Sitting of 14 January 1999

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

    New Deal (West Midlands)
    Mr. Robin Corbett: How many young unemployed people are taking part in the new deal in Birmingham and the west midlands. [64036]
    The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith): At the end of November, there were just over 10,800 young people taking part in the new deal in the west midlands, 3,000 of them in the Birmingham area.
    Mr. Corbett: Those young Brummies who have helped to make the dole queue the shortest for 19 years are delighted with the extra opportunities for training and jobs that the new deal is providing, and they do not understand why the Conservative party would deny them those opportunities. What further steps can the Minister take to assist people with disabilities to make maximum use of what the new deal has to offer?
    Mr. Smith: I thank my hon. Friend for his remarks about the new deal and its benefits for the young people of the west midlands and the rest of the country. A total of 52,500 young unemployed people are now in jobs thanks to the new deal, and of those, 5,500 are young people with disabilities. That is a great tribute to the work being done by all the partners in the new deal and our disability employment advisers. That help is in addition to the extra measures being taken through the new deal for disabled people.
    The new deal is working for young people who are disabled and for the rest of unemployed young people in this country who, as my hon. Friend rightly pointed out, would have been denied those opportunities by the Conservative party.
    Mr. Edward Leigh: What proportion of those entering the scheme leave for other benefits or disappear from the scheme altogether?
    Madam Speaker: Order. I remind questioners and the Minister that this is a limited question and it relates to the west midlands.
    Mr. Smith: In the west midlands, as elsewhere, the number of those whose destination is unknown having
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    benefited from the new deal is significantly lower than it was under the jobseeker's allowance regime introduced by the Conservative party. When we look at the cohorts of young people passing through the new deal, the number whose destination is unknown is as low as 12 per cent.
    Mr. Bob Blizzard: I wonder whether Birmingham and the west midlands are experiencing the problem that exists in my constituency, which is that, although the new deal is working successfully, some young people face multiple obstacles to employment. They are people who were previously referred to as being unemployable. They may have had drugs problems, they may be alienated or have been involved in petty crime. We are finding that, for such people, the gateway period is not long enough to prepare them for work. Even if they take up an option—
    Madam Speaker: Order. I must be firm about questions. This is Question Time and the hon. Gentleman must not set the scene in his own constituency. If he wants to do that, he can put a question on the Order Paper. Will he come to his question for the Minister in relation to the west midlands?
    Mr. Blizzard: Thank you, Madam Speaker. Will the Minister consider extending the gateway period or offering more support for young people in Birmingham and the west midlands who are finding it difficult to succeed properly in the new deal?
    Mr. Smith: It is important to stress that the most disadvantaged young people, including those who have had drug problems, ex-offenders and those with severe literacy and numeracy difficulties, are getting jobs through the new deal. They are being given the help that they need in the gateway period. Of course, although the new deal is working well, it can always be improved. We have a continuous improvement strategy under way and that includes a more intensive use of the gateway services such as that urged by my hon. Friend.

    Teachers' Pay
    Mr. Phil Willis: What estimate he has made of the effects on (a) local education authorities and (b) teaching staff of the staging of the last three pay awards for teachers; and if he will make a statement. [64037]
    Mr. David Rendel: If he will make a statement on his Department's plans for expenditure on teachers for the current year and for each of the next three years. [64038]
    The Secretary of State for Education and Employment (Mr. David Blunkett): The impact of staging the teachers' awards over the past three years has enabled education authorities to meet the pay bill without even further reductions in the provision of services or investment in standards. The impact on teachers has generally been to irritate them. The Government recognise that and have done so in their evidence to the schoolteachers' pay review body for the coming year.
    The investment programme for the next three years in the comprehensive spending review settlement has ensured that, over the next three years, there will be a

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    16 per cent. increase in real terms for education. There will be £19 billion of new investment for the next three years which, this year, means a cash increase of 5.7 per cent. to local authorities. In the years 2000 and 2001, as well as the external funding increases to local authorities, we have also allocated up to £1 billion to fund the proposals that are now out to consultation for the Green Paper on the reform of the teaching profession, to ensure recruitment, retention and motivation in the teaching profession in the years to come.
    Mr. Willis: I thank the Secretary of State for that comprehensive answer and, in particular, for his admission that it was his intention to annoy the teachers. He has succeeded. The Liberal Democrats welcome the evidence that the Government gave the pay review body, which intended that this year's pay settlement would not be staged. Will the Secretary of State confirm that that is the Government's intention? Does he not feel that it is hypocritical of the Government to then cite the £140.7 million overhang from last year's pay award as an excuse to drive down teachers' pay this year?
    Will the teachers have to pay for the Government's mistakes, or will that fall on the other services provided by local authorities?
    Mr. Blunkett: The Government have not made a mistake. We have ensured that there are new resources to meet the challenge of the next three years. The school teachers' review body will of course have to take account—it is its job to do so—of the extra expenditure and other factors, such as the target inflation level. It is also the body's job to ensure that it takes account of recruitment and motivation in the teaching profession. We expect it to do that also. In our evidence, we recognised that our intention is not to phase the award. However, we shall have to wait until the award is announced, and consequently make a decision based on the volume of cash and percentage increase recommended by the body.
    Mr. Rendel: Does the Secretary of State accept that staging over the past three years has effectively resulted in a 2.5 per cent. cut in teachers' salaries? Will not the first 2.5 per cent. of any increase recommended this year therefore do no more than catch up with a cut that has already been made?
    Mr. Blunkett: No, I do not accept that. In the recommendations—I am responsible only for the most recent one—the STRB had to take into account the inflation rate, overall pay settlements in comparative sectors and affordability for local authorities. It would be quite useful if hon. Members considered events in the private sector and settlements across the country when making comparisons with public service pay.
    Mr. Derek Twigg: Is it not true that the teachers' pay structure does not reward experienced teachers for excellence in the classroom? Will not the Green Paper proposals deal with that problem?
    Mr. Blunkett: My hon. Friend is entirely right. Current proposals, and the questions that have been asked today, deal with the annual round. However, we are talking about a restructuring, so that we are genuinely able to attract people into the profession, and so that they know that they
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    will not only be reasonably rewarded when entering the profession but well rewarded as they move through the profession and gain experience—and as their abilities shine through in enhanced performance and lifted standards. The intention of substantial investment, with something for something, is to transform prospects for teachers and children in the years to come.
    Helen Jones: Does the Secretary of State agree that one of the factors demotivating teachers in the past 18 years has been the lack of recognition of their professional expertise? Does he agree that the proposals in the Green Paper will not only give higher rewards to good classroom teachers but enable teachers to extend their leadership roles in school and to develop their own careers? Is that not one of the best ways of motivating teachers and ensuring that they remain in the profession?
    Mr. Blunkett: I entirely agree with that. Our proposals—which include substantial investment in establishing a leadership college, investment in head teacher training and the Green Paper's professional development proposals that can be taken advantage of by all teachers—will provide not only that motivation but the excellent skills that are needed. Those proposals in themselves will lift the teaching profession's self-esteem and confidence and help to encourage people of all ages to want to enter one of the most rewarding jobs that anyone can take up.
    Mr. Dafydd Wigley: Does the Secretary of State accept that the teachers' pay issue is one central factor, although it is not the only one, creating the severe teacher shortage—which amounts to almost 40 per cent. in subjects such as technology and mathematics, and 30 per cent. in modern languages? Will he assure the House that the deal on which he settles will be aimed at overcoming those shortages?
    Mr. Blunkett: I hope that the proposals—not merely in the review body's report but in the Green Paper—will make a substantial difference in recruitment in the years to come. However, we have to get the matter into some sort of perspective. I do not want there to be talk of crisis in the education service when, across the United Kingdom, there are only 2,600 teaching vacancies—which is 0.8 per cent.—240 of which are for head teachers. It is important to remember that, although I accept that the position has worsened in recent years. That is why my hon. Friend the Minister for School Standards has announced a package of measures with the Teacher Training Agency, including £5,000 bonuses for maths and science graduates to come into the profession. We are also proposing radical changes for the teaching profession in our Green Paper—an issue that the Conservatives neglected for the two decades they were in office.
    Mrs. Theresa May: The Secretary of State for Health has managed to recognise the crisis in the health service caused by the lack of recruitment of nurses. It is a pity that the Secretary of State for Education and Employment is unwilling to recognise the growing crisis in our classrooms caused by a lack of teachers and problems of recruitment.

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    Whatever Government figures the Secretary of State gives, a recent survey by the National Union of Teachers shows that the real figure for teacher vacancies is—[HON. MEMBERS: "Oh!"] I am fascinated to note that Labour Members greet mention of the NUT with such derision. Its survey shows that there are 10,000 vacancies—four times the number that the Government accept. Despite there being so many vacant posts, over Christmas the Secretary of State cut targets for teacher recruitment by 13 per cent. Does he believe that he can solve the problem of the lack of teachers in our classrooms by recruiting fewer of them, or is he just desperate to fiddle the figures to avoid failing to achieve yet another target?
    Mr. Blunkett: The shadow Minister is matching the shadow Secretary of State in her enthusiasm to back the National Union of Teachers and, to mirror his words, to set up workers co-operatives running our schools. "Leave it to the teachers" is the new Conservative party slogan.
    We are interested in a partnership with teachers. We want to support them and work with them to help them do their job. Nobody pretends for a moment that it would help recruitment, morale or standards for me to go round suggesting that there is a crisis when there is not. I was shadow Health Secretary for two years and I well understand what those in the acute services can present on television. We are ensuring that there is a plan for the future. We shall overcome recruitment problems, we shall raise standards and, above all, we shall make the teaching profession one that all people want to join.

