yugoslavia decline to be boarded? What rules of engagement have been given to Her Majesty's ships on what to do in such circumstances? Will they be authorised to open fire on neutral shipping in the Adriatic Sea? Is it intended to interrupt tankers bound for Yugoslavia outside the Adriatic or Ionian Seas?
I believe that the House will wish to be assured that there is absolute clarity on a matter of such potentially momentous import.
We share the Government's regret that Russia was not represented at the Heads of Government meeting of 23 non-NATO nations of the Euro-Atlantic Partnership Council. It remains our view that close co-operation with the Russians on security matters is vital, as is their influence and potential role in finding a solution to the continuing crisis in Kosovo. We hope that the Government will never underestimate the extent to which the Russians may well hold the diplomatic key to unlock a settlement to the humanitarian tragedy in the Balkans.
Last week, the Prime Minister commented to the US media that:
"we carry on until Milosevic steps down".
The Foreign Secretary said at the weekend that ethnic hatred could be defeated,
"only when we get a change of regime in Belgrade".
But, when asked by my noble friend Lord Trefgarne in the House last Wednesday whether it was now a war aim to remove President Milosevic from power, the noble Baroness, Lady Symons of Vernham Dean, replied, "No, my Lords". Would the noble Baroness be prepared to reconcile those statements? Again, where is the clarity here? Do we carry on until Milosevic steps down and there is a change of regime, or do we negotiate with him at the appropriate time?
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How far will we extend targets in Yugoslavia? When this action began on 25th March, the noble Lord, Lord Gilbert, responded to the noble Lord, Lord Stoddart, by saying:
"We are addressing a very small number of precise military targets, in exactly the same way as we were doing in Iraq". — [Official Report, 25/3/99; col.1512.]
Are radio stations "precise military targets"? Do the Government confirm the statement of Mr. Berger, the US National Security Adviser, that NATO is now out to strike what he called "high-value national assets", including the electricity grid, water supplies and the national telephone system? Have we not come a long way from a "very small number of precise military targets" in a short month? If we are moving on, where are we going and can we be clear?
Finally, there is need for clarity on the long-term future of NATO, in particular the EU place in it. We welcome the fact that the European defence identity will be developed within the NATO structure, but where does the development of an EU-led capability leave countries such as Turkey—which is of vital strategic importance—which are members of NATO but not of the EU?
However, in the light of what the Prime Minister said in his Statement, would the Minister care to comment on whether the agreement signed by him at last renders obsolete the St. Malo agreement he signed last year and the specific idea of developing an EU defence identity outside NATO, something we warned against then and still view as unacceptable?
Once again, there is surely a case for clarity. Es the Government's policy an EU capability inside NATO or outside NATO? It is difficult to see how the two agreements can be reconciled.
To conclude, on behalf of these Benches I express the wish that NATO is as successful in the next 50 years as it has been during its first 50. I look forward to the Minister's reply.
4.37 p.m.
Lord Rodgers of Quarry Bank: My Lords, I too, join the noble Lord, Lord Strathclyde, in welcoming the Minister and thanking her for repeating the Prime Minister's Statement. I hope that it will not be regarded as churlish to associate myself with remarks made by the noble Lord, Lord Henley, earlier today. The first duty of every Minister is to Parliament. On an occasion of this kind, the noble Baroness the Leader of the House should have been present. The summit was not a sudden event; it could have been anticipated. If it were anticipated, it would have been known that the Prime Minister would make a Statement on the following Monday. In those circumstances, there was adequate time for the Leader of the House to make alternative arrangements. I regret her absence and I hope that in future she will participate more fully in these discussions.
There are two statements in the single Statement made by the Prime Minister. The first is about NATO operations in Kosovo, a short-term issue which is of great concern to the House. The second is about the new

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strategic concept of NATO, what the Prime Minister in his Statement called "a new vision". That needs the closest scrutiny. The outcome in Kosovo is only one factor in a major long-term development which it is right that we should examine and discuss in full.
Indeed, we shall have a debate in your Lordships' House on Thursday 6th May. It was to be introduced by the noble Lord, Lord Gilbert. I hope that it will be recognised by all sides of the House that the debate must go much wider than the defence considerations of Kosovo. It must look not only at the issue of the refugees, but at the whole future of the Balkans. Speaking from these Benches, I believe that it would be highly unsatisfactory if the debate were not widened. Indeed, that would be a good opportunity for the Leader of the House on such an important occasion to lead for the Government and bring all these important issues together. As regards the short term, we know that the short, sharp shock in Kosovo, the air strikes, have turned into a major war of attrition. It has been recognised that, for good or for ill, there is a larger role for ground troops than the Government were prepared to recognise two or three weeks ago. Indeed, the Prime Minister acknowledged that in the Statement when he referred to "contingency planning". That must be recognised as a major shift of policy on the Government's part.
As regards the long term, the Statement listed very properly the major issues which were discussed at the summit and which underlie the communiqué: first, crisis management and response options in what is now called the "Euro-Atlantic" region. That alone deserves a very careful examination to see what NATO will be concerned with out of area. Its great success over the past 50 years must not lead us to assume that there is a major out-of-area function for it.
Secondly there is an argument for, as I believe the Prime Minister described it, a more balanced partnership between the North American parts of NATO and their European allies. I welcome that. But we must consider carefully how we can develop a European defence identity while recognising at the same time that for the foreseeable future we must draw the United States into Europe. We must not allow isolationism to develop so that it feels that it no longer has a place in problems of this kind.
Indeed—and I have referred to this already in respect of the debate we are to hold—there are major foreign policy issues about the long-term future of the Balkans and whether those countries will be turning to the east or the west; and about the need to have a plan for post-war reconstruction. All that needs to be thought about when a military operation is in progress. We can then look at the strange birth of the old diplomacy which is one result which could have been anticipated by the break-up of the Soviet Union but the full weight of which was not clear until the events in Yugoslavia and more particularly the recent events in Kosovo took place.
I ask three brief questions of the Minister, the first of which is very straightforward. We have been led to believe—it has been commented on widely—that the Prime Minister's speech in Chicago marked a major
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development of government policy. In addition to the documents which will be placed in the Library, perhaps we may have a copy of that speech so that we can measure precisely what has been said.
I hope it is not too soon, because I am sure the Chancellor of the Exchequer will be concerned about this, to make some estimate of the additional costs falling upon the defence department as a result of the Kosovo intervention. The noble Baroness may tell me that that is part of the contingency arrangements of the present year's budget. If so, so be it. But at least we should know and it is important that the calculations should be made.
Thirdly, I pick up an important point made by the noble Lord, Lord Strathclyde, whose questions were all relevant in that respect, The experience of oil sanctions elsewhere in the past has been that, for the most part, they have been unsuccessful. In view of that, do the Government really believe that they can be successful on this occasion? What percentage of oil reaching Yugoslavia do Ministers really anticipate will be stopped as a result of the arrangements which we are now discussing?
4.45 p.m.
Baroness Symons of Vernham Dean: My Lords, I thank both the noble Lords, Lord Strathclyde and Lord Rodgers of Quarry Bank, for their broad support on those issues. I should say to the noble Lord, Lord Rodgers, that my noble friend the Government Chief Whip gave a clear explanation of why my noble friend the Leader of the House is not here. I am sure that your Lordships will recognise that Northern Ireland is also an extremely important issue at present. My noble friend had a long-standing engagement which would have occasioned a good deal of difficulty and disappointment had she been unable to fulfil it.
Both noble Lords made a number of points to which I shall do my best to respond as fully as I can. I associate myself with the remarks of the noble Lord. Lord Strathclyde, about NATO having preserved the peace for 50 years. I reiterate that NATO remains the cornerstone of the Government's defence and security policy as we have had occasion to discuss many times in your Lordships' House in the past two years. That was developed very well in the discussion on the strategic concept which took place in Washington last week. Again, we have had the opportunity to discuss that in the House.
The noble Lord, Lord Strathclyde, said that clarity is needed in the Government's position on Kosovo. There has been a good deal of clarity on the political objectives. The noble Lord said that he is still not clear. Perhaps I may reiterate those objectives for him, as I thought I did last week. They are that there should be an immediate ceasefire; that Milosevic's forces should be withdrawn from Kosovo on a verifiable basis; that refugees should be able to return in confidence to their homes; that there should be an international security force on the ground in Kosovo to make sure that the refugees have that degree of confidence: and that there should be an acceptance of the political process,

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building on the Rambouillet accords. Those are five clear political objectives. The Government have stated and reiterated them on a number of occasions.
The noble Lord is also concerned that there should be clarity as regards the military objectives. The military objectives must be those which ensure that the political objectives are met. They are that there should be the degrading of the Milosevic war machine. Only last week we discussed this in your Lordships' House when the noble Lord, Lord Trefgarne, asked me specifically about military objectives. It will not have escaped the attention of the noble Lords, Lord Strathclyde and Lord Trefgarne, that I did not answer specifically about military objectives.
We are in a war situation at present. British troops are going in to fight. Over and above the general objectives which have been laid out, it is not in the best interests of our troops to specify particular objectives at present. However, I shall try to say more about that in a few moments, particularly in relation to points raised by the noble Lord about the television station.
We are about ensuring that our troops have the best possible chance of success. We are not about giving any help to Mr Milosevic. The clarity which the noble Lord demands, understandably, in respect of your Lordships' House, may mean that we are giving more clarity to Mr. Milosevic in relation to some of the points raised.
In particular, the noble Lord asked about the oil sanctions. They are being discussed today by my right honourable friend the Foreign Secretary. Therefore, the proposals for a maritime operation are still in the planning stages. We should take account of the legal implications of any NATO operation before agreeing it. Therefore, any action will be taken in accordance with the law. As I said, the details of how that is to be undertaken are under discussion today. As those emerge, if we can put them into the public arena and give the noble Lord more help on that point, I am sure that we shall do so.
The noble Lord was exercised also on the question of ground forces. We are concentrating on what can be achieved through an effective air campaign. We are inflicting serious damage on Milosevic's war machine through the very structures which keep him in power. With the allies at Washington, we agreed unanimously to intensify that air campaign in order to increase the pressure on Milosevic and to reduce his ability to wage war against his own citizens. However, at the same time, as the noble Lord will have noted, the Secretary General of NATO, Mr. Solana, has tasked the. NATO military authorities to update the planning for ground forces in a variety of environments—I pick my words carefully. I say to the noble Lord, Lord Strathclyde, as I believe has been fairly clear now for some time, no option is being ruled out. I hope that brings greater clarity in the way the noble Lord felt was important.
The noble Lord raised a number of questions in relation to Russia. We regret that our Russian friends were not with us in Washington. We want to work with Russia. The Kosovo crisis does not negate any of the principles underpinning the NATO-Russia Founding Act 1997. We are aware and, I hope, sensitive to the
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domestic and parliamentary opposition in Russia at the present NATO dealings. However, the Foreign Secretary and the Prime Minister are keeping in close touch with their Russian counterparts. On 22nd April the Prime Minister had extended discussions by telephone with Mr. Yeltsin. He emphasised then that Russia has a vital role to play over Kosovo. I believe my right honourable friend also gave that clear message in a television appearance in Russia.
The noble Lord asked about the position concerning Milosevic. I gave the clearest possible answer on that to a direct question from the noble Lord, Lord Trefgarne, only last week. We believe that Milosevic has been an unmitigated disaster for his country. However, as I made clear to your Lordships, it is for the people of that country to decide who governs them. When we look at the way in which Mr. Milosevic has carried out repression against his own citizens and denied them any semblance of democracy, I think we must all agree that he is a brutal, cruel and repressive man. There cannot be any negotiation with him over his policy of ethnic cleansing. He has to meet our conditions. He has to withdraw his forces from Kosovo, allow the refugees to go home in peace and allow an international presence there to protect them.
Lord Strathclyde: My Lords, I thank the noble Baroness for giving way. I do not want her to give away any state secrets but my contention is that there is some confusion about Milosevic's own position. Can I take it, from what the Minister said, that Her Majesty's Government are happy to negotiate with the President so long as he has met the initial demands she set out earlier?
Baroness Symons of Vernham Dean: My Lords, Her Majesty's Government have made it clear that Mr. Milosevic must meet those five conditions. We have made it clear that it is not an aim of this war to see Mr. Milosevic fall from power. I believe we would be delighted if that was the case, but that is a question for the people of his country. We have stated our conditions in relation to taking forward the position.
The noble Lord also asked about the bombing of the television station. The regime's propaganda keeps the Serbs ignorant of the brutality that goes on in Kosovo, the aims of the international community and the reasons for NATO's campaign. The media has been used to incite racial hatred and to immobilise the Serbs. Therefore, where media facilities are relevant to military operations or to the capacity of Milosevic to continue his campaign of terror, they will be considered as possible targets. I hope that makes the point clear.
I turn to the specific matters raised by the noble Lord, Lord Rodgers of Quarry Bank. The speech given by the Prime Minister last week ranged over a number of issues. It can be put into the Library of the House and I shall arrange for that to be done. The additional costs of the military action will, indeed, be falling on the contingency reserve. If there is any further information that I can let the noble Lord have on that matter.. I shall do so. However, I must say, as I am sure the noble Lord would wish, that I will be able to give such information

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as is consistent with the security of our troops. We do not want anything to be read across from one area to another. Of course, my right honourable friend the Chancellor will be concerned about the costs involved. However, that is not the issue at stake here, which is the humanitarian disaster in Kosovo.
The noble Lord also raised a number of issues about European defence, as did the noble Lord, Lord Strathclyde. There was a strong endorsement from all allies, European and North American, EU members and non-EU members, for our European defence initiative. We do not believe that this is taking place outside NATO at all. We believe this is about crisis management where the alliance as a whole is not engaged. That does not derogate in any way from the points I made at the beginning of my answers about the continued importance attached by Her Majesty's Government to NATO as the cornerstone for security.
The noble Lord, Lord Rodgers, was also concerned about what was termed "out of area action". The term. "NATO area" is one which Her Majesty's Government believe is misleading. NATO's Washington treaty and the strategic concept do not impose any geographical restrictions on NATO action. I hope that that has shed a little more light on that point. I believe I have covered all the issues raised by both noble Lords.
4.57 p.m.
Viscount Cranborne: My Lords, does the Minister accept that the whole House will have noted the careful preparations she has made this afternoon towards the possibility of achieving a U turn on the question of an opposed invasion of Kosovo by ground troops? Can she tell us whether the consideration of such a possibility is viewed with equanimity by every member of NATO and whether they would support such a consideration?
To what extent have the Government been considering the impact of a possible opposed invasion by NATO ground troops on our own reserves of infantry in particular? What effect will that have on the emergency tour plan of infantry battalions of our own troops should that occur, particularly in view of the worrying signs of developments in Northern Ireland?
Baroness Symons of Vernham Dean: My Lords, I am sure that the noble Viscount is not trying to be unnecessarily tendentious at a time when I would hope that the House would be able to pull together. I do not believe that there is anything like what the noble Viscount described as a U turn. The fact is that military situations develop. The situation now is not as it was when we began this military encounter. With the greatest respect to the noble Viscount, I do not believe that playing along the party political lines at this time is tremendously helpful.
As the noble Viscount knows, NATO acts by consensus. As regards ground forces, it has always been the position of Her Majesty's Government, as my right honourable friend said in his Statement in another place, that we should not give Mr. Milosevic any veto over NATO's actions. Those words speak for themselves. Mr. Milosevic does not have the right to veto what
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NATO does. It was for that reason that Mr. Solana was asked to update the assessments about all contingencies. It is on that basis that all the partners in NATO agreed. As the noble Lord will know, NATO cannot operate by anything other than consensus. All 19 countries in NATO, including what have been described as the front line states, the neighbouring states of Serbia, agreed on that position in the communiqués released.
Lord Merlyn-Rees: My Lords, with regard to the role of the individual members of NATO, can the Minister confirm that at the moment 86 per cent of the resources and manpower are provided by America; 7 per cent by the UK and the other 7 per cent by the rest? Those that supply the greatest amount of manpower and resources call the tune compared with those who supply a small amount. Also, was any thought given in Washington to the future role of the KLA? Is it to be brought into the fold? Is it to play a major part in the reoccupation of Kosovo? It is important to know that.
Baroness Symons of Vernham Dean: My Lords, I recognise the figures quoted by my noble friend. but I do not know whether they are absolutely accurate. It is true that the United States provides a considerable amount of military equipment into the area, but I shall have to check with my colleagues in the MoD in relation to the current military deployment of personnel. Those figures have been changing. As my right honourable friend's Statement made very clear, more troops are being sent to the area, and a considerable number of British troops are there as well.
I can assure my noble friend on two points. First, there is engagement across the board in NATO, both as to equipment and as to manpower. Secondly, as I said a moment or two ago to the noble Lord, Lord Strathclyde, there is agreement by consensus. I remind my noble friend of the point made in my right honourable friend's Statement, that every one of the NATO partners who spoke on this in Washington began by saying that he believed that the alliance had to defeat and reverse the policy of ethnic cleansing and that NATO will and must prevail. That is a strong position across the alliance.
My noble friend will know also that the KLA is still engaged in fighting. It is difficult to talk to the KLA at the moment, for reasons I am sure my noble friend will understand, and in any case, as we have discussed before in your Lordship's House, the KLA is itself a fractured organisation in terms of leadership. I take my noble friend's point that any movements towards peace must involve consultation with those who represent the Kosovars, but that will comprehend their political leaders as well, perhaps, as those who have been doing some of the fighting.
Lord Craig of Radley: My Lords, when the air campaign began, it appeared that we were bent on persuading Milosevic, by degrading his war machine, to accept the basis of the Rambouillet proposals, in particular that Kosovo should have autonomous status within Serbia. more recently there have been suggestions that Kosovo should be partitioned, or that

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it should be an independent state. What is the Government's current position on the future of Kosovo? Has there been a departure from the original position?
We now hear far more talk about taking out Milosevic's key elements of power rather than degrading his war machine. There seems to me to be some difference between talking about degrading his war machine and attacking the key elements of what keeps him in power. The precise position over Kosovo will have major implications for any ground forces that may be deployed inside Kosovo and it would be helpful to know what the Government's position is.
Baroness Symons of Vernham Dean: My Lords, on the political track, if I can put it that way, the Government's position is that the Rambouillet process should be built upon for the future of the Kosovar people. But it is not easy to predict at this juncture what the Kosovars themselves will want for their future. After all, they have been through a truly scalding and horrific experience over the past few weeks. Perhaps what was acceptable to them then may not be acceptable when the military action is completed.
The noble and gallant Lord says that he is not clear as between on the one hand the Government's desire to degrade the military capacity of Mr. Milosevic and, on the other, a desire to undermine the key elements in his power. While I see that philosophically those issues can he separated, some of the key elements in keeping Milosevic in power will be part and parcel of keeping his military machine alive. It was for that reason I gave the specific answer I did to the noble Lord, Lord Strathclyde, in relation to the Government's view of the television station as a proper military target. It is the propaganda machine that helps to keep the military machine moving. Therefore, though philosophically what the noble and gallant Lord says may be true, in practical terms the two issues coincide considerably.
The Earl of Lauderdale: My Lords, will the noble Baroness kindly answer one or two short questions? The first concerns the oil embargo. Are we to understand that oil is reaching Yugoslavia through the Adriatic port of Bar, and also through Thessalonika? If there is to be an embargo enforced by naval power, will that also apply in the Aegean Sea as well as the Adriatic? Also, can the noble Baroness tell us anything about Mr. Djukanovic's statement reported in this morning's press—after all, he is number two to Milosevic—pleading for Russian endeavours to obtain a compromise? Finally, the noble Baroness talked about a forum for south-east Europe. Is that something that will take account of the many territorial claims of those countries—Greece has claims on Albania, Bulgaria has claims over Romania and so forth—or will it ignore all the current and outstanding territorial claims that have beleaguered that part of the world for the past 50 or 60 years?
Baroness Symons of Vernham Dean: My Lords, as I indicated earlier when answering the noble Lord, Lord Strathclyde, the proposals for the maritime blockade are being discussed today. They will be
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discussed with a view to making that blockade as complete as we possibly can. We do not want to be in the position, so eloquently described by the noble Lord's noble friend Lord Moynihan last week, where there is a possibility of British servicemen risking their lives in bombing expeditions only to find that oil is getting into the FRY through other means. The purpose of my right honourable friend's discussions today will be to make that blockade as clear and solid as we possibly can.
The noble Lord asked about the comments made by Mr. Draskovic. That was an interesting development. I am sure that all noble Lords who heard about it were extremely concerned as to what was happening. It is clear that only Mr. Milosevic can take the decision about ethnic cleansing and NATO's demands. Mr. Draskovic's remarks demonstrate that Mr. Milosevic at the moment does not appear to be in a position to reason with anyone, even members of his own government. But we were interested in that development and, if I can put it this way, we shall keep a watching brief.
The noble Earl also asked about the stability pact in south east Europe. The OSCE and the EU have proposed this pact which would build on existing regional initiatives and open the door for a long-term political and economic stabilising process. Details still have to be worked out, but it is hoped that NATO and the international financial institutions would be involved as well as the EU and the OSCE.
The Earl of Lauderdale: My Lords, perhaps I may point out to the Minister that Mr. Djukanovic was the man who made the statement, He is now Mr. Milosevic's number two in government and was leader of the opposition until a few years ago.
Baroness Symons of Vernham Dean: My Lords, in that case, let us hope that some of the wisdom in his words will prevail. However, I do not believe that the noble Earl should have any confidence that that will necessarily be the case, given Mr. Milosevic's record.
Lord Redesdale: My Lords, although we on these Benches would quite support the use of ground troops to enable refugees to return to Kosovo, if that is the only way by which they will be able to go home, can the Minister say whether there have been any discussions on the use of depleted uranium shells? This is the main armament for the A10 anti-tank aircraft and it would be unfortunate if the Kosovan refugees were to go home only to find that this significantly environmentally unfriendly ammunition had been used.
Baroness Symons of Vernham Dean: My Lords, the questions of environmental degradation raised by many people are matters which Her Majesty's Government wish to keep in the frame as we consider the way forward. NATO is making every effort to ensure that only facilities of specific military value are targeted for that very reason. I will have to write to the noble Lord on the particular question that he raised. It is my understanding that we are taking every precaution that we can not to degrade the natural environment and not to cause any long-term environmental damage.

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However, the noble Lord raised quite a specific point. If I am able to respond, given the other strictures on some of my answers, I shall of course do so.
Lord Mackay of Ardbrecknish: My Lords, perhaps I may return the Minister to the appalling question of the refugees who have been driven out of Kosovo. Like many people in this country, I am becoming a little bemused by the numbers involved. Can the Minister tell the House how many Kosovan Albanians were estimated to be within Kosovo when the campaign began, how many are still there and, therefore, by subtraction, how many have either been driven out or killed? Does the Minister agree that that will show up the enormity of the problem with which the surrounding countries will have to deal?
The noble Baroness mentioned the non-NATO countries in the area and the discussions that NATO is having with them. However, is NATO having any discussions with them about the huge economic damage which has been done to their economies by the bombing of bridges over the Danube, bearing in mind the fact that the Danube is no longer an important economic artery for those countries? That will mean very serious consequences for them; indeed, they are not rich countries.
Finally, can the Minister help us with what seems to me to be a contradictory statement? At the beginning of the campaign it was made absolutely clear that we were ruling out the deployment of ground troops in any kind of war situation. In my view, that sent Milosevic a pretty clear signal. Some of us who have been listening to the noble Baroness are puzzled. Is she now actually dulling that signal and suggesting that we may well send in ground troops? If that is so, does she not think it is time that we made it a little clearer so that Milosevic understands?
Baroness Symons of Vernham Dean: My Lords, for the avoidance of any doubt, perhaps I may point out to the noble Lord that nothing is ruled out in terms of ground troops. I have told the noble Lord as much as I am able to tell him in this respect. I should also emphasise that the advice that I have been given over what to say to your Lordships on this point is the advice of those who are in a better position than I—and indeed, the noble Lord—to judge the best way to protect our troops. I have given the noble Lord the best answer that I can; namely, that nothing is ruled out. I hope that that is a clear enough signal to the noble Lord and perhaps also to Mr. Milosevic.
The noble Lord asked about refugees. It is very difficult to obtain any firm figures as regards the numbers of displaced persons within Kosovo. Indeed, it is extremely difficult. My right honourable friend the Secretary of State for International Development has the major responsibility in this area. I know that she is keeping a daily record of what is happening in so far as she is able to do so. I could give the noble Lord the running totals as regards where refugees are in Albania, Macedonia and Montenegro, but I am sure that the noble Lord can probably obtain those figures himself.
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However, we calculate that there are still some hundreds of thousands of displaced people in Kosovo, although they are moving towards the borders and many of them are crossing over into the neighbouring states. We still believe that there are considerable and very worrying numbers of refugees who have yet to find any degree of safety.
The noble Lord raised the most important point about what is being done to help those countries which are affected by this military action. The Statement from my right honourable friend made clear that, in the discussions with the front line neighbouring states, a number of issues had been discussed about the ways in which to rebuild economies in the future. I believe that both my right honourable friend and indeed NATO allies recognise that a number of neighbouring countries are having to absorb some fairly difficult economic problems which arise from the military action that is being undertaken. They also recognise that those countries of NATO which are in a position to do so are prepared to do what they can to help those countries in the future financially to rebuild those parts of their economies that have been damaged. However, these discussions are continuing at present. as I hope the Statement made clear.

London Bombings
5.17 p.m.
Lord Williams of Mostyn: My Lords, with the leave of the House, I should like to repeat a Statement made by my right honourable friend the Home Secretary in another place. The Statement is as follows:
"With permission, Madam Speaker, I should like to make a Statement about the bomb explosions in Brixton and Brick Lane.
"Last week on Saturday 17th April, the explosion in a busy market street in Brixton injured 39 members of the public and three police officers. This Saturday, at about the same time, another improvised device exploded in Brick Lane in East London, injuring six people. In both cases no warnings were given.
"I know that I speak for the whole House in expressing my deep sympathy for those injured in these blasts, for their families and friends and our admiration for the very prompt way in which the police, fire and ambulance services responded.
"Sir Paul Condon, the Commissioner of Police for the Metropolis, made it clear yesterday that the investigation into these evil acts is the number one priority for the whole of the Metropolitan Police Service. A huge effort is going into the investigation which is being led by the anti-terrorist branch. The branch has a great deal of experience of this kind of outrage but the perpetrators are only likely to be brought to justice with the help of all sections of the community. I urge anyone who believes that they have information which might help the police to contact them immediately.

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"Sir Paul Condon has already stated that he considers that the bombings were racially motivated. Brixton is at the heart of London's African-Caribbean community. Brick Lane is at the heart of the Bangladeshi community in Britain. I want to make clear that any attack on these communities is an attack on all British people and the whole of British society. We will not tolerate racism of any kind, still less this pernicious violence.
"Ours is a country, which can be proud of its achievements in race relations. Because of that it is a better and stronger society. Of course, there is much more to he done to make Britain a truly multi-racial arid multi-cultural society; but the overwhelming public support for the recommendations of the Lawrence inquiry shows the strength of our commitment to achieve this.
"The criminals who committed these attacks will not succeed. As in Brixton last week, the whole community in Tower Hamlets has come together to assist the police in every way possible.
"As my honourable friend the Member for Bethnal Green and Bow, Oona King, has said,
"History shows we do not tolerate this type of racism, however violent. If anything. I hope that some good will come out of this because both the black and the white community will strengthen so it will he overcome'.
"Whilst the perpetrators of this violence remain at large there is plainly a risk that they may strike again. We must meet that threat with vigilance, but without panic.
"The police are pursuing the investigations of these bombings and the protection of the public with the utmost vigour. I have every confidence in them. I know that the whole House will share their determination and condemn these mindless crimes".
My Lords, that concludes the Statement.
5.20 p.m.
Lord Cope of Berkeley: My Lords, I am sure the whole House will agree with every paragraph of the Home Secretary's Statement. These are appalling outrages committed by evil people which none of us can tolerate. I entirely endorse what has been said, and particularly the expressions of sympathy to those who have been injured and affected in other ways.
As the House knows, I had some Ministerial responsibility for fighting terrorism in Northern Ireland a few years ago. We can of course in no way relax in that connection. I have visited bombed sites and bombed communities and I have reason to know a good deal about threats. The threats that have been made are threats to us all. I also endorse what the Home Secretary said in that respect.
The House will not expect the Minister to give any details that he may have either of the investigations or of the protective measures which are being taken. To do so would obviously be counter-productive. However, he assured the House that both the Metropolitan Police, and I am sure all our police forces, are working as hard as
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possible with the fullest possible backing to identify these criminals, to bring them to justice and to present further outrages of this kind.
5.21 p.m.
Lord Dholakia: My Lords, we on this side of the House welcome the Government's Statement and also the sentiments expressed by the noble Lord, Lord Cope of Berkeley. Innocent people going about their daily business have been hurt and dastardly acts have been perpetrated against members of ethnic minorities. Sooner or later, some people, irrespective of their race or colour, will be maimed or killed simply because they are in the wrong place at the wrong time.
We welcome the actions that the police have taken They have been thorough and efficient and that has. assured local people that police activities will be stepped up. This confidence-building exercise is important, particularly when the community is scared and frightened. Those of us who have lived here for a long time have never before seen such an unprecedented level of hatred directed at law-abiding citizens. The perpetrators are small in number and would even kill or maim simply to generate publicity for their race-hate propaganda.
A number of Right-wing organisations have claimed responsibility. A common thread running through all of them is their hatred of the black, Asian and Jewish communities. Coming so soon after the Lawrence inquiry, the extremists have found that the British public are not prepared to tolerate racism in this country. This is a credit to the British people. The extremists have continued to lose ground in the political. process for a long time. It is no wonder that they are now hell bent on intimidating people by means of planting bombs that cause major damage.
This morning I spoke with a representative of the Board of Deputies of British Jews. They, like other communities, have been advised that the police are stepping up security for their community. In addition, the board has sent messages to schools, synagogues and others to be extra vigilant. The same message has gone out from other community leaders. The protection of temples, mosques and gurdwaras is vital. These are the focal points of community activities and must be protected at all costs.
I wish to put a number of questions to the Minister. Will he use the Asian and black media—that is, television, radio and the newspapers—to assure ethnic communities of the actions the police are taking to protect them? Will he ensure that extra precautions are taken to protect the places of worship of the different communities? Will he ensure that posters and publicity materials are printed in various languages explaining what to do if a suspicious package is found? Will the Minister examine the provisions of legislation dealing with incitement to racial hatred to ensure that racist propaganda has no place in our society? Will the Minister ensure that key areas such as Southall, Ealing, Birmingham, Bradford, Leicester, and a number of areas where minorities have settled, have additional resources so that adequate policing is possible? Will the Minister

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thank the police at the Palace of Westminster for their prompt action in informing many noble Lords that they have received racially offensive literature in their mail?
All of us abhor racist crimes. The present actions are designed to destabilise our record of good community relations. We must not give comfort to racists who perform such dastardly acts. I quote from the Commission for Racial Equality. This quotation supplements the sentiments which have been expressed by the Home Secretary. The commission states,
"The bomb attacks in Brixton and Brick Lane are an assault on the whole of British society. The sense of outrage and revulsion felt across all communities reflects growing support for decisive action to eliminate all threats to a multiracial society".
We should ensure that we are vigilant against those extremists who have no concern for men, women or children of any race. They should be told that they will not be allowed to destabilise good community relations of which we are all proud.
5.26 p.m.
Lord Williams of Mostyn: My Lords, the noble Lords, Lord Cope of Berkeley and Lord Dholakia, never disappoint me or, I think, your Lordships' House in the generosity and decency of their responses on these occasions. The noble Lord, Lord Cope, with his extensive knowledge, was scrupulous in saying that he would deliberately refrain from asking me details about investigations or protective measures. I am most grateful to him once again for taking that course. The Home Secretary is in close contact with Sir Paul Condon as Commissioner for the Metropolis.
The noble Lord, Lord Dholakia, quite rightly said that the people involved were innocent people going about their daily business. The people who perpetrated these offences are criminals. That is foremost in my mind. I was about to say that they have planted these bombs because they had lost the moral argument, but they have no moral argument that can be detected.
The noble Lord, Lord Dholakia, asked a number of questions. I agree with him that it is important fully to involve our friends and colleagues in the Asian and black communities, particularly as regards their willingness to provide media opportunities in languages that are more familiar and more appropriate to some of them. I very much take the noble Lord's point about precautions at places of worship and poster dissemination about what to do if a suspicious package is found. I believe that is well in hand.
The noble Lord mentioned the excellent service that is given—as always—to your Lordships by the police in the Palace of Westminster. I know that all your Lordships would want me to reaffirm the great gratitude that we feel for that service. The noble Lord also referred to legislation. As your Lordships know, under the Public Order Act 1986, prosecutions for incitement to racial hatred require the consent of the Attorney. I shall give a little background to this.
From 1988 to 1998 there were 54 applications to the Attorney and 45 were granted. Therefore he and his predecessors have been diligent in this regard. As your
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Lordships also know, the recent Crime and Disorder Act instituted nine new racially aggravated offences with increased penalties. It is also a requirement under Section 82 of the Act that, where there is evidence of a racial motive or racial hostility in connection with any offence, the court should consider that as an aggravating factor meriting an increased sentence within the maximum available. That is an extremely important measure which the noble Lord. Lord Dholakia, supported when we discussed it in your Lordships' House.
I now refer to the up-to-date material that I can provide without trespassing on unsafe areas. At 8.3 p.m. on Saturday last, the explosion having occurred at about 5.55 p.m., a call was received by a 999 operator from a man who claimed to be a member of a group which chooses to call itself Combat 18 and which claimed responsibility for the bombing. That was traced to a phone box in south-west London and, I repeat, Sir Paul has plainly stated that this was a racially-motivated attack and the police have linked it to the Brixton bombing on 17th April.
5.30 p.m.
Baroness Flather: My Lords, perhaps I may first of all apologise for being overeager in my attempt to say a few words.
I was a victim of a very serious and potentially lethal racial attack in the early 1980s. I know something about the fall-out, so to speak—apart from nails—which takes place after such an event. It is important that we tell Londoners to be robust in their response. It is not a good thing to give in and do fewer of the things that one normally does. When Northern Ireland terrorists were active in London, Londoners were extremely robust in their response. There is a lesson to be learnt. We should not let the perpetrators of such dreadful deeds win. We should not let them change the quality of life in London. I hope that the Minister will make that plain.
Secondly, it is very important that we should be open about what happens to us. If we do not speak up. no one will. Certainly in the 1980s very few people were willing to speak up and say, "Yes, we have been victims of such attacks".
Thirdly, in the past we have discussed proscribing groups. The main argument against that is that a group will simply change its name and become another group. But if the machinery is put into motion, then why not continue to proscribe each group as it becomes known? That would make the job of the police in detecting these people much easier. Usually information comes from the less right-wing right-wing groups—if there can be such a thing. These are groups which are not particularly violent but are right-wing in their thinking. They are the ones that do not like others carrying out this kind of violence. I hope the Minister will consider the question of proscribing groups.
Lord Williams of Mostyn: My Lords, the question of proscribing groups is of course important but—the noble Baroness is right—it is not always successful. These are fringe, marginal organisations. I almost said

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they are on the margins of our society; I believe that they are beyond the margins of our society. At the moment the proscriptive powers under the Prevention of Terrorism Act are limited to those essentially connected with terrorism in Northern Ireland. But I remind your Lordships that we have issued an extensive consultation paper in regard to possible gaps in our legislation to deal with UK-wide counter-terrorism, not forgetting that international terrorism also needs to be taken into account. Therefore, I shall bear very much in mind the point made by the noble Baroness.
We should also remind ourselves that since these people have nothing else to bolster themselves, very often some of them, curiously, would want to be proscribed to obtain the attendant publicity for their otherwise dismal, pathetic little lives. It is important that we should be robust. That was very much brought home to me. My daughter, who is 17, was not too far away and within easy earshot of the bomb. We should bear in mind that terrorism wins when we succumb. I entirely endorse what the noble Baroness said about that.
As to her second point, it requires moral courage, which she has shown on all these occasions, to speak up because, again, silence is a secret accomplice.
Baroness Uddin: My Lords, I thank the Minister for repeating this very important Statement. Does my noble friend agree that the people of Brick Lane, both the Jewish community and now the Bangladeshi community, have historically been resolute in their defiance of fascist activities? Does he further agree that the local community has demonstrated great tenacity and strength in dealing with racists and racist attacks, of which there have been many?
I visited the site yesterday, and on Saturday night—just after the bomb exploded—I was less than half a mile away. Like many other people in the community, I could not believe that on the second Saturday after Brixton a bomb would go off. The horror and tragedy of what might have been were obvious. One had only to look at the walls and some of the cars parked on the street which had six-inch nails stuck in them. Anyone with children would be horrified by the possible consequences. Will my noble friend aid other noble Lords join me in paying tribute to the community leaders of Tower Hamlets and Brixton for dealing with the events and consequences of these incidents with the kind of robustness that has been mentioned? Perhaps I may take this opportunity to pay tribute to the police for the way they have responded very promptly since last Saturday.
Finally, will my noble friend assure the House that the Metropolitan Police will take this opportunity to build up the confidence of the community, which is feeling tense at the moment, by ensuring that sensitive support and thorough protection continue to be provided, as they have been since last Saturday. Will he further assure the House that we will vigorously continue to implement the recommendations of the Macpherson report?
Lord Williams of Mostyn: My Lords, anyone who was present for the debate on the Macpherson inquiry
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into the murder of Stephen Lawrence will have no doubt about our determination. The action plan set out in the report could not have been more positive. Virtually all of the recommendations have been accepted in their entirety. I am happy once more to reassure your Lordships on that point.
I agree with the noble Baroness about the great tenacity and strength of people who refuse to he intimidated out of their communities. That is extremely important. Many of them are living in difficult circumstances, in a country which originally was not their own, dealing in a language which is not their own. One would have thought they would have enough struggle and adversity without being threatened by these mindless hooligans.
I am very much obliged to the noble Baroness for her generous tribute to the police. It is as well to put that in the balance occasionally when the Metropolitan police in particular have been subjected to so much criticism. The police are a public service. To move on to the noble Baroness's third point, the police are well aware, certainly under the leadership of the commissioner—it is well demonstrated—of the need to build on and improve confidence. One of the consequences of this wickedness is that it provides such an opportunity, which I know has been eagerly seized on, both by those who live in the community and insist on continuing to live their lawful, peaceful lives and by the police.
Lord Janner of Braunstone: My Lords, I wish to associate the Jewish community of this country with the statements that have been made from the Front Benches and especially by the noble Lord, Lord Dholakia. We have long recognised that an attack by a fascist, racist group on any minority is an attack on all minorities. When there is an attack on the Afro-Caribbean or Asian communities it may not be today an attack on the Jews, but it will be, probably, tomorrow; if it is an attack today on the Jews, it will probably he an attack on the Catholics or the Anglicans or any other minority the day after. Whether we are Moslems, Jews, Hindus or Catholics, we are all members of minorities. Do the Government accept and does the Minister understand that we must all stand together and fight racism of this kind?
Lord Williams of Mostyn: My Lords, I am most grateful to my noble friend. This sentence in the Statement got in by no accident. We thought about it with some care and I repeat it. I want to make it clear that any attack on these communities is an attack on all British people and the whole of British society. That is well worth repeating and bearing in mind.
Lord Shore of Stepney: My Lords, wise words have already been spoken from this side of the House. I want to add a few thoughts of my own, as I represented for more than 30 years the area in which the Brick Lane outrage took place. I assure the House and my noble friend the Minister that there will be full co-operation, as far as the community can give, with the authorities in helping to apprehend the evil people who inflicted this appalling outrage and indiscriminate act of violence

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on the community. I hope that my noble friend will be in contact with colleagues in the Government to look again at the wider problems of areas such as Brixton and Tower Hamlets arising from large-scale and recent immigrant communities and also suffering acute deprivation, particularly in housing and employment. I urge my noble friend—I have great confidence in his goodwill in this matter—to talk to his colleagues about what can be done to help ease the inevitable tensions that arise in such circumstances and meet the genuine measure of social need of the people living in those areas.
Lord Williams of Mostyn: My Lords, I am very grateful to my noble friend for stressing that we may confidently expect full co-operation from everyone who has decent, human feeling. I refer in particular to those who—going back to the phrase used by my noble friend Lord Dholakia—have been so monstrously affected in the innocent conduct of their daily business both in Brixton and Brick Lane. My noble friend's second point was well made. I spoke only this morning to my honourable friends Kate Hoey, who is one of the local Members of Parliament, and Oona King—the other local MP. As my noble friend rightly said, these questions are of wider consequence and they are being attacked by the social exclusion unit and welfare to work. Such measures may not be spectacular in terms of immediate results but they are an important plank in the Government's general policy for all who are poor and disadvantaged—particularly those who are poor and disadvantaged in the way my noble friend specified.
Baroness Anelay of St. John: My Lords, I join other noble Lords in condemning those people rightly referred to by the Minister as being outside the margins of society. The noble Lord, Lord Dholakia, referred to the elixir of publicity that such persons enjoy. The Minister referred to existing legislation being used in an attempt to cut off that publicity. Can the Minister say what consideration is being given by the Government to ways in which the self-publicity that is possible via the Internet can be curtailed? I am sure other noble Lords are sickened and shocked, as I am, by the availability of the most disgraceful material through that medium.
Lord Williams of Mostyn: The noble Baroness, not for the first time, rightly identifies a deeply significant aspect. Everyone deplores the distribution of any anti-Semitic or racially inflammable material via the Internet or any other medium. Matter on the Internet is already subject to the same laws, provided—and this is the difficulty—that the Internet provider is within our jurisdiction. We are co-operating closely with other jurisdictions. If it can be demonstrated that offences have occurred in other jurisdictions, as a matter of course we regularly inform the relevant authorities. The criminal policy strategy unit in the Home Office co-ordinates the work undertaken on Internet crime generally. There are legal remedies, which are sometimes difficult to apply, but crime is committed, even crime on the Internet, if it can be caught within the laws that bite within our jurisdiction. There are others
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who help. The Internet Watch Foundation, for instance, is funded by UK Internet service providers and does good work. But I readily concede that there is a lot more yet to be done.
Baroness Scotland of Asthal: My Lords, may I saw how warmed I am by all the comments made by various noble Lords which demonstrate the change in the complexion of our society. Good men and women from every community, as represented in this House, have already spoken. That is a demonstration of what joining in friendship can do. That friendship threatens bigotry, threatens prejudice and threatens hate. Those who stand against friendship, community and warmth will feel threatened indeed by the sentiments expressed in your Lordships' House. I endorse everything said by the Minister and my other noble friends. We must not be afraid; we must be resolute in our objection and resistance to such racist terrorists as live amongst us.
Lord Williams of Mostyn: My Lords, my noble friend is quite right. For evil to triumph, it is only necessary that good men remain silent. It is only when one has friends—in my case, a wife—who are Indian that one realises that the key to all this is the total, utter, mindless irrelevance of racial or anti-Semitic prejudice. It has completely nothing to do with human society. They are deeply sad people—happily, in a very small, pathetic minority.
Lord Clinton-Davis: My Lords, is it not encouraging that noble Lords have indicated today that there is no place for bystanders in relation to thuggery and racial bigotry of the kind we have witnessed over the past two weekends? Will my noble friend give an assurance that the police and Home Office will be especially vigilant in prosecuting where appropriate those who are responsible for journals spewing out racial hatred in the most vile way? Will he also indicate that people who have telephoned claiming responsibility for these vile crimes are, at least prima facie, guilty of crimes of causing public mischief and conspiracy and that if the evidence becomes properly available they will be prosecuted with the utmost diligence?
Lord Williams of Mostyn: My Lords, my noble friend is right. That is why I thought it helpful to give such details as I could about the claim of criminal liability that was made on Saturday. My noble friend is right also that we need to be vigilant about any spewing out of material in any form of publication, including the Internet, that causes racial damage. I shall not be as absolute in saying that offences have been committed because it would be a catastrophe if people were prosecuted and were then able to say that they had not had a fair trial. They will have a fair trial and, thereafter, what they deserve.
Lord Alli: My Lords, I am on my feet for the second time in less than a week, not having spoken for eight months. I agree with many of the sentiments expressed by members of all Front Benches, but I must detract from something said by my noble friend the Minister.

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I have not found very satisfactory the way in which the police in this House have reacted to me and a number of my colleagues who have been subject to personal threats. I have found it difficult to receive any co-operation and to get them to take any of the comments seriously. I believe that those of my colleagues who have received personal threats and letters will agree. When in particular the officer who is responsible for our security in this House was asked to investigate, he told at least two of us that it was not his job to do so. The House should be aware of that. I should be grateful if the Minister would look into the matter and report back to the House.
Lord Williams of Mostyn: My Lords, I am sorry to hear that. I had not heard it before. If the noble Lord would be so kind as to give me as much detail, chapter and verse as possible, I shall personally take up the matter with my colleague, Paul Boateng, who has responsibility for the Metropolitan Police. As soon as I receive his letter I shall take up the matter and reply to hint with as much detail as I can obtain. To carry out that kind of inquiry on behalf of those in this House, I do need detail. Subject to the agreement'of the noble Lord, Lord Alli. I shall place my reply to him and a copy of his letter in the Library. If he thinks that inappropriate, then of course I shall be guided by his judgment about confidential matters.

Tax Credits Bill
5.50 p.m.
House again in Committee on Clause 1.
[Amendments Nos.2 and 3 not moved.]
Clause 1 agreed to.
Clause 2 [Transfer of functions relating to tax credits]:
Lord Swinfen Lord Swinfen moved Amendment No.4:
Page 1, line 10, at beginning insert ("Subject to subsection (1A) below, ")
The noble Lord said: This amendment is a paving amendment for Amendment No.9, to which I shall also speak.
This is a probing amendment. Its aim is to obtain a statement from the Government which clarifies and explains the treatment of maintenance payments for working families tax credit and disabled persons tax credit purposes. A statement is needed, because WFTC replaces family credit. WFTC is, like family credit, a means-tested payment designed to help people into work and to subsidise families on low and modest incomes.
Both family credit and WFTC are income-related. The amount of credit any family receives depends on the normal earnings of the family and any other income that they might be receiving. Income for both purposes means a family's net income after income tax and national insurance contributions have been deducted. Certain types of income are, however, ignored. Child benefit is ignored; and, for family credit, the first £15 a week of any maintenance payment is also ignored.
During debate in Committee in the other place on Clause 1 of the Bill, the Paymaster General indicated that for WFTC purposes there would be a 100 per cent. disregard for maintenance payments. That was the first indication that the Government proposed more favourable treatment for maintenance payments than is given for family credit. An explanation is clearly required. As a result, it appears that some families will receive a much greater credit than other families with the same income. The implications appear to be that a lone parent would be significantly better off than a widow in similar circumstances; and, secondly, that a lone parent would also be significantly better off than a single-earner married couple in otherwise similar circumstances even though there would also be a second adult in the household. I certainly want to see lone parents properly looked after. However, it is unclear why they should be treated preferentially.
If the Government believe that earned income that is used for the maintenance of children should be disregarded for the purposes of working families tax credit, it is difficult to see why a more generous rule should apply where the income is earned by a providing parent who is separated from the parent with whom the children are living than is the case when the income is earned by the parent with whom the children are living.
Will all maintenance payments be disregarded, or only those paid as a result of CSA intervention? Neither the income tax rules nor the family credit rules draw a distinction between CSA payments and other payments.
The proposed treatment of maintenance payments will also affect families' entitlement to the so-called passport benefits. If family credit rules are followed, entitlement to these will depend on whether a family receives working families tax credit. Unless, therefore, the rules have changed, families headed by a lone parent in receipt of maintenance payments will be entitled to these benefits, whereas a family headed by a married couple with less income coming in each week will not. Will the Minister, in replying, give an assurance that anomalies of that kind will not be allowed to arise? I beg to move.
Lord Astor of Hever: I support these amendments. As my noble friend said, the Paymaster General told Standing Committee D that the Government were proposing to disregard all maintenance payments because that followed the income tax treatment.
Both WFTC and DPTC are based on a family's income after tax has been taken off. If maintenance payments are exempt from income tax and deducted from the family's net-of-tax income, the same payments are deducted twice. Parents who benefit from this treatment will end up with more WFTC than those who do not; namely, families where both parents are living together.
There would seem to be an unanswerable case for saying that the cost of maintenance—whether it be the cost to a couple living together or a single parent—should be disregarded in calculating WFTC and DPTC

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either for all families or for none. This matter is complicated. I should be grateful for clarification from the Minister as to why there is this difference.
Baroness Hollis of Heigham: In replying, I shall also respond to the grouped amendment, Amendment No.9.
These two amendments anticipate a good deal of the debate on Amendment No.28. I wish now that we had grouped them together: many of the questions quite properly raised by the noble Lord, Lord Astor, reflect rather more on Amendment No.28 than they do on these amendments. I may therefore stray into Amendment No.28 territory, given that I have been invited to do so.
The purpose of these amendments is to provide that the disregard of maintenance payments should not result in a lone parent receiving more WFTC than a couple. I believe that the Committee will agree with that description of the amendment.
I must confess that I am rather sorry at the reasoning behind the amendment. Although it is expressed in entirely reasonable terms, I am somewhat concerned by it. I shall attempt to explain. The amendment centres on the treatment of maintenance payments within WFTC. Given the welcome statement by the Paymaster General in February, the Government have decided that, for the purposes of calculating income for WFTC, no account will be taken of maintenance payments received by the claimant. At present, after the first £15, it is deducted from family credit, with the usual taper as presently exists.
We see this change to allowing a lone parent what is effectively a 100 per cent. disregard for maintenance as providing a significant contribution to tackling child poverty. It will mean that those lone parents who claim WFTC will keep all the maintenance that they receive, which can then be used directly for the child or children rather than having it tapered off after the first £15.
Why is that so desirable? First, the change will provide a clean break from the benefits system at the start of the new tax credits; secondly—this is an administrative argument—it will make child support within WFTC simple and easy to administer; most importantly, it will help us to address child poverty. One child in three in this country lives in relative poverty. Of those children, 1.8 million, 80 per cent, who fail to receive any maintenance from the non-resident parent—usually the father—are in workless families. If, as a result, maintenance flows and the mother goes into work, anything over £15 is tapered away quite sharply, with the rest of the family credit deductions.
By allowing 100 per cent. disregard, first, we make a serious contribution to tackling child poverty. Even if a lone parent is in work, if she earns such low wages that she has to draw on WFTC, she is not generously paid. By allowing her to keep all this money, we are making a contribution to trampolining her and her children out of poverty, we hope for life.
Secondly, it is a real work incentive. It becomes like child benefit. You can go into work, carrying it with you, knowing that, provided your former partner pays
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reliably and regularly, you can be assured of that income, which will be a steady floor, irrespective of what may happen to your earnings and, as a result, irrespective of what may happen to WFTC.
The third argument, which I hope Members of the Committee will accept, is that it has long been the case that father' organisations have complained about paying maintenance, which they say goes not to their children but to the Treasury—that the old Child Support Act was Treasury support, not child support. Our proposal has been welcomed not just by women's groups but also by men's groups. Decent fathers who pay reliably and properly, as they should, and as so many of them tell us they want to do, will see that the maintenance will go directly to the benefit of the child. The children, in turn, will see that the responsibility of a non-resident father continues even when the marriage breaks down. The children will continue to enjoy something of the same living standards, although not as generous as they would enjoy if both parents were still together.
The scheme is simple to administer and represents a clean break between a benefits system and being in work. It is to the direct benefit of the lone parent going into work; it is a direct attack on child poverty; and it sends messages to fathers and to their children, particularly boy children, that this is the way that responsible men behave: that they continue with their financial responsibilities, even though the relationship may have broken up. I say "men"; I hope Members will forgive the gender point. Most non-resident parents are men.
When that money is clawed back by the Treasury, men often use the excuse: "Why should I pay? It is Treasury support, not child support". We believe that our proposal has been warmly welcomed by men's groups as well as by women's groups.
The amendment suggests that the question of maintenance does not arise within an intact family or a widowed family—the example given by the noble Lord, Lord Swinfen—because, by definition, if a woman is a widow she will not receive maintenance because the spouse is not there, or, if, there is an intact family, maintenance will not flow, and, if that is the case, a lone parent who should be receiving support for her child should not enjoy it either. I believe that, on reflection, Members will not want to support such a position. It is ungenerous and sends wrong signals to men, to children and to lone parents wishing to go into work.
We are committed to tackling child poverty at every opportunity. Children of lone parents are likely to be financially worse off than children with two parents. The family has the same household expenses as a couple. In addition, she—in something like 97 per cent. of cases it is a woman—will have to cope with the pressures of bringing up her children alone, without the active help of a partner and her partner's family. When she works, as a woman she is likely to receive only 70 per cent of the equivalent male rate. She may find that her children are damaged, if they have come out of a difficult relationship break-up, and she needs extra support for them. All the research shows that after a break-up women lone parents have on average only

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two-thirds of the income of men and their income falls after a break-up. After a marriage split-up, the income of most men improves compared to when the couple were living together.
If the amendment were to be accepted, it would subvert and undermine all the messages we want to send with regard to child support, tackling child poverty, work incentives, having fathers support their children, and so on. Worse still, the amendment would put lone parents in a worse position than they are currently in for family credit, where there is already a £15 disregard for maintenance payments, which, by definition, cannot apply when someone is a widow or is in an intact family. I accept that the amendment: is a probing amendment, but its effect would be to make poor lone parents and their children poorer than they currently are on family credit.
The noble Lord, Lord Swinfen, asked me what type of maintenance was to be disregarded and whether it was just CSA maintenance. No, the disregard will apply not just to CSA maintenance but also to maintenance arranged through the courts and to voluntary maintenance.
It is not a mirror-opposite situation that there should also be a disregard on the father's income. That is the substance of Amendment No.28. That would represent a subsidy from the Treasury to the father of more than half his maintenance payment. Instead of the Treasury taking it from the father to offset against the mother's benefits, we would be subsidising him to pay her the maintenance she should have. In terms of cost and of social policy, that would be unacceptable.
Only one parent with care in three receives regular child maintenance. One of the objects of reforming the Child Support Act, which I hope will command the support of the House, should the measure come in the forthcoming parliamentary Session, is to ensure that men pay, women co-operate and children benefit. That would not be the case if the amendment were to be accepted. The effect of the amendment would be to make lone parents even poorer and subvert our other objectives of tackling child poverty and providing work incentives. I hope that the Committee will not wish to pursue this matter any further.
A minor but perhaps relevant point is that the amendment would not work as currently drafted as it refers to a paragraph in the family credit regulations which does not exist. The substantive points are the ones that matter. The amendment discriminates, is unjust to lone parents, will damage their children, will send out the wrong signals to men and will subvert work incentives. For all those reasons, and for many more that I could offer the Committee, I hope that the amendment will not be pursued.
Lord Swinfen: I did not say that I would pursue the amendment this afternoon, but I may do so later. The noble Baroness has obviously taken a lot of trouble with her reply, which took a long time to give. It will take me some time to digest it. I shall read her reply carefully. It is possible that I may feel it necessary to come back to the matter at a later stage—whether in the same form or
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a different form I do not know. I can then have the pleasure of hearing another long peroration from the noble Baroness! In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Swinfen Lord Swinfen moved Amendment No.5:
Page 1, line 10, at beginning insert ("Subject to subsection (1B) below")
The noble Lord said: Amendment No.5 is another probing amendment and is a paving amendment to Amendment No.10, to which I also speak. The purpose of the amendment is to seek an explanation of the differences between the levels of credit for the working families' tax credit and the disabled person's tax credit.
The two credits have different origins, in family credit and disability working allowance respectively. These benefits were introduced at different times and for different purposes and it is not surprising, therefore, that there are differences between them. However, now that they are being improved and brought together as tax credits, it is possible to compare and contrast them.
While one might reasonably expect the levels of DPTC to be higher than those for WFTC, it is difficult to see any logical explanation for the wide variety of differences. For example, the proposed level of the basic tax credit for a single person for DPTC is £54.30, only £2 more than for WFTC. There is an argument for saying that the credit should be at the same level in each case and that a disabled person should have a significantly higher credit than someone who is not disabled. But it is not easy to see the argument for having a very small difference between the two credits, particularly since, by contrast, at £16,000 the savings disregard under the disabled person's tax credit is double, or very significantly higher than, that under the working families' tax credit.
However, it is in the treatment of a couple that the two credits are particularly different. The second purpose of the new subsection therefore seeks an explanation of the treatment of couples under the working families' tax credit. This question was raised but not answered in the debate in the other place on Third Reading. It was raised by the noble Lord, Lord McNair, and also by myself at Second Reading, but again was not answered. Under both the working families' tax credit and the disabled person's tax credit, in the case of a couple the income of the parents is aggregated in determining the net income to be deducted from the total credit otherwise payable. Equally, the savings of the parents are aggregated in determining whether the credits fall to be abated or not paid at all. The DPTC then continues to take account of the second adult in the family by giving a couple a higher basic tax credit at a proposed rate of £84.55 as compared with £54.30 for a single person, but there is no similar higher basic tax credit proposed for a couple under WFTC. In other words, WFTC takes account of both parents where it is to their disadvantage but ignores the second adult where to take both parents into account would be to their advantage. This illogicality of the treatment of couples under WFTC is clearly unfair. Yet the Chancellor claims that one of his major aims in taxation is fairness.
Moreover, it also works against one of the Government's main purposes in introducing WFTC which is to reduce the number of children living in poverty. At any given level of net income, a family of four (two adults and two children) will be poorer than a family of three (one adult and two children). Yet under WFTC the credit available to the former will certainly be no greater than that available to the latter and may well be less, without taking account of the treatment of maintenance payments which is also advantageous for a lone parent, as I mentioned when dealing with the previous amendment.
The other major difference between the two credits, which I also raised at Second Reading, is in the treatment of a disabled child. Under the disabled person's tax credit a credit of £21.90 is to be given in respect of a disabled child in addition to the normal age-related child credit. There is no such disabled child credit under the working families' tax credit. Surely, the additional cost that parents may incur in looking after a disabled child will be just as great if they are not themselves disabled as if one of them is disabled. The entitlement to the disabled child's credit should turn on the disability of the child alone, not that of his parents. The logic of this argument is accepted in the childcare tax credit which, in the case of both WFTC and DPTC, is given for a disabled child up to a higher age than in the case of other children. Why not, therefore, in the case of the disabled child's credit? I beg to move.
6.15 p.m.
Lord Rix: Before this amendment is supported by the noble Lord, Lord Astor of Hever, for the first time since I entered your Lordships' House I find myself in the unique position of putting a question to the noble Lord, Lord Swinfen, in regard to Amendment No.10. Does the noble Lord agree that there is a longstanding tradition of recognising the special needs of disabled people by giving preferential treatment in all possible circumstances? Does it not seem inappropriate to rule that out in the context of tax credits as appears to be the case in Amendment No.10?
Lord Swinfen: I ask the Government: what is the logicality of either not making the two credits similar or making a very much greater difference?
Lord Astor of Hever: I support these amendments. With regard to the difference in the level of WFTC and DPTC, it is reasonable to expect the level of DPTC to be higher than that for WFTC, but the discrepancy in the rules governing the treatment of couples within both credits requires explanation. The failure of WFTC to take any account of the cost that results from the second adult in the household means that married couples end up poorer than single-parent households with the same gross income. This does not happen where the DPTC rules apply. Surely, second adults should be treated in the same way for both credits, particularly as we are told repeatedly that the Government support marriage and want to reduce the number of children in poverty. As my noble friend said, under DPTC the credit is given
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for a disabled child in addition to the normal child credit. No such disabled child's credit is available under WFTC when the extra cost involved will be the same. Can the Minister explain these differences between WFTC and DPTC?
Lord Desai: Before my noble friend replies, perhaps I may make one point in response to the noble Lord, Lord Swinfen. The noble Lord spoke about fairness. I am puzzled. I would have thought that parents, one of whom was disabled, who raised a disabled child, would have much higher cost than two able-bodied parents (if I may use that incorrect term) who raised a disabled child. It seems to me fairer to recognise that extra cost. I do not see how that is unfair.
Lord Swinfen: One is concerned with the cost of the disability which will remain the same whether or not the parents are disabled. One is talking about the cost of the disability in the form of aids, equipment, possible adaptations to the house, and matters of that kind.
Baroness Hollis of Hefigham: Perhaps I may respond to Amendment No.5 and with it Amendment No.10. The amendments seek to ensure that a working family receiving WFTC is never worse off than a comparable family receiving DPTC. It appears that the amendments are intended to probe the reasons for the differences between the two tax credits. These differences are not new; they exist between family credit and DWA in the same way. Given that we are building on the two existing benefits as we move into tax credits, the differences lie in the basic tax credit, the disabled child's tax credit and the amount of savings that a family can have. In all other respects families will be treated the same.
The main differences is in the generosity of the basic tax credit which is higher for DPTC, as it was for DWA, to reflect, as the noble Lord, Lord Rix, said, the additional support that disabled people need and the lower wages that they are likely to be able to command. I am disappointed that the noble Lord, Lord Swinfen, who has fought so gallantly in this Chamber on behalf of disabled people, should seek to challenge the fact that disabled people need greater support through DWA, which is being carried through into the tax credit, than non-disabled people. He knows better than anyone in this Chamber that on average the income of disabled people is only about 70 per cent that of non-disabled people and that they also have higher living costs. The last research I saw several years ago indicated a figure of about £60 a week for diet, transport, laundry and so on.
Lord Swinfen: Why, therefore, is the basic tax credit for a disabled person under DPTC £54.30 for a single person as opposed to £52.30 for a single person under WFTC? Two pounds is not a great deal to pay for the additional costs of disability.
Baroness Hollis of Heigham: The point is that for the single allowance the lower level of a DPTC could be for a single individual; it does not have to include