    Citizenship
    Mr. Ben Bradshaw: What plans he has to ensure that citizenship is taught in schools. [64039]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Charles Clarke): We will ensure that citizenship has a key place in schools in the new century, drawing on the advice from the advisory group on education for citizenship and the teaching of democracy in schools, chaired by Professor Bernard Crick, which is helping to inform the current review of the national curriculum.
    Mr. Bradshaw: I am grateful for that reply. How does my hon. Friend respond to my constituent, Christopher Hopkins, aged 9, who wrote to me recently? He said:
    "I would like to know if you were planning to put politics in the national curriculum, as I find it very interesting."
    Does my hon. Friend agree that if those in the younger generation are to have confidence in our political system and play an active role in it, they have to understand how it works? Will he immediately scotch rumours that Mr. Woodhead is trying to veto the sensible proposals to put citizenship into schools?
    Mr. Clarke: Certainly, no one is trying to scotch or veto any proposals. We are taking advice from the Qualifications and Curriculum Authority and a wide range of organisations on the best way to put into effect the reforms that we are discussing. I agree very much with my hon. Friend's comments about the importance of teaching politics and the approach to political life and democracy in our schools. That is one reason why many politicians from all parties have supported the idea of teaching citizenship in some way.
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    Just to add another point, a primary school in my constituency is teaching philosophy. There has been a tremendous response because the interplay of ideas and arguments is such an important part of ensuring that children grow up to play a full part in society and in the community.
    Mr. Andrew Rowe: Does the Minister accept that perhaps the most important element of the teaching of citizenship is giving young people the thought that they can influence what happens in the world in which they are growing up? Will he encourage the growing number of schools that are taking seriously ideas from their pupils about the running of their schools and the work they can do in the community?
    Mr. Clarke: I agree very much with the hon. Gentleman. Let me take the opportunity to commend his work in developing youth parliaments and other approaches to the teaching of citizenship. Schools councils have a great deal to offer. Although we have no intention of making them a requirement in the curriculum, they have assisted children from a young age to address precisely the issues that my hon. Friend the Member for Exeter (Mr. Bradshaw) and the hon. Gentleman have raised.
    Mrs. Anne Campbell: With the welcome use of referendums by the Government, will the Minister take heed of the importance of sixth formers and those reaching the end of their school careers being adequately informed about the issues on which they may have to vote? I refer in particular to entry into the single European currency and the Jenkins commission report on electoral reform.
    Mr. Clarke: I am grateful to my hon. Friend for that question. Referendums on issues such as she has raised are an important constitutional development that requires citizens to be as fully informed as possible of the implications of decisions that they are being asked to take, which include important decisions about economic and monetary union, proportional representation and electoral reform, and the issues on which there have already been votes in Scotland, Wales and London. That is one reason why developing within the curriculum the idea of strong citizenship will help to produce a more informed democracy and better quality decisions.
    Mr. David Willetts: Is not citizenship just one of a range of new curriculum topics that Ministers want to impose on schools? When will they stop? There are a host of them, including "values" and "environmental awareness". When will the Government stop their remorseless flow of instructions and directives to teachers and schools—what the Secretary of State has just called partnership? Does not the Minister understand that the 322 communications sent from his Department to schools and LEAs last year represent an impossible burden which is distracting teachers from delivering the national curriculum and raising standards in schools?
    Mr. Clarke: I am interested in the hon. Gentleman's comments on citizenship. The reform and review of the national curriculum is exceptionally important to ensure that it best reflects current needs. As the hon. Gentleman

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    said, the curriculum includes citizenship, sustainable development and personal, social and health education, because it is important that those issues be addressed. However, we are not imposing anything; we are undertaking a review and taking advice from a wide range of people.
    I can only return to what I said earlier: some senior Conservative politicians acknowledge the need to examine the issues properly and would be rather shocked by the cavalier way in which the Opposition today simply dismiss their considerations.
    Helen Jackson: Is it not irresponsible of the shadow Minister to suggest that Parliament should have no interest in what happens in schools apart from teachers' pay and similar issues? Does my hon. Friend recognise the role that his Department can play together with right hon. and hon. Members so that when we examine new ways of conducting our business to ensure democracy in the Chamber, in Committee and in local government, the issues are better understood in schools and colleges of further and higher education?
    Will my hon. Friend help those of us on the Modernisation Committee to look at new ways of strengthening the interface between the younger generation and the democracy of which we are proud to be members in this House?
    Mr. Clarke: I strongly support what my hon. Friend has said. I was fortunate enough to see the parliamentary website—which has been developed by the education unit of this House—at the British educational technology exhibition at Olympia yesterday, and that does precisely what my hon. Friend mentioned. I played around with the site, and saw how it was presented and working. All those in this House who are developing such education, so that young people can understand the nature of our democracy, deserve credit and thanks, and I pay tribute to those working on such projects.

    New Deal (Young People)
    Mr. Simon Hughes: How many Londoners benefited from the new deal for young people during 1998. [64040]
    The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith): Latest figures to the end of November show that over 28,000 18 to 24-year-olds have benefited from the new deal in London.
    Mr. Hughes: Those figures do not reveal that the outcome in London has been relatively poor. Given that Glasgow, the worst area in Scotland in terms of the new deal, is better than half of London; given that Liverpool has had a better outcome than two thirds of London; and given that the worst area in Wales in terms of jobs from the new deal has had a better outcome than all but three of the 20 areas in London, what will the Minister do to make sure that London as a whole has a much better success rate and, in particular, that my borough of Southwark—which is bottom of the league table—has a better success rate than less than 10 per cent. of those who
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    go into the new deal coming out with jobs? In Southwark, the general view is that it has been a lot of money for very little product.
    Mr. Smith: There would have been no product at all if the hon. Gentleman had had his way, because there would have been no new deal. He should not talk down the achievements of the new deal in London, which has placed 5,000 young people in jobs, 2,500 in full-time education and training and another 800 in the environmental task force and voluntary sector programmes. The hon. Gentleman should remember that London has 14 of the 22 most deprived local authority districts in the country, and that is why young people there particularly need the help that the new deal provides.
    We have set up a business coalition for London, which is mobilising London businesses to help youngsters in the most deprived parts of the city. A continuous improvement strategy—focusing on job placement, job retention, qualifications gained and the satisfaction of young people and businesses with the new deal programme—will focus especially on what else can be done to improve the performance in London. The hon. Gentleman should not sell that down the river.
    Kali Mountford: I am glad to hear the figures that my right hon. Friend has just given—particularly the fact that 5,000 young Londoners have found jobs as a result of the new deal. That is a price worth paying, and it reflects the fact that 52,000 other youngsters have found work through the new deal. Given that important fact—and knowing that social deprivation often comes from unemployment—does the Minister understand why the Conservative party is opposed to the new deal and that great success? If he does understand it, can he explain it to me, because I certainly do not?
    Mr. Smith: It is incomprehensible. The Conservative party opposed the new deal at the general election—the Liberal Democrats opposed the means of funding it—and all they can do is repeat their catastrophic failure in terms of youth unemployment, and unemployment in general in this country, which left a whole generation neglected and its needs ignored. The new deal is bringing the help that we promised at the general election, and to have 52,500 young people in work only seven months into a new programme is a major achievement of which we are proud.
    Mr. John Bercow: Will the Minister confirm that the average cost per job of the new deal programme in London is £11,000, by comparison with £443 for a job obtained from a job club and £282 per job through the restart programme? Given that, only this week, we have witnessed among young Londoners between 18 and 24 a substantial increase in the number of those who have been unemployed for between six and 12 months, why does not the right hon. Gentleman cease to be so wet behind the ears and admit that the programme has been a colossal and expensive failure?
    Mr. Smith: The figures quoted by the hon. Gentleman are a grotesque fabrication by his hon. Friends on the Opposition Front Bench. The true average cost of securing jobs through the new deal is about £1,000, and very good value that represents. It is money well spent, bringing

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    hope and opportunity to young people who would be denied them by the hon. Gentleman and his hon. Friends. As for the labour force survey statistics, they show that over 14,000 more young people in that age group have gained employment since the new deal started.

    Youth Service
    Mr. Phil Hope: If he will outline his plans for the youth service. [64041]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. George Mudie): The Government see the youth service not only as carrying out its traditional tasks, but as constituting a vital partner in our vision of ending social exclusion and widening participation. A paper on the future of the youth service is in preparation, and will be available for consultation soon.
    Mr. Hope: I thank my hon. Friend for his reply. The paper is eagerly awaited throughout the country.
    Is my hon. Friend aware that youth workers in Corby play an important and effective role in working in the community with the young people who experience the greatest problems—young people with problems related to drug abuse, young people who are perpetrators and victims of crime and young people who have left school with no qualifications? The youth service plays a critical role in helping those young people to return to the community. Will my hon. Friend devote all his energies and ability to giving the service new purpose and new leadership, so that it continues to be open to all young people and can target its resources and expertise on those who are most disadvantaged and most alienated from their communities?
    Mr. Mudie: I thank my hon. Friend for what he has said, and congratulate the youth workers in Corby. As the House knows, last year we conducted and published the first national audit of youth service work. The details varied: some authorities spent just under £300 per youngster in their areas, but the amount fell as low as under £20.
    I urge local authorities and those responsible for the youth service to see ending social exclusion, widening participation and returning youngsters to either education or work as a vital part of their job. They need not necessarily wait for the consultation paper, or for anything else to happen; they should get on with the job of refocusing and helping youngsters.
    Mr. Donald Gorrie: One obstacle in the way of the youth service in my part of the country is the Government's delay in producing national guidelines or an approved scheme to deal with the registration of youth workers and youth organisations, as proposed by Lord Cullen after his inquiry into the disastrous events in Dunblane. Can the Minister give us any idea of when the Government might introduce either United Kingdom or separate English and Scottish arrangements enabling local authorities to work together to produce an approved scheme that will allow more youth workers to be properly vetted?
    Mr. Mudie: Vetting is a problem. I hear many requests from the youth service for statutory provision, but I am at pains to tell youth service workers and authorities—including local authorities—not to wait for legislation. They know the task that the Government have placed at the top of the agenda: ending social exclusion, an aim that is shared throughout the House. I urge local authorities, notwithstanding their wish for statutory backing, to get on with the job even before the publication of the consultation paper.
    Given a record revenue support grant settlement and a very good standard spending assessment for education, there is little excuse for any local authority not to take the youth service seriously. I find it strange that local authorities and others who say that they approve of participation are not strengthening and refocusing their youth services.