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being married or having children. Like DWA, it relates to the disability rather than the family circumstances. The clearer analogy is with DPTC where there is a couple with children on WFTC. That is the direct analogy. In that situation a couple earning £200 a week, working over 30 hours, with two children under eleven, would on average be £29 better off by virtue of the tax credit system than the couple on WFTC. That is a contribution towards the cost of their disability.
The noble Lord, Lord Swinfen, has previously quite properly argued—and I have been happy to join him in that—disabled people should have that recognition of the extra costs of their disability. We know that DLA covers certain costs of disabled persons who need care, attendance and supervision, but many other disabled people have lower levels of costs related to diet, transport or laundry, but which are not related to the existing DLA tests. The DWA recognised that distinction and that is why it is carried forward into these proposals.
The second point on which I have been pressed is the additional credit for the costs of caring for a disabled child. That is the result of lobbying, particularly by the disability organisations, in the run-up to its introduction in 1991 by the previous Government, which conceded its propriety. Under family credit arrangements no such distinction is made. Again, we are building on the two existing benefits, into tax credits which run in parallel. It is a proper point for us to reflect upon.
The higher savings limit was introduced following pressure from the Social Security Advisory Committee and criticisms made by noble Lords during debates on the Bill to introduce DWA. I recall that the noble Lord, Lord Swinfen, joined my noble friend Lord Carter and myself in arguing the same point.
The concern was that disabled people may need to have extra savings to pay for adaptations to the home and special equipment and services, and therefore they needed a higher savings limit of £16,000 rather than the £8,000 which would normally apply to couples.
We believe that disabled people should have extra support of this kind. Is the noble Lord, Lord Swinfen, arguing that we should deliberately cut the standard of living for disabled people by reducing the tax credit down to the level of WFTC, which would mean that they would be £30 worse off as a result of the amendment; or is he arguing the reverse, that WFTC should float up to DPTC? Does he have Front Bench support, as he appears to have, for the additional expenditure of a further £1.5 billion on public expenditure over and above what DPTC already costs? Which of those paths is the noble Lord, Lord Swinfen, asking noble Lords to follow?
I hope that following this explanation the noble Lord will be able to withdraw his amendment.
Lord Swinfen: I hope that the noble Baroness knows me well enough to know that I am not arguing for a reduction for disabled people. She joined me, when the last administration was in power, in defeating that administration and improving the position of disabled people over a number of years, and that is now my aim.
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I am delighted that the noble Baroness will reflect on the position of the disabled child, and I look forward to her bringing forward an amendment to improve the position at the next stage of the Bill.
I will read what the noble Baroness has said.
Baroness Hollis of Heigham: I made no such commitment; I said that I would simply reflect on those points. The noble Lord should not infer anything beyond that.
Lord Swinfen: I am making no inference, I am looking forward. One can always indulge in wishful thinking. I am sure that the noble Baroness has done that; it may have been for just a slightly larger Easter egg next year, but it is wishful thinking. One can look forward where there is no guarantee.
It may be that I shall bring forward an amendment to address the point. I will read what the noble Baroness has said, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The noble Lord, Lord Swinfen, moved Amendment No.6:
Page 1, line 10, at beginning insert ("Subject to subsetion (1C) below")
The noble Lord said: This is another probing amendment and is a paving amendment to Amendment No.11.
The aim of the amendment is to seek an explanation from the Government as to how the WFTC and the DPTC will apply to families with comparatively small amounts of capital, perhaps as a result of receiving a redundancy payment.
Ministers have stated unequivocally on a number of occasions that when WFTC comes into operation every working family will have a guaranteed income of £200 a week, and that no income tax will be paid until earnings reach £235 a week.
In his Budget speech the Chancellor stated that every family would be guaranteed a minimum income. That provision will be introduced in October, not at the previously announced rate of £190 but at £200 a week—more than £10,000 a year—and no income tax will be paid until earnings reach £235. That statement was repeated at paragraph 4.48 in the Budget Red Book, which spoke not of "more than £10,000 a year" but of earnings of less than £235 a week—over £12,000 a year—saying that no income tax would be paid from October this year. That was repeated in the Treasury Budget day press release, which referred to a minimum income guarantee of £200 a week for every family with a full-time earner. It was further repeated by the Paymaster General in her speech on the Third Reading of the Bill in the other place.
I wonder whether those promises will be kept, as it seems unlikely that these figures will become a reality for families because, using the powers being transferred to the Treasury by Clause 2, the Treasury will have the power to introduce WFTC by way of amendments to the Family Credit Regulations. Under these regulations a

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family would receive no family credit if it had savings of £8,000, and family credit is progressively reduced if those savings are £3,000 or more. I beg to move.
Lord Astor of Hever: I rise to support the amendments. With regard to clarifying how WFTC and DPTC will apply to families with small amounts of capital, the Revenue states that the credit will be progressively withdrawn if savings, including those of a parent and children, are between £3,000 and £8,000. The DPTC position is similar except for the "couple" point, where it is £16,000.
As my noble friend stated, if that is the case, it will not be correct therefore that every family with a full-time earner will have a minimum income of £200 per week or that no income tax will be paid until earnings exceed £235.
If it is the intention that every family should have a minimum income of £200, WFTC will have to be paid in full, whether or not the family has savings. If that is not the Government's intention, Ministers should retract what they have said about every family having a minimum income, as some families may already be making plans based on the Minister's statement in another place. Can the Minister please clarify the position in her reply?
Baroness Hollis of Heigham: I was a little baffled by the amendment in the first place, but I am now entirely baffled because, if I may gently say so, the points made bear no relation to the amendment.
Amendments Nos.6 and 11 seek to ensure that tax credits do not begin to be restricted, that is withdrawn on the taper, until the applicant has gross taxable income of £235 per week. Currently, the threshold for withdrawal is set at a net weekly income of £90. There is no mention of savings. This would be a massive increase in the generosity of the tax credit system—it is hard to estimate—possibly in the region of a further £1 billion. Perhaps there is some misunderstanding. The two speeches by the noble Lords bore no relationship to the purport of the amendment tabled. Perhaps the amendment is based on a misunderstanding of the figure of £235 per week cited by the Chancellor in his Budget Statement and in the Red Book, and the aim of the amendment was to probe the figures.
The Chancellor announced in his Budget Statement that the minimum income guarantee under the WFTC for every family with children and with full time earnings would increase from October 1999 to £200 per week. He also said—as Members of the Committee quoted—that no such family earning less than £235 per week would pay any net income tax from October 1999. In both cases the numbers refer to a family and not to an individual in these specific circumstances.
These are the reference points for the Chancellor's package of measures to make work pay and reduce the burden of taxation on low paid families. They illustrate, for a typical family, how Budget measures might change their minimum income and the point at which net tax would be payable. They allow the comparison to be
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made from year to year. The minimum income guarantee for October 1999 has gone up from £190 last year to £200 this year as a result of the measures in this year's Budget. Similarly, the balance point at which tax credits match tax due for the typical reference family has gone up from £220 cited in last year's Budget to £235 in this.
The reference family is not special. It is a family with a full time earner, working more than 30 hours a week, and with a child under 11. The minimum income guarantee assumes that the earner works full time at the minimum wage and includes child benefit. The balance point for tax and tax credit is based on the details of this family, giving the appropriate reliefs and applying the appropriate tax rates.
If that is what noble Lords sought to find out, as opposed to what the amendment provides, I hope that I have answered the question. In that case I hope the noble Lord will agree that there is no point in building such reference points into the legislation. Even if they could be made to work. the amendments would apply those reference points indiscriminately—for example, to families who work less than full time hours. That would give a perverse incentive to people to reduce their hours knowing that the tax credits would take the strain.
The amendment is rather a mess. It is an expensive mess as it stands because the taper would not kick in until the income of £235 as opposed to the £90, depending on the assumptions being made. The noble Lord says that it is a probing amendment. If his concerns were about the connections with the Red Book, I hope that I have also addressed those.
6.30 p.m.
Lord Swinfen: The noble Baroness has probably addressed the points I sought to elucidate. I shall read what she said and reserve my right, if necessary, to return to the subject at a later stage of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos.7 to 11 not moved.]
Lord Higgins Lord Higgins moved Amendment No.12:
Page 2, line 2, at end insert—
("( ) The Treasury. in making regulations under any functions transferred to it under subsection (1) above, shall ensure that payments of the tax credit are not made to individuals who have an income, or to couples who have a joint income, in excess of the income at which the higher rate of tax would be payable by an individual. ")
The noble Lord said: The amendment raises an important point of principle. One of our main complaints against the changes proposed by the Government is that they will increase dependency on the welfare state. The Government's intention, we understand, is that that should be reduced rather than increased. The effect of the proposals is that people who, by normal standards, would be regarded as fairly well off will benefit. I may not be popular in proposing the amendment. We suggest that the figure should be capped. However, one cannot consider the issue without also having regard to the taper and the effect on other income groups.
In reply to a Question for Written Answer in July 1998, Ms Dawn Primarolo stated that some families with incomes over £38,000 would receive support. She stated that a family with two children and maximum eligible childcare costs of £150 would still be receiving some working families' tax credit with family incomes of £31,000. However, the highest possible level of income would be supplemented by the working families' tax credit depending on the number and age of the children of the family. For example, if the family had five children under 11, rather than two, it will receive some working families' tax credit with family incomes around £38,000. Members of the Committee may feel that someone with five children requires an income of £38,000. Be that as it may, the effect of the Government's proposals will bring people into benefit (or tax credit if the Minister prefers that expression) at that level of income. That seems a remarkable situation.
Perhaps the Minister can tell us how many people who would not otherwise depend on welfare she expects to be brought into welfare benefit as a result of the Government's proposals.
The increased cost of the working families' tax credit is £1.5 billion. Some of that will go to individuals and couples with higher incomes. The amendment suggests capping at the level where people begin to pay the higher rate of income tax. It does not seem appropriate that they should receive such benefit.
I have suggested that we should consider the issue in relation to scales elsewhere. The Institute for Fiscal Studies has done some fairly elaborate analyses of the effect. Taking 10 quartiles, it is suggested that those in the group I described still receive some increase in the average percentage change in their disposable income. But that does not apply in the same way throughout the scale, Those in the lowest quartile, the poorest people, receive a lesser percentage change. Those in the next quartile receive significantly more. From then on the figure declines. Perhaps we may have some indication why the proposals do not help those at the very bottom end and, after a large increase, the figure declines somewhat.
There is a number of issues we wish to examine. I have not always agreed with Professor Patrick Minford in the past. I recall one of my colleagues on the Treasury committee saying that his views gave monetarism a bad name. Monetarism is now so unfashionable that perhaps I should not be so unkind to Professor Minford. In other respects, he has made some important contributions.
Lord McIntosh of Haringey: I cannot resist intervening. After years of opposing Labour economic policies, Professor Minford has now come round to the view that our economic forecasts are, if anything, a little pessimistic rather than optimistic.
Lord Higgins: We could have a long debate on the accuracy of economic forecasts. I believe that he has expressed that view. Perhaps I was right in my original remarks. He gave evidence to the Select Committee on Social Security that in trying to deal with the unemployment trap by bringing some 750,000 people
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into higher marginal rates of tax—between 50 and 60 per cent—the Government have worsened the poverty trap. Perhaps the Minister will comment on that. It appears that at the top end of the high tax rate scale there has been a reduction. However, there has been a increase in the number of people paying more than 60 per cent and we are concerned about the increase in dependency. As one works up the income scale of the Government's proposals, the overall effect is curious, to say the least. Therefore, on grounds of reducing dependency, cutting public expenditure and making the system more rational, there is a strong case for considering the amendment.
The Child Poverty Action Group, quoting the Institute of Fiscal Studies, points out that as regards the increase in net income with working families' tax credit, a family receiving £75 a week does not benefit. I referred to that point in an earlier debate and it seemed to puzzle the Minister. At £100 a week, they receive £8.05; at £150 a week, they receive significantly more at £15.55; at £200, they receive £23.05; and at the top of the scale, £250 a week, it is only £3.15.
The basic pattern introduced by the Government's proposals is strange and difficult to justify. No doubt the Minister will attempt to do so.
Lord Desai: Before the Minister replies, perhaps I may help the noble Lord on one issue. There is a curious pattern in that when one tries to alter incomes, the lowest decile always receives less than the next two further up the scale. I fell foul of that some years ago when I proposed a basis income scheme, as I have done many times. Whatever I proposed did the maximum damage to single people in the lowest decile. I then discovered that the lowest decile includes many anomalous people; some are locked into it and cannot be helped through any tax credit scheme. Therefore, it is always difficult to reach those in that decile through tax credits and so forth which are paid through the income scheme.
That is the pattern which we are again witnessing. Those in the lowest decile are difficult to help if one works through earned income, employment and so forth. One has to help such people in other ways. It is a standard result of almost every Budget I have known.
Lord Goodhart: I have considerable sympathy with what was said by the noble Lord, Lord Higgins. It is anomalous that means-tested benefits will go as far up the scale as £31,000 for a family with two children and £38,000 for a family with five children.
Furthermore, there is a problem with the proposal of a cap. It means that for an extra £10 of income over the cap one loses more than £10 in benefits. Therefore, one has the anomaly of the marginal tax rates of more than 100 per cent. The Government ought to re-examine the taper and consider whether something could be done with it. For example, above the upper earnings for national insurance contributions the marginal rates fall by the 10 per cent that one is paying by way of NICs. Perhaps that opens up a greater level of taxable capacity and the Government might consider a slightly higher

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level of taper past the upper earnings limit. That might have the effect of reducing the startling upper level at which the means-tested benefits continue to be paid.
6.45 p.m.
Baroness Carnegy of Lour: I, too, believe that the Government should consider the amendment. I raised the point on Second Reading, but together with others the Minister was unable to reply. I spoke in terms of a sense of unfairness which might be felt by a not at all well off widow paying tax on a small pension. She might consider that a benefit is going to parents with an income of £38,000 because they have a certain number of children.
After reflection, I still believe that that will be a perception. Although when the tax credit is paid through the wage packet it may not be seen so easily as a benefit, most not particularly well off widows will know some people who are receiving the tax credit directly and will see it as a benefit, despite the Government's hopes.
Cannot something be done in another way for such people? I am picturing the mother with five children doing her weekly shopping in a supermarket on an income of £38,000. I can see that it is not an enormous combined income, but surely this is not the way to deal with such people. The point of the tax credit system is to encourage people to see that work pays. Nobody needs encouragement to see that work pays if they are earning together, or singly, £38,000 a year. The whole purpose of the tax credit goes to people on such an income and I believe that they should be helped through the tax system and not by this means. I believe that the Government should look seriously at that.
Baroness Hollis of Heigham: I do not believe that Amendment No.12 would work. Therefore, even if I agreed with its basic premise, which I do not, I am afraid that I would have to ask the Committee to resist it.
The amendment appears to refer simply to limiting the opportunity to pay applicants WFTC, which implies that everyone above the higher rate threshold would remain entitled to an award but could not be paid. This seems a rather odd approach to take.
The amendment also attempts to link the award—and the award is based on a snapshot of current circumstances—to a ceiling which can be set only by reference to circumstances—for instance, the applicants' tax allowances—which cannot be finally known until after the tax year ends. So this could in practice mean that the Inland Revenue would need to hold back payment until after the year end, when the figure can finally be worked out and, in fact, until after the submission of the applicant's tax return. At this time, the applicant's circumstances may have changed.
The amendment aims to set a limit which, unfortunately, is not a single set figure but will differ from person to person, depending on a number of factors. There is no single higher rate limit which can be used in the way in which the amendment envisages; particularly in the way that it is intended to apply it to couples. It must be remembered that some would be
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eligible only for WFTC and the childcare element. It is that element which takes the figures up into the higher limit because both parties are working. Any change in the relative income of either one would then affect the payment to be made through the tax system.
Not only would the amendment not work; it would introduce a cliff edge that would be undesirable and harsh. For instance, a family with three children, two under 11 years and one over 11, claiming the WFTC and getting maximum help with childcare costs whose net income was £1 below the basic rate limit would receive £12.20 through WFTC. So the proposed amendment would, if we used the basic rate limit instead, make them £11.20 worse off for that extra £1 of net income. That would seem a pretty severe incentive to earn that extra money.
I see and understand that there is some concern about money going to those on higher incomes. But the combination of rates, threshold and the taper addressed that point. The WFTC will spread further up the income scale, particularly where the family has more than two children, or four or five children, as in the examples given, where there is a joint income of more than £30,000 and the family is paying for childcare. Indeed, we want that to happen to help more low and middle income families. But—and it is important to remember this—the WFTC tailors the amount available to their circumstances and the threshold and the tapers together make sure that the amount which they can receive reduces gradually as they earn more. It avoids the problem of producing a situation in which it is no longer an advantage to earn more.
Within social policy, where one is dealing with tapers, one has a choice. One may have a very sharp taper with very high deduction rates as the money is clawed back. That has been the case in the past with family credit which had a deduction taper rate of 70p in the pound. Therefore, that may produce tax rates of 100 per cent when that is related to housing benefit and so on. Alternatively, one may have a much shallower taper and a more gentle clawback of a tax credit or, as in the past, family credit. In this case, that is 55p in the pound. Therefore, it makes it more advantageous to work. But, by definition, because the taper is shallow, it goes much higher up the income scale before it is withdrawn. There is a straight choice between those two and there is no right answer. One tries to make an appropriate judgment.
However, the higher earning taxpayer would receive the credit because there is a large number of children and a high childcare bill. In a two-earner family with four or five children, one person may be earning £20,000 and the other £15,000. As both are in work, they are entitled to childcare credit. They would have a joint income of more than £30,000 but neither would be a higher rate taxpayer. Indeed, we estimate that only 5,000 people who earn more than £500 per week or £25,000 per year will be entitled to the WFTC. Those people will receive quite small sums.

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Therefore, it may be possible for those who have joint earnings of £30,000 plus to qualify for the second element; namely, the childcare credit. That goes right up the income span. It will be extremely rare that one of two parties is already a higher rate earner.
The amendment will not work and we should not wish to see the system which it envisages imported into tax credits. Moreover, the number of people affected is very small indeed. In the light of that, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Skelmersdale: Before my noble friend decides what to do with the amendment, perhaps I may seek further clarification. Perhaps the noble Baroness will write to me on my second question.
First, what caused the Government to choose 55p in the pound withdrawal rates as opposed to 70p under family credit? Secondly, what would be the effect of going up the income scale, if they had chosen a percentage of 62.5p or 60p? Obviously, the noble Baroness cannot answer that off the top of her head but it may be helpful to have a note on that before the next stage of the Bill.
Baroness Carnegy of Lour: Will the Minister say something about my remarks? She may not have anticipated them in the light of the amendment. However, I wonder why the Government believe it to be necessary to apply this system to people who in no way will need persuading that work pays better than unemployment.
Lord Higgins: I am trying to understand the points the noble Baroness made about the taper. These are never simple matters and I often wonder whether we should have a blackboard. Having failed to get one in the Commons for many years, I doubt whether I shall succeed in the Lords.
First, how many more people does the Minister expect to come within the welfare net as a result of the changes being made both in relation to WFTC and child benefit? Secondly, does the Minister expect that carrying benefits that far up the scale will encourage anyone to work who was not previously working? It seems unlikely that someone will suddenly enter the workforce earning £38,000 per year. Perhaps that is a false point.
Thirdly, I should like to be better informed about the taper for subsequent stages of the Bill. Will more people be paying marginal tax rates of 60 per cent than are doing so at present? Fourthly, is it the case, as Professor Minford suggests, that this worsens overall, rather than improves, the poverty trap? Therefore, there are a number of issues on which we should seek clarification at this stage so that we can review the position on Report and Third Reading.
Also, will some people see their marginal tax rates increase from the position at which they are at present? Finally—again, this anticipates a matter which may arise later—is the fact that we go this far up the scale one of the main reasons that we have a passport problem? I still find it rather surprising that the Government did
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not announce immediately that the passports which obtained to various benefits such as prescription charges and so on would be continued. I was thinking about why that was so. Is it because it would mean that people paying higher rates of income tax would receive passported benefits? Is that one reason for problems in that regard?
Baroness Hollis of Heigham: I shall do my best to answer those questions. The noble Lord, Lord Skelmersdale, asked why we had opted for MDR rates of 55p. That relates to one of the questions raised by the noble Lord, Lord Higgins. There is a balance of judgment. We are trying to make a decision on how we want the taper to be. We are trying to work out how far up the income scale one should properly go, with the implications for public expenditure, set against the problem of withdrawal rates.
We face two problems which were mentioned on Second Reading. The first is the unemployment trap which relates to getting people off benefit and into work. The second is that once they are in work we need to make it worth them working longer hours for higher pay so that they may seek to climb up the ladder.
I can say from my experience that we know that couples on family credit dip down because they are already in work but may come up again quite quickly. Because of pay rates for men, they quickly climb out of family credit. But lone parents stay on family credit arid at the same levels of family credit for long periods of their working life. In part, because they are relatively unskilled and because of childcare problems, women cannot work the extra hours and even if they worked to earn extra money, they would not keep very much of it. Therefore, they make a judgment that it is better to work for less, and family credit takes the strain. Therefore, they stay as they are.
In other words, they face the second trap which is the poverty trap. Having found work, it is not worth them coming off those benefits because the taper rate is so high that they have to work a lot more and earn a lot more before they have sprung free altogether of the poverty trap. That is a basic dilemma which is common to all governments in relation to DSS. It is not at all a partisan point.
One then must ask how one can reduce the combined effect of the tapers so that people's tax rates remain sufficiently appropriate to retain the incentive to go off benefit into work and once in work to climb out of dependency on longer-term benefits such as family credit. We went for the figure of 55p because, frankly, we thought that the balance was about right. Had it been 62.5p or 70p, as the noble Lord suggested, yes, we would have had people coming off benefit much sooner and there probably would have been reductions in public expenditure. However, for people climbing up, there would have been very high MDRs (marginal deduction rates). That would have meant that instead of being able to say to most people, "You will have a deduction rate of no higher than 60 to 70 per cent", very many more people would have had deduction rates of 80 to 90 per cent or 90 per cent plus. So, it is a question of balance. There is not a right answer but in the absence, at present,

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of any changes to housing benefit, council tax benefit and the like, we felt that that would be the appropriate fulcrum point.
If noble Lords agree, perhaps I may add to that point or even cite the figures I gave earlier. The implication is that, whereas in the past some 750,000 people were having marginal deduction rates of over 70 per cent., that has now been reduced to under 250,000 people. The noble Lord, Lord Higgins, is quite right that the consequence is that the number below the 70 per cent. rate is increased; that is, between 60 and 70 per cent. or between 50 and 60 per cent. Statistically, that is an inevitable consequence of what we are doing. If I have further information about the implications of a different taper, I shall write to the noble Lord. There may be research on this point with which I am unfamiliar. However, that is our basic thinking.
The noble Baroness, Lady Carnegy, asked why we need to do it for people on higher earnings knowing that they do not need the incentive to go into work; they are already well paid. Perhaps I may ask Members of the Committee to step back. What sort of family will receive tax credit at £30,000 plus? We are not talking of the man in work and the woman at home, a single high earner. By definition, they would not then be receiving the childcare tax credit, which is what takes people up the income scale. Who, therefore, will receive that? It will relate to a combined family income of over £30,000. That is the only way they will receive the child credit which, of course, therefore means that the woman is in work and has children at home being cared for by other people. That is why somebody with a family income of over £30,000 may be eligible for the working families' tax credit. In that case it is her income contributing towards his to take them to an income level of over £30,000.
That means, in practice, that apart from the 5,000 people I talked of who receive over £500 a week, that is over £25,000 a year, he is more likely to be in the £20,000 to £25,000 band. She is likely to be in a band somewhere over £5,000 to come within the 16-hour rule and therefore to count for childcare purposes.
I believe that the question raised by the noble Baroness assumes a single earner and, therefore, effectively somebody coming up to higher rate bands. If we did not have a generous childcare credit, the childcare costs of a couple both in work, and at that top point having possibly four or five children, would be so high that it would not be worth the woman working. We would then be in a situation where he might be on an income of £20,000 to £25,000 and receiving WFTC and she would be at home and not receiving childcare credit. Therefore, that would not take them into the higher earning levels we have been discussing. I see the noble Baroness would like to intervene.
Baroness Carnegy of Lour: I understand that point and am grateful to the Minister. However, I still wonder whether this is the right way to do it for that sort of family. Why not do it through the tax system because that sort of family does not require to be persuaded of the matters about which the Government are trying to
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persuade other people, such as work paying. If, say, the wife, in the example given by the Minister, was in a fairly low paid job, she may decide not to work. They have the freedom to do that. It seems to me that that should all be brought about through the tax system rather than through this system. That was really my question.
Baroness Hollis of Heigham: That is a deeper point about what the tax system should be carrying in terms of whether children are built into the tax allowance. Given that they are not—the noble Baroness will forgive me if she does not tempt me at this hour into a wider debate about the role of the tax system on this aspect—what we are doing is a perfectly decent and fair way of ensuring that, where a couple have a considerable number of children, three plus, and she wishes to work, she can afford to do so. That is the effect of how the system works, otherwise her childcare costs would outweigh any benefit.
One other point worth remembering is that even with childcare tax credit, at least 30 per cent of the costs will continue to be borne by the families. It is not 100 per cent reimbursement; the reimbursement arises because of the large number of children, the cost of childcare and the fact that the figure of £30,000 is based on two earners. So, in practice, we shall not be talking about very many higher rate taxpayers, which, of course, would be an individual. One can see how the model would not work.
The noble Lord, Lord Higgins, asked me how many extra people would come in. We expect WFTC to aid a further 400,000 families. He asked whether this was the reason, because of the taper, for the passport problem. Yes, I believe it is perfectly fair to say that that indeed is the issue. The Government will be coming back with their position. Again, it is an honourable problem to have, but that is one of the consequences. I hope that I have answered the queries raised by Members of the Committee.
Lord Rix: Before the noble Lord, Lord Higgins, responds, he asked for a blackboard to receive suitable communications. I hope that the gesticulations by the Minister sufficed. I can only say that from the rear, I imagined that I was in the Albert Hall listening to Mahler's third. It was a most pleasurable experience!
Lord Higgins: I prefer the adagio to the fifth! We can certainly agree that this is not a partisan issue at the level at which it is now being debated. The partisan issue is whether or not more people are born into the dependency net and whether, in that respect, the Government have hit the right balance between the opposing elements of the taper. I have to say, quite sincerely, that I was lost in admiration for the way in which the noble Baroness managed to explain that without any notes. I could not possibly aspire to that. What she said was extremely helpful. We will need to consider it and, more particularly, in the absence of a blackboard, to read it before we come to Report stage.
I also accept the technical deficiencies she mentioned as far as concerns linking it to the top rate of income tax. However, I have some considerable doubts about