    Disabled People
    Mr. Tom Levitt: What measures he is taking to promote the retention of people in employment when they become disabled. [64042]
    The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): My hon. Friend has drawn attention to an important aspect of our drive to help people with disabilities into the labour market. Clearly, it makes good sense to offer early help to people who, through disability, risk losing their job. The Employment Service already helps some 5,000 disabled people a year to retain their jobs and the new deal for disabled people will explore what further employment and training support is needed.
    As part of the £30 million package of extra help that we announced in October, we are increasing the amount of help that is provided through access to work by £12 million over the next three years. I am also working with colleagues in other Departments and with the voluntary sector to ensure that all our policies work in tandem to help disabled people to remain in work.
    Mr. Levitt: My hon. Friend is clearly aware that to assist a disabled person to stay in work enhances not only their dignity and income, but their productivity, and prevents them from what could be a lifetime on the dole. It must be frustrating for an employee in middle age to lose their job because of reduced dexterity and mobility or increased sensory impairment. I welcome the measures that my hon. Friend has described.
    Will my hon. Friend assure the House that not only now through the agencies of the Employment Service, but in future through the Disability Rights Commission, the retention of disabled people in their current employment will be promoted wherever possible?
    Ms Hodge: I am delighted to be able to reassure my hon. Friend on that point. I would particularly like to thank him for all his work in supporting civil rights for disabled people. Clearly, it makes good sense to try to keep people in their jobs, rather than to force them on to benefits and then to try to bring them back into the labour market, so that will be the thrust of all our policies.
    Mr. Michael Jack: While I welcome what the Minister says, is she aware of the considerable difficulties experienced by the children who come out of a school such as the Pear Tree school in my constituency—which deals with children who have severe learning difficulties—in gaining a place in the employment sector in the first place? Will she undertake to study the matter and to look at the problems that are being encountered by the school in connection with further education, social services and the Employment Service? As a first step, will she to speak to the school's head mistress, Mrs. Jean Cooke, about her first-hand experience in that difficult area?
    Ms Hodge: I give the reassurance that, if the right hon. Gentleman writes to me, I will look into the particular circumstances of the children who leave that school. I know that he has raised the matter previously with my hon. Friend the Minister for School Standards in relation to the Green Paper on special educational needs. Clearly, it is important that young children with learning disabilities should be given opportunities in the labour market. Part of the new deal and our policies to open access to further education are geared towards ensuring that those opportunities exist.
    Mr. Peter L. Pike: Will my hon. Friend give an assurance that Remploy factories, which have a tremendous history of employing disabled peopled, have an important part to play, in addition to all the other measures that the Government are announcing?
    Ms Hodge: I can give my hon. Friend the assurance that Remploy will have a crucial role over the coming period in ensuring that we provide employment opportunities for people with disabilities. We want not only to provide opportunities in its factories, but to ensure that we can progress people through the factory into open employment, so that we can start to deal with the discrimination that people have experienced in the labour market over many years.
    Rev. Martin Smyth: I welcome the steps that have been taken, but sometimes it is difficult to get what might be available through to people who require that help. Is the onus on the individual, or are the social security officers being trained to give guidance to those with disabilities as to the benefits and aids that might be available?
    Ms Hodge: I am working with my colleagues in the Department of Social Security to ensure that we get a joined up Government approach to ensuring employment opportunities for disabled people. I am also working with colleagues in the Department of Health, so that we can get that liaison going. We have special advisers in the Employment Service focusing on the employment needs of disabled people.
    As well as educating those who work with disabled people in the public services, we hope to mount an information and education campaign among employers so that they can take advantage of the abilities that disabled people can offer in the workplace. The campaign will also encourage employers to open up job opportunities in their businesses to more disabled people.

    New Deal
    Mr. Dennis Skinner: What new measures he plans to introduce to expand opportunities under the new deal; and if he will make a statement. [64043]
    The Secretary of State for Education and Employment (Mr. David Blunkett): So far, 201,000 young people have entered the new deal programme and 52,500 have gone into work. In addition, we have introduced a new range of initiatives that includes the skills shortage pilot programme. Employers are able to access three quarters of the total amount available in subsidy if they are prepared to provide up-front, concentrated skills training. Also, 100,000 young people will benefit from the new mentoring programme, and the 28 new deal pilot programmes will help 90,000 people aged over 25.
    All those measures mean that we can contribute to the phenomenal change that has taken place in the labour market. They also put into a reasonable context the opinions of the pundits about this week's figures for the number of people going into work and for the unemployment rate.
    Mr. Skinner: Can I suggest another idea to my right hon. Friend? He, like many Labour Members, will be aware that the local authority is often the largest employer in areas of high unemployment, so why not make more use of those authorities to implement the new deal? Unemployment is excessively high in some of the old colliery areas. Under the new deal scheme, new training centres could be established and run in co-operation with those local authorities. That would ensure that, in future, there would be people to mend the roads, repair the schools and so on. That would be a useful approach, and I hope that my right hon. Friend will take it on board.
    Mr. Blunkett: My hon. Friend is right. In replacing the old skill centres, we must look imaginatively at how the national traineeships that we are developing this year and the modern apprenticeship programme can directly impact on the skills that young people need to get into work. I am happy to assure my hon. Friend that my Department will study the way in which the national traineeships and the Employment Service new deal can be linked to build on the success that we have achieved in the task that we face.
    Since the Government came to office, we have halved the number of young people under 25 out of work, compared with the total that we inherited from the Conservatives. That total was 178,000, and is now down to 88,000. I am sure that Conservative Members, even without our new numeracy programme, can do the sums necessary to see that the total has been cut by 50 per cent. We will be able to do even more if young people acquire the skills and training that my hon. Friend advocates.
    Mr. Paul Keetch: Does not the Secretary of State agree that, given the enormous resources that have gone into the new deal programme, it is important that the House can be sure that the scheme is working as well as the Government want it to? Does he recall that page 12 of the Government's specification for the new deal programme for young people aged between 18 and

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    24, tells potential contractors that at least 45 per cent. of people on options would move into subsidised employment? So far, that figure has totalled only 25 per cent. Does not that show that the new deal programme is not working as well as the Government hoped?
    Mr. Blunkett: I am sure that that forecast was contained in paragraph 3 of page 12. However, I think that the hon. Gentleman has missed the crucial point, which is that the key to ensuring that the value-for-money precepts built into the new deal programme are achieved is that the programme has a target for unsubsidised employment. The gateway proposals on providing advice, counselling and social skills have enabled that target to be achieved and, in fact, exceeded. The latest figures show that we reduced the claimant count for that particular group by 5,000 in December alone.
    Mr. Andrew Reed: While I warmly welcome the fantastic news about the number of young people who are now in employment, does my right hon. Friend agree that it is crucial to bring on line as quickly as possible assistance for those over 25 and, in particular, for people in their 40s who find themselves unemployed? We must accept that manufacturing jobs are being lost. For example, at Ladybird Books in my constituency 200 people will lose their jobs and, as they have been working on machines that are more than 30 years old, it will be extremely difficult for them to find work. Can we ensure that assistance is given to them as quickly as possible, so that they do not have to wait to become long-term unemployed before they get help from the new deal?
    Mr. Blunkett: I agree entirely that we need to be able to do that and I look forward to being able to expand on the pilot programmes that I mentioned, which will help 90,000 such individuals. It is a case not simply of the new deal, but of the whole programme from the Employment Service and the Department for Education and Employment, including the rapid response unit, which is moving in quickly where redundancies are declared, and working with the training and enterprise councils, employers and trade unions to ensure that we can immediately move those people into other opportunities for retraining or directly into jobs. Bearing in mind the fact that we face a challenge this winter, the success of that programme was exemplified in yesterday's figures.
    Mr. Damian Green: The Secretary of State's claims for the new deal bear close scrutiny. In November, the Government said that they would spend £660 million in the coming financial year on the new deal. In December, the Minister for Employment, Welfare to Work and Equal Opportunities claimed for the first time, as he repeated this morning, that each new deal job cost £1,000. With the benefit of the numeracy programme, the Secretary of State should be able to work out that that means that there will be 660,000 long-term unemployed young people later this year. Either the Chancellor's economic policy is even more disastrous than I thought, or that £1,000 figure is complete nonsense. Which is it?
    Mr. Blunkett: I was genuinely expecting more of an Oxford graduate.
    Mr. Green: Answer the question.
    Mr. Blunkett: I am about to do so. The calculations are sensible and take into account the fact that when
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    someone gets a job he or she pays back into the Exchequer in tax and national insurance and thus contributes directly rather than drawing benefits. [Interruption.] It is no good hon. Members saying, "Ah!". Every time someone draws a benefit, he or she costs the state money. Every time someone pays tax and national insurance, it helps us to invest in stopping people being dependent on the state. New Labour stands for independence, dignity and self-reliance.
    Ms Sally Keeble: Will my right hon. Friend join me to pay tribute to the staff of the Employment Service in Northampton, who have been taking new deal road shows round shopping centres, especially in places with a large number of single parents? They have done so jointly with staff from the Benefits Agency and have provided good advice and opportunities to single parents under the new deal programme. Will he ensure that such schemes are extended to other areas because they are an exercise in joined-up government, they provide real opportunities to lone parents and they also ensure that staff in Government agencies are encouraged to show initiative and imagination in the way in which they develop such programmes?
    Mr. Blunkett: I certainly agree with my hon. Friend and I congratulate those staff in Northampton who have developed that programme and worked together to make it successful. The child care initiative and the forthcoming working families tax credit, together with the announcement that the Secretary of State for Social Security and I made yesterday, which builds on the enormous amount of work that my right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities has done to draw up the gateway proposals, with advice, support, counselling and rehabilitation, will all contribute to making success a reality throughout the country.

    Left-handed Children
    Mr. Peter Luff: What assessment he has made of the educational and training value of the video, "Left-Handed Children; A Guide for Teachers and Parents", produced in consultation with his Department and the Teacher Training Agency; and if he will make a statement. [64044]
    The Minister for School Standards (Ms Estelle Morris): The video can play a part in raising teachers' awareness of the particular issues surrounding left-handed children. I hope that it will be of use both for the initial training and the continuing professional development of teachers.
    Mr. Luff: I thank the Minister for another constructive answer on this important but previously overlooked problem. I am glad that she agrees that the video produced by Mark Stewart and the Left-Handers Club of Great Britain and generously sponsored by the Post Office can play a part in improving teachers' awareness of this important issue. I am sure that she welcomes the fact that the Teacher Training Agency is sending the video to all providers of initial teacher training. What can be done to

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    ensure that teachers in nursery, first and primary schools are made aware of its existence and get a copy, and ensure that teachers and governors sit down and watch it?
    Ms Morris: The hon. Gentleman is right that much progress has been made in acknowledging that the left-handedness of children is a factor in the educational development of some of them. I am pleased that he welcomes the fact that the Teacher Training Agency has agreed to fund distribution of the video to initial teacher training providers. Beyond that, it is for others to make it clear that the video is available. Ultimately, the allocation of resources for purchasing videos and other things is up to head teachers and governing bodies.
    Mr. Michael J. Foster: Will the Minister join me in congratulating Mr. Richard Buttle, the head teacher of Redhill primary school, his staff and the children, who took part in making the video? Does she agree that this exemplifies the high standards of teaching in that school and in Worcestershire as a whole?
    Ms Morris: I am happy to do so and to confirm that the Teacher Training Agency has informed me that the video is of good quality. I extend my congratulations and thanks to all involved.