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whether, at the income levels we are discussing—that is, the upper end—it will either encourage people into work as clearly they are already in work, or whether it will encourage them to work harder. I would have thought that it is the least arguable: that, if you are in that kind of income bracket and suddenly find that you come into family credit and working families' tax credit, you do not work rather less and perhaps play rather more golf than you otherwise would. However, we agree that these are all stereotypes.
Nonetheless, these are difficult problems. There are some doubts as to whether the Government have really got it at exactly the right point. One must always worry when the poverty trap is actually being made worse which, for the reason the Minister has mentioned, it looks as though we are doing. We shall study carefully what she has said and consider whether there is a point where one could suggest a somewhat different taper with rather less increase in the number of people who are dependent on welfare payments. Subject to that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 2 shall be agreed to?
Lord Goodhart: Perhaps I may start by clarifying—for the benefit of the noble Lord, Lord Skelmersdale, if for nobody else—our position on Clause 1 because it has a bearing on our views on Clause 2. The noble Lord, Lord Higgins, was absolutely right, as I said when giving him my support on Clause 1, that the working families' tax credit is not a tax credit it is a benefit. However, what it is called is not the point that really matters. That is why we do not seriously object to Clause 1 referring to it as a tax credit.
The problem here is that the Government are making actual administrative changes to make the working families' tax credit look more like a tax credit when those changes are in fact inappropriate and have real disadvantages. One of those inappropriate changes which has disadvantages is the transfer of responsibility for family credit from the DSS to the Inland Revenue. That is why we object to Clause 2.
The culture of the Inland Revenue is entirely different from that of the Department of Social Security. The Inland Revenue is concerned with ensuring that everyone pays at least what they are due to pay in taxation. It does not seek to investigate whether or not everyone claims all the reliefs to which they are entitled. By contrast, the job of the DSS is to ensure that everyone receives the benefits to which 'they are entitled, though no more than that. That may involve the prevention of fraud, but it also involves checking that the people seeking help obtain the correct help to which they are entitled. That is why the way in which claims are dealt with is much more investigative and much less confrontational than the way in which the Inland Revenue deals with tax issues.
The Inland Revenue has no experience of doing casework with poor or relatively poor people. In many cases those people do not have enough income to be taxable, and in many more cases for those on relatively
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low incomes the tax liabilities are paid entirely through PAYE and the Inland Revenue has no direct contact with the taxpayers.
When we come to these two tax credits, the claims procedure will have to be—and is, in the draft regulations—based on very much the same sort of practice as in the case of other means-tested benefits such as income support. But that relates not only to the claims procedure; it relates also to the procedure for making decisions on claims and the procedure for revising those decisions when they have been made, which again have no equivalent in the Inland Revenue's procedure on taxation.
Those procedures have to be the same for tax credits as for other means-tested benefits. But the procedure is completely different from anything done by the Inland Revenue. That is recognised by the fact that it is still proposed that appeals from decisions will have to go to the new unified tribunals under the social security Acts and not, at any rate for the time being—I hope never—to the commissioners of income tax who deal with entirely different matters.
Many of the regulations at present apply both to family credit and to other types of benefit. For example, the Social Security (Claims and Payments) Regulations 1987, some 38 pages long, lay down the basis on which claims are made and they apply to family credit as they apply to other kinds of benefit. Those regulations, with certain consequential amendments, will continue to apply in basically the same form. It is desirable that rules about claims should be, as far as possible, the same in relation to all these means-tested benefits in order to avoid confusion when somebody switches from income support to family tax credits. But from now on, when changes need to be made, they will have to be agreed by two departments and presumably enacted by two separate statutory instruments. In fact, I wondered who drafted the draft regulations we have now seen to bring the working families tax credit into operation. Were they drafted by the Treasury or, as I suspect—perhaps the noble Baroness can tell us one way or the other—were they drafted in Richmond House'?
One ends up with a situation where one is shedding one type of benefit off the DSS into the Inland Revenue when the work regularly done by the Inland Re venue is entirely different from the work regularly done by the DSS. Why not leave the administration of these tax credits where they belong; that is, with the Department of Social Security?
7.15 p.m.
Lord Higgins: My Lords, I am glad to see that, contrary to his earlier remarks, the noble Lord, Lord Goodhart, is now anxious to improve the Government's position on these issues. I agree with everything; he said.
In this Parliament, now almost half-way through, we have seen an increasing tendency for the Treasury to take over the Department of Social Security. One of the reasons why we are stuck with what is a very unsatisfactory mechanism for the working families' tax credit is that rather than saying, "We failed to make it a proper tax credit system", the Government are saying, "It is now our flagship; we must go ahead regardless".

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The noble Lord, Lord Goodhart, drew attention to an important problem. There is a real difference in culture between the Inland Revenue and the Department of Social Security. We know that that is the case because the Inland Revenue, as the noble Lord rightly said, hitherto has been concerned with collecting money rather than giving it away. The two functions put one into a different frame of mind. It is true either way that the taxpayer has an interest; nonetheless, the attitude is very different.
It is also strange that, the Inland Revenue having finally pushed through a system of self-assessment which transfers massive burdens from the Revenue to the taxpayers, a burden is now to be switched over from the Department of Social Security to the Inland Revenue who will do all the calculations for those who are to receive the benefit. So we have the self-assessment argument going one way and the benefit argument going in the opposite direction. Many people will now deal with the Inland Revenue who were not previously affected by it and it will be interesting to see how they cope with the extra information of a quite different kind with which they will now have to deal.
What also gives me considerable cause for concern is the extent to which the Inland Revenue will be able to switch a lot of people over and add other people to the present Department of Social Security staff in an expeditious manner. In relation to cash flow, for instance, the department is asked to do things very quickly, and that is not something which even in simple cases the Revenue has been good at. The delay in the Revenue deciding what one's ultimate tax liability is is often measured in years and sometimes numbers of years rather than a month or something of that order. Bearing in mind that we have had problems with computers elsewhere, can the Minister say to what extent she believes that the present computer structure in the Inland Revenue is able to cope with these issues? That is a particular cause for concern when one considers the massive problems that arose in the Department of Social Security computer structure.
For all those reasons I share the concerns expressed by the noble Lord, Lord Goodhart. This is a major change and largely an unnecessary one. We would have been better to stay with the previous structure. If the Government wish to allocate more funds to it, as we said earlier, that is all to the good. But changing the structure in the way they have will cause considerable problems and not result in any improvement in the service which the taxpayer and those in receipt of benefits receive.
Baroness Carnegy of Lour: Perhaps I may add a further point which looks forward to later clauses in the Bill. I ask Members of the Committee to forgive me for mentioning this now, but I shall not be able to be present for the second day of Committee because I shall be taking part in the last stages of the election campaign for the Scots Parliament.
The fact that all this will be done through the Inland Revenue seems to me to have led the Government to allow it to treat employers (as set out in Clause 8) as if
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they were taxpayers. Indeed, it has placed that kind of responsibility upon them. According to Clause 8, the powers to obtain information as a result of the system are to be found under Section 20 of the Taxes Management Act 1970. That applies equally to the penalties set out under Clause 9, and indeed continues right through to Clause 12.
This is a ferocious way to be treating employers. I know that we have not yet reached that stage, but it seems to me that it is a consequence of conducting the whole operation through the Revenue. In fact, it is rather an unfortunate consequence from the point of view of employers.
Lord Swinfen: Up until now it has been the Department of Social Security which has worked out what benefits should be paid to people; indeed, it has fought their corner against the Treasury. However, with all this being passed over to the Treasury, which is used to cutting every payment, who will work out the correct level of the tax credits? It will be the Treasury. The Treasury will be fighting itself—in other words, left hand against right hand. As I understand it, the Secretary of State for Social Security will not be fighting on people's behalf: it will be someone from the Treasury trying to justify it within the Treasury, but the Treasury is used to cutting down every single outgoing government penny.
Lord Skelmersdale: For the avoidance of doubt I should just like to say that I agreed with the noble Lord, Lord Goodhart, on Second Reading on this exact point; and I agree with him now.
Baroness Hollis of Heigham: I was not expecting a full-blown Second Reading debate. Nevertheless, I shall try to respond. The thrust of the speech made by the noble Lord, Lord Goodhart, which was supported by the noble Lord, Lord Higgins, and others, appears to be that because the working families' tax credit is, after all, a benefit it should therefore continue to be run by the DSS. That seems to me to be the argument.
We have made it very clear that this is built on family credit. I quote Martin Taylor again:
"I recommend family credit should be replaced with a tax credit. To facilitate its introduction the credit should, in the first instance, be modelled on family credit".
That is precisely our position. Therefore, why is it that we are moving away from family credit into a tax credit?
I know that I am repeating myself in this respect, but I hope that Members of the Committee will forgive me. First, family credit is too easily perceived as income support and not as wage support. It is perceived as something that is paid at home; in other words, it is seen as closer to income support than to the sort of activities that we are engaged in jointly with the Department for Education and Employment. I have in mind measures to add to the attractiveness of the New Deal by giving employers subsidies to employ people, introducing pilot schemes, and so on. We are seeking to move this area

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of support from being at home and, therefore, brigaded with income support, to being seen as part of work support.
Secondly, family credit has a relatively low take-up compared to other benefits—for example, 69 per cent. per couple and 79 per cent. for lone parents. Through a pay packet we expect a much higher rate of take-up by definition. Thirdly, family credit remains vulnerable to fraud. as do income support and other benefits. However, I believe that most people will accept that the Inland Revenue has a more effective track record in tackling fraud.
Fourthly, the current family credit has a system of a childcare disregard, which means that those who have the greatest need of it—that is, those who are on maximum family credit—are unable to get any access to it. However, by virtue of having a tax credit, we can produce, if you like, an additional credit for childcare. That brings us back to some of our debates earlier as regards how far that goes up the income scale.
Finally, and most importantly, family credit is part of an extension of DSS measures. But the future will see the greater integration of taxation and the former benefits system. We have already referred to things like children's tax credits which are envisaged in the future. So we expect these measures to develop. It is therefore appropriate that this, which is the very first benefit to become a credit and which is therefore being built on the existing benefits structure, should nonetheless be the first to go over to the Inland Revenue.
I was asked who drafted the regulations. I can tell the Committee that they were drafted by the Solicitor for the Inland Revenue. I was also asked whether computers would be affected. I can tell noble Lords that the answer is no, and that computers will remain the same. I should emphasise that staff in the current family credit and DWA units will go over to the Inland Revenue. Therefore, the fear expressed by the noble Lord, Lord Swinfen, that there will no longer be a champion to fight people's corner, should not arise. I give way to the noble Lord.
Lord Swinfen: I am grateful to the Minister for giving way. Can the noble Baroness tell us whether there will be a Minister to champion these people? In other words, will there be a Minister in Cabinet to fight the corner for those people who need tax credits when the Budget is being prepared? As I understand it, there will only be the Chancellor of the Exchequer and he will not do it because his task is to spend as little money as possible.
Some years ago I asked about the experience outside the Treasury of those in the top half dozen layers of the Treasury. I found out that very few had served anywhere but the Treasury; they had no experience outside the Treasury. Some had had experience in one or two other ministries but very few had any experience of the big wide world outside. It seems to me that the Treasury is a big white tower, and those within it never go outside.
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It seems to have a veto on everything. I have a feeling that there ought to be a Minister to fight in Cabinet for those who need tax credits.
Baroness Hollis of Heigham: I find this all very odd. The noble Lord, Lord Swinfen, addressed his remarks in the context of the Chancellor of the Exchequer's Budgets. The latter have raised child benefit to levels unprecedented in terms of the real increase for children—for example, from next April it will be £15 for the first child and £10 for the second child. We are also speaking about a Chancellor of the Exchequer who has underwritten a minimum income guarantee for pensioners and disabled people alike which, again, is unprecedented.
Lord Swinfen: The Minister will realise that Chancellors of the Exchequer come and go, as. indeed, do governments. We are trying to put legislation in place which may well be there for many years and for many parliaments.
Baroness Hollis of Heigham: It is perfectly true that in the foreseeable future—indeed, I hope that it will be a long-distant future—there may be a Conservative government who do not protect the interests of disabled people or poor people in work. I would regret that very much. From what he said, I am sure that the noble Lord would also regret such a catastrophe. However, in the meantime we have a Labour Government and a Labour Chancellor of the Exchequer who are committed to ensuring that public expenditure is used appropriately to encourage people into work and bring them out of isolation into the mainstream of life.
We are committed to tackling deprived communities; and, indeed, to investing in health and education. We do not want to spend on economic and social failure, as was the case over the past 20 years, whereby we would spend more and more on social security but people would remain poor and inequality would widen. Instead, we are determined that money should be spent on investing in people as regards their talent, skills and opportunities. We want to help them into work and to ensure that the public services they need, like education and health, are there to sustain them.
If the noble Lord wishes to take the matter further, I suggest he studies the interviews that the Chancellor of the Exchequer gave to the Guardian newspaper over the weekend. He made it very clear that the commitment of this Government is to use public expenditure wisely so as to invest in people, their talents and opportunities and to ensure that the necessary public services are there to support them. I am delighted to say that, rather belatedly, Mr. Peter Lilley seems to be coming round to something of the same position.
In conclusion, the point pressed by the noble Lords, Lord Goodhart and Lord Higgins, was whether there would be a difference in culture as a result of going across to the Inland Revenue. In other words, they thought that there would be no one in the Revenue to fight the corner of those most in need. I repeat: the same skilled and experienced staff of the family credit and the DWA units will be moving across to the Inland

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Revenue. Therefore, in terms of that approach, there will be no difference in culture within government. However, if one were to ask about the difference in culture for the applicant—that is to say, the unemployed lone parent or the workless household—I hope to heaven there will be a difference in culture because for too long lone parents and workless families have been deprived of access to work. They have been marginalised out of the mainstream of work. They, and above all. their children have suffered poverty which too often has been unnecessary. Too often people wondered whether it was worth their while to work. By getting this Bill through this Chamber and through Parliament I hope we shall achieve that different culture that some Members of the Committee have today deplored.
7.30 p.m.
Lord Higgins: Before the noble Lord, Lord Goodhart, replies, I hope I may make two quick points. First, as regards the point about culture, I believe the noble Baroness is being rather optimistic in thinking that if DSS staff suddenly transfer to the Treasury they will not be affected by the Treasury culture, however open-minded they may be. I remember a government conference centre at Ditchley Park where the food was terrible and the heating was non-existent. I believe that I was the Minister of State at the Treasury at the time. When the estimate was presented to me I wrote on it that we should spend more money on Wilton Park—I am sorry; I did not mean to refer to Ditchley Park—and within almost 30 seconds (this was absolutely pure "Yes, Minister") my private secretary told me that the Permanent Secretary wished to have a word with me. He told me that no Treasury Minister had ever proposed an increase in public expenditure. Therefore I believe there is a difference in culture in the Treasury.
On a more serious note, the noble Baroness has said that the computer records will be switched from one department to another. However, a quite different method of working will need to be employed in this regard unless the amounts due to each individual are paid directly to employers who pass that money on. However, that is a matter we can discuss later.
Lord Skelmersdale: Before the noble Lord, Lord Goodhart, responds on what, when all is said and done, constitutes a wrecking amendment—I admire the forbearance of the Minister in not pointing that out to us—I wish to make the following comments. The Minister appears to have said that the trouble with family credit is that it is not seen as a work benefit; it has too low a take-up because it is not generous enough and it is not paid through the wage packet. However, as I pointed out earlier, one could still have family credit and not administer it through the Revenue. Then at least we would not sail blind, as the Government are determined to do. There will come a point in the not too distant future when questions will be put to the noble Baroness or her successor with regard to the take-up of
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the WFTC. When does she think that point will arrive and when can we be given some sensible answers to show that the Government have been extremely silly?
Baroness Hollis of Heigham: I hope that the noble Lord can always count on sensible answers from this side of the Chamber. However, I cannot predict when it will be sensible for noble Lords on the Opposition Benches to table such a question. However, I shall try to take the noble Lord's point seriously. We shall pay this money—as family credit is paid now—from October. It will be paid through the pay packet from April 2000. I believe that probably a year will have to pass before one can appraise the results. Normally quarterly statistics are published, and there is no reason to believe they will not be published. Certainly, I am confident that my colleagues in the Inland Revenue and in the Treasury—that is the Paymaster General and her colleagues—would be as concerned as myself if there should be any problem of delivery or decline in take-up. However, I am confident that because this measure is associated with the pay packet, problems of take-up, fraud and other problems that we have experienced in the past will begin to diminish. That process may take more than the first year of full running to assess; it may take a couple of years. However, if the trends are not going in the right direction, the noble Lord will be quite correct to hold us to account.
Lord Goodhart: Family credit has been a rather successful benefit until now. The take-up is high. The crucial figure is not so much the proportion of eligible people who take it up but the proportion of the funds that are taken up if everyone applies. That proportion is about 85 per cent which suggests that most people who would be entitled to substantial sums of money if they applied for family credit are doing so.
The noble Baroness said that there must be a culture which encourages people to take up the working families' tax credit. I agree with that. However, the take-up of that money may be considerably higher. That will arise primarily because the benefits will be substantially more generous than apply under the current rules of family credit. I find it difficult to imagine that the switch of responsibility for this measure from the DSS to the Inland Revenue will increase the level of take-up. I believe that the culture is important in this regard. The noble Lord, Lord Swinfen, put his finger on the matter; namely, it is not just a question of transferring the measure from one department to another, but of transferring it from a department whose job it is to pay money to people who need it to a department whose job it is to collect money from those who have to pay in order to keep the mills of government rolling.
There is a difference in culture at all levels. It is particularly important that there is a difference in culture at the higher levels. I acknowledge that the present Chancellor of the Exchequer has considerably increased certain benefits and in particular has provided generous increases with regard to the changeover from family credit to the working families' tax credit. However, it is by no means certain that that will continue. It is not just

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a matter of the working families' tax credit coming under the control of the Revenue. When one is considering the appropriate level of expenditure on social security, one has to be able to balance one benefit against another. It may be appropriate at some time to say, "The Treasury has told us that there is only so much money available". The Treasury, of course, always determines any increase in the amount of money that is available for social security.
However, the DSS is at least in a good position to say it considers that in a particular year the extra money is needed for income support rather than tax credits. I believe that that ability on the part of the DSS will be lost. That seems to me entirely the wrong procedure. I do not think it can be justified by saying that the Inland Revenue will be tougher on fraud than the DSS. I believe that both departments should be equally tough. I am seriously concerned by this measure. However, I doubt whether the noble Baroness will be surprised to hear me say that I do not propose to divide the Committee on this occasion.
Clause 2 agreed to.
Lord McIntosh of Haringey: I beg to move that the House do now resume. In doing so I suggest that the Committee stage should not start again before 8.35 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Central America
7.40 p.m.
Viscount Montgomery of Alamein Viscount Montgomery of Alamein rose to ask Her Majesty's Government what steps have been taken to facilitate economic recovery in the recently devastated republics of Central America.
The noble Viscount said: My Lords, in asking this Unmarred Question, to which I have no right of reply, I wish to express my gratitude to all noble Lords who will speak in the debate. I am particularly glad that the noble Baroness, Lady Richardson of Calow, will make her maiden speech. It is most encouraging to welcome a new member to what I loosely call the "Latin American fraternity" in the House, which is always in dire need of new members. On this occasion the noble Baroness is to be followed by the right reverend Prelate the Bishop of Blackburn, which is an encouraging sign.
Noble Lords will remember that on 10th December we debated this subject, but at that time we were debating the immediate relief in the aftermath of Hurricane Mitch. Her Majesty's Government are to be commended on their rapid reaction to the hurricane. We are all extremely grateful to the noble Baroness, Lady Amos, for the action taken by herself and her department in bringing that immediate relief. But tonight we are concerned more with the longer term economic recovery of this devastated region. Honduras and Nicaragua were victims of massive levels of destruction; El Salvador and Guatemala inevitably to a lesser extent, but they also suffered.
The infrastructure in Honduras and Nicaragua was severely damaged—roads, bridges and schools were wiped out. But perhaps more crucially in the longer term, their agriculture, upon which their exports depend, was largely wiped out. For instance, in Honduras, the banana, coffee, shrimp and melon industries were destroyed and the sugar industry was badly damaged. The same applies in Nicaragua and to a lesser extent in Guatemala, where 70 per cent of the banana plantations were wiped out and thousands of hectares of coffee, fruit and vegetable crops were ruined. Those are serious matters from which it will take a long time to recover.
I have mentioned bananas in connection with two countries. As an aside, perhaps I may mention that we have debated the subject in the House for many years. I fear that the noble Baroness, Lady Amos, will not agree with me when I draw some satisfaction from the WTO ruling that the EU was out of order for subsidising its former colonial powers to the disadvantage of Latin American producers, which are also developing countries and will increasingly need to export these crops if they are to survive. That is an aside and I do not expect the noble Baroness to agree or to comment because that is not the main thrust of today's debate, which concerns economic recovery in Central. America.
It is gratifying that the Department for International Development has had a team in Central America which has made a study and shown that things such as safe water and health are key areas about which we can do something. I wonder whether it would be possible for the United Kingdom to take responsibility for specific projects, which could be attached to our name, such as the rebuilding of a school or a series of bridges. Specific projects in kind often prove much better and much more effective than donations in cash which sometimes are dissipated in the process of being utilised.
An important subject in the longer term is debt relief in the area. Because of their history, these countries are obviously heavily indebted. I am sure that several speakers will refer to that. The subject was not cove red in detail in the December debate because we were then concentrating on the matter of immediate relief. All Central American countries are more or less in the same position, but obviously the impact is in direct proportion to the damage caused to their respective economies and their export potential. As the exports of Central America are largely agricultural, trade surpluses will be very low and in some cases non-existent. That is likely to continue for some years.
Clearly, the Inter American Development Bank and the World Bank will have to play a major part in this matter. Whatever we in Europe may feel about it, the most important trading partner for Central America is the United States of America. It is the major power player in the area and has the most influence and the most trade. But Europe has a role to play in general, particularly in the context of the EU, and possibly of Britain in particular. I hope that we can see our way forward to developing that role.
Central American countries generally have favourable climatic and soil conditions except, obviously, in the case of major natural disasters. The people of Central

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America are hard working and talented. They have natural entrepreneurial and other skills. I can say that with some authority. I am probably the only Peer who has lived for some years in El Salvador. During that time I visited all these countries and got to know their peoples very well. The region is worthy of our continued support. I hope that we can provide it.
7.45 p.m.
Baroness Richardson of Calow: My Lords, I am very conscious of the privilege of sitting in your Lordships' House and, from now on, of speaking in it. I am grateful for the unfailing courtesies I have so far received and for the help that so many people have given me. I hope that that help continues for a few weeks yet. I ask for your Lordships' indulgence if I inadvertently transgress the codes of courtesy with which I am not yet very familiar and also if I repeat points already made by the noble Viscount.
I am not an economist. I speak now partly because I have a concern for the people of Central America. I am an ordained minister of the Methodist Church and I currently have the responsibility for all our world church partnerships. The Methodist Church in its missionary endeavour reaches many parts of the world. Although most of our partnership churches are now autonomous, we still have very great links of personal friendship. We share our personnel across countries and also give aid in financial resources. I also have responsibility in the Methodist Church for our Methodist Relief and Development Fund. We also have a number of ecumenical partnerships which enable us to reach areas such as Central America which are not normally Methodist areas.
I wish to make three points. First, I wish to refer to debt relief. There is a general agreement that one of the most critical factors in economic recovery is the debt burden. I warmly commend Her Majesty's Government on their response to the emergency in the aftermath of Hurricane Mitch. Three million pounds has been spent on emergency and reconstruction aid since last November, £6 million has been promised for medium-term rehabilitation in Central America, and a significant contribution has been promised to the European Union's fund for relief.
I am also grateful that Britain took the lead in calling on the World Bank to set up a trust fund to service multilateral debts and made a contribution of £10 million to that fund. However, I understand that the moratorium on debt payments, which was declared in December by the Paris Club of creditor nations, relates only to the next two or three years and that the interest incurred will be added to the debt burden after that time. It also seems that this agreement was made without the representatives of Nicaragua and Honduras being present at the meeting. I suggest that rehabilitation and reconstruction will take much longer than three years and perhaps longer than 20. When the Minister replies, perhaps she would like to make reference to the Government's position.
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As to development aid, it was felt by some agencies at work in Central America that the coverage given by the British media after the disaster gave the impression—I quote from a letter from a local Nicaraguan non-governmental organisation to the Methodist Relief and Development Fund office—that
"Nicaraguans were entirely helpless and disorganised, begging for handouts and calling for international handouts and calling for international experts to save them".
In fact there are significant networks of community workers and agencies in those countries, well set up to deal with the crises that affect that part of the world. The hurricane was a major disaster and meant that those agencies diverted their resources to dealing with immediate needs of shelter, food and trauma care. Their material resources are stretched now but the expertise, energy and creative leadership are in place for community development.
Aid is not only government-to-government but people-to-people. The response by the ordinary people in Britain has been very good. I am grateful to the Government for their announcement of the gift aid scheme to bolster individual donations to charities at work in poorer countries. I would be grateful for confirmation that the scheme will cover donations to agencies at work in Central America.
My third point is made by way of personal anecdote. I was visiting El Salvador on behalf of Christian Aid when we were taken to a remote community, where returning refugees had been given a small parcel of unproductive land. They were scratching a living from it and were very poor. As we left we asked whether there was one thing that was in our capabilities to give them that would help their work in the village. We expected to be asked for agricultural implements, building materials or school books. In fact, it was a ping-pong table. Talk of economic recovery is not only about balance sheets, investment returns, company profits and government debts. It is about enabling individuals to have a quality of life that includes meeting basic human needs, freedom from fear and occasional laughter. It is also about enabling communities to support and strengthen individuals.
7.52 p.m.
The Lord Bishop of Blackburn: My Lords, it gives me the greatest pleasure on behalf of the whole House to offer our congratulations to the noble Baroness, Lady Richardson of Calow, on her maiden speech. The noble Baroness has had a distinguished Christian ministry in the Methodist Church, to which she has referred, and beyond that in the ecumenical movement among the Churches. She is a notable pioneer in the Methodist Church.
The noble Baroness is a veritable collector of firsts. When she and I lived in adjoining streets in Rastrick, in West Yorkshire, she was the first woman chair of a Methodist district. She went on to be the first woman president of the Methodist Conference, first woman moderator of the Free Church Council and the first woman to be president of the Churches Together in England. Your Lordships will understand that there was widespread delight among the Churches when she

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became the first woman Free Church minister to be made a Peer. Tonight is a unique occasion in every sense. We all look forward to hearing more of her experience, wisdom and anecdotes on future occasions.
I am most grateful to the noble Viscount, Lord Montgomery of Alamein, for enabling the House to have this short debate on an important matter. There is a real danger that, as the world rightly focuses its attention on the dreadful situation in the Balkans, the continuing needs following the devastation wrought by Hurricane Mitch on Central America will be overlooked. The situation remains perilous in a number of countries, even though the immediate crisis is over. In Honduras, the combination of structural weakness and the sheer volume of water had a devastating effect and whole communities have now to be re-established. So great was the damage caused by the hurricane that cartographers are redrawing the map of that country.
One in four people have no prospect of work for the foreseeable future. It is not surprising that immigration officials in Mexico and the United States are expelling increasing numbers of immigrants from Central American states. Further heavy rain in the north last January only served to exacerbate the problem and made rebuilding difficult. The beginning of the rainy season next month could well trigger new flooding and further landslides. The United Nations World Food Organisation has warned that Honduras does not have enough grain to feed the nation and is predicting a further food crisis this year.
It is good to report that the Churches, through Christian Aid and other aid agencies, have been actively involved in providing emergency relief and are continuing to try to stimulate the economic and social recovery in the region about which the noble Viscount spoke. Christian Aid, for example, is trying to ensure that reconstruction takes into account the need to manage better natural resources and the environment, provide much-needed training in basic healthcare, create measures that will deal more effectively with natural disasters in future, and be concerned about the needs of women, children and the elderly. Even with all that, there is a growing consensus among aid agencies that policies aimed at stimulating economic growth must seek also to narrow the gap in social inequality that is perpetuated through structural financial discrimination.
Although Christian Aid has partner links with the Christian Commission for Development in Honduras—working on the ground and helping to reconstruct houses and rehabilitate health services in affected areas—the Church of England here, as a member of the Jubilee 2000 Coalition, has been trying to focus attention on the underlying issue of debt as a barrier to economic and social development in the affected states that is so much needed. As the Honduran ambassador to the United Kingdom pointed out:
"Honduras has no revenue to pay for both its debts and its reconstruction, not because of bad policies or because it does not wish to, but because that capacity was mortally crushed by a, force majeure".
The disaster means that the debt has become a noose around the nation's neck that is slowly being pulled more tightly.
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Last year's Lambeth Conference of bishops from the worldwide Anglican communion—many of whom have first hand experience to bring to our debates—called in a considered resolution for debt remission. This month, the Roman Catholic bishops of England, Wales and Scotland made a similar call. They rightly stated that
"the remission of unpayable debt of the world's most indebted countries was no longer an impossible ideal but a practical necessity".
That is certainly the case in the Central American region. Honduras and Nicaragua together owe more than 10.2 billion dollars. I hope that the Government, who I know have done so much, will address that issue and feel able to follow the example set by other European nations. Finland has recently written off 18 million dollars owed by Nicaragua. France and Spain have unilaterally written off the debt of affected countries. It seems that those nations need more than the three-year moratorium on loan repayments offered by the Paris Club. To many, that seems but a stay of execution rather than a serious determination to resolve the debt burden facing the region.
When the Minister replies, I hope that she will assure the House that the matter will be raised by our government at the G8 summit in Cologne. It needs concentrated international effort to encourage progressive reconstruction. I am sure that the Government will do all they can to play a full part in helping to achieve that.
7.58 p.m.
Lord Desai: My Lords, I thank the noble Viscount, Lord Montgomery, for introducing this important question, and we heard an excellent maiden speech from the noble Baroness, Lady Richardson of Calow. Unlike them or the right reverend Prelate, I do not bring any practical experience of relief work or development aid, but I want to make some general points. While we are very good at relief, we must now think in terms of recovery and development. We must think in terms of a different timescale and in different depth.
It is interesting that if a country falls into financial crisis as a result of bad bank lending, billions of dollars are found for that country, as we saw during the Asian crisis. I believe that a sum of 54 billion dollars was found for Korea following misbehaviour on the part of banks. Other large sums of money have been found for Mexico, Indonesia, and so on. It is peculiar to forgive, as it were, errors of commission, whereas, when countries have been visited by natural disaster of a great order about which they can do nothing, we have not found swift and generous ways of recompensing those countries for the cost of development.
Another aspect is that some argue that, owing to global warming, our weather is becoming more variable and we are subject to natural disasters with greater frequency than we have been used to. I agree with that view. If that is the case, we ought to take the Central American experience as a test case, and use it as a learning device to set up long-run generous permanent funding facilities for dealing with future disasters. The noble Viscount mentioned the World Bank and IADB. The UNDP should play a part. Wherever natural

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disasters occur we must have a double strategy: first of all, immediate relief, but then generous development aid to help with reconstruction. It has been done following wars and bad bank lending; but somehow we are unable to do it following a natural disaster. That lacuna should be filled.
Given that the Government have done such good work in development aid, both in terms of relief and in tackling debt, I urge my noble friend on the Front Bench to take up this call. It is not a question that requires an immediate answer, but we could take the initiative and state that this kind of fund should be set up; and we should begin with Central America as a test case. It is complex region, mainly agricultural. We could learn a large number of lessons in how to reconstruct economies.
Perhaps I may make a marginal reference to the noble Viscount's remarks about the WTO. I do not want to be involved in controversy, but I agree with him. It will be proved that no one will listen to him once I agree with him! These countries should not be reconstructed as they were; they should be diversified to some extent. We must grasp the opportunity to diversify many of the economies that have been over-dependent on a small number of crops such as coffee and bananas. In the course of reconstruction we should apply a diversification strategy, which would be good for growth.
Finally, I turn to a problem that was mentioned by the noble Baroness in her excellent maiden speech. Women frequently bear the excess burden of adjustment. Men may migrate; women stay behind and have to cope. Whatever strategy is adopted for recovery and the reconstruction of economies should be gender sensitive. It must look after the needs and responsibilities that women have to bear in that respect. I do not say that as a cliché. I refer, for example, to setting up lending facilities, work schemes, clean water and health facilities, education, or whatever. The prime focus should be on gender. That is also a good long-term development strategy.
I have spoken more about the long-term than the short-term strategy. I entirely agree with the remarks made by the right reverend Prelate in relation to debt. The large amount of private debt that Latin American and other countries had in the 1980s was "forgiven" by the market; it was equitised, and very often countries paid 10 cents in the dollar. The difficulty is that we cannot seem to forgive public debt. That is a paradox. When the market is more generous about debt forgiveness than governments, something must be wrong somewhere.
8.5 p.m.
Lord St. John of Bletso: My Lords, with world media attention currently focused on the plight of the Kosovar refugees and the uncertain future of the Balkans, it is opportune that the noble Viscount, Lord Montgomery of Alamein, has again given us the opportunity to draw attention to the plight of the devastated republics of Central America less than six
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months after Hurricane Mitch blew devastation through the region, leaving almost 19,000 men, women and children dead and missing and more than 5 billion dollars'-worth of economic damage. It was perhaps fate that Honduras and Nicaragua, two of the poorest countries in the western hemisphere, should have been the worst affected by the disaster. I wish to devote the few minutes available to me to those two countries.
In the debate introduced by the noble Viscount, Lord Montgomery, in the aftermath of the hurricane last year, three key issues arose. I refer first to the devastating effects on the agricultural sector as well as on the basic infrastructure of roads, rail, bridges and communications. The second was the question of debt relief, a vital issue in today's debate. Debt is effectively crippling the economic growth of many countries in the region. Finally, many noble Lords spoke about the measures taken by the international community to provide not merely short-term relief but sustainable reconstruction in the recovery of the region.
Clearly, apart from the huge international response, the private sector and NGOs have played an important role in efforts to restore stability and help recovery. It is encouraging to read and to hear from several noble Lords, particularly the noble Viscount, Lord Montgomery, who has visited the region, that there are signs of progress, in particular the repair of many important bridges and the fact that most areas now have clean running water. Apart from devastation to the agricultural sector, the basic challenge remains to provide long-term housing for the many thousands of families who remain without a home or a future. Her Majesty's Government have played an important role in providing financial assistance for the programme of rebuilding secondary roads and bridges, repairing water and sanitation infrastructure and restoring health and education services.
The key question posed in the wording of the Question is: what necessary action will be taken to facilitate long-term economic recovery in the worst affected regions? The noble Lord. Lord Redesdale, speaking in the previous debate on this subject, stressed the need for long-term sustainable economic recovery beyond merely restoring the devastated countries to the pre-Hurricane Mitch status quo. We all certainly welcome the announcement last month by the Paris Club to cut part of Honduras' debt service obligations by two-thirds and to defer all debt service payments until 2001.
Agreement with the International Monetary Fund on a three-year package of structural adjustment measures has given Honduras the chance of entry into a further plan to reduce the amount it owes to multilateral creditors. Damage in Honduras is estimated to be about three-quarters of its GDP. The finance minister was recently quoted as saying:
"I hope we can recover in 7 to 10 years—if we get private sector investment coming in, if we get trade benefits from the US, and if we get resources for reconstruction".
The stress is on "hope" and "ifs". Forecasts are that the Honduran economy will shrink to about 2 per cent this year and that growth in Nicaragua will be about 1 per cent. With the agricultural sector being the

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mainstay of the exports of both countries, large inflows of foreign aid will be needed to plug holes in their balance of payments.
An issue which has not been raised this evening is that of privatisation. Privatisation has played, and will continue to play, an important part in boosting reconstruction funds. Direct investment in the region in 1998 accounted for almost 2.8 billion dollars through privatisation alone. Both El Salvador and Guatemala have put their telecoms and power distribution sectors into private hands, creating a healthy cushion of foreign reserves.
The United States Government have recently launched a large second-phase aid package of almost 1 billion dollars for the hurricane relief programme. It is to be hoped that there will not be lengthy delays in Congress in the implementation of the programme.
My noble friend Lady Richardson of Calow, in her excellent maiden speech, referred to the recently established World Bank multilateral trust fund to help service debts of the worst affected areas. Can the Minister elaborate on the contribution that Her Majesty's Government have made to that fund and their plans to give to it in the future?
In conclusion, despite the laudable international relief efforts for the worst casualties of Hurricane Mitch, there is no doubt that life remains extremely precarious for many in the region. With the rainy season expected next month, there is much concern about future flooding. This year will be another exceptionally tough period as Honduras and Nicaragua continue the slow process of rebuilding their shattered economies.
8.12 p.m.
Lord Redesdale: My Lords, I, too, start by thanking the noble Viscount, Lord Montgomery, for initiating this debate. It seems that, because of his great expertise in the area, he initiates almost all our debates on South America. It is also a great privilege to welcome a maiden speaker. I very much hope that the noble Baroness will join us in many international debates. It is a small, happy and select band which usually takes part in debates on these issues.
The horror of Hurricane Mitch had a massive impact on the media at the time, although it was interesting to see how quickly the world's media forget such issues and move on to other things. This hurricane killed more people than any other hurricane in the western world in the past 200 years since records started. However, I was interested to discover that it was not the fiercest hurricane this century but ranks fourth in the league tables.
What made this hurricane so catastrophic and lethal was the fact that it was super-saturated. It has been calculated that the hurricane, which picked up evaporated water over the oceans, dropped 40 cubic kilometres of water—a quite horrendous amount of water—over Honduras, Nicaragua and parts of El Salvador over a period of two days. That was on top of the unusual amount of water that had already saturated
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the landscape and caused flooding. That was one of the reasons for so many landslides and the resulting savagery of the flooding.
Hurricane Mitch literally redrew the map, especially of Honduras. A project has been undertaken to withdraw the map of Honduras because whole towns and villages were either buried in silt or washed away. Even the coastline has changed. Rivers have altered course and a number of bridges and countless roads were disrupted by the numerous landslides.
The economic devastation was quantified by the noble Lord, Lord St. John of Bletso. The sector which was hardest hit was agriculture. That was not only because of the destruction of crops but also because of the unfortunate after-effect of flooding in which the agricultural land was buried under as much as two to three feet of sandy silt. I have seen pictures of fields being reclaimed. The only way to do that is to dig the silt off. That work is being undertaken by some of the larger companies, such as Chiquita, but that is of little help to many of the smaller farmers, who will find it extremely difficult to reclaim their land.
One of the crops which were hardest hit was bananas. I quote an interesting fact I heard recently, which may help in the WTO negotiations; namely, that bananas are not a fruit but the largest herb in the world. I thought I would throw that in, because it tickled me!
The economic devastation meant that reconstruction was needed. Looking back on the previous debate. I find it strange that we talked about debt relief as the most important thing. It shows how slanted our view of economic growth is that we do not talk about new money going into the area for rebuilding or reconstruction; we immediately look at how much the developing world owes us rather than at what 'we can give to it.
I had a number of questions which I wished to probe further, but my guns were spiked by a letter passed to me by the noble Lord, Lord Rea, written by the noble Baroness, Lady Amos, which set out Britain's contribution. For the sake of time, I shall not look at that issue again, but I should like to ask the noble Baroness whether she has any further information to add on Britain's contribution to debt relief.
The reconstruction in Central America and Latin America will owe much to one simple expedient; namely, the success of the Caribbean Basin Initiative. One of the problems that Central America faces is the trade barriers imposed by the United States on Central American goods. One way of kick-starting those economies after Hurricane Mitch could be to remove some of those trade barriers. That point could perhaps be brought to the attention of the Americans.
This debate is well-timed. I believe that on the 15th of this month the IMF signed an agreement with Honduras for a structural adjustment programme which will start the process of debt remission.
I should like to end by asking the noble Baroness a question about schemes relating to the environment. Hurricane Mitch was one of an increasing number of storms, which will hit again. Has the Minister any examples of schemes that the DfID is undertaking to

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reduce the effects of these storms. I read an account of work which had been undertaken at San Pedro, the second largest city in Honduras. Because of the work, that city managed to avoid much of the devastation. Without such work, the next hurricane will cause the same amount of humanitarian disaster as that caused by Hurricane Mitch.
8.18 p.m.
Lord Moynihan: The noble Baroness, Lady Richardson of Calow, sought our indulgence for an additional few weeks. She need have made no such request. Her eloquence, clarity of thought and sensitivity to the crisis in Central America made her maiden speech memorable. I am sure that it is those of us who participate in aid and development debates in this House who will be seeking her indulgence in the future. From these Benches, we offer her a warm welcome and our congratulations. I also thank my noble friend Lord Montgomery of Alamein for tabling this Question. This House last had the occasion to debate the situation in Central America in the immediate aftermath of Hurricane Mitch in December, once again as a direct result of my noble friend's abiding interest in and commitment to the region.
With the initial phase of search and rescue, the urgent delivery of millions of pounds of water, food, medicine, plastic sheeting and clothing to the thousands who lost everything in the hurricane now completed, it is critical that, as the international community seeks to direct its strategy and resources from the relief phase to the process of long-term reconstruction, compassion fatigue is not allowed to set in.
I take this opportunity once again to pay tribute to the non-governmental organisations which brought immediate emergency relief to the affected communities in the form of food, medicine and shelter, and to those still on the ground, where their efforts will be necessary for many years to come.
It is true that destruction breeds desperation, which in its turn can be the nurturer of crime and conflict. The international community therefore has far more than a passing interest in ensuring a region of strong, stable and prosperous democracies as a partner for trade and investment and in combating common problems, such as drug trafficking, corruption, illegal immigration and environmental degradation. It is in no one's interest if trade is allowed to contract, co-operation is allowed to lapse and a fertile environment is created so that crime, corruption and drug trafficking fill the vacuum left by the storm.
On that note, what action are the Government taking to assist the governments of Central America to ensure that Hurricane Mitch leaves one positive legacy to the people of the region by helping them to reinforce their renewed commitment to democracy, transparency and continuing reform? It is only in this way that the governments of Honduras and Nicaragua in particular will be empowered to grasp this opportunity from out of the jaws of adversity and not only rebuild but transform their institutions both politically and economically.
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This evening's debate provides a key opportunity for the Minister to set out the assessment of the Department for International Development of the long-term rehabilitation and reconstruction needs of the countries of Central America affected by Hurricane Mitch. What information can the Minister give the House on the DfID mission referred to earlier? The mission was due to visit Honduras and Nicaragua on 22nd February to look at possible long-term assistance and check on progress of the work being done as a result of Britain's £4.2 billion package, including work to rebuild roads and bridges, repair water and sanitation infrastructure and restore primary health and education services. The extent of work on epidemic control was also to be assessed.
The widespread loss of jobs is of particular concern in relation to the attempts to reactivate the region's economy. Does the Minister agree that the ability of the economies of this region both to restore jobs and to create new ones is vitally important? It must not be forgotten that more than 50 per cent of the population of Central America is under the age of 20.
In the Minister's view, what are the significant lessons on how better to co-ordinate international aid efforts that the Government have learnt from the tragedy? When will these lessons be implemented as a result of the review of the disaster preparedness programme that the department is considering? What specific elements to date have been included as part of the international recovery programme for Central American countries in order to help them improve their ability to withstand future disasters? The last point is particularly relevant and has been referred to by a number of noble Lords, not least given the predictions of Dr. Willoughby of the National Hurricane Center in Miami, which were referred to in the debate in December, that the conditions which brought about Hurricane Mitch could prevail again this year?
Does the Minister agree that the approach of the 1999 rainy season in Central America and the Caribbean poses enormous risks for the region? Is the international community now better able to respond in a more co-ordinated way? Without going into detail on debt relief—it has been well covered by many noble Lords who have spoken this evening—we on these Benches also welcome the Government's push for a stronger link between debt relief and poverty eradication as pledged by the Secretary of State, not least to be discussed this week as part of the IMF and World Bank 1999 spring meetings. Perhaps the Minister is in a position to report on progress achieved so far, for we must take the opportunity this week in Washington to ensure that debt relief is used more effectively as a tool of international development—debt development swaps are but one example—so that linkage really benefits governments who adopt policies that help the poor.
In conclusion, Hurricane Mitch took the lives of thousands of victims. We cannot allow it to take the future of the survivors as well. We cannot allow the fury of the storm to erode not just the topsoil in the region's flooded fields but the very fabric of society and its consolidation of democracy. We cannot allow the economies of the region to be undermined, for, if the

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international community fails to respond to this crisis in both the short and long term now that the television cameras have gone, these countries will be condemned to years of poverty and misery with massive setbacks to their social and democratic development. We shall all he the poorer if that is the lasting legacy of Hurricane Mitch.
8.26 p.m.
Baroness Amos: My Lords, I begin by thanking the noble Viscount, Lord Montgomery of Alamein, for again bringing to the attention of the House the plight of those affected by Hurricane Mitch. I also thank the noble Viscount for his support of the work of DfID. I also pay tribute to the noble Baroness, Lady Richardson of Calow, for a notable maiden speech. I look forward to her contributions in the future.
Hurricane Mitch may no longer be in the nation's headlines, but that does not mean that the people of Central America are no longer suffering from the mass destruction which was caused during that dreadful time. The UK has been active in offering support to those affected by the disaster. I can announce today that my honourable friend the Parliamentary Under-Secretary of State for International Development will be visiting Honduras and Nicaragua in July to see the reconstruction process for himself.
In the immediate aftermath of Hurricane Mitch there was an overwhelming need to provide humanitarian assistance. The Department for International Development responded to requests from carefully chosen organisations already in the country at the outset of the disaster. During the initial response a number of individual grants were given to NGOs and international organisations. I support the comments of the noble Lord, Lord Moynihan, who paid tribute to the work of NGOs.
A team from DfID visited the region earlier this year to assess the work that was being done with support from the UK Government. I should like to share with noble Lords the fact that DfID was praised from ministerial level down not only for the speed and appropriateness of its initial response but for the focus and level of its humanitarian assistance package. The speed with which the Royal Navy sprang into action was also rightly highlighted.
Noble Lords will be pleased to know that government Ministers in all the affected countries are currently preparing a portfolio of projects for a donors meeting in Stockholm scheduled for 25th to 28th May. It is encouraging that the proposals being prepared for Stockholm are oriented towards reconstruction and reducing vulnerability to future disasters rather than just patching up.
The noble Viscount referred to steps to facilitate economic recovery. The noble Viscount will agree with me that the economic aspect of recovery cannot be divorced from other aspects of human development. A strong economy depends on the strength of its component parts, including areas such as housing, infrastructure, health and education. It was in these areas that Britain opted to provide assistance in the transitional phase.
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Our programme to rebuild rural roads and bridges is a good example of a simple project helping to regenerate the economy. Many areas in rural Honduras have been virtually cut off since the hurricane, in many cases accessible only by donkey. Children in some areas were unable to get to school and doctors had difficulty in reaching patients. The local economy came to something of a standstill, as normal trade was next to impossible. Opening up access by repairing the road system and making the bridges passable again means that life can get back to something like normal. The project is also an income generator, as it employs local people, at least 20 per cent of whom are women, in groups of 30 at up to five locations on each road.
The noble Lord, Lord St. John of Bletso, mentioned the need for housing. In Honduras, DfID has been funding housing and micro credit schemes run by CARE International. The housing project will provide the materials for the basic houses, which will be constructed by families in groups of 10.
The micro credit project reflects the loss of a significant proportion of the pre-Mitch capital used by the poorest sector of the Honduran population, both urban and rural, to buy, sell, trade, and for general income. In order to reactivate household economies and jump-start the informal sector, CARE is making available small loans of between 75 US dollars and 150 US dollars per household. Working through community and solidarity groups, 3,000 families—that. is, about 15,000 people—will benefit directly from this initiative.
It is important that the reconstruction process is carried out in such a way that any hurricane of the future does not cause such massive destruction. That is why one of the studies we funded in the early days was for an organisation set up by the Central American presidents to advise on the best methods for reconstructing the countries to ensure they are better placed to survive in similar circumstances in the future. We are now considering further help for work on preparedness at a local level.
Several noble Lords, including the noble Lord, Lord Redesdale, mentioned agriculture. In addition to an emergency seed-planting programme in the weeks immediately after the hurricane, we have recently agreed a programme to help to regenerate agriculture in Honduras. The focus here is on putting local seed systems on a strong footing for the future and for assisting efforts at rehabilitating soil, which is now viewed as potentially more serious and threatening to the long-term viability of the food system than seed supply.
In Nicaragua DfID is supporting UNICEF's emergency programme to repair water and sanitation infrastructure and to restore primary health and education services for disaster-affected communities.
The noble Lord, Lord Moynihan, asked about epidemic control. The health project is aimed at preventing and controlling any outbreak of cholera or other transmissible diseases, particularly those affecting children. Given the importance of this sector, we hope to do more in the long-term reconstruction phase. We

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have just completed preliminary discussions with the pan-American Health Organisation and others on further work in areas such as disease prevention.
In education we have helped rehabilitate schools, given students back-packs and materials, equipped classrooms with desks and tables, and supplied schools with textbooks, maps, encyclopaedias and dictionaries.
Overall we plan to spend some £6 million in the region over the next two years on measures to help with long-term reconstruction, as well as the £3.2 million already spent.
In addition to those measures, we have also taken a number of steps on the debt front. I agree with the noble Baroness, Lady Richardson, that reconstruction and rehabilitation will take longer than two years. Nicaragua and Honduras have both received assistance with their current debt burdens, with bilateral governments agreeing to forgo debt payments for two years and donors helping these countries to meet their multilateral debt payments. Both Nicaragua and Honduras are classified as heavily indebted poor countries (HIPCs) and will be considered for debt relief under the HIPC initiative. A debt sustainability analysis will be done on those countries this year to decide the level of assistance for which they qualify.
The right reverend Prelate the Bishop of Blackburn spoke powerfully of the need to resolve the debt burden facing the region. A comprehensive review of HIPC is currently under way. I can assure noble Lords that we are pressing for revisions to HIPC so that it provides countries with a permanent exit from their debt problems, as it was designed to do, and so that sufficient resources are released early on by lower debt service payments to allow countries to tackle poverty more effectively.
The noble Lord, Lord St. John of Bletso, asked me about the trust fund. The UK Government proposed a trust fund to help Honduras and Nicaragua to meet their multilateral debt service payments and have contributed £10 million, now that the World Bank has taken up our suggestion. Total commitments to the fund now exceed 100 million dollars.
The noble Lord, Lord Redesdale, also mentioned the need for long-term investment. The Commonwealth Development Corporation has become increasingly involved in the region. The value of the programmes in the Mitch-affected regions has grown from £23.7 million in 1993 to £72.4 million in 1998.
We are currently looking at a number of options for continuing our work in the long term. These include work in reproductive health and disease surveillance, working alongside the United Nations Population Fund and the pan-American Health Organisation.
In mid May we will begin discussions with the regional technical assistance unit for agriculture which provides policy support to ministries of agriculture, natural resources and environment in seven countries of the region, and assist in preparation of investment proposals for funding by the World Bank and others.
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This reflects our long-term strategy for the region, which is to work alongside the multilateral organisations in order to give added value to their programmes and ensure that British influence is well felt.
The first example of this co-operation is a capacity-building fund for Central America which was signed in February with the Inter-American Development Bank. This is intended to strengthen the ability of local groups to run their affairs more effectively. It will be aimed specifically at the poorer sectors of society and particularly at those whose lives have been disrupted by Hurricane Mitch.
I would like to touch on three specific points raised in the debate, and I will write to other noble Lords whose points I have been unable to cover. The noble Baroness, Lady Richardson, mentioned the gift aid scheme. The scheme applies to British charities working overseas and I see no reason why it should not apply to Central America.
My noble friend Lord Desai mentioned the Asian social fund and the need to establish a fund for Central America. I assure the noble Lord that the consultative group process has brought together the donors in a very similar way.
I make only one comment on bananas, be they fruit or herb: in all the discussions we have made it clear that the UK is looking for a solution which is clearly WTO compatible, does not run the risk of WTO challenge and meets our responsibilities to the ACP suppliers.
It is not possible to underplay the horrors that face the people of Central America, yet they have responded magnificently. With the help of the international community much of life is getting back to normal, or as normal as it can be. Houses are being built and roads repaired; children are back in school and hospitals are functioning again. There is still an enormous amount to be done. Noble Lords can be assured that Britain will play its part alongside others in the process of recovery.

Tax Credits Bill
8.40 p.m.
House again in Committee.
Lord Goodhart Lord Goodhart moved Amendment No.13:
After Clause 2, insert the following new clause—
CHILD CARE ELEMENT
(". Regulations made by the Board under section 2(1)(c) shall provide that, in the case of a claim for working families' tax credit, where a married or unmarried couple is included in the family and one member is in employment and the other member is receiving education or training of a specified kind and for a specified period, the tax credit may include such credit for child care as may be specified. ")
The noble Lord said: The amendment raises a short and simple point. At present a couple cannot claim the childcare disregard for family credit unless both of them are working for at least 16 hours a week, or unless one of them is working and the other is incapacitated. Those requirements are to be carried over into the working families' tax credit.
There may frequently be cases where mothers have been bringing up children for perhaps 10 or more years and need retraining in order to get back into the workforce. However, their children still need care and the mothers may be unable to become retrained if they cannot afford to pay for childcare. Would it not be a good idea for a couple to be able to claim the childcare element in the working familes' tax credit in order for the mother to be retrained and get back into the workforce?
The amendment leaves matters as flexible as possible. It would be up to the Inland Revenue Board to decide, for example, the minimum period of retraining per week to qualify for the right of the childcare credit. The board could restrict the childcare credit, for example, to cases where training is directly related to a prospective job, and to exclude what I might loosely call recreational education. In principle, I believe that the amendment is clearly desirable. I ask the Government to give it favourable consideration. I beg to move.
Lord Skelmersdale: Immediately before dinner, we heard the main reason for working families' tax credit. If the whole objective of the exercise is to get people into work, one has to have a mechanism which encourages take-up of work. If one has that, some of those people whom one is encouraging into work will need education and training. I support the amendment.
Lord Higgins: As the noble Lord, Lord Goodhart, said, it is a simple and straightforward amendment. I hope that the Government will accept it.
8.45 p.m.
Baroness Amos: The new clause seeks to extend the childcare tax credit to couples where only one of the couple is in work but the other is in a specified type of education or training. The normal rules would require both the partners in a couple to be in work for them to be able to claim the childcare tax credit. In his introduction to the amendment, the noble Lord, Lord Goodhart, mentioned that the rules are the same for the childcare disregard in family credit and disability working allowance.
Working families' tax credit is primarily a work incentive measure. It might be argued that where one partner is in education, the childcare tax credit is a work incentive for the other to go out to work, a point already made. But, equally, where one partner in a couple is already in work, it would act as an incentive for the other partner to go into education instead of employment. That is not necessarily a bad objective but it is not the objective of this measure.
The common element in the examples is the entry of one of the partners into education, and increasingly we need to address the needs of couples with children who are in, or want to enter, education or take up training. The noble Lord, Lord Goodhart, said that that point is at the heart of the amendment. The national childcare strategy Green Paper, Meeting the Child Care Challenge, issued last year shows conclusively that these issues are being met by more money for the appropriate access funds. Those funds allow institutions
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to help such students, and more money has been provided for such funding since the Green Paper was published.
Channelling help through the childcare tax credit would provide help for families which had a worker in it but not for families without a worker—for example, because both are students, or one is a non-earner., or the student is a lone parent. I can assure the Committee that the Government are alive to the problem. The issue remains under review. But the Government do not think it necessary to provide the key to change through primary legislation. The details, such as the rules for eligibility, are in secondary legislation and they could be changed without the new clause.
Social security provision is not available to the majority of full-time students because social security is not intended to support people who are studying full time and are not therefore available for, or able actively to seek, work. I repeat. The working families' tax credit is primarily a work incentive measure. On that basis, and on the basis of the commitment of the Government to review the problem, I ask the noble Lord to withdraw the amendment.
Lord Higgins: Perhaps I may intervene before the noble Lord, Lord Goodhart, replies. We are naturally interested in the reply we have received. Can the nook Baroness give some indication of the amounts involved under the arrangements to which she referred for training and education compared with the amounts as regards childcare under the amendment? I presume that an individual may receive the benefit whether there were or were not children. However. there is a different. problem for those with children, even though they receive the same financial help as regards training.
The noble Baroness refers to secondary legislation. I find that somewhat surprising. The Government have been extremely good in providing drafts of the relevant statutory instruments. Can the noble Baroness indicate under which aspects of the statutory instrument it would be possible to extend the scope of the Bill in the way the noble Lord seeks. I find it slightly surprising. I should have thought it was more appropriately achieved by primary rather than secondary legislation.
Baroness Amos: With regard to childcare credit, the figures are £70 of £100 for the first child; and £100 of £150 for two children.
Students have access to loans. There is a standing weekly disregard of £10 on loan income. Any amount specifically included in a full-time student's grant for books and equipment is disregarded. If no amount is specified, a standard amount—currently it is £295 a year—is disregarded. Where a student is in receipt of a standard maintenance grant of £1, 180—it is slightly more in London—the amount currently disregarded for travel is £166 a year or £256 if the student lives in the parental home and travels to his or her educational establishment. If a student were to receive by way of grant any other amount specifically for travel, that amount would be disregarded. From the start of the 1999–2000 academic year, in order to reflect the changes in student funding, the disregard on hooks, equipment