    ILO Conventions
    Mr. Andrew Mackinlay: If he will review the UK's contribution to the implementing of International Labour Organisation conventions; and if he will make a statement. [64046]
    The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith): We have been reviewing the conventions as yet unratified by the United Kingdom. I hope to be able to make an announcement shortly.
    Mr. Mackinlay: I thank the Minister. May I remind him that there is a long list of unratified or unimplemented ILO conventions? I welcome what I think that he said about publishing the comments of the Government in respect of them all. Will he address with urgency the ratification of conventions 111 and 138, which relate to discrimination in employment and combating the exploitation of child labour? They are important and their non-ratification is causing us some embarrassment, especially in respect of the latter. Will he consider convention 137 on dock workers? Can we have early re-ratification of convention 26 on the minimum wage?
    Mr. Smith: I share my hon. Friend's concern about the importance of those conventions and the desirability of the United Kingdom being able to ratify them. We took a leading role in securing the adoption of the declaration on fundamental principles and rights at work at the ILO convention in Geneva last June. The steps that we have set out in "Fairness at Work", along with introducing the minimum wage and signing up to the social chapter are significant strides forward for workers' rights and representation in this country. I hope to reach agreement shortly on signing up to convention 111 and also to convention 138 on the minimum age in respect of child
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    labour. We have been working closely with other bodies in this country and internationally to stamp out the grotesque abuses of child labour.

    Lower Class Sizes
    Mr. Ian Bruce: What representations he has received from school governing bodies with infant and junior classes about the effect of lower class sizes for five, six and seven-year-olds on future classes for eight, nine and 10-year-olds. [64047]
    The Minister for School Standards (Ms Estelle Morris): Some governing bodies have sought clarification of the implications of the policy for junior classes. We have made it clear in our guidance to local education authorities that lower class sizes for infant pupils must not be achieved at the expense of junior pupils. We are providing £620 million for the pledge to be met fully and to ensure that resources are not diverted from other phases of education.
    Mr. Bruce: St. John's school, Weymouth, wrote to me about a point on which I wrote to the Minister and on which she has replied to me. The school now has classes of 30 where previously it had had higher numbers. That means that the school's funding for the later years relies upon having larger classes to ensure that it gets the same funding. The school is concerned that bringing in lower class sizes will undermine its viability. It simply asks the Government to address the issue. This is important to a county such as Dorset, which is at the bottom of the standard spending assessment league table—the money that the Government say that it is allowed to spend. It already spends well above SSA in schools. The Government need to consider this important point because school governors are worried about the future of their school.
    Ms Morris: I am delighted to tell the hon. Gentleman that schools now do not have to have huge class sizes in order to get extra money, as they had to do when his party was in power. It is clear that the school to which he refers and many others in his constituency and local authority will have money to reduce infant class sizes and will receive a share not only of the extra £19 billion that will be put into education over the next three years but, I suspect, of the 20,000 extra teaching assistants that will be funded through the standards fund. I know that the hon. Gentleman omitted to say, because of lack of time, that he very much welcomed the £0.5 million extra money that his area received to reduce class sizes last September and the reduction by more than 1,000 of five, six and seven-year-olds in Dorset now in classes of over 30.
    Miss Melanie Johnson: Will my hon. Friend develop further her comment about the 20,000 extra classroom assistants and their contribution, together with lower class sizes, to improving standards in our schools? How does she expect them to contribute to making teachers even more able to do the job that they are there to do?
    Ms Morris: The extra 20,000 classroom assistants are one of the most important policies in the Green Paper on the reform of the teaching profession. For too long they

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    have been an ignored group of people. They contribute a great deal to standards in schools and among individuals. I am delighted that for the first time they can be assured of proper training and a proper place in the education of our children. I pay tribute to the good work that they have done and that they will do when there are more of them under this Government.
    Mr. David Willetts: Does the Minister accept that a survey by another group of our friends in education, the National Association of Head Teachers—[Interruption.] They are all on our side now because they recognise the consequences of the rigid implementation of the Government's pledge on class sizes. The association shows in its survey that there are more larger classes in junior schools for eight, nine and 10-year-olds as a direct consequence of the rigid implementation of the pledge. Does the Minister not understand that schools also have more mixed-year classes and, despite what she said a moment ago, that there is still per capita funding for schools? Schools are having to turn away children whom they would have been happy to educate and they are losing funding as a result. Does the Minister not understand that that is a consequence of the rigid implementation of the pledge?
    Ms Morris: I have never heard so much twaddle in my life. How on earth can the hon. Gentleman quote a figure in a survey and claim that there are more junior school children in large classes as a consequence of the infant school policy when the children educated in smaller classes cannot possibly have reached the ages to which he referred? That is absolute nonsense. The policy has not yet been enacted in full, but it will be in two years' time. The hon. Gentleman cannot have it both ways. He cannot change his mind since the general election and now claim that class size matters while he objects to every penny that we put in and every action that we take to deliver our pledge to parents and pupils. His local authority received £1 million of capital funding to reduce class sizes last September. It has gained from our policy. He and every
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    other Member of Parliament will see five, six and seven-year-olds in classes of no more than 30 and junior school pupils benefiting from the extra resources put into education as a whole.

    Reception Classes
    Mr. A. J. Beith: What estimate his Department has made of the number of four-year-olds in reception classes; and if he will make a statement. [64048]
    The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): In January 1998, 350,959 four-year-olds were in maintained reception classes in England.
    Mr. Beith: Is the Minister aware that in rural Northumberland, where successive local government settlements have left schools desperately underfunded, schools feel under pressure to take in four-year-olds to maintain their position at the expense of the viability of play groups? As there are so many four-year-olds, will there be a curriculum for them along the lines of the foundation key stage about which the Minister spoke before Christmas? Or shall we finish up with four-year-olds in sets, as recommended by the chief inspector?
    Ms Hodge: What matters is not so much the setting in which a child receives that pre-school experience, but the nature of the experience itself and we are focusing on that. That is why we have asked the Qualifications and Curriculum Authority for proposals to review the desirable learning outcomes. Like the right hon. Gentleman, we recognise that what count are skills in listening, speaking and working together, in persistence and co-operation. We shall pursue that agenda and there is no question at all, in anything that has been said, relating to setting.

Business of the House
12.30 pm
Sir George Young: Will the Leader of the House tell us the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows.
MONDAY 18 JANUARY—Opposition Day [3rd Allotted Day]
Until about 7 o'clock, there will be a debate entitled "Rationing in the NHS", followed by a debate entitled "Pensioners and Dividend Tax Credits". Both debates will arise on Opposition motions.
TUESDAY 19 JANUARY—Consideration in Committee of the Greater London Authority Bill.
WEDNESDAY 20 JANUARY—Until 2 o'clock, there will be debates on a motion for the Adjournment of the House.
Conclusion of consideration in Committee of the whole House of the Greater London Authority Bill.
THURSDAY 21 JANUARY—Remaining stages of the Road Traffic (NHS Charges) Bill.
Second Reading of the Scottish Enterprise Bill.
FRIDAY 22 JANUARY—The House will not be sitting.
The provisional business for the following week will be as follows:
MONDAY 25 JANUARY—Second Reading of the Sexual Offences (Amendment) Bill.
TUESDAY 26 JANUARY—Opposition Day [4th Allotted Day].