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and travel which currently applies to grant income will be applied to student loan income for new students to ensure that they are not financially disadvantaged by the new arrangements.
Lord Skelmersdale: The noble Baroness has totally and utterly confused me. Under educational law, what childcare help will the grant system give to a man, or more usually a woman, who has a working partner and goes out to be trained or retrained?
Baroness Amos: I understand that, it does not give them specific childcare help in that instance.
Lord Higgins: Will we be given an answer on the statutory instrument point?
Baroness Amos: Was that the point about primary as opposed to secondary legislation?
Lord Higgins: The noble Baroness's reply indicated that the provisions which the noble Lord, Lord Goodhart, seeks to write into primary legislation could be achieved by means of secondary legislation. The Government have efficiently provided the Committee with all the relevant statutory instruments in draft form which are involved in the Bill. Consequently, if the noble Baroness is saying that the change can be achieved through secondary legislation, where can we find provisions which can be altered to meet the noble Lord's point?
In any case, is it not more appropriate for the change to be made through primary legislation? It would seem extraordinary to do so by secondary legislation and it would be undesirable when we now have the opportunity to do so through primary legislation. No doubt the noble Lord, Lord Goodhart, may have other points to make.
Baroness Amos: The point I made about secondary legislation is that the Government are currently looking at other mechanisms to support parents who wish to return to full-time training. I mentioned specifically the Green Paper on childcare, which provides for access funds which institutions can use to encourage and enable individuals to return to education and training. However, if in the context of the review which the Government are undertaking it was perceived that such a change would be useful in the context of legislation currently before Parliament, we could look at Regulation 46.
Lord Higgins: I am not clear what Regulation 46 is. We have in front of us a number of draft regulations. Is the noble Baroness referring to secondary legislation under this Bill or under some other primary legislation?
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Either way, which clause in primary legislation enables the Government to do what the noble Baroness suggests?
Baroness Amos: It is Regulation 46 under this Bill. It deals with issues such as eligibility criteria. Perhaps I can assist the noble Lord by writing to him specifically on this point.
Lord Goodhart: I must confess that I find the noble Baroness's reply most disappointing. Obviously, the amendment is not intended to cover all people, particularly women, who require retraining in order to gain access to jobs. It can deal only with women who have working husbands because the WFTC will, by definition, apply only to couples where one partner is in a job.
Within its limitations, the amendment is desirable. Obviously, some women who have been out of the workforce for a number of years now feel able to return. After such a time they may need retraining because the work involved may have changed. That happens in many jobs. It seems to me that in those circumstances it would be desirable not only to claim the childcare credit when the mother has returned to part-time work, say, but also to pay for childcare during her training to rejoin the workforce.
I believe that there is an overwhelming case for allowing the mother to receive the childcare tax credit while she is retraining and I am extremely disappointed that the Government were unable to respond positively, particularly as the whole purpose of WFTC is to increase incentives to work. The amendment is targeted precisely on getting people back into the workforce. I do not mind whether the change is made through primary or secondary legislation. If the Government were satisfied that they had the necessary powers to do so by secondary legislation and were prepared to give such an undertaking, I should be completely satisfied. But they are nowhere near that; they talk only about further reviews and have made no commitment to accept either primary or secondary legislation which will deal with the issue.
I shall not press the matter any further on this occasion, but I repeat that I am extremely disappointed. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Goodhart Lord Goodhart moved Amendment No.14:
After Clause 2, insert the following new clause—
WORKING FAMILIES' TAX CREDIT: CLAIMANT
(". Regulations made by the Board under section 2(1)(c) shall provide that, in the case of a claim for working families' tax credit, where a married or unmarried couple is included in the family, the claim shall be made by and payment shall be made to whichever member they agree should so claim and, in default of agreement, shall be made to the member having the principal responsibility for care of the children of the family. ")
The noble Lord said: This is a much more important amendment. It is the first of a series dealing with the payments which should be made through the wage packet and the payments which should be made directly by the Inland Revenue. The Government accept that

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some payments should be made directly. First, there is the case where an employer has no contact with the Inland Revenue because he does not deduct PAYE or National Insurance contributions from his employees' wages. Secondly, there is the case where a couple agree that the tax credit to which they are entitled should be paid to the non-working partner. In any event, payments have to he made directly by the Inland Revenue to the self-employed where there is no employer to provide the wages packet. That means that a substantial proportion of those entitled to WFTC will receive it directly.
We on these Benches have said that we do not like the Bill and we voted against it in the other place. However, we accept that in this House the Government are entitled to have their Bill. Therefore, we shall not support any changes which are wide enough to be regarded as wrecking or near-wrecking amendments such as would be a right for either all employers or all employees to opt out of the payment through the employer.
But since the Government have accepted in principle that in some cases it is legitimate for payment to be made directly rather than through the employer, we do not regard it as in any way improper to try to expand the categories where payment is to be made directly if there are reasonable grounds for doing so and if those changes do not go to the heart of the Bill.
In our view, Amendment No.14 falls within the category of changes to the Bill which it is legitimate to make and cannot be regarded in any sense as a wrecking amendment. It raises the purse-to-wallet issue. It has long been recognised that the best way of helping children in poor families is to get money into the hands of the mother. That is why child benefit is paid to the mother and that is why, until now, family credit has been paid to the mother. Both the Child Poverty Action Group and MENCAP want that system to continue.
I was tempted to table an amendment to provide that WFTC would go automatically to mothers in the case of couples. as Amendment No.16 in the name of the noble Lord, Lord Higgins, provides. I was reluctant to do that because I accept that, to a large extent, that would destroy the main purpose of the Bill to secure a general practice of payment through employers. But the Government have rightly accepted the principle that WFTC can be paid by the Inland Revenue to the caring parent rather than by the employer to the working parent if the partners agree.
9 p.m.
Lord Higgins: Does the noble Lord accept that the choice of how a person wishes to receive the payment does not constitute a wrecking amendment?
Lord Goodhart: If the noble Lord, Lord Higgins, waits a little longer, he will see that what I propose is that in the case of couples, there should certainly be a choice. if they both agree, and ultimately, there should he a fall-hack position in favour of the caring parent if they do not agree. Therefore, in substance, I accept that.
As I said. I do not wish to see the payment go automatically to the mother without any element of choice on the part of the parents. But, as I said, the
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Government have accepted that WFTC can be paid to the caring parent if the partners agree. it should say that I am not entirely happy even with that because it leaves open the possibility of consent being obtained by intimidation. But it is certainly better than nothing.
What is the situation if the couple cannot agree? The draft regulations, which I have seen, simply provide:
"In the case of a claim for working families tax credit, where a married or unmarried couple is included in the family, the claim shall be made by whichever partner they agree should so claim".
There is no default position there at all. By contrast, the corresponding regulation for income support provides that, in default of agreement between the partners, the claim is made by whichever partner the Secretary of State shall, at his discretion, determine. So if there is no agreement, it then goes to the Secretary of State to decide which of them is to receive it, in line, no doubt, with established principles.
In March, the Inland Revenue published a memorandum to say that where there is a dispute between the partners about which of them should be paid and the application for payment comes from the partner who mainly cares for the children, it will consider exercising its powers of care and management by accepting the application even though that application is technically defective.
What does that mean? It means that the Government are deliberately creating a lacuna in the legislation and then proposing to fill that gap by disregarding their own regulations. There is only one possible reason for that; that is, that the Government want to make sure that the mother's right to compel payment of WFTC to herself is kept firmly off the face of the regulations so that she is less likely to become aware of her rights.
That impression has been strengthened greatly by the draft application forms which I have now seen. The claim form itself does not make it sufficiently clear that it must be signed by the claimant's partner as well as by the claimant. That will lead to many defective forms, most of which will result merely from a failure to understand that both partners must sign and not from any disagreement between them.
The explanatory leaflet makes it clear that both parties must sign. It states:
"Your partner will have to fill in his or her details and sign the declaration at the end of the form".
However, it does not say what happens if the claimant's partner does not sign that document. If I were reading that leaflet without any background knowledge, I should certainly draw the conclusion that if the clairnant's partner does not sign, there will be no tax credit. No idea is given by the leaflet that if the caring parent makes a claim and the working parent refuses to sign, the caring parent can still receive the tax credit. That is contrary to the Select Committee's recommendation that payment should normally be to the partner at home but that the claim form should allow payment through the pay packet if both partners prefer.
The Government are trying to run with the hare and hunt with the hounds. They are telling the poverty organisations that in cases of dispute the caring parent will receive the money while they are doing everything

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they can to conceal from caring parents that they have the option to secure the tax credit payment to themselves.
On Second Reading, I said that the Government's proposed method of dealing with that issue was unacceptable. I repeat that. It is more than unacceptable: in my view, it is unlawful. The Inland Revenue's duty of care and management would make it possible to dispense with a second signature on a claim form, no doubt, if it was due to an oversight. But if the regulations provide simply that the payment goes to whichever partner the couple agrees, I believe there is no power in law to pay the credit to one of them in the absence of agreement by both. It is a clear principle that regulations cannot be set aside by reliance on the powers of care and management; nor can they be set aside, as the noble Baroness, Lady Hollis of Heigham, suggested at Second Reading, by reliance on ministerial Statements, either in this House or in the other place.
I have to say, with great regret, that I believe the Government's handling of this particular issue has been disgraceful and that they must include a default provision in regulations. If they refuse to do so, I believe it should be written on to the face of the Bill. I beg to move.
Lord Astor of Hever: I support the amendment moved so ably and eloquently by the noble Lord. Lord Goodhart, and speak also to Amendments Nos.16, 17 and 18.
There has been widespread concern that by paying the WFTC through the pay packet, the credit could be transferred from the woman—normally the main carer in the family—to the man. The TUC stated in its 1999 Budget submission:
"There is a real danger that the WFTC will fail to replicate the success of Family Credit if the wage packet is to be the primary means of delivering the tax credit and this kind of payment system is also likely to divert assistance away from the primary care giver in the family".
There are roughly 300,000 couples currently receiving family credit in which the man is the principal wage earner. Under the WFTC, that could mean that £900 million would be going to men rather than to women. The Low Pay Unit has pointed out that there is:
"a real fear that the benefit currently paid to the principal carer, the mother, will now he transferred to the father's wage packet, which may adversely affect the family budget".
The National Association of Citizens' Advice Bureaux told me that recent research found that money paid directly to mothers is more likely to be used to meet family needs while men use some of the payment as personal spending money. A recent CAB case in Buckinghamshire of a married Asian woman with two young children is an example of the problems that can occur. Her husband was employed but did not pass on any money to her for household expenses. Her only income was child benefit of £20 and family credit of £30. The CAB commented that if family credit was to be replaced by tax credit paid to her husband, the only income under her control would be the child benefit. It seems highly unlikely that she would be able to insist on a new credit being paid to her.
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In practice, many other women may be unable to assert their wish to receive the cash, and those most in need of exercising the choice for cash payments could be the least able to exercise it. The Government said in their manifesto that they wanted to help families. They stated:
"We will keep under continuous review all aspects of the tax and benefit systems to ensure that they are supportive of families and children. "
As so much evidence suggests that less money will be spent on children as a result of the Bill, will the Government reconsider their approach so that the WFTC is paid to the primary care giver in the couple. which would normally be the mother? I am most interested to hear the Minister's reply.
Baroness Lockwood: I have always supported the principle of child benefit being paid to the mother. I certainly accept the comments of the noble Lords, Lord Goodhart and Lord Astor, that where benefit is paid to the mother there is a better chance that it will be spent on the children.
However, the Bill is about a completely different principle. The amendments of the noble Lord, Lord Higgins and the noble Lord, Lord Astor, go to the very heart of the purpose of the Bill, which is to encourage people on benefit into work; that is, to encourage into work those who at present are unemployed jobseekers or those people not looking for work because they feel it is not worth their while to do so.
We need to look at two groups of people in this category. First, there are the lone parents; and, secondly, there is that group of men who seem to opt out of the labour market and often out of the system as a whole. I want to consider those men, particularly the younger men, some of whom have family responsibilities but who have nevertheless grown up in a society where it is not expected that they should go out to work. Something drastic must be done to encourage those young people into work. One of the objects of the Bill is to do just that.
The other group are the lone parents. Again, as my noble friend the Minister said in an earlier debate, lone parents constitute the largest group of people in poverty and we need to do something to encourage them into work. It is a fact that once people move into work, particularly women and even if it is low-paid work, they gain confidence after a period of time and begin to move up the wage scale.
Lord Goodhart: I am grateful to the noble Baroness, Lady Lockwood, for giving way. In a situation comprising a working man and a non-working woman, where the woman says she does not want the money to go to her partner because he will spend it on drink and she will not have it to spend on the children, is the noble Baroness saying that in those circumstances the tax credit should go to the man and not to the woman?
9.15 p.m.
Baroness Lockwood: The trouble with this debate is that nobody is prepared to wait until an argument is developed. I shall certainly come to that point.

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The point I was making is that there is evidence to indicate that the entry wage for people who are unemployed is much lower than the going rate for people already in employment. For example, the average wage of all new entrants is £4 per hour, compared with £5.80 per hour for workers generally; for men, the entry wage is £4.53 per hour, compared with £6.92 for workers generally; and for women the entry wage is £3.66 compared with £4.97.
We can see from those figures that there is a real problem that, when people are re-entering or entering employment for the first time, as is the case with some young men, their wages are much lower. Therefore an incentive is required to get them into work and the purpose behind the Bill is to give that incentive to people generally and to those with whom I am particularly concerned: that is, women lone parents—they make up the majority of lone parents—and young men who appear to be opting out of the system.
Amendment No.14, as the noble Lord, Lord Goodhart, says, is within the terms of the Bill, but the amendments tabled by the noble Lords, Lord Higgins and Lord Astor, go to the heart of the Bill. I therefore oppose those amendments. At Second Reading I pointed out that 50 per cent. of the recipients of the present family credit system are lone parents; 25 per cent. are women in a married couple; and, of the remaining 25 per cent., some are covered already by the Bill but there are other groups about whom we need to be particularly concerned.
At Second Reading my noble friend assured me that, where there was a dispute in families—the point raised just now by the noble Lord, Lord Goodhart—between husband and wife or between the partners, then the wishes of the woman partner would be given priority. I also asked my noble friend on Second Reading what would be the situation as regards women where the choice went by default. I do not believe I received a clear answer to that question. Nevertheless, I should like to press my noble friend on the point. If no choice is put down on the form, will the payment be made to the woman?
There is another ill-defined group. It is perhaps a small group. but one which could cause great concern. I have in mind the situation where not only is there a difference between husband and wife but there is also violence in the family and the woman dares not speak out. Can my noble friend the Minister say whether there are any proposals to try to monitor that situation and ensure that some protection will be given to such women?
The whole question of passport benefits, which is relevant to this matter, will be considered under later amendments. However, if my noble friend could not only give us assurances but also tell us that the draft form is available for revision, I believe she would set our minds at rest. I must say that I agree with the noble Lord, Lord Goodhart, that the form is not as clear as it should be. Indeed, I have made some scribbles on my form as to how it could be improved; for example, by making clear in the brief notes at the top that there is a
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choice between husband and wife, that the payment can be made directly or through the husband's pay packet and, indeed, that both parents must sign the form.
As I said, the whole form is not as clear as it ought to be and I have noticed some other technical points in that respect. However, if we could have some assurances from my noble friend that the form can be amended so as to make it much clearer, I believe we would all feel much happier.
Baroness Fookes: I rise to intervene briefly because I am aware that Amendments Nos.16, 17 and 18, which I support, cut across the Government's intentions and, therefore, are not likely to get very far. However, I would be failing as regards my sense of responsibility if I did not place on the record once again, as I did on Second Reading, the fact that, in my view, these payments ought to go to the mother or to the principal carer, if by any chance that is the father rather than the mother. I realise that this is not what the Government want, but I still believe that this is by far the best way to do it. These three amendments attempt to put this into practice in the Bill.
If the Government are not prepared to accept any of the latter amendments, I recognise that Amendment No.14 is a reasonable compromise. At the very least, hope that the Government will be prepared to accept it, or something along those lines, if Amendments Nos.16, 17 and 18 are unacceptable.
Lord Swinfen: I too should like to express my support for Amendments Nos.16, 17 and 18. I believe that the mother should receive this credit. After all, she is the one who is looking after the children 90 per cent. of the time.
There is one further matter upon which I should like some clarification. Amendment No.14 refers to an "unmarried couple". I have with me one of the draft application forms that the noble Baroness was kind enough to let me have—namely, WFTC6 version 4. Ori page 4 it refers to,
"a woman and man who live together as if they are married and you (one of you if you are a couple)",
and then goes on to specify certain conditions. However, for the purposes of this Bill, I want to know the definition of a couple who are living together. We all know that a man and woman who get married immediately constitute a family. If they have children. that is all well and good. However, if the man takes a mistress and has children by that mistress, does that. constitute another married couple? He may have that mistress for years and a second family. What is the position if a man and a woman live together and have children without getting married? How long do they have to stay together to be considered a married couple?
I know that some relationships where people do riot go through a formal ceremony of any kind will last a lifetime. I am happy with that. I would class them as married couples. We know that today so many so-called couples who may or may not have children stay together for months or years at a time. They may form unions with other people of the opposite sex and possibly have

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other children. Where is there a definition in any legislation to cover this point? Who can make a valid claim for the working families' tax credit? It is quite possible—this is known—for a man to have a whole series of partners, to none of whom he is married (although he may have married the first one), and have children by each of them. What is the position?
We are becoming terribly nebulous. We talk about couples the whole time, but often we are not talking about married couples with a legal responsibility that society as a whole can see. Can the Minister help me on this point when she replies? Are there any legislative provisions or court rulings which enshrine the position in common law?—because at the moment it strikes me that I could go off with all kinds of different women, although my wife would be furious, as she has put up with me for 36 years and I think I owe her something. In fact I owe her a great deal.
Baroness Hollis of Heigham: You owe her everything!
Lord Swinfen: I would like to think so. She is my everything, I know that. As I say, the situation seems to me to be terribly nebulous. I never quite know where we are on this point.
Lord Skelmersdale: I was rather surprised to note on the Marshalled List Amendment No.16 in the name of my noble friend as I thought we had all agreed on Second Reading the first part of the amendment in the name of the noble Lord, Lord Goodhart; namely, that,
"the claim shall be made by and payment shall he made to whichever member they agree should so claim".
I am sure that the noble Baroness and the Government have no problem with that. We also learnt something on Second Reading, slightly by default, from a comment made by the noble Baroness, Lady Lockwood, who said:
"I understand that if there is a disagreement between husband and wife, the wife will receive the benefit". —[Official Report, 12/4/99; col.536]
She was not disabused by the Minister. Therefore I assume that that is the correct position.
I return to the amendment of the noble Lord, Lord Goodhart. We have not got far away from the fact that, in default of an agreement, payment,
"shall be made to the member having the principal responsibility for care of the children of the family".
As has been said by my noble friend and the noble Baroness, Lady Lockwood, in 99.99 per cent. of cases, that person will indeed be the lady of the family. Therefore I do not see why the Government should have any problems in accepting the amendment of the noble Lord, Lord Goodhart, at least in principle.
I have commented on Amendment No.16. Amendment No.17, which stands in my noble friends' names, states:
"Where there is only one earning partner in a married couple the Board shall ensure that any tax credit shall be paid to the non-earning partner".
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That rather goes across the whole purport of the Bill as it has been explained to us at great length—both today and on Second Reading—and no doubt will be explained again. That is not to say it is wrong. I recognise the noble Baroness's position on that.
Amendment No.18 states:
"Where a couple is entitled to working families' tax credit the credit shall be paid to the principal carer in the couple".
That is exactly the same as the second half of the amendment of the noble Lord, Lord Goodhart. Again, I have no difficulty with that. I hope that we shall hear from the noble Baroness that she has no difficulty with the amendment of the noble Lord. Lord Goodhart.
9.30 p.m.
Baroness Hollis of Heigham: Perhaps I may respond to Amendment No.14, which has been moved by the noble Lord, Lord Goodhart, and deal with it last, as well as to Amendments Nos.16, 17 and 18 which have been spoken to by the noble Lord, Lord Astor, and supported by noble Lords on his Benches.
I start by repeating what my noble friend Lady Lockwood rightly said and what the noble Lord, Lord Skelmersdale, suspected I would say. The tax credit is not about support for children as such. Support for children is highly desirable—child benefit does that; child maintenance may do so—but this is about a credit paid essentially through the wage packet to the main earner, if that is his choice, such that we increase work incentives while, at the same time, because it reflects family shape, size and necessities, supporting families. In other words, it is not a benefit in the traditional sense, whether income support or whatever, which is automatically paid to the carer for the support of children. That is not the purpose of this tax credit. Its purpose is to produce an incentive to work, as my noble friend rightly said, and to top up an entry wage to make it a more attractive return for moving into work; a more attractive return for working for longer hours and higher pay. That is its purpose. I hope that all the rest of what I shall say will be understood in that context.
I do not disagree with the points made by the noble Baroness, Lady Fookes, about, for example, the need to look after children or, as my noble friend said, the need to protect women in situations of domestic violence. I share all of those concerns. That is not the purpose of this measure. I certainly join other noble Lords in seeking, as my noble friend said, to avoid any situation in which there is domestic violence, emotional pressure or emotional blackmail in such a way that women within marriage cannot exercise their appropriate rights. I assure my noble friend that the Government have an "across the waterfront" concern about domestic violence. We shall continue to keep the matter under review through the "Ministry for Women", which is located in the Cabinet Office, and we work with the DoH and within my own department to this end. Obviously a good deal of domestic violence is by definition invisible and therefore is not easy to track. I can assure my noble friend that the Government treat domestic violence with zero tolerance.
This group of amendments—whether they are wrecking amendments is arguable: some I suspect are—concern how we propose to handle disputes. As I said, my

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noble friend Lady Lockwood has made the point for me about the credit for work. The amendments press points about the difference between the two tax credits—working families' tax credit and disabled person's tax credit—the role of marriage and, most fundamentally, why we believe that giving couples the choice of who is to be paid is the best way forward. I cannot accept the amendments as they stand.
I shall deal, first, with Amendments Nos.16, 17 and 18, spoken to by the noble Lord, Lord Astor, which do away with choice in various circumstances, and then, in responding to the amendment of the noble Lord, Lord Goodhart, I shall expand on the disputes procedure. I shall try to address his real concerns on that point.
Amendments Nos.16 and 17 seem to disregard the differences between the two tax credits. They suggest that we should treat WFTC and DPTC in similar ways. They propose that the money should go to the carer of the child even if, for example, the earner has qualified by virtue of his disability, is receiving DPTC and there are no children involved. Your Lordships would be wise to keep those two benefits uncoupled because they have different pedigrees and functions. Those differences are not new. They exist currently with family credit and disability working allowance. Working families' tax credit, like family credit, is help for a family whereas disabled person's tax credit, like DWA, is help for an individual who may or may not be married, may or may not have children. They are very different benefit structures in that respect.
In DPTC, an application could come from an individual who is not responsible for any children, so there has to be a special lower basic tax credit. As with DWA, lone parents are eligible for the higher basic tax credit, which puts them on the same basis as lone parents claiming WFTC, which was one of the misconceptions that crept into the Second Reading debate.
DPTC, as with DWA, goes to the disabled individual and is payable to the working individual even where there is a couple. It contains elements to help support children in the relationship and money to help with childcare costs. DWA is not paid to the woman, nor to the caring partner, but to the disabled worker. Disabled person's tax credit will follow that tried, tested and accepted practice—as recognition of the degree to which disability hampers or caps earning potential. It is effectively a partial incapacity benefit, so it would be absurd to talk about paying it to carers or the non-working partner. It is for a disabled person.
The first two amendments would change that by forcing DPTC payments to be given to the woman or partner who stays at home, even where there are no children. That would be wrong. DPTC provides disabled workers with additional money that allows them to take work or continue in work at lower 'wages or, more realistically, for shorter hours by virtue of their fatigue or disability. It has always been accepted that that is the right way to handle those payments, even though, as with WFTC, there may be embedded support for children.
Tax credits, like the benefits they replace, do not distinguish between marriage and any other relationship. The noble Lord, Lord Swinfen, asked what would happen
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in the case of somebody who had a series of relationships, and he questioned the difference between marriage and a couple living together. It is clear in DSS regulations, DSS case law and common law—and the courts have enshrined this—that a couple cohabiting and living as husband and wife are for benefit purposes treated as a household. That means they share household finances and probably sexually cohabit.
If they do not share household expenses but have a series of relationships of the sort described by the noble Lord, I suspect that in some cases the woman would be a lone parent with a live-out boy friend. That would not be a household in DSS terms. A household is where a couple live together, married or not, as though they were husband and wife. As to a man who might be having a relationship simultaneously with his marriage, the presumption there is that the other woman is a lone parent with a live-out boy friend. I hope that makes the situation clear. That is precisely why so much income support fraud occurs. A lone parent continues to claim as such but actually has a live-in boy friend helping to support her. All that is well established in law and we know what makes for cohabitation and what counts as a couple.
If a lone parent cohabits, she loses her benefit and is treated as a dependent on his benefit because they form a household. If we did not treat them that way, a lone parent who cohabited would be privileged over a lone parent who remarried. I am sure that the noble Lord, Lord Swinfen, would not want that to happen. Marriage is not as prevalent as it was. Even where children are involved.. one third are now born outside marriage. Therefore, it is necessary for tax credits to look at the world as it is—of unmarried partners or of couples—when considering the money coming into the family. The noble Lord's distinction would be to the disadvantage of formally married couples.
If the amendment were pressed, there would be first and second class families. Unmarried couples would have free choice of who should receive the tax credit because, in the noble Lord's view, they would not count as a family. Married couples would always have it paid to the woman or in the case of the second, more PC amendment, to a non-earner. That would disadvantage marriage still further. Neither amendment is acceptable in the present day. The thrust of the amendments, taken together—even if noble Lords do not accept my argument that this provision is about producing a work incentive but wish to apply it to the carer—suggests that it is the woman who always cares for the children and the carer is the non-earner. We can no longer assume that that is always the case.
These amendments are simply anachronistic. They belong to a different generation. Some women both work and care for the children. Nowadays, 71 per cent. of married women work. In some couples, it will be the man who cares for the children while the woman works. In a quarter of couple families on family credit, a woman is the main wage earner. Often, the man may be disabled and she is his carer, but he may appropriately supervise the children. He may be self-employed, working from home and also caring for the children while the woman works outside. The amendments impose on the wide patterns that now exist, of sharing

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work and sharing care for children, a pattern that belongs back in the 1950s which probably now applies to only a tiny fraction of the households that make up our society.
Amendment No.18 would require WFTC to be paid to the carer when the application is from a family comprising a couple. In that situation, the couple's choice as to whom the credit should be paid would be replaced by a rule that the payment must go to the principal carer, whether they wished it or not. Couples would have to decide who was the principal carer. Yet, as I have argued, increasingly both partners work and share responsibility for the children. There would need, quite unnecessarily, to be detailed rules to cover all possible circumstances. If the money had to go to the principal carer, who would make that decision? If the Inland Revenue decided who was the principal carer, would the decision be based on pay, hours worked, detailed questioning as to who does the school run? It would be highly intrusive. But if the couple were to decide who was the principal carer to whom the money should be paid, that would be no different from the present situation; namely, the couple can make a choice as to whom it is paid. The amendment either denies the couple choice or requires the Inland Revenue to be intrusive; and it is redundant, because the couple already have a choice as to whom the money is paid. So the main objection to these amendments is that they replace choice with rules.
At the same time as your Lordships wish to offer lone parents a choice as to how they are paid, that is to be denied to couples and the credit paid to the mother whether the couple wish that or not. It is not even clear whether the mother is the main carer; nonetheless, it would be the mother. The whole bundle of amendments is inappropriate in this day and age.
I appreciate that noble Lords aim to ensure that there can be no dispute in the relatively rare cases where the couple cannot decide who should receive the tax credit. But surely it is right that, as far as possible, the couple should make that choice for themselves. I appreciate that there may be concern in some families that the earner may treat the tax credit as his or her own—the example of drunkenness has been given—the extra money in the wage packet being reflected in extra housekeeping for the partner. But that will happen with all the moneys going into that household, including his wage. At the end of the day it is a decision for the couple how they apportion their moneys.
If the concern is mainly about how the tax credit is used by families, we must examine carefully the wording of the amendments. Accepting them would mean that the help given to families by the WFTC is presumed to be supporting the children and payment with better wages cannot achieve that. That is not entirely so for WFTC, and it has not been so for family credit. I repeat. The introduction of WFTC is a work incentive measure to make work pay. While it is focused on families with children who need the help most and who may need higher wages so that their wages are enough for them to live on, the specific help for children is through child benefit, which the Government have
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increased well above inflation and which continues to be paid to the mother. We believe that it is sensible to trust couples to make the decision for themselves, as I am sure they will, and to provide a safety net for those rare occasions when they cannot agree.
The key principle is that WFTC is money for the family, and we expect there to be no difficulty. There could be a number of factors that may be taken into consideration. One or both partners could be working, either employed or self-employed. For those who are employed, the frequency with which the employer pays wages may be a factor. We believe that they should decide for themselves. But in cases, however rare, when families cannot reach an agreement as to which partner is to receive the tax credit, we decided early on how best to respond. As the parliamentary Answer given by my honourable friend the Paymaster General made clear, in cases of dispute of this kind, the tax credit will be paid to the partner who mainly cares for the children.
Copies of the latest draft of the application form have been seen by Members of the Committee and have been quoted tonight. They show that the way in which couples will exercise their choice of which one of them is to receive the tax credit is to decide at the very outset which one of them is to complete the form as applicant (filling in the left-hand column). Drafts of the form and the guidance notes have been sent to a wide range of interested organisations. The approach has been broadly welcomed and comments have focused on making the implications clearer so that the family's choice is better informed. The comments have been reflected in the latest version of the form and the accompanying notes.
I am happy to say that we shall continue to review the form to make clearer what happens in a situation of dispute or default. It is not likely that that will be done by October. In any case, in October payment will continue to be made in the same way as family credit and so the situation will not arise. It will certainly he done by next April.
I hope that the noble Lord will accept that, in terms of the information accompanying the form, we shall take on board the comments about making clear what happens should there he a dispute and what the default procedure should be. That information will be built, as far as possible, into forms and guidance. We shall have to consult on this matter, but I listened to the Committee about the need to make that information clearer.
I now turn to Amendment No.14. The new clause seeks to require regulations to provide that a couple claiming WFTC should be able to choose which of them should apply for and receive the tax credit but that where there is no agreement it should be paid to the carer. I am delighted to say that, as we made clear at Second Reading, the amendment of the noble Lord, Lord Goodhart, is redundant because that is what we shall be doing.
While the regulations cover the choice, they do not include the procedure for resolving disputes where partners do not agree who should claim—and therefore receive—the credit. The reason for that is simple. We believe that they will sort it out by themselves. If they cannot, we expect the Inland Revenue to exercise its