There will be a debate on an Opposition motion, subject to be announced.
WEDNESDAY 27 JANUARY—Until 2 O'clock there will be debates on the motion for the Adjournment of the House.
Second Reading of the Tax Credits Bill.
THURSDAY 28 JANUARY—Motions on the Social Security Benefits Up-Rating Order, The Social Security (Contributions) (Re-Rating and National Insurance Fund Payments) Order and The Guaranteed Minimum Pensions Increase Order.
FRIDAY 29 JANUARY—The House will not be sitting.
Sir George Young: As we meet today for the first time on a Thursday morning, as an experiment, can the House be assured that the new arrangements will be monitored by the Modernisation Committee, to help us to decide whether the experiment should be made permanent? Part of the Government's modernisation package was a constituency week in February. Will the Leader of the House tell us what has happened to that?
On House of Lords reform, can the Leader of the House confirm press speculation that the Bill will be published next week; will the White Paper be available in good time for the Second Reading debate; and will there be a statement to the House on the setting up of any royal commission on the constitution? Finally in relation to the House of Lords, I have asked on many occasions whether all the stages of the constitutional Bill could be taken on
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the Floor of the House. I have had no satisfaction, and the time has come for the Leader of the House to give a clear assurance that that convention will be respected.
On the Sexual Offences (Amendment) Bill, will the Leader of the House confirm that the key issues of conscience on the age of consent will be taken on the Floor of the House, and on a free vote?
Finally, may we have a debate in Government time on benefit fraud, to clarify the confusion that has arisen from certain assurances about resources given by Ministers on Monday which have been challenged both by local authorities and by Benefits Agency investigators?
Mrs. Beckett: I can confirm that it was quite explicit that the experiment—of which the first day is today—was indeed an experiment. The monitoring will be a matter for the Modernisation Committee, but in relation to conclusions, I should like to point out delicately to the right hon. Gentleman that, as we are only hours into the first day, it is a little early to worry about conclusions, although the House will rightly want to consider how we proceed on the matter.
The right hon. Gentleman also asked—I did not quite catch his question as someone was murmuring in my ear—about a potential non-sitting week in February. I remind him that I said during our debate about the experiment that I was not able to give an assurance that it would be possible to find time in the present Session. The Government are mindful of hon. Members' wishes to have a clear picture of the path of Government business and debates and consideration in the House in the months ahead, and to receive notice of when decisions may be made. However, the right hon. Gentleman will appreciate that the Government face a great deal of heavy business at present and that this part of the Session has barely begun. I cannot, therefore, at present confirm that we will feel able to put aside time in this Session, although we shall obviously keep the situation under review.
The right hon. Gentleman asked about the handling of legislation to reform the House of Lords. The Government hope to publish the Bill and the White Paper next week—so, yes, we intend to provide proper time for hon. Members to study both the White Paper and the Bill. As the right hon. Gentleman said, he has raised previously the issue of whether all the Bill's proceedings should be taken on the Floor of the House. I have said before that the Government intend to respect normal conventions and that the matter will be discussed through the usual channels. That remains our position. The right hon. Gentleman need not feel the unease that he expresses.
The right hon. Gentleman also referred to the Sexual Offences (Amendment) Bill. That matter can be discussed through the usual channels, but the Government at least intend to recognise the fact that it is in some ways a matter of conscience. I anticipate that that recognition will underlie our decision, but we shall discuss the matter through the usual channels.
Finally, the right hon. Gentleman asked me to find time for a debate on benefit fraud, consequent on earlier exchanges. I. am not immediately familiar, with those exchanges, but I shall undertake to draw the right hon. Gentleman's observations to the attention of the relevant Ministers. I cannot, however, undertake to find time for that debate in the near future.
Mr. Tam Dalyell: As chairman of the all-party Latin America group, I wish to know whether there will be a statement next week—possibly froni a Treasury Minister—about the implications of the bank crisis in Brazil. Furthermore, will there be a statement before my Adjournment debate on Monday 25 January about the French proposals in relation to Iraq and the lifting of sanctions? Will my right hon. Friend and her colleagues look favourably at my ten-minute Bill, the Military Action Against Iraq (Parliamentary Approval) Bill, which asks simply that there be a formal vote in the House of Commons regarding any further bombing of Iraq and that any such action be supported by a two-thirds majority?
Mrs. Beckett: I recognise the concern that my hon. Friend has expressed about events in Brazil and I understand his wish for that issue to be raised with Treasury Ministers should matters develop in a damaging direction. I understand that my right and hon. Friends, together with others in the international community, are doing all that they can to ensure that there is no crisis in Brazil of the kind that might lead to demands for a statement. My hon. Friend will have seen that my hon. Friend the Financial Secretary to the Treasury is on the Front Bench, and she will certainly bring his views to the attention of my right hon. Friend the Chancellor.
My hon. Friend asked also for a debate about the French proposals regarding sanctions. That matter is being considered internationally and my right hon. Friend the Foreign Secretary has discussed it with the French Foreign Minister. We are looking carefully at those proposals, although I am sure that my hon. Friend appreciates that they raise other difficult issues. It is not clear that we shall be able to make a statement on those matters before my hon. Friend seeks to raise them again.
My hon. Friend also asked about his ten-minute Bill. I take his point on that, but the Government strove to keep the House as fully informed as we possibly could about how matters were handled, and we continue to do so. I am sure that my hon. Friend, like all Members, while wanting the Government to keep the House fully abreast of events, would not want us to do so in a way that would jeopardise our armed forces.
Mr. Paul Tyler: First, when does the Leader of the House expect the Government to make proposals for the implementation of the recommendations of the Neill committee on the funding of political parties? What arrangements will be made for the House to be kept informed and to have an opportunity to debate those proposals?
Secondly, will the right hon. Lady arrange for the Foreign Secretary to make a statement next week on the serious breakdown of confidence between the European Parliament and the European Commission, which touches the interests of the country and the House? She will have noted that the Liberal Democrat Members of the European Parliament and their group are the only people to resist the Commission's attempts to blackmail the Parliament into submission and that the Socialist and Conservative groups are now split and have been bought off.
Mr. Iain Duncan Smith: The Liberal Democrat group is not big enough to split.
Mr. Tyler: It is bigger than the hon. Gentleman perhaps realises. Can we have an urgent statement that includes Government proposals for improving accountability in the European Union?
Thirdly, the Leader of the House may recollect that in July I asked her predecessor about proposals to charge our constituents and others who visit the House during the summer recess. I raised that issue again in a debate on 16 December, and there is now early-day motion 145.
[That this House is opposed to the introduction of charges for the admission of visitors to the Palace of Westminster.]
I understand that the other place has decided that it would be inappropriate to restrict by the considerable charge of £6 or £7 our constituents' access to Parliament. Will the Leader of the House urgently consider the issue and give the House an opportunity to debate it before any decision is made?
Mrs. Beckett: I am not in a position to tell the hon. Gentleman how speedily the matters on the Neill report will proceed. I shall find out whether it is possible to tell him and, if necessary, write to him and copy my reply to other hon. Members.
The hon. Gentleman referred to events in the European Parliament. He made a passing comment of enlightenment to a Conservative Member, and he is correct to say that the European Parliament group to which the Liberal Democrats belong is large. However, I utterly reject, as most other hon. Members will, his suggestion that only the Liberal Democrat MEPs and their group are concerned about the management of affairs in Europe or about fraud. The Christian Democrat group and the Socialist group have made it plain that there is a need for strong measures to improve the financial management of resources in the European Union, which, along with the need for close scrutiny, I understand to be the burden of the resolution that has been carried.
With regard to the hon. Gentleman's remarks about the significance of the Liberal Democrats' group being the only one to vote, I presume, for the dismissal of the Commission, that suggests that it is the only group in the European Parliament irresponsible enough to have done so. He ought to bear that in mind.
I cannot read my notes. The hon. Gentleman referred to Government accountability on another issue. Will he refresh my memory as to what it was?
Mr. Tyler: Charging.
Mrs. Beckett: Fine. That is a genuinely difficult issue because every hon. Member would be concerned at the notion that access to the House would not be free to our constituents. However, the request that was made and is being considered by the relevant House Committees—it has not yet reached the House of Commons Commission—related to the building being open during the recess when it is anticipated that large groups may wish to tour. Obviously, this brings costs to both Houses, and I think that the Accommodation and Works Committee was striving to balance the costs incurred in

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opening the building more fully to visitors with the question of access. It is a difficult issue, which I understand will arouse great sensitivities in this House as in another place. The proposal has not yet come before the Commission. No decision has yet been taken, but I have taken note of views already expressed to me from all parts of the House.
Mr. David Winnick: I am wholly opposed to charges in any circumstances.
Is my right hon. Friend aware of the deep concern about the fact that while we are waiting for the outcome of the inquiry into the circumstances of Stephen Lawrence's death and what occurred afterwards, the one police officer who was to have faced disciplinary charges is taking early retirement? Does she not think that we should have a statement? Is my right hon. Friend further aware of the deep distress felt first and foremost by Stephen Lawrence's parents and of the general feeling that the police officers who acted wholly inappropriately are escaping any form of disciplinary hearing? What has happened in this case—the previous Government refused to take any action, but the present Home Secretary of course set up the inquiry in this Parliament—remains a cause of great and continuing concern.
Mrs. Beckett: First, I thank my hon. Friend for reinforcing so promptly my remarks to the effect that there is clearly concern among all parties about charging for entry to Parliament.
Secondly, of course, the whole House understands and sympathises with the sense of frustration felt by the Lawrence family about the long-term effects of the way in which the tragic attack on Stephen Lawrence was handled. My right hon. Friend the Home Secretary will be considering the matter in the light of Sir William Macpherson' s report. I know that my hon. Friend will be looking for opportunities to raise this matter in a variety of ways and at some length, and Home Office questions are to be held on Monday.
Mr. Peter Brooke: When the Leader of the House constructively answered my question on 3 December about the procedural consequences of devolution, she made no reference to her own memorandum dated 24 November. Although the Government have now postponed the first operational date for the Northern Ireland Assembly from 1 February to 11 March, time remains extremely short. Will she confirm that the memorandum went to the Procedure Committee in late November and was not delayed until the middle of December, which is when it first became known to the House at large?
Mrs: Beckett: Frankly, I have to tell the right hon. Gentleman that I cannot quite remember when the memorandum went to the Procedure Committee, but it was certainly some time ago. I did not refer to it when he raised the matter with me because it was in the hands of the Committee; and I understand that it has now been put more fully into the public domain. I am sorry, as I know the Committee will be, if the right hon. Gentleman feels that it has held things up. I cannot quite remember when
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the memorandum was passed to the Committee—time flies—but if I have anything to add, I shall write to the right hon. Gentleman.
Mr. Eric Illsley: Will my right hon. Friend arrange an early debate on millennium compliance, as the millennium is now fast approaching and in view of the fears expressed by TaskForce 2000 that some systems will simply not be ready in time? May we have an early debate so that we can identify any problems that remain?
Mrs. Beckett: I cannot promise my hon. Friend such a debate in the near future. However, it is not only TaskForce 2000 which has been dealing with such matters—it operated under the previous Government—as a range of organisations, including Action 2000, is now doing the same and is continually seeking to ensure that as many people as possible, especially those involved in small and medium-sized businesses, begin to tackle the problem. It would be quite a task to try to identify all the areas that might not be completely ready. I do not think that anyone in any organisation anywhere in the world will be able to say with absolute confidence that he is wholly ready. As this matter is studied more fully and in greater depth, the dimensions of the potential sources of difficulty unwind and the greater the problem seems to be.
It would be for the good of all, nationally and internationally, if everyone in public life raised these matters with their local authority, with small businesses in their constituencies and with all those with whom they come into contact. The first step is to prioritise the action that needs to be taken, to take as much of that action as possible, and for people to make contingency plans for unforeseen developments.
Sir David Madel: As a former Minister in the Department of Education and Science, the right hon. Lady has always taken an interest in the education service. She will know of the excellent work of the Office for Standards in Education in strengthening and supporting the teaching profession. However, Ministers in the Department for Education and Employment seem silent on this matter. Could we have a clear statement next week? Do the Government and the DFEE support Ofsted and the chief inspector in their valuable work?
Mrs. Beckett: Frankly, I am a little surprised by the hon. Gentleman's question, especially as we have just had education questions. The Government work with Ofsted. We want everything possible to be done to raise standards. That is the task of Ofsted, and in that sense we work well together.
Mr. Jim Cousins: Has the Leader of the House seen the press reports that suggest that the Government are considering the introduction of regional Committees? Will she comment on that? Twice last year, I asked my right hon. Friend's predecessor to recall the Standing Committee on Regional Affairs, which, although it has not met since 1978, could be recalled tomorrow. At its first meeting, it could discuss the economic opportunities facing north-east England.
Mrs. Beckett: We are very keen to recognise the need to take account of the regional dimension in England. We