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duties of "care and management- under the tax credit system and, exceptionally, allow the WFTC application form to be signed by one, rather than both, partners.
The noble Lord, Lord Goodhart, pressed me as to the standing of the care and management vis-à-vis regulations which appear to push to the contrary. He was concerned as to whether the care and management responsibility could legally and legitimately override regulations which indicated, to the contrary, that to be valid the form had to be signed by both partners.
The dispute procedure is an exception to the normal rules, which require that both partners sign to say that the information on the application form is complete and correct. An administrative practice is the most efficient way to handle the exception. A more formal approach, by setting down rules in legislation, would be very complex. It would be difficult to cover all the relevant circumstances without leaving the rules open to abuse, and we do not think that that is appropriate.
A formal legislative approach would have to provide a way for the family's income to be reported by only one partner. Clearly one partner is unlikely to know all the necessary details, and even in family credit, which is portrayed as the woman' benefit—or the mother's benefit—the man sti 11 needs to help complete and to sign the claim form.
The administrative procedure copes with this by acknowledging that, quite exceptionally, the Inland Revenue gives up some of its ability to investigate errors properly by allowing only one partner to be involved in the application. That is why it needs to be handled under "care and management". This overruling by "care and management" is not a unique position. For example, the Inland Revenue can and does decide not to collect £10 of tax because it costs £200 to collect it. That is done in terms of "care and management".
The Inland Revenue needs information about the earnings and savings of both partners in a couple because working families' tax credit is based on family income. There may be situations when an application is sent in, signed by the applicant alone, but which shows that there is a partner in the household whose circumstances need to be taken into account for the correct award to be calculated.
WFTC rules require the forms to be signed by both partners, just as with family credit. We anticipate that, as with family credit, this should not cause any problems in the majority of cases and that, as currently, the majority of applications—of which there is a tiny percentage—from couples with only a single signature will be because there has been a simple oversight, in which case the form will normally be returned.
Where an application is received from a couple but signed by only one partner and there is some indication that the reason for its being completed in this way is because there is a dispute between the partners, the form will be followed up rather than returned. We expect this to he very rare. Officials cannot remember half a dozen cases in family credit over the years.
The Inland Revenue will follow it up by contacting the partners directly to confirm that the dispute is about which of them should be paid and that the application
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has come from the partner who mainly cares for the children. Where both conditions are fulfilled the Inland Revenue will consider accepting the application, although technically it will be defective. The details on the applications form may not have been provided by both partners. Only the applicant certifies that the application form is correct and complete. It may be wrong. Consequently, the award will be inaccurate. The absence of a second signature limits the extent to which the Inland Revenue will be able to follow up and correct errors subsequently.
In cases where the Inland Revenue may consider accepting a defective application—one with only a single signature—it will ask the partner to confirm that all the relevant information known to the applicant about the applicant's own and the partner's circumstances has been declared. The application will be subject to a detailed check and risk assessment before a decision is made whether or not to accept it. Where the Inland Revenue finds no evidence to suggest that the application is materially incorrect or incomplete, it will be processed as if it had been signed by both partners. The award will be determined and paid to the applicant. Where the Inland Revenue considers that the application is materially incorrect, the procedure will not be applied. The form will be returned on the ground that has not been fully completed because it lacks the partner's signature.
As consultees have suggested, the form and guidance notes set out what needs to be considered by a couple when making the choice. More recent comments have suggested further changes which refer specifically to what happens in the case of a dispute or tell applicants where to go for help. We are looking at these. We very much hope that we shall be able to embody them to the satisfaction of all concerned in the forms that go out as of next April. In addition, the working families' tax credit helpline is always available and our guidance will be made public.
We believe that the procedure that we have developed correctly addresses the need to deal with cases where families cannot agree on which partner should receive the tax credit. We think that it is right that it should be handled administratively. It will enable the Revenue to cut to the heart of the problem and resolve it efficiently and effectively, and it has been generally welcomed.
To conclude, it will be paid through the wage packet if both agree; it will be paid to her if both agree. A form which lacks his signature may be taken as valid, but a form which lacks the woman's signature cannot be. If there is only one signature and it is his it will be investigated. If it is a simple mistake which is corrected it will be paid in the normal way, if they agree: but if there is a dispute, ultimately it will be paid to her. If there is only one signature on the form—hers—and it reflects a dispute as opposed to an error, it will also be paid to her.
I hope it is clear that there is a choice for it to be paid to the woman as opposed to the working partner or carer. If he wishes it to be paid to him but she wishes it to be paid to her and the form is signed by only one of them, but it is clear that it is not an oversight and it is by

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choice, the matter will be investigated. If it is a dispute it will be resolved with the presumption in favour of the carer.
I apologise to the Committee for giving a rather long explanation but it appears to me to be important given that this is perhaps one of the two big issues at the centre of the Bill. I felt that I should spell it out in some detail at this stage so that noble Lords can reflect on it and decide whether they wish to return to other issues at Report stage.
Lord Goodhart: I am extremely grateful to the noble Baroness for that explanation. I am also grateful for the support that Amendment No.14 has received from all parts of the Committee. I apologise to the noble Baroness, Lady Lockwood, for being too quick off the mark and not quite appreciating the direction in which she was moving.
I welcome the movement that the Minister has made on this issue as far as it goes. It does not, however, remove my concerns on this matter. The noble Baroness has set out extremely clearly what the position will be, and that will be reported in tomorrow's Hansard.
Unfortunately, members of the public who are potential recipients of WFTC will not, in all probability, have the opportunity of reading what the Minister has said. While what she has said is satisfactory, in my view it must also be made clear to those who need to know what their rights are. That is why it is extremely important that the claim form and explanatory leaflet, or at least one of them, should express, as clearly as the noble Lady expressed it tonight, what the rights of the caring member of the couple are in the event of a dispute. Those rights are not adequately explained now. It is unfortunate that we will not have an opportunity to see the claim form or leaflet of instruction until after the Bill has become law. We cannot therefore know, when deciding whether or not to pass amendments, what that claim form will be.
I was by no means persuaded of the Government's reasons for not including any provision dealing with default on the face of the Bill. It is very unsatisfactory that a matter of principle of this kind should be dealt with by the administrative practice of the Inland Revenue and not provided for on the face of the regulations. I am not suggesting that it should be included in the Bill because undoubtedly the regulations would be a better place to include it, but we do not have the regulations.
I am extremely doubtful whether the care and management powers of the Inland Revenue would extend to treating as a settled practice something which could and should be stated on the face of the regulations. My mind would be very much more at ease if the noble Baroness were to seek legal advice on whether the care and management powers of the Inland Revenue enable it to do what she proposes. That advice could then be explained to noble Lords at Report.
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Obviously, one does not wish to divide the House late at night.
Baroness Hollis of Heigham: I understand that this matter has been worked through with the Solicitor to the Inland Revenue, so legal advice has indeed been taken to sustain the position I have outlined on care and management.
Lord Higgins: I should like to make the same point as the noble Lord, Lord Goodhart: it should be the Law Officers who provide the advice.
Lord Goodhart: I should like to see some advice that has come from outside the department. I agree with the noble Lord, Lord Higgins, that there should be appropriate advice from the Law Officers or some independent counsel instructed by them. I would be very much happier if, when we come back at Report—and I shall be putting this amendment down at Report—we could see the independent advice on the validity of what is proposed before I decide whether or not to seek to divide the House at Report stage. Obviously, tonight is not the appropriate occasion to divide the House, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
10 p.m.
Clause 4 [Special provision for certain contacts]:
On Question, Whether Clause 4 shall stand part of the Bill?
Lord Higgins: This is probing in the strict sense of the word. The Minister has been helpful both in responding after Second Reading and in arranging meetings with officials to discuss specific points.
I have a recollection that at some stage in our discussions with officials a particular issue arose on this clause which I had not immediately perceived. Am I right in thinking that there is no ramification which is not apparent on the face of the clause?
Baroness Hollis of Heigham: I think that the noble Lord is saying that he put down the amendment, he cannot remember why he did so, and will I please tell him. In that case, I cannot help him because I believe that the Bill is a model of clarity.
Lord Higgins: I have no wish to press the matter further.
Clause 4 agreed to.
Lord Rix Lord Rix moved Amendment No.15:
Before Clause 5, insert the following new clause—
FUNCTIONS OF BOARD: DISABLED PERSON'S TAX CREDIT-REVIEW OF ENTITLEMENT
(". The Board shall conduct a review every two years of entitlement to the disabled person's tax credit and issue recommendations to the Secretary of State. ")
The noble Lord said: Before I speak to the amendment, perhaps I may pay tribute to my noble friend Lady Darcy de Knayth. Even at this late hour, and with all the problems she may well have in arriving at your Lordships' House, she always remains to speak to any amendments concerned with disability. She is a superb example of what can be done by a disabled person on behalf of disabled people and I should like to pay her every tribute in that respect.
This is a general amendment. It is not dissimilar to Amendment No.63, which will be moved by the noble Lord, Lord Freeman. It asks the board to review the eligibility criteria for the disabled person's tax credit at least every two years, and makes recommendations known to the Secretary of State. I believe that that should be on the face of the Bill because a formal system of monitoring will help with the efficiency and effectiveness of the scheme.
The Minister explained that she expects take-up of the disabled person's tax credit to double compared with take-up of the disability working allowance. I am pleased with that level of expectation. However, the noble Baroness does not say over what period of time, so I believe that careful monitoring is essential.
What differentiates my amendment from that of the noble Lord, Lord Freeman, is that I also request the Government to re-evaluate their policy, in particular with regard to eligibility criteria. The Government should not leave unchecked the predicament of those who move from welfare to work only to find that loss of housing benefit means the loss of up to 96p of every pound earned. I also urge Ministers to consider again the policy of including family income in the tax credit means test. As I mentioned at Second Reading, I believe that the disabled person's tax credit should go some way to compensate for the employment limiting effects of the individual's disability and should not be viewed as an alternative way of supporting family income. I beg to move.
Baroness Darcy de Knayth: I warmly support my noble friend's amendment. First, I thank him for the eulogy, but point out that I am a night owl. If he wanted me to turn up early in the morning for a meeting I would not be half as reliable.
A serious evaluation of the scheme would be welcome by the employers concerned and by disabled people. I have one question for the Minister to answer and I hope that her reply will be helpful and encouraging to my noble friend. Does she expect the Disability Rights Commission to have a part in monitoring the performance of DPTC and the effect of other benefit changes in supporting disabled people?
Baroness Hollis of Heigham: The amendment seeks to specify that the Board of Inland Revenue should carry out a review into entitlement to DPTC every two years. I have every sympathy with the sentiments behind the amendment. The Government believe that DPTC will provide much needed help and work incentives for people with a disability who experience difficulty in moving into work. We are obviously anxious to ensure that the DPTC achieves this. The benefit being replaced,
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the disability working allowance, has largely failed. Only one quarter of those we expected to do so have taken it up because it failed to provide a sufficient incentive to work and it did little to help people who became disabled to stay and work. That is why vie are seeking to change this by introducing DPTC.
Noble Lords will already have seen that DPTC will be more generous, with lower tapers, higher thresholds and improved help with childcare costs. But of course we want to do more if we can and if it will help. That is why we are consulting with various interest groups to seek their views on possible options.
One outcome has already been announced by the Chancellor of the Exchequer in his Budget package. It is a fast-track gateway to DPTC to help with the retention of staff disabled while working. Someone who was on the employer's payroll and being paid statutory sick pay can be assessed for DPTC without first having to drop out of work entirely on to a qualifying benefit, which is incapacity benefit or DLA. In other words, DPTC will allow someone to stay in work. We know that if such people are not kept on by their existing employer they find it difficult to find any other employer. I am sure that when I have the pleasure, probably at the Report stage, of bringing forward an amendment to make that commitment explicit, I will have the support of the entire House. At that stage, DPTC will be able to act as a partial incapacity benefit for someone working and disabled while in work and needing to reduce their hours or pay accordingly.
Another way forward which we intend to use, and which answers some of the concerns raised, is that of piloting some of the changes. The Tax Credits Bill builds on existing social security legislation. Within that, there are provisions for piloting changes. In response to organisations such as RADAR, we shall be exploring that. In addition, we are backing our proposals with the one-year linking rule we introduced last October and extending the 56-day rule for DWA to six months in which people may find work.
I was asked by the noble Baroness, Lady Darcy de Knayth, whether this would be monitored by the Disability Rights Commission. It will depend on the review and how it is conducted, but the Disability Rights Commission is there to ensure no discrimination. It is clear that under Clause 7 and the appropriate schedule there could be a case if the Disability Rights Commission believed that there was discrimination against a disabled person. That is my understanding, but if I am wrong I will write to the noble Baroness and to other noble Lords. Normally, social security benefits as such have not been matters for the equivalent of the Disability Rights Commission. Essentially, it is about active discrimination in employment practice, transport, housing, financial services and the like. However. I can conceive of circumstances in which discrimination applying to someone who seeks DPTC may subsequently become part of the remit of the Disability Rights Commission. In general, I would not expect that it would be because that is not what the Disability Rights Commission was set up to do. However, if I can be more helpful to the noble Baroness, I shall return to that matter. For example, if the Disability Rights

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Commission felt that a type of employer was discriminating continuously against people who should receive payment under this provision, there would be an opportunity for the commission to look at that matter. We can explore that later. I can see that it may have a part to play but, for the most part, as the noble Baroness will know, the Disability Rights Commission is doing a different job.
I hope that all I have said reassures the noble Lord, Lord Rix, that we shall keep fully under review the need to monitor and improve DPTC. Many noble Lords will want to track it and to see whether it is doing what we hope it will do; namely, to improve take-up of the benefit. In that light, I ask the noble Lord to withdraw the amendment. It is not only redundant. My main criticism is that it does not go far enough.
Lord Higgins: I thought initially that the noble Baroness was going to accept the amendment. Will she clarify one point as regards passport provisions for the disabled?
Baroness Hollis of Heigham: Which passported benefits does the noble Lord have in mind?
Lord Higgins: Prescription charges, if that is appropriate.
Baroness Hollis of Heigham: At present, one is entitled to free prescriptions if one is in receipt of DWA, and the same situation applies to family credit. Both of those issues are being considered in the light of the much more generous financial terms of DPTC and WFTC.
Lord Rix: I welcome the Minister's assurance that the scheme will be adequately monitored in terms of its effectiveness. I welcome too the possibility of looking forward to a government amendment on Report. I am glad that the Minister mentioned the pilot schemes in relation to RADAR and the possible involvement of the Disability Rights Commission.
Before I withdraw the amendment, will the Minister clarify whether the operation of the means test will be re-evaluated, in particular in view of the take-up of the credit?
Baroness Hollis of Heigham: Is the noble Lord asking that if the DPTC does not have the take-up we hope and expect we should review the basic income-related element within it? Is it on that which the noble Lord is pressing me?
Lord Rix: In truth, I am asking whether the means test, which includes the family income, will be re-evaluated?
Baroness Hollis of Heigham: I believe that the noble Lord is asking me whether we shall assess the eligibility for DPTC solely on the income of the disabled person and disregard that of the spouse or other income coming into the household.
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I know that that has been pressed by the disability organisations. In the past, benefit entitlement has been household-based. Obviously, we keep such issues under review but at present I should not expect income of other members of the household to be disregarded when looking at eligibility for disability benefit. It is clear that it can go to a single person and is not affected by other income. But where disabled people receive the higher benefit by virtue of the fact that they have a partner and a higher benefit still by virtue of the fact that they have children it would be unreasonable to disregard that on the income side. That is the position at present.
However, experience will show us whether there are problems with this disability benefit, as there was with DWA. We shall continue to look at it because we want to make this benefit a success. The previous well-intentioned efforts by government in relation to DWA, which we all supported, have failed. We hope that we are meeting the problems of DWA but if there are new problems we must return to the matter and consider those problems.
Lord Rix: With the assurance that the means test will be re-evaluated from time to time in the future, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [General functions of Board]:
[Amendments Nos.16 to 18 not moved.]
Lord Higgins Lord Higgins moved Amendment No 19:
Page 3, line 1, leave out subsection (2)
The noble Lord said: It may for the convenience of the Committee if I speak also to Amendments Nos.22 and 25. This is a fairly narrow and technical point. I am simply slightly puzzled. This clause is, of course, concerned with the care and management of the board, which was referred to earlier by the noble Lord, Lord Goodhart. Subsection (2) of that clause, to which Amendment No.19 refers, is concerned with the payment of the revenues received by the department to the Exchequer. I am not clear as to why that is necessary; nor indeed am I clear as to why the department is apparently receiving tax credit, which is dealt with in Amendment No.22, rather than giving it up.
As I understand it, the whole thrust of the Bill is that the Inland Revenue will be disbursing money, not collecting it. More particularly so far as subsection (2) is concerned, I am a little puzzled as to why it refers to the gross revenues of the department. One would expect it to refer to the net revenues. Perhaps the Minister could clarify that point.
10.15 p.m.
Lord McIntosh of Haringey: I am slightly taken aback to hear the noble Lord describe this as a narrow and technical amendment. I thought that he was going to open up the whole range of issues debated with Amendment No.1 regarding the accounting procedures of the Government, which might have been debated in Opposition time at the last budget debate. As it turned out, they were not. I suppose that means that I should

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cut out my eloquent defence of government accounting policies, just as I had to cut it out last time, as nobody attacked me. I am becoming rather blasé about that now.
I have to take the three amendments as a whole and look at their total effect. I understood that the intention of the amendments was to criticise the accounting treatment of the two tax credits and to require them to be treated as if they were benefits. On that, there is clearly a philosophical disagreement between the Government and the Opposition which was aired at some length in the discussion on Amendment No.1.
These amendments, practically, would not work. Amendment No.19 would prevent the Revenue from paying tax credits out of the money they take in. Amendment No.25 would require the Revenue to apply to Parliament for the necessary money by way of a vote. However, Amendment No.22 would not require it; in other words it would remove the requirement that it reflects all of the money in its accounts.
I do not know whether that was the intention of the three amendments but we have to have doubts about whether they would work in practice. I always laugh at counter aphorisms. My favourite has always been Wittgenstein's, "That's all very well in practice but we ought to see how it works in theory". These amendments make clear, as has the debate this afternoon and that in another place, that our difference is a philosophical one of considerable importance. We take the view that these are tax credits administered by the Revenue. They are paid through the wage packet, where their effect will be to reduce or eliminate the tax burden, and, having done that, to augment wages so that those who get it see more clearly that it pays.
There may be more specific concerns about the implication of the treatment we are adopting. I understand that there are concerns about how the Government present their figures compared with how they need to be presented in the national accounts. However, as this has not been drawn into question, all of my defence of net taxes and social security contributions in table B9 of the Red Book is no longer appropriate.
Suffice it to say that the way in which we treat this in the Red Book is not wrong; it is just different from the national accounts. As the Treasury Select Committee made clear in its report. what is important is that we should be transparent about the way we produce our accounts. That is, indeed, as Andrew Minot recognised in his evidence to the Select Committee, what happens in the Green Book.
The issue of accountability still arises. If we are netting the tax credits from tax receipts rather than coming before Parliament specifically to ask for money, it is argued that the Government are less accountable for what they do. That is simply not the case. The board of revenue will be paying out tax credits, but there will be occasions when it will have to collect—that is, receive—amounts of tax credits which have been wrongly paid perhaps because of fraud. So the Bill has to provide for paying and receiving tax credits. The difference does not have any philosophical significance.
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The Bill amends the Inland Revenue Regulation Act in subsection (5) of this clause to require the board of Inland Revenue to separate out the tax credits and present them separately. That is a rigorous requirement. In fact, one might express surprise that it has not been done before. At the moment, benefits are grouped together and estimates put forward for the purposes of the "vote" by the Department of Social Security or any other department. But the Inland Revenue does not just have to produce a reconciliation on a sample basis; it has to ensure that nothing has gone wrong and that the accounting systems are more thorough, because, unlike a vote, the Inland Revenue needs to track payments to and from employers.
If there are concerns about whether there is enough control and parliamentary scrutiny, I hope it will be seen that this is a good deal more effective in the separate report which the Inland Revenue will have to produce than the Consolidated Fund Bill, which is never debated properly in another place and, by tradition, is not debated at all in this Chamber.
I claim that the procedure we have adopted and which would be removed by these amendments is sensible, fair and transparent. It is also the practical way to proceed because it fits in with the way in which employers deal with tax credits and their payment obligations. Employers withhold PAYE tax from their employees and from that pool of money will pay some of their employees the right amount of tax credit. That handling of tax credit on the basis that they are fungible with the employee's tax is fundamental to the administration of employer payments.
Separate records will be kept and each payment will be capable of being accounted for. But in practice the tax credits will be paid out of tax receipts and it is only sensible to follow that through in the way we propose: in the Bill.
Lord Higgins: I am somewhat mystified. I am not sure if I lured the noble Lord into a sense of false security. His reply seems to be based on Amendments Nos.21, 23 and 24, to which we have not yet come. I certainly expect to raise the question of accountancy treatment of these matters at that stage, but I was seeking with these amendments—and with Amendment No.19 particularly—to clarify the position with regard to the question of why subsection (2) of Clause 5, which says it has been netted off before it is paid in, is necessary. Also, I was not quite clear as to why they would be receiving amounts in respect of tax credits. They would presumably be receiving amounts in respect of tax credits that had been wrongly paid. If that is the purpose of subsection (c), I understand that. But, as this is about administration enforcement, I did not think it raised the broad issues the noble Lord was surprised I did not raise with him.
We shall come to the accountancy points a little later and on those we shall need to pursue the matter. I was simply puzzled as to why it was necessary to have

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subsection (2), which, in order to raise the matter, I sought to delete, in order for the matter to operate correctly.
Lord McIntosh of Haringey: It was because the effect of these amendments taken together would call into question the whole way in which we propose to deal with the issue. If I had followed the noble Lord in taking a narrow and technical view, I should have been doing less than justice to the effect of his amendment.
As I said, Amendment No.19 would prevent the Revenue paying tax credits out of the money it takes in. That would be madness. Money would come from the Revenue to the employer in order to pay tax credits while, at the same time, money was coming from the employer to the Revenue in payment of his PAYE and national insurance contributions obligations. That is why we are doing it by netting out and that is what Amendment No.19 would make impossible.
Amendment No.25 would require the Inland Revenue to apply to Parliament for the necessary money by way of a vote. As I explained, a much better way to do it is the way we actually propose; that is, to have the detailed accounts which the Inland Revenue has to produce every year and on which this would be a separate account. Paradoxically, Amendment No.22 would remove the obligation on the Inland Revenue to reflect the money in its accounts. That is why I took the amendment more seriously than the noble Lord appears to take his own amendment.
Lord Higgins: I take the amendment perfectly seriously. However, I will need to consider carefully what the noble Lord has said and study his response. We are clearly somewhat at cross purposes here. It is perhaps a little late at night to pursue the matter in detail. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins Lord Higgins moved Amendment No.20:
Page 3, line 13, at end insert ("and the Board's officials shall be responsible for calculating the tax credit due to individual employees and informing the relevant employers of the tax credit to which their employees are entitled")
The noble Lord said: This is rather an important amendment in contrast to the previous one. We are concerned here with the fact that the board's officials should be,
"responsible for calculating the tax credit due to individual employees and informing the relevant employers of the tax credit to which their employees are entitled".
This reflects an undertaking which the noble Baroness gave at an earlier stage in saying that employers need not worry about working it out because they would be told precisely by the Inland Revenue how much was to be paid to individuals.
I have to confess that, originally, I did not quite understand the way in which the matter operates at present. In reality, I believe that both the previous and the new arrangements involve calculating the amount of what I would like to call benefit but what I am sure the
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Government would term as "tax credit" to be paid on a 26-week basis rather than on a weekly basis. That will raise some further questions with regard to cash flow, and so on, as regards later amendments.
The noble Baroness has assured us that all this will be worked out by the Inland Revenue and that it will inform employers exactly how much to pay out as regards each individual. Indeed, the Revenue will do all the calculations, and so on, and the information will arrive on time so that the employer can take it into account and make the necessary payments.
In other parts of the Bill we come across a complicated system about netting it off, which means that the other receipts that the employer is receiving by way of national insurance contributions or, indeed, income tax are netted off against the tax credits to which some people will be entitled. One of the points which concerns us is whether in reality, given the recent problems with computers, it will be feasible for the Inland Revenue to carry out these functions. However, perhaps the Minister can tell us whether it is to be done on a 26-week basis rather than on a weekly basis; or, indeed, whether it is to be dealt with in some other time period.
Clearly, there will be a problem as regards small business, especially as regards cash flow. I know, for example, that the CBI and others are concerned about whether the Revenue will succeed in making these complicated adjustments and in informing companies of them on time. There is clearly a danger of delays and errors occurring which will impose a considerable cost on business.
Further, will the Minister confirm that the overall effects of making these calculations and asking employers to pay the relevant amounts to individuals will not have an adverse effect on cash flow, even though the matter is "netted off' as it were? I think I am right in saying that at the moment there is some benefit to the employer—however, the noble Lord has more practical experience of this than I—as regards the collection of NICs and tax because they have the use of the money before it is remitted. However, the effect of "netting" this off will nonetheless mean that, overall, the cash flow of companies will be worse than it is at present. Perhaps the noble Lord will confirm whether that is the case. Those are the main points which arise here. There are other points concerning cash flow which arise on later amendments and it may be more appropriate to pursue them when they arise. I beg to move.
10.30 p.m.
Lord McIntosh of Haringey: I dread the thought of being once more at cross purposes with the noble Lord because what he describes as rather an important amendment is one which I believe is totally unnecessary. However, he has quite reasonably and properly used the amendment to give me an opportunity to explain how this measure will work. He asked me some specific questions on how we can be sure that any money will arrive on time and for reassurances with regard to the 26-week period and cash flows. I am happy to give those assurances.

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As to the necessity for the amendment, the Bill already provides that responsibility for calculating the tax credit payable will be with the Inland Revenue from October 1999 onwards. Clause 2 transfers the functions of the DSS in relation to family credit and DWA to the Inland Revenue. So there can be no question of employers being asked to calculate the tax credits payable to their employees. Indeed, Clause 6(2)(a) makes clear that the Revenue will provide employers with notification of their employees' entitlement.
Let me explain how the scheme will work. From October 1999 a special unit of the Inland Revenue will assess all applications for WFTC and DPTC, making 26-week awards as appropriate and notifying applicants accordingly. just as the Benefits Agency currently does for family credit and DWA claims. This procedure will remain unchanged after April 2000 when employees start to receive their tax credits through the payroll.
From April 2000 the Revenue will continue to make assessments of WFTC and DPTC and will continue to pay the credits direct to self-employed and non-earning applicants. But, where the applicant is an employee, the Revenue will make initial payments direct and will notify the employer—giving enough notice for any payroll adjustments—when to start paying tax credit, how much to pay and when to stop. The notification that will be given will depend on how frequently the employee is paid. The employer will usually be expected to take responsibility for paying tax credits for weekly paid employees 14 days after a notification is sent by the Revenue for weekly paid employees and 42 days after a notification is sent by the Revenue in all other cases. Employer representatives have discussed this matter with the Inland Revenue at length and they are satisfied that these notice periods are adequate for all normal payroll cycles. Even where non-standard payroll cycles are used, it has not been possible to identify any cases where they will not be adequate. During the initial 14 or 42 day period the Inland Revenue will make direct payments Therefore, that process will have no cash flow implications.
The start notification will include the daily rate of tax credit to be paid, together with a table of 1 to 31 multiples of the daily rate. So all the employers will have to do is read off from the table the amount of tax credit due, according to the number of days for which they are responsible in a pay period. Employers will simply be carrying out Revenue instructions and will not be responsible for assessing the level of the award.
The noble Lord asked me three questions. He asked me whether the payment would arrive on time. I think I have answered that. He asked me about the 26-week period. I think I have answered that. His third question was about cash flow. In around 90 per cent. of cases, as far as we can estimate, the cash flow implications are that, as the noble Lord suggested in his opening speech, there will be a netting off of some of the money due from the employer to the Revenue for PAYE and national insurance contributions.
The noble Lord was kind enough to remind the Committee that if was responsible for a payroll for nearly 30 years. I can tell him that that was the easy part. It is the VAT return that is the real nightmare for a small employer. Nevertheless, the
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noble Lord is right to say that there is a cash flow benefit, particularly to a small employer, in the gap between the time when he collects the PAYE and the NIC arid the time when he has to pay it out to the Revenue. The noble Lord is right: to say that there will be some reduction in that because the employer will be paying out a little more. There will be a reduction in the positive cash flow benefits of the employer's relationship with the Inland Revenue. It is not possible for us to calculate in advance what that will be. but it will be relatively small and it will be for a small minority of employers. We consider that, in terms of the implied contract between employers and the Inland Revenue ever since the setting up of PAYE, this is not an unreasonable change.
In the minority of cases where the PAYE and the NIC payments are not enough to cover the tax credit, payment will have to be made by the Revenue to the employer. There will be a responsibility on the employer to notify the Revenue of the amount that will have to be paid. We estimate—this again is the result of consultation—that, if a claim is made nine days before the payment date, the employer will get the money three days before the employment date. Those consulted and the Government consider that to be a reasonable bargain.
I hope that I have answered the detailed questions set out in the noble Lord's introduction of the amendment.
Lord Higgins: I am grateful to the noble Lord for his clear exposition. He said that the money will be paid three days before the employment date. Will refunds be paid by cheque and will those cheques be paid three days before? Secondly, the noble Lord said that there will be an adverse effect on the cash flow, or, more accurately, a reduction in the favourable effect on the cash flow, of the employer's relationship with the Revenue for some small firms and for a small number of firms. I am not clear why that does not apply to all firms. Thirdly, he said that the individual recipient of the payment—I use a neutral term—will be informed as to how much he is entitled to and that the employer will be informed. Will the Revenue tell the recipient and the employer? If it is both of those, part of the argument that one can see it in the pay packet is presumably somewhat eroded. We need to consider that point. We shall need to consider carefully what has been said on the administration of the system—
Lord McIntosh of Haringey: I would like to answer those three points, so that they do not arise again. The timing of the payment from the Revenue to the employer, where one is due, depends on whether or not automatic transfer is available. If not, notification will have to be made quite a lot earlier, because cheques will have to clear through BACS in a rather more complicated way. The number of days required depends on how efficient is the firm's credit transfer system.
When I said not all firms will be affected. I meant that not all firms would have employees receiving tax credits. Clearly, all firms which have tax credit employees will be affected—but that is not all firms.