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are conscious of the view held by many hon. Members that the interests of the English regions have to some extent been overlooked in recent years. I intend, I hope in the very near future, to put some proposals before the Modernisation Committee on the use of procedures of the House that allow for a Standing Committee on the English regions. It may not b+9e in the form implied by my hon. Friend's question, but it would be in a form that would, I hope, be of assistance to the House.
Mr. Charles Wardle: The debate to follow is about public accounts and the National Audit Office. Will the right hon. Lady find time in the near future for a debate on the work of the Audit Commission, particularly its assessment of county councils? Is she aware that East Sussex county council pays private sector residential care homes less than any other county council? It pays £12 per week per resident less than the Department of Social Security's recommended rates, because its social services department subsidises its own more costly beds to the disadvantage of the private sector. Is that an appropriate subject to raise in a debate on the Audit Commission?
Mrs. Beckett: The hon. Gentleman would be able to raise that matter in a debate on the Audit Commission, but I cannot find time for that in the near future. I hear what he says, and I was not aware of the issue. As I understand it, the council is controlled by the hon. Gentleman's party, so he could use other means to raise the matter.
Mr. Dale Campbell-Savours: May I again ask my right hon. Friend for a debate on the lending practices of the banks? In particular, we should discuss the outrageous conduct of the National Westminster Bank and Lombard Banking, including the way in which they have treated the Tanning Shop franchisees nationally. That subject is known to hon. Members. When we finally have that debate, I shall be able to argue the case for Mr. Robert Munn and Mr. Peter Stern to be questioned about what really happened inside National Westminster Bank and about the outrageous and almost dishonest treatment of many of the bank's clients.
Mrs. Beckett: I am aware of my hon. Friend's great concerns about this matter. As he said, he has raised the issue with me before and I understand the anxieties that he has expressed. I fear that I cannot undertake to find time for such a debate in the near future, but I recognise that it is a matter that he may continue to raise
Mr. Howard Flight: On Monday, my hon. Friend the Member for Gainsborough (Mr. Leigh) and I asked the Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), certain questions about the adequacy of resources for pursuing benefit fraud, and for an undertaking that there were absolutely no cuts taking place in that matter. In view of the cases that have been cited in three eminent newspapers this week, will the Leader of the House ask the Minister to come back to the House with an explanation for a reply that was at best misleading but potentially baseless?
Mrs. Beckett: That matter was raised earlier and I said then that I was not aware of the concerns mentioned by
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Conservative Members. I will draw those concerns to the attention of the relevant Department. All I would say is that it is sometimes dangerous to place too much reliance on stories that appear in newspapers.
Mr. Mike Gapes: Can my right hon. Friend find time for an early debate on the successful launch of the euro so that the House can have an opportunity to discuss the implications for our economy over the next three or four years, as well as the continuing bitter divisions and splits that still exist within the Conservative party on that issue?
Mrs. Beckett: I greatly respect the interest that my hon. Friend has taken in these matters over many years. However, I believe that the divisions in the Conservative party are diminishing as the rampant anti-Europeans take control. I agree with my hon. Friend that the euro has been launched successfully. He will recall, as I do, the many occasions on which the idiots on the Conservative Benches said that it would never happen. [HON. MEMBERS: "Withdraw!"] I spoke in the heat of the moment, Madam Speaker; of course I withdraw that comment. I shall seek other words to describe my concerns. The folly of what was said does not cast light on the wisdom of the hon. Members who have made such remarks.
Madam Speaker: I am grateful to the right hon. Lady for her gracious remarks.
Mr. Andrew Rowe: This week, Kent Members had a briefing from Kent police, who have made it abundantly clear that the public perception that the bootlegging that goes on across the Channel is causing crime is grossly understated and that, in fact, major crime syndicates are moving into Kent and changing the whole nature of the crime prevention policy. Can we have a debate on that serious issue from a Government who, after all, took office on the basis of being tough on crime, tough on the causes of crime? This is one of the most blatant causes of crime and it goes a great deal wider than any benefit that the Treasury might be deriving from a difference in duty.
Mrs. Beckett: I share the concern expressed by the hon. Gentleman—as I am sure do hon. Members in all parts of the House—at the way in which that fraud is being exacerbated and offering an opportunity for crime. I am sure that the hon. Gentleman will take an opportunity to raise those concerns with Treasury Ministers. However, he will know that it is not a simple matter to make major changes in the structure of our taxes and duties. Indeed, Conservative Members are usually calling on the Government to be careful about how we do such things. There is certainly great consciousness of some of the difficulties that are arising and the Government keep the matter under active consideration.
Mr. Gordon Prentice: The BBC has told us today that we are entering a new phase in the Lib-Lab deal with the meeting later today of the joint consultative committee with the Liberal Democrats to discuss foreign and defence policy. Given that the papers will be classified and denied to Labour Members and the fact that we are all becoming weary of the endless speculation about Lib-Labbery, where it will take us and what

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precisely is in the Prime Minister's mind—[Interruption.] I say this in all seriousness—will the Leader of the House prevail on the Prime Minister to make a statement to the House next week on the Lib-Lab deal, the constitutional implications and precisely where it is all leading us?
Mrs. Beckett: I am very clear, as I think that all hon. Members are very clear, about what is in the Prime Minister's mind—to continue making successful progress on the Government's policies, which have led, for example, to 100,000 children in smaller classes, 200,000 people taking advantage of the new deal and the creation of 500,000 new jobs since the Government came to power. My hon. Friend asks about the use of a Committee to discuss various issues with the Liberal Democrats. Yes, it is intended that that group will consider some foreign and security policy issues, along the lines of previous discussions on constitutional matters on which there is genuinely common ground and agreement. It is sensible for people to work together on such issues. My hon. Friend has attended business questions today and will have noticed that there are a great many issues on which the Government and the Liberal Democrats diverge, as I am sure that Liberal Democrat Members will be happy to confirm.
Mr. John M. Taylor: May we have a reprint of the list of ministerial responsibilities? The current one dates back to October and seems to be showing some signs of attrition. Will she also confirm that the remedy of impeachment is still available to this honourable House?
Mrs. Beckett: I shall certainly draw to the attention of the relevant authorities the hon. Gentleman's request for a reprint of the list of ministerial responsibilities. I shall refrain from commenting on his other remarks, as all sorts of comparisons spring to mind of people misusing such remedies for partisan purposes and doing their country no good in the process.
Mr. David Watts: Following the Government's decision to pay compensation to GCHQ workers, will my right hon. Friend make time in the House for a debate on employment rights? Does she agree that such a debate would give Conservative Members an opportunity to apologise to loyal hard-working people who were sacked for no reason other than that they wanted to be members of a trade union?
Mrs. Beckett: I am grateful to my hon. Friend. I anticipate that, as the Government proceed with their legislative programme, there will indeed be time for a discussion of employment rights. I share his view that the treatment of workers and former workers at GCHQ was shabby and contemptible. I am glad that the Government have had the opportunity to put it right.
Mr. Mike Hancock: Will the right hon. Lady prevail on her colleagues in the Ministry of Defence to come to the House for a debate on the reasoning behind the closure of the Royal Hospital Haslar? If she cannot do that, will she prevail on her colleagues at the Department of Health to come to the House for a debate on how they will fund and provide
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adequate health services to cover the population of Greater Portsmouth? There is widespread concern across half a dozen constituencies about the future of health provision in the Greater Portsmouth area.
Mrs. Beckett: Hon. Members will be able to ask questions in Defence Question Time, in just over a week. The hon. Gentleman will have an opportunity to raise the issue on that and on other occasions with my right hon. and hon. Friends with responsibility for health and defence issues. I cannot promise a special debate on the problems of hospital provision in his area, but he may like to take advantage of the opportunities that arise for hon. Members to apply for Adjournment debates.
Dr. Stephen Ladyman: My right hon. Friend will be well aware that the United Kingdom's assisted area status map is being redrawn. She will also be well aware that, before Christmas, there was a small opportunity for a debate on the subject, although many hon. Members were frustrated in that debate. Will she provide an opportunity as soon as possible for another such debate, so that I can make the point to hon. Members that it is vital for Thanet, which has the third highest unemployment level in England, to retain full assisted area status and objective 2 status? Will she, please, provide that opportunity?
Mrs. Beckett: I cannot undertake to provide an opportunity for a debate on that in the near future, particularly as we had a debate on it only recently, as my hon. Friend kindly recognised. I understand and share the frustration that is always felt by some hon. Members when there is not time for everyone to be called. However, I am confident that my hon. Friend will seek other opportunities to make his point.
Mr. Michael Jack: The Leader of the House may be aware that the Minister of Agriculture, Fisheries and Food has recently begun a nationwide consultation exercise on reform of the common agricultural policy. Does she agree that, to avoid discourtesy to the House, it would be proper for there to be a debate in Government time on the reform package? So far, the Minister has not consulted the House. He is giving the impression in the country that what farmers say will have far more influence than will really be the case. It is time that the House had an opportunity to probe the Minister on that important subject and to give its view on the reforms.
Mrs. Beckett: The right hon. Gentleman is being uncharacteristically ungenerous to my right hon. Friend. It is right, sensible and wise for us to encourage those involved in UK agriculture to put forward their views. I should have thought that the right hon. Gentleman would agree and would play his part in encouraging that.
Mr. Jack: A debate?
Mrs. Beckett: Of course there will be opportunities for Members of Parliament to make their points of view known, but when that debate eventually comes—I cannot promise one in the near future—it will be better informed if those in the industry have had an opportunity to make their points fully. It makes for better government if people are encouraged to put forward their views early in a

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discussion on reform rather than waiting until Government views have gelled more fully, without the advantage of that input of information and advice. I hope that the right hon. Gentleman will encourage the farming industry to respond to my right hon. Friend's appeal.
Mr. Christopher Leslie: Can we have a debate soon about town planning and unitary development plans? I refer in particular to a long-running planning application in my constituency for an outrageous 400 houses at Warren lane, Gilstead in Bingley. The proposal has raised several issues, including whether privatised water companies such as Yorkshire Water can withhold information about drainage networks from local councils on the grounds of commercial confidentiality and the woeful inadequacy of the Conservative Government's town planning legislation, which did not give residents the ability to shape the outcome of local planning decisions properly.
Mrs. Beckett: I sympathise with my hon. Friend's concerns. All hon. Members are conscious of the enormous impact of planning decisions and how fiercely fought they often are locally. My right hon. and hon. Friends at the Department of the Environment, Transport and the Regions have the issues under consideration and review. I am sure that they will take on board my hon. Friend's comments.
Mr. Paul Burstow: I should like to draw the attention of the Leader of the House to early-day motion 182 on council tax benefit subsidy limitation:
[That this House deplores the unfair anomaly of relatively low income council tax payers subsidising the payment of council tax benefit that is to be introduced by the Government through statutory instrument and the Local Government Bill; condemns the totally unacceptable principle that the poor should subsidise the poorest in this way; regrets that the matter will not be subject to full parliamentary scrutiny; and urges the Government to reconsider this unfair and ill-considered measure.]
Early-day motion 150 is similarly about limitation of housing benefit and council rents. Does the right hon. Lady agree that it is important that we should have an opportunity for a proper debate on the Floor of the House about the Government's intention to introduce a new clawback of council tax benefit subsidy? The issue should not be sent to a Committee and dealt with through secondary legislation and regulations. It is a fundamental issue of the poor paying for the poorest. The Conservatives introduced that principle when they were in government. Why are the Labour Government copying them?
Mrs. Beckett: The hon. Gentleman makes an important point about the handling of local government subsidy matters. I am confident that his concerns are part of the consideration of my right hon. and hon. Friends at the Department of the Environment, Transport and the Regions. However, the House decided that many matters of detail relating to the implementation of Government decisions and the handling of issues such as benefit subsidy should be taken away from the Floor of the House. That decision was taken because it was believed
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to be for the better management of Government business. I am confident that the hon. Gentleman will have opportunities to raise the issue, but I fear that I cannot promise an early debate.
Mr. Robert Syms: May I ask the Leader of the House for a statement on fraud and nepotism in the European Union, so that hon. Members can seek assurances not only about what the Government are doing about such problems with their apparently new-found influence in Europe, but that they will never give up the rebate that was negotiated by that great British patriot, Margaret Thatcher?
Mrs. Beckett: We have made clear from the outset, not only in government but in opposition, our strong opposition to fraud and our concern at incompetence and fraud in the handling of public moneys, particularly in the European Union. It has been made clear repeatedly from the Dispatch Box and everywhere else that the Government have no intention of giving up the rebate. As for the pretence that only the Conservatives defend the interest of the United Kingdom, they may have got the rebate, but they gave up the veto.
Mr. John Wilkinson: Following the pertinent concerns of the hon. Member for Linlithgow (Mr. Dalyell) about the financial crisis in Brazil, will the right hon. Lady grant the House an urgent debate on foreign affairs so that we can discuss that crisis and the associate Mercosur country next door, which is being jeopardised by the Government raising the political temperature there and deterring the inward investment on which it depends? I refer of course to Chile.
Mrs. Beckett: As my hon. Friend the Member for Linlithgow (Mr. Dalyell) said, the handling of the economy of Brazil is a matter for the Treasury rather than for the Foreign Office, but I repeat what I said earlier: the Government are concerned to ensure that no such crisis arises. As for the hon. Gentleman's later remarks, he will be aware of the House's ruling on matters that are sub judice and I do not propose to respond to his attempts to raise them.
Miss Julie Kirkbride: Will the Leader of the House make a statement to the House next week accepting the kind offer of Mrs. Elizabeth Filkin, the Parliamentary Commissioner for Standards, to look into the affairs of Ministers in the same way as she looks into the financial and other affairs of hon. Members? Does she agree that it would be particularly appropriate in the light of recent revelations that the right hon. Member for Hartlepool (Mr. Mandelson), the former Secretary of State for Trade and Industry, accepted a loan from the former Paymaster General of £373,000 which he could not repay, to pay for a house that he could not afford at the time when his Department was looking into the affairs of the former Paymaster General, and that he failed to inform the permanent secretary? Would that not also be appropriate because of the further revelations in The Times today about Lord Donoughue, a Minister in the other place, who was also financially involved with that crook, Robert Maxwell, who robbed the Maxwell pensioners? If the

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Government are determined to be whiter than white as the Prime Minister once said, would it not be appropriate to accept the offer?
Mrs. Beckett: That was a very long question; indeed, it was more of a dissertation, the core of which was the question whether the Government propose to take up the offer made by the new Parliamentary Commissioner for Standards. Of course it was sensible for Mrs. Filkin to say that she was prepared to take on the matter, but the hon. Lady may or may not be aware that the Neill committee is looking again at how such issues are handled, reassessing what we have learnt from experience. It is a matter of consideration and judgment. I am not persuaded that it is quite the right way to handle those matters for the parliamentary commissioner to take on that role—[Interruption.] Perhaps the right hon. Member for Bracknell (Mr. MacKay) could stop heckling, as I do not think his wife needs any support from him.
In my view, different issues can arise involving the conduct of Ministers and what happens within Departments that it might not be right for the parliamentary commissioner to explore. It is genuinely a matter that needs to be considered without the need for knee-jerk and immediate results. I have some reservations about whether it is Mrs. Filkin's role, although the matter will be examined.
Rev. Martin Smyth: The Leader of the House will be aware that, as a result of the changed timings of Thursday sittings, there will be a motion tonight to change the sitting next week of the Northern Ireland Grand Committee. Could she explore why an understanding that the Northern Ireland Grand Committee would meet at least once or twice in Northern Ireland last year was not kept up—and will not be kept up this year unless there is a change? Is it because 25 Labour Members of Parliament do not want to travel there, or is there some other reason?
Mrs. Beckett: I was not aware of the concerns that the hon. Gentleman has raised. If there is a feeling that an undertaking that the Grand Committee should meet in different places has not yet been fulfilled, that will be of concern to my right hon. Friend the Secretary of State for Northern Ireland. I undertake to draw the matter to her attention, and I will write to the hon. Gentleman.
Mr. Dennis Skinner: As a follow-up to the question from my hon. Friend the Member for Pendle (Mr. Prentice), may I say that it is not true that the Liberal Democrats agree with the Labour party about all constitutional issues? There are differences between us on devolution, there is a very stark difference about what is to happen in the House of Lords after the first stage, there are without doubt differences on defence and there are certainly differences on foreign policy. Frankly, some of us are fed up to the back teeth with the Liberals wanting to have their cake and to eat it. It is high time that a message was passed to the Prime Minister, or anybody else, that it is time to put a stop to it. I am old enough to remember the Lib-Lab pact leading up to 1978, and it
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ended in tears. The Liberals ratted when it got too hot, because they could not stand the heat in the kitchen. We do not want a repeat performance—sack the lot of them.
Mrs. Beckett: I fear that I might not please you, Madam Speaker, if I were to venture to comment on many of my hon. Friend's points. I accept that there are issues—particularly constitutional issues—on which the Liberal Democrats and ourselves do not see eye to eye. What I intended to say earlier was that, where there was agreement, it was sensible for that to be recognised. However, I fully understand that there are many areas where there is not agreement—including on some of the issues to which my hon. Friend referred.
Dr. Julian Lewis: Will the Leader of the House consider arranging for a statement next week by the Minister for the Cabinet Office on the lack of progress towards the introduction of open government legislation and, in particular, whether it is still intended that such legislation should include protection for people who blow the whistle on secret abuses, bearing in mind the very sad case of Mr. Charlie Whelan, who has recently lost his job merely for blowing the whistle on secret abuses by two of the Prime Minister's Cabinet cronies?
Mrs. Beckett: The Government have every intention of producing for scrutiny our proposals about freedom of information, and we are giving careful consideration to how they can be effective. As for Mr. Charlie Whelan, I thought that the one thing that nobody had ever accused him of was operating in secret.
Mr. John Bercow: Will the Leader of the House find time for an early statement by the Chancellor of the Exchequer, which would enable him to commit the Government to publishing a White Paper on the implications for our democracy of possible British entry to the European single currency?
In that context, is the right hon. Lady aware of the erroneous claim made last night by the Chief Secretary to the Treasury that the Chancellor's statement to the House on 27 October 1997 had addressed the constitutional issues? Will she confirm that it did nothing of the kind, but simply stated that there were constitutional issues but no constitutional bar? Does she agree that a White Paper dealing with the role of central banks, the power of national Parliaments, the health of our democracy in the future and related issues is the very least that we should guarantee our constituents?
Mrs. Beckett: The Opposition raise that issue continually, and I see no reason why we should provide time for yet a further debate on it in the near future. I have no doubt that there will be many opportunities for the publication of relevant Government documents at the right stage, and perhaps, in the fulness of time, even a White Paper; but I fear that I cannot promise the hon. Gentleman a White Paper, a debate or anything else next week.
Mr. Christopher Chope: May I return to the question put by my hon. Friend the Member for Bromsgrove (Miss Kirkbride)? Does the Leader of the House recall that, only a few weeks ago, she told the House that we should trust the then Secretary of State for

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Trade and Industry to be able to make his own correct judgments about conflicts of interests, and potential conflicts of interests? In the light of events, does the right hon. Lady not feel rather let down? Does she not feel that it would be helpful to the Neill Committee, the Government and the House to have an early debate on ministerial accountability, and the fact that, at present, Ministers are the sole judges of whether conflicts of interest exist? As my hon. Friend the Member for Bromsgrove pointed out, the issue is made more pertinent by revelations about the involvement of a junior agriculture Minister with the Maxwell empire.
Mrs. Beckett: I think that my right hon. Friend the Member for Hartlepool (Mr. Mandelson) has eminently justified what I said about his recognising where conflicts of interests arose. He has acknowledged that he made a mistake, and he has paid the price—unlike Ministers in the last Government.
Mr. James Paice: Last week, the Government published figures showing that the tuberculosis outbreak in our cattle herds is still exploding, and is now doing so at an even faster rate. May we have a debate on that as a matter of urgency, so that the Minister can explain to the House why, just over a year after the Krebs report, only six of Professor Krebs's proposed 30 study areas have been identified, and the study has already been suspended in the case of two of those six because of a lack of resources? That means that the British tuberculosis-free status is now in jeopardy, as are hundreds of farmers' livelihoods—especially given the fact that the Minister of State, Ministry of Agriculture, Fisheries and Food has said repeatedly that this is a crisis second only to the BSE crisis.
Mrs. Beckett: I fear that I cannot promise a debate in the near future, but I am aware of the concern in the industry. Concern has also been expressed in the Ministry, and I shall draw the hon. Gentleman's comments to the attention of my right hon. Friend the Minister for Agriculture, Fisheries and Food.
Mr. Patrick Nicholls: The right hon. Lady was unable to find time for a debate on bank lending practices, but might she find time for a debate on building society lending practices? Would that not give us an opportunity to understand how the right hon. Member for Hartlepool (Mr. Mandelson) was able to sign a Britannia building society application form—happily, I have a copy with me—on which he certified that he had
"not arranged any other loan"
in connection with the property? As we now know, he had arranged a loan from the former Paymaster General. Would not the debate enable us to understand why the right hon. Gentleman was able to do that, given that, if an ordinary member of the public had engaged in such a practice, it would probably have been referred to the police?
Mrs. Beckett: No.
Mr. Bernard Jenkin: May I draw the right hon. Lady's attention to a matter that should concern the House, but is somewhat reminiscent of a Monty
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Python sketch involving a skeleton and a telephone box? I have here a letter from the Financial Secretary to the Treasury, dated 5 January, which opens with the sentence
"Thank you for your letter of 21 May to Gordon Brown."
Does the right hon. Lady suppose that my correspondence fell into a deed box and was sent off to Guernsey during the period in question? Will she undertake to mount an informal inquiry into what is happening to correspondence in Her Majesty's Treasury? This may well be the record example to date, but it is by no means the only example of delayed correspondence relating to our constituents and to Treasury matters.
Mrs. Beckett: I am afraid that, as I do not remember the sketch to which the hon. Gentleman referred, the allusion was somewhat lost on me. I do, however, understand his concern if there is delay in the handling of correspondence, and I shall draw his remarks to the attention of the relevant Ministers.
As I am sure the hon. Gentleman realises, the Treasury receives an enormous amount of correspondence. While no one could possibly think it satisfactory that he, or his constituent, had to wait so long for a reply, sometimes things slip through the net.
Mr. Nigel Evans: Would it be possible for the Leader of the House to arrange for a Welsh Office Minister to wind up the debate that we are shortly to have on national health service rationing, because three issues have recently been raised in the Welsh media? Age rationing is going on in hospitals in Wales. The lengthening time that junior doctors now have to work in Welsh hospitals is appalling and, even using the fiddled figures of the Government, there are 3,000 more people on waiting lists than at the time of the last general election.
The important point is that people are now waiting longer than before when they finally get on to the waiting list. At the general election, they were told that things could only get better, but, for many patients and people wanting medical help in Wales, things have got worse.
Mrs. Beckett: The hon. Gentleman is right in identifying that there will be a debate on health service matters in the near future, when it will be possible for those who catch your eye, Madam Speaker, to raise those issues.
Obviously, who opens and winds up particular debates is a matter for consideration. It is not for me to give the hon. Gentleman the assurance that he seeks. I am sure that his remarks have been heard.
Sir Patrick Cormack: May I ask the right hon. Lady to clarify one point about the royal commission on the House of Lords? Can she guarantee that there will be an oral statement in the House when the royal commission is set up? We would expect such a statement and the opportunity to question whoever makes it.
Can the right hon. Lady clarify, or say when she expects to be able to clarify, the position regarding the February week? We voted against the package that she put before the House before Christmas, but we believe that the House has the right to know whether we are to have that week. If we are not to have it, can she please tell us whether we shall at least have part of it?