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The notification to the employer will be as I described in detail. The notification to the employee will take the form of an entry in his or her pay slip.
Lord Higgins: I need to study carefully what has been said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins Lord Higgins moved Amendment 21:
Page 3, line 14, leave out subsection (5) and insert—
("(5) The amounts—

(a) of the several payments made by the Board of or in respect of tax credit;

(b) of the expenses of paying and managing tax credit; and

(c) received by the Board in respect of tax credit,

shall be set forth in the accounts of the Department of Social Security, distinguishing in each case between amounts relating to working families' tax credit and amounts relating to disabled person's tax credit. ")
The Deputy Chairman of Committees (Lord Dean of Harptree): If this amendment is agreed to, I cannot call Amendments 22 and 23, by virtue of pre-emption.
Lord Higgins: Amendment 21, with which it would be helpful to consider Amendment 23, is one to which I thought the Minister had given an answer earlier. It suggests that the number of payments,
"made by the Board of or in respect of the tax credit; [or] of the expenses of managing and paying tax credit; and [the amount] received by the Board … shall be set forth in the accounts of the Department of Social Security, distinguishing in each case between the amounts relating to working families' tax credit and amounts relating to disabled person's tax credit".
It is simply an argument for transparency and I hope that the Minister can give a reasonable response. I beg to move.
Lord McIntosh of Haringey: I am glad that I am not being invited to go over the philosophical argument again. If we are concentrating on transparency, I can give the noble Lord the assurance that he seeks.
The amendments would remove the tax credits from the accounts of the Inland Revenue and place the information in the accounts of the Department of Social Security or in a separate report that is to be laid before the House of Commons. Neither option represents a sensible way forward in properly reporting tax credits.
The noble Lord thinks that because credits build on the benefits they replace, they are benefits in another guise—but they are not. The noble Lord argued on Second Reading that because the credits do not go as far as they would have done under the Green Paper with which he was involved in 1972, they are not proper tax credits. The difference is that these credits are going to work and the noble Lord's Green Paper did not take effect.
In the hands of the employer, the tax credits will be intimately entangled with PAYE. Employers will be pooling tax and tax credit and remitting the net amounts to or from the Inland Revenue. The employee's pay slip will of course show tax and tax credit separately, which provides recipients with the transparency they need to be
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certain that tax credits are coming through to them. I agree that tax credits are not being incorporated in the PAYE code. I will not return to our debate on Amendment No.1 but, as my noble friend Lady Hollis made clear, we could not achieve the objectives through incorporation in the PAYE code. So we do not agree that the proper place to account for tax credits is in the accounts of a department that does not administer them. If the tax credits are not appropriate for inclusion in the accounts of the Department of Social Security, and we would argue that they are not, the second amendment suggests that the details should be published in a separate report and not in the accounts of the department that administers and has policy responsibility for them. That seems somewhat perverse.
I have explained how the practical handling of tax and tax credit goes together, and the accounting systems follow, with tax credits being tracked and accounted for alongside PAYE. The natural and logical result would be for the tax credit figures also to be dealt with alongside those for tax and for them to appear in the accounts of the Inland Revenue. The Inland Revenue has policy responsibility for them; they are under the Inland Revenue's care and management; and they should be there to reflect that part of the Inland Revenue's business. Nothing would be gained by separating them out from other parts of the Inland Revenue's business. Tax credits will be shown separately by the Inland Revenue and in the board's report in the same way as MIRAS is presently shown. The obligation to keep adequate accounts of these items will be the same wherever they are to be presented. The figures will be no more accurate for having been presented outside the Inland Revenue's own accounts.
I seek to persuade the noble Lord that the resulting reporting mechanisms will be at least as transparent as those that he proposes and much more logical in that they appear in the accounts of the responsible department.
10.45 p.m.
Lord Higgins: I think we are saying that we disagree on the principle and therefore these amendments would be in line with what we are suggesting and the opposition to them reflects the Government's view on whether this provision is or is not a tax credit. I certainly do not wish at this late hour to go over Amendment No. I again, although that is where the matter rests. At this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos.22 and 23 not moved]
Lord Higgins Lord Higgins moved Amendment No.24:
Page 3, line 22, at end insert—
("( ) The duties of the Treasury under section 155 of the Finance Act 1998 shall include a duty to set forth in the Financial Statement and Budget Report a table showing—

(a) the amounts of the several payments made by the Board of or in respect of tax credit;

(b) the amounts of the expenses of paying and managing tax credit; and

(c) the amounts received by the Board in respect of tax credit,

distinguishing in each case between amounts relating to working families' tax credit and amounts relating to disabled person's tax credit. ")
The noble Lord said: This amendment is concerned with the Finance Act and setting forward in the financial statement the amount of several payments made by the board in respect of a tax credit and the amount of expenses and so on which are incurred.
We have been discussing transparency. This amendment stems from our concern which we debated at length the other evening with regard to how these matters should be presented in the Red Book and other related government documents. In Table B14 on page 160 of the Red Book, working families and disabled person's tax credits appear under the heading, "Accounting and other adjustments. " It seemed to us to that to put in £5.4 billion by 2001 and term it "Accounting and other adjustments" was, to say the least, not frightfully transparent. Our view is that the amount ought to appear under public expenditure as part of the budget of the Department of Social Security, although I suppose that we must now consider whether it appears as expenditure of the Inland Revenue. It would be rather strange if the Inland Revenue had such expenditure. That takes us back to the point of principle. All we are saying is that to describe this expenditure as "Accounting and other adjustments" is clearly wrong.
Earlier, I understood the Minister to say that the Government were meeting this point, although that was in the context of the European conventions on the matter. ft would seem more appropriate to abide by the accounts and conventions of the Office for National Statistics and UK national accounts. If they are the same, I am not clear why this appears as an accounting adjustment. I beg to move.
Lord McIntosh of Haringey: For the sake of clarity, the important table in the Red Book is table B9 on page 154. Although that does indeed emphasise and highlight the Government's definition, which is,
"Net taxes and social security contributions'",
it also includes,
"Other receipts and accounting adjustments'.
which includes contributions to the EU budget.
As far as the issue of accounting conventions and the Office for National Statistics is concerned, the noble Lord will know that ESA 95, which is the most recent European convention on national accounts, was adopted by the Office for National Statistics in November 1998, and the speech which I was not able to give, either a few weeks ago or today, goes into some detail as to why it is appropriate for the Government to adopt those European standards for its national accounts, which are correctly a historical record, and to use the different definition,
"Net taxes and social security contributions",
which is that which is used in the Red Book and which is more appropriate for the purposes of the Red Book.
Lord Higgins: Does a net social security contribution appear as a positive or a negative in this context?
Lord McIntosh of Haringey: The,
"Other receipts and accounting contributions"
are added to the net taxes and social security contributions in the table which is headed "Current receipts".
Lord Higgins: Following the developments to which the noble Lord referred, will it still appear in the next Red Book as an accounting and other adjustment?
Lord McIntosh of Haringey: It will appear in the same way in the Red Book, but the noble Lord will also have access to the national accounts, which will give the figures in accordance with European conventions. As the Treasury Select Committee demanded, the Government are being entirely transparent and are using the appropriate measures for appropriate purposes.
Lord Higgins: On that basis, I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
[Amendment No.25 not moved.]
Clause 5 agreed to.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No.26:
After Clause 5, insert the following new clause—
PASSPORTED BENEFITS
(". Recipients of a tax credit shall he entitled to the benefits to which claimants of family credit and disability working allowance were entitled under the National Health Service (Travelling Expenses and Remission of Charges) Regulations 1988 as they had effect immediately prior to the coming into force of this Act. ")
The noble Baroness said: Amendment No.26 is grouped with Amendment No.27, both in my name. With the leave of the Committee, I shall speak to both of them.
The first amendment deals with the issue of "passported" benefits. That matter has been raised on a number of occasions during our discussions, but I believe that this is the appropriate place to deal with it and to receive a response from my noble friend the Minister.
Family credit claimants have free prescriptions, dental treatment, glasses and sight tests. They are also entitled to help with maternity and funeral expenses from the Social Fund. The Government have said that those who are presently entitled to "passported" benefits because they receive family credit will continue to be entitled to such benefits when the working families' tax credit is introduced. However, I am informed that it is not clear whether the entitlement would continue beyond the end of the current award on 5th October 1999. Moreover, in evidence to the Social Security Select Committee on 28th October 1998, the Inland Revenue was unable to say whether these "passported" benefits would be transferred to the WFTC and the DPTC.
The intention of the amendment is to provide for that to be done. The increased generosity of the tax credits will otherwise be undermined if the charges referred to as "passported" benefits are to be met by the families

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benefiting under the new legislation. "Passporting" will help to ensure that families in low-paid work retain access to vital medical treatment and other services. It seems to me that this is a very simple issue and I do not intend, at this point in our discussions, to make any further comment on it.
Amendment No.27 deals with school meals. Children whose parents are in receipt of income support and income-based jobseeker's allowance are entitled to free school meals. Children whose parents receive family income supplement, which was the precursor of family credit, were similarly entitled, but when family credit replaced family income supplement that entitlement to free school meals was withdrawn from working families.
The Government have often recognised the importance of school meals. According to the most widely accepted definition, there are about 2.8 million school children living in poverty in the UK and yet only about 1.8 million have an entitlement to a free school meal. According to the Child Poverty Action Group, up to 30 per cent. of children do not go home to a cooked meal. Even mild under-nutrition affects concentration and cognition. Improvements in the nutrition of school children should reduce the risk of chronic degenerative and other diseases in adult life. To extend free school meals is an investment in our children's future.
The combination of WFTC, the minimum wage, increases in child benefit and other measures in the March 1999 Budget will increase the number of families able to meet a low cost but acceptable budget. The extension of free school meals to families in receipt of WFTC will increase that number still further.
I understand that the argument can well be made that the amendment asks for something extra. The recipients of family credit did not have an automatic right to free school meals, but the cost of what is being asked for in this amendment is not excessive when one recalls that the future health and wellbeing of children is at stake. The cost of extending free school meals to all children of WFTC recipients is estimated at £410 million; £210 million if it is limited to children under the age of 11 years.
I hope that my noble friend is prepared to give this a sympathetic hearing as she knows that I fully support the Bill. These are probing amendments. I should welcome a response from the Government on these important issues.
Lord Swinfen: My name is added to Amendment No.26. I am delighted to support the noble Baroness, Lady Turner, particularly as this was a point that I raised at Second Reading which, as far as I recall, was not answered. However, I am aware that the Minister could not answer every single point. It is extremely important that disabled people, who very often rely to a considerable extent on the National Health Service, have these passported benefits. Without them, very often they will be unable to work.
Apart from purely health service benefits, will these tax credits be passported through to the social fund maternity payments, funeral payments, help with home
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repairs and with energy efficiency, which these people receive at the moment, free legal advice and assistance and assisted prison visits? One must bear in mind that assisted prison visits may well help to prevent the break-up of families. It is important for families to stay together. If families break up it is far more costly to the nation as a whole not only financially but in regard to the effect on the children, who need a family with both parents in it to ensure that they grow up to become responsible members of society. I am delighted to support the noble Baroness in this amendment.
Lord Higgins: I too support the noble Baroness. Passported benefits are very important. We touched on this matter in earlier debates. As my noble friend said a moment ago, it is of particular importance to the disabled, not least with regard to medical treatment. When we discussed this matter at an earlier stage the noble Baroness indicated that part of the problem was that, because of the way in which the taper worked, a lot of people with incomes way in excess of £20,000 would suddenly get benefits to which they had not previously been entitled. This is obviously a difficult area. When the matter came before the Select Committee, the Inland Revenue was unable to give an answer. At the moment we still do not have an answer. I think the Government will accept that the Bill should not go through without this point being clarified.
With all the arguments, difficult though they may be, I would have thought that a view would have been taken before now. Can the Minister tell us the conclusion of the Government's consideration or can she at least let us know at what stage we are likely to hear what is happening about what is clearly a very important matter and one which is giving grave concern to people outside who feel that a reasonable solution will not be found?
Lord Goodhart: I welcome the amendment because it raises an important subject for discussion. It would be profoundly unfortunate if those who have incomes with levels which would currently entitle them to family credit and therefore to passported benefits were to be deprived of those passported benefits. However, I can see that the Government have an arguable case for saying that, with the much higher reach up the income scale of the new working family tax credit, there may be a case for not extending the passported benefits to everybody at the higher income levels. The main point here is that we are now within five months of the start of working family tax credit and we still do not know what the levels of passported benefits will be. It is important to know the position before the Bill is passed.
Baroness Hollis of Heigham: These amendments introduce new clauses that aim to give tax credit recipients additional help by passporting recipients to additional benefits.
Amendment No.26 seeks to ensure that WFTC and DPTC recipients are entitled to free prescriptions and other NHS help, in the same way that FC and DWA recipients were. Amendment No.27 seeks to provide that recipients of WFTC should receive free school meals.

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I should like to deal with the issues raised by Amendment No.27 and the school meals point. WFTC is replacing family credit and taking on the major part of the current structure. Family credit has no provision to allow recipients to receive free school meals. There is a very good reason for that. Family credit itself replaced family income supplement, which did allow for free school meals. However, it was found that the take-up level was low, and 30 per cent. of those eligible failed to apply. It was decided that, instead, family credit would include a cash amount to compensate for that situation. In that way everyone obtained the equivalent value, and it was paid throughout the year, not just on school days. WFTC inherits this from family credit, and in that sense it has already provided what my noble friend is asking for. Given the much greater generosity of WFTC over family credit, the grounds for reinstating school meals as a passported benefit back in the old family income supplement days, I suggest, is even less appropriate.
I recognise that there is a particular problem when someone is coming off income support, having had the benefit of free school dinners, and is moving on to working credit and, in future, tax credit: the first four weeks are without pay. It is in that situation that the lack of free school dinners is a heavy expense. We recognise that problem. In the Budget the Chancellor stated that there should be income support roll-on for the first two weeks of the move into a tax credit. Given that benefits such as income support and JSA are paid up to two weeks in arrears, we believe that the two together will at least produce a bridge for that first month.
Other than that, given that it is not incorporated in family credit and that WFTC is more generous than family credit, I hope that my noble friend would agree that her amendment should be withdrawn.
Amendment No.26 relates to NHS passporting. It seeks to ensure that NHS help to free prescriptions should continue as tax credits to replace the current benefits. The Tax Credits Bill works by making family credit and disability working allowance into working families' tax credit and the disabled person's tax credit by changing their names. This gives us the foundation on which to build. It also means that whenever there is a reference to FC or DWA in legislation, be it primary or secondary, from October of this year they will be read as references to WFTC and DPTC.
The importance of the new clause is that it attempts, but does not quite achieve, the goal of preventing changes beyond that renaming. I fear that it will not work because those changes are not a matter for the Inland Revenue, the Treasury and the Bill, but for other departments, especially the Department of Health, and their legislation. From what has been said, I wonder whether this is really what is wanted. Concerns have been expressed generally in relation to WFTC—the noble Lord, Lord Higgins, repeated them earlier today—about the total annual income that a family could receive and still qualify for a tax credit. These are concerns about targeting when we are referring to families who could, through two incomes, be earning over £30,000 or perhaps more per year.
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We have said that we are committed to ensuring that WFTC and DPTC recipients who need it will continue to receive help provided by passported benefits such as those of the NHS low income scheme. As the current situation stands, tax credits go considerably further up the income distribution level. That is not by virtue of the tax credits. The childcare allowance extends it up the income levels.
We are still considering whether it is appropriate to passport all WFTC and DPTC claimants, some of whom, by virtue of their children and relatively high levels of childcare, could with relatively high earnings be receiving a tax credit on these additional benefits.
I am grateful for the non-partisan way in which not only my noble friend (from whom I would expect it) but also the Opposition Benches have dealt with the issue. They share the dilemma of the Government on this matter. It is a question of getting the balance right. The issues are not for a single Minister or department. They cut across Government. The noble Lord. Lord Swinfen. said that passported benefits are not just NHS prescription charges. They include home energy installation grants and assisted prison visits—I take the points he made—funeral and maternity grants, through to legal aid. At the last count, they affected seven or eight different government departments. We have to agree that what is decided is satisfactory and is perceived as fair on the same cross-government basis.
However, I can assure the Committee that we shall set out clearly what we propose in relation to passported benefits for recipients of tax credits before the Bill leaves Parliament. My noble friend is entitled to demand nothing less and that is what we shall do.
I wish that I could have given further clarification of the situation tonight. I cannot do so as the matter is still under negotiation. As soon as the position is clear across all the government departments in respect of all the benefits, I shall be happy to come back and clarify the position.
Lord Swinfen: I am grateful to the Minister for giving way. She said that she would set the matter out clearly before the Bill leaves Parliament. Is she able to do so before the Bill leaves this House? If the other place agrees any amendments that we subsequently make in this House the Bill will not come back here.
Baroness Hollis of Heigham: That is my hope. We are negotiating between seven or eight government departments and the timetable is not in my hands. The prime department is the Department of Health but other departments are involved. The DSS is already clear as to what will be proposed for its funeral and maternity grants. I hope to achieve the same degree of clarity from others. I hope I shall be able to inform the House as quickly as possible; I have no wish not to do so. However, the timing is not entirely in my hands so I shall do my best.
Lord Higgins: I am happy to continue the discussion on a non-partisan basis in order to assist the Minister. It would not be acceptable to us not to know what is to happen about this very important matter. We must have

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an opportunity of debating it in this House. The only thing involved is ministerial time and, surely, even on a cross-departmental basis, having had many months of consideration already, they can make up their minds before Third Reading.
I do not ask the Minister to respond, but in order to assist her, I wish to make clear that we must know where we are on a matter that is causing great concern. In doing so, I accept the difficulty of the argument, not least the problems of people on higher incomes and so forth.
Baroness Turner of Camden: I thank my noble friend for her response to Amendment No.26. I appreciate that there are difficulties, particularly as regards recipients of higher incomes. I am grateful for her assurance that she will do her best to ensure that before the Bill leaves this House we shall know the results of the Government's reconsideration of these difficult issues. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No.27 not moved.]
Lord Higgins Lord Higgins moved Amendment No.28:
After Clause 5, insert the following new clause—
MAINTENANCE PAYMENTS DISREGARD
(". —(1) In calculating the value of tax credit payable to a parent with care. maintenance payments received by him shall be disregarded.
(2) In calculating the value of tax credit payable to an absent parent, maintenance payments paid by him shall be disregarded from his income.
(3) In this section, "maintenance payments" means payments made under the directions of a court, or the child support agency, to maintain a child. ")
The noble Lord said: We are coming into the finishing straight. Actually, I find that we have nearly completed a lap, because the maintenance amendment which we are now debating was related to the second group of amendments we discussed today, as the Minister pointed out. However, the points involved are not precisely the same.
There have been a number of representations suggesting that there is some confusion over the recently announced maintenance disregard for the working families' tax credit. Various outside bodies—for example, the CAB—are not sure what the Government intend, in particular as to what type of maintenance is to be disregarded. In February, the Paymaster General suggested that only child support would be disregarded and for the purposes of WFTC there would be a disregard of 100 per cent. for any maintenance paid as a result of the CSA intervention. However, the disregard of child maintenance arranged through the courts is not clear, nor is the situation with regard to voluntary child maintenance. In addition, there is a problem of whether spousal maintenance is to be disregarded and what
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happens in the case of non-resident parents. Perhaps the Minister will clarify those points because there is some confusion. I beg to move.
Lord Goodhart: I support the noble Lord's amendment. I found the reasons advanced earlier today by the Minister as to why child maintenance payments should be disregarded for the purposes of calculating the income of the receiving parent to be very persuasive. However, I find it more difficult to accept what she then indicated; that the payment of maintenance will be disregarded when looking at the income of the paying parent. It raises the difference between first and second families to an unacceptable level.
Let us envisage a situation in which a formerly married couple are divorced. The wife receives £2,000 per year by way of child maintenance and £10,000 per year by way of earned income. Let us say that the husband has remarried and has a second family. Again, he obviously has to pay that £2,000 per year. His earned income is also £10,000.
The position is that the first family will receive the WFTC as though its income were £10,000 whereas in reality, taking into account the child support payments, it will be £12,000. The second family will receive the WFTC on the basis that the family income is £10,000 whereas in reality, after taking into account the maintenance payments which must be made, its income will be only £8,000.
As I understand it, it is not intended that child support or maintenance payments should leave second families in poverty, but at first sight there seems to be an unacceptable degree of discrimination between second and first families. Perhaps the Minister will reconsider that issue.
Lord Swinfen: I support the amendment. Perhaps the noble Lord, Lord Goodhart, will allow me to suggest that the payment would not be reduced by just £2,000 but by more than that because that £2,000 would come out of taxed income, so the second family would be even worse off.
On the earlier amendments, when maintenance payments were mentioned, the Minister said that maintenance payments made under the directions of the court and the Child Support Agency would be taken into account. What is the position of the maintenance payment that is not made in either of those ways but is made under a voluntary agreement between the father and the mother of the child or children in question?
Baroness Hollis of Heigham: The proposed new clause seeks to provide for maintenance payments to be disregarded in calculating tax credit payable to a claimant who is either paying or receiving maintenance payments.
First, I deal with a situation in which someone is receiving maintenance payments. It is clear that there will be a 100 per cent. disregard of child maintenance.
I was then pressed whether the disregard would be affected by the way in which that maintenance were paid, whether by CSA, court order or voluntary

137
agreement. I thought that I had answered that previously. There will be a 100 per cent. disregard whether the payment is made by the CSA, through court order or voluntary child maintenance arrangement. I believe that that is what the noble Lord, Lord Swinfen, asked me.
I find it difficult to accept the suggestion that maintenance payments being made by a claimant should be disregarded, as though there were some mirror opposite in that regard. It would mean that the Child Support Agency or the court, having decided that a certain amount of maintenance should be paid from the non-resident parent's income for the upkeep of the non-resident parent's children, the Government should then proceed to subsidise those payments. If this amendment were carried, it would mean that the Government were contributing 55 per cent. of the maintenance to be paid because the taper would kick in after the maintenance had been paid.
I cannot believe that that is the intention of the Committee because the parent with care is entitled to the hill maintenance paid. If Members of the Committee are then saying that it should be disregarded from the father's income, it means that the Treasury—other parents, other fathers—have to make good that deficit. It means, therefore, that instead of him paying the £15 or £25 or whatever is appropriate on his income, the Treasury would be paying more than 55 per cent. of that sum. I cannot believe that that is what noble Lords intend. I believe that the problem noble Lords are having is that they are comparing the woman receiving family credit in the past and who will go on to receive tax credit in the future with the man—the non-resident parent—who is paying.
I suggest to noble Lords that that is not where the equation should lie. It should lie between the single man earning £200 per week who is not eligible for WFTC and who has one child in the first family but, because he is single, now does not have any more children, who, under the new proposals we hope to bring before Parliament soon, will be paying £30 out of that £200.
If he was married, however, or had moved on into a relationship in which the woman had two children, who might not be his biologically, his maintenance assessment under the new proposals would fall from £30 to about £25 in recognition of the responsibilities of a second family. However, what noble Lords would be saying is that in his case, having moved in with somebody, possibly not married, who has brought children into that relationship, possibly not his, the maintenance he should then pay to the first child should be more than halved in comparison with that of a single man. I do not believe that to be even faintly reasonable. The obligations of that second family would be reflected in the reduced maintenance he should pay, not reflected at a higher point at which the taper starts to kick in. Given that, I hope noble Lords will reject the amendment.
Lord Goodhart: Before the noble Lord, Lord Higgins, replies, perhaps I may say that obviously this problem only arises if the father then has a second
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family. Surely the purpose of family credit is to ensure that families with children get adequate support. What is happening here is that a second family will be penalised because the amount of the working families' tax credit will be calculated not on the real income that the father has left but on a kind of notional income which does not take account of the fact that he is absolutely committed to paying a substantial slice of that income, quite rightly, to the first family.
Baroness Hollis of Heigham: No, I emphasise that I am now dealing with the proposals we are about to bring to the House, not with the current CSA, system. There, given the complications of protected income and so on, the equations are very different. It seems to me to be simpler to say what we expect to be the case because the timing will be very similar.
In the new proposals, second families will indeed be properly protected and treated in a balanced way with first families. We expect that protection to extend to stepchildren who are not biologically the children in the second family of the non-resident parent. So, within the second family, we are not talking about first-class children and second-class children.
In the recent consultation exercise, to which there were over 1, 500 replies, it was clear that the percentage we are expecting a non-resident parent to pay to support. a child or children in the first family was about right—that is 15 per cent for one child, 20 per cent. for two and 25 per cent. for three or more—but that that amount should be abated to the extent that there are children in the second family, whether his biologically or whether they have been brought into that relationship by his new partner, so that we do not have first-class and second-class children.
As a result of the consultation exercise, that was broadly regarded as a fair way to proceed. However, if noble Lords accepted the amendment, that would mean that a single person would pay £30. If someone starts a relationship and moves in with a woman—it may not be for very long—who has two children of her own, he would not only have it deducted down to £25 in recognition of that second family responsibility but that would be asking the Government to pick up 55 per cent. of the sum as well by having the tax credits kick in at a lower notional income. So, effectively, of the £25 to be paid, or more than £30 because of the responsibility of a second family, he would pay something like £11.50 and the Government would contribute £13.50. However, if the woman you were paying it to was on income support, and therefore the issue of family credit did not arise and she was even poorer, you would be expected to pay the entire sum, even though it would be netted back by the Treasury off the benefit, all but £10.
Whichever way we work, whether we compare the situation with a lone parent on income support., in which case the full sum would be paid because there would be no question of her maintenance being disregarded, only the first £10; or we compare his position with that of a

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single man or with that of other fathers in work supporting their children, on all three grounds this amendment is unfair. I suggest the Committee rejects it.
Lord Higgins: I find myself trying to relate what the noble Baroness said to my former constituents' specific cases; it makes it a little more concrete. But the noble Baroness has been doing an immense amount of work on the Child Support Agency side and I shall need to consider carefully what she said.
In that context, since she related some of her remarks to what the Government propose, can she give us any indication of timing with regard to those proposals being announced and the passage of this Bill through the House?
Baroness Hollis of Heigham: Obviously we are in election purdah at the moment and that limits the extent to which government can properly make new announcements. But I am hoping that the White Paper will come forward some time next month. I had hoped it would be earlier but for the election purdah. If it is then so decided, I hope to see parliamentary legislation to that effect in the autumn programme. But that is not a decision for me. It is for the appropriate bodies to determine what goes into the Queen's Speech. That would be my hope.
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However, it may be worth emphasising that the new proposals are highly dependent on having a robust computer system. We have had a lot of problems with computers within the DSS and the CSA. Indeed, the computers in the CSA do not talk to the computers in the Benefits Agency and information has to be swapped manually and so forth. Therefore, the timing of implementation, as opposed to the parliamentary timetable, will be heavily dependent on when the robustness of the computer system is ensured. I am sure the Committee will understand that we cannot afford for this to collapse through weak information systems. That is as helpful as I can be to the noble Lord at the moment.
Lord Higgins: The noble Baroness has been most forthcoming. I thank her for that and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey: I beg to move that the House be now resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-seven minutes past eleven o'clock.

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