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Finally, in view of what the right hon. Lady said to the hon. Member for Bolsover (Mr. Skinner), can she give an undertaking to him and to me that, as we agree with her on PR, we can be invited to join the Cabinet Committee to discuss it?
Mrs. Beckett: Picking up on the hon. Gentleman's last point first, I do not think that anyone is suggesting that that is a feature of discussions at present, but I hear what he says.
The hon. Gentleman asks me to clarify the issue about the February week. I cannot give him any further clarification than I have already given. In the debate close to Christmas, when the matter was raised, I made it plain that it might not be possible to make such an arrangement this year, but that the Government would keep the matter under review, depending on the progress of business.
I had not intended to make the following point—indeed, I refrained from making it before—but I have noticed that all the hon. Members who have so far approached me to ask for certainty—and I understand that certainty is important to hon. Members—about whether that week will be provided, are Members who voted against our having it.
The hon. Gentleman asks me about a statement on the royal commission. It would be as well if we undertook to keep those matters under review through the usual channels. Although I fully understand and appreciate the wish of the House to be properly informed, he may find that we are able to deal with the matter in a way that may not call for a specific statement when the commission is set up, so we could perhaps undertake to keep the matter under review through the usual channels. There is no intention to deprive the House of any opportunity to comment as fully as it would wish on those matters.
Mr. Wardle: On a point of order, Madam Speaker. In her reply to me during business questions, the Leader of the House, I think inadvertently, suggested that East Sussex county council is under Conservative control. I can understand why she should think that that should be so, and I am sure that it will be the case before long, but, at present, it is not the case.
Mrs. Beckett: I apologise. I was misinformed. I did not wish to misinform the House.

Orders of the Day

  Public Accounts
  1.29 pm
  Mr. David Davis: I beg to move,
  That this House takes note of the 1st to 67th Reports of the Committee of Public Accounts of Session 1997–98, and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm 3880, 3893, 3894, 3936, 3955, 3973, 4004, 4015, 4021, 4041, 4055, 4060, 4069, 4075) with particular reference to the following Reports:

  Twenty-seventh, Measures to Combat Housing Benefit Fraud (HC 366);

  Thirty-second, Cataract Surgery in Scotland (HC 546);

  Thirty-fourth, Foreign and Commonwealth Office: Irregular Payments at the British Embassy in Amman, Jordan (HC 553);

  Forty-fourth, Northern Ireland Social Security Agency: The Administration of the Disability Allowance (HC 527);

  Forty-sixth, The Contract to Develop and Update the Replacement National Insurance Recording System (HC 472);

  Sixty-first, Getting Value for Money in Privatisations (HC 992);

  Sixty-seventh, HM Treasury: Resource Accounting and Resource-Based Supply (HC 731).

  In the past year, the Public Accounts Committee has published 67 reports, more than in any equivalent period in our 137-year history. Those reports ranged from a review of the home energy efficiency scheme, designed to provide warmth to the most vulnerable in our society, to a study of the operation of the Department of Social Security, which spends some £96 billion of taxpayers' money each year.
  The number and variety of reports that we have produced is a testament to the quality, dedication to duty, and breadth and experience of the staff of the National Audit Office who support us. However, it is also a testament to the commitment and perspicacity of the members of the Committee, who twice a week grapple with diverse topics that require stamina, forensic intelligence and tenacity in equal measure—qualities that my colleagues on the Committee undoubtedly possess. I take this opportunity to thank all of them for their dedicated hard work.
  I also extend my special gratitude to the hon. Members for Corby (Mr. Hope) and for Shipley (Mr. Leslie), both of whom had to resign from the Committee after a year of sterling work, although I am glad to say that the reason for their resignations was the happy one that they both received well-deserved promotions. I also extend my thanks to the Clerk of the Committee, Mr. Ken Brown, and to his dedicated staff, who made a formidable job possible.
  Finally, I want to extend my personal gratitude to the senior member of the Committee, the right hon. Member for Swansea, West (Mr. Williams), who made his sage advice freely available to me when I had to deal with a number of rather difficult problems.
  We also welcomed two new members of the Committee, the hon. Members for Halton (Mr. Twigg) and for City of Durham (Mr. Steinberg), both of whom have shown already that they will be assets to the team. The newest formal member of the Committee is, of course, the new Financial Secretary to the Treasury, the

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  hon. Member for Hornsey and Wood Green (Mrs. Roche), whom I am pleased to congratulate on her promotion. As well as her undoubted ability, she brings to the Committee a reputation for commitment to open government and transparency—matters that the Committee holds dear.
  The Committee is steeped in the history of public service reform, the result of Gladstone's determination to raise the standards of the British civil service to unprecedented heights and to set the standards for services in the rest of the world. We have a long and learned history, but what makes the Public Accounts Committee important and relevant today—despite tumultuous change and a near-revolution in public service delivery—is its ability to grasp the nettle of change and to continue to make an impact.
  That impact can be financial. Each year, the work of the NAO and the Public Accounts Committee generates substantial savings—some £365 million in 1997 alone. Those savings come from diverse areas, from controlling the cost of prison food and the redesign of benefit order books to cut fraud, to the proper of use of lottery money. The sums involved range from relatively small savings of, perhaps, £1 million to savings of tens of millions of pounds a year. To paraphrase the American billionaire Nelson Bunker Hunt, "A million here and a million there and pretty soon you're talking real money." Real money indeed: over three years, savings of £1 billion have been achieved, equivalent to £8 saved for every pound spent to run the NAO.
  Saving taxpayers' cash is important, but we also have a qualitative impact. Last year alone, about 2,500 significant changes to systems in audited bodies were prompted by the Committee's work. The Committee has maintained its record over the past few years by ensuring that more than 90 per cent. of our recommendations have been accepted by the Government.
  Mr. Andrew Rowe: I congratulate the Public Accounts Committee on a remarkable year's work. One of the features of the Committee is that, by and large, it examines expenditure incurred several years previously. In the case of the channel tunnel rail link, I am delighted that the Committee will look at expenditure that has yet to be finally incurred. Is that a possible precedent for the Committee's future activities? Will it be able to study likely costs before they are incurred?
  Mr. Davis: I am not 100 per cent. sure of the reference that my hon. Friend makes, but the National Audit Office and the Public Accounts Committee have, historically, examined contractual arrangements that extend into the future. I shall refer to one such arrangement later: indeed, the problems of hindsight and of creating lessons for the future will form a major theme of my speech. I will press on as I have much to say and I do not want to take up too much time.
  It is no accident that since Gladstone's reforms—indeed, only since those reforms—the British civil service has become a worldwide watchword for honesty and commitment to public service. That is a reputation that we treasure and it is one that our Committee seeks to defend by its actions. The Committee's effectiveness depends and rests on accountability. We have the most impact when we can hold those truly responsible to
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  account for failures and weaknesses in policy implementation. The British tradition of accounting officers, who are responsible to Parliament for the work of their Departments, is a cornerstone of our constitution and it is one that must not crumble.
  Recently, I have become concerned that some accounting officers are not taking their responsibilities to Parliament as seriously as they should. Perhaps a few examples will illustrate that. The first may sound trivial, but it is not. At the hearing on the millennium threat, I asked the accounting officer of the Office of Public Service—the man responsible for dealing with the millennium bug—whether he would be available to report back to the Committee in February 2000, which seemed a reasonable request at the time. It was not his fault, but he promptly responded that he would retire a few months before the date at which the bug took effect, just before the turn of the year 2000. Although it was not his fault, it is indicative of an attitude to accountability that the single civil servant who has a time-limited task will not be in place for it.
  More sombrely, following the fraudulent loss of £333,000 from the British embassy in Amman, the accounting officer from the Foreign and Commonwealth Office told the Committee in February 1997 that he had made improvements to financial controls his top priority. He gave my hon. Friend the Member for Bexhill and Battle (Mr. Wardle) the assurance that he was, "as sure as anybody" that no additional fraud had taken place. One year on, his successor was in front of the Committee, this time to explain a further £100,000 fraud at the same embassy. To be fair, that accounting officer appears to be taking the Committee's comments extremely seriously, as he should.
  Accounting officers must also pay Parliament the courtesy of keeping the Committee informed of key developments on issues in which we have taken an interest. This Session, one of our more important reports was the 46th report on the private finance initiative contract for the new national insurance recording system. We were concerned about the delays in the delivery of the system. However, in a response to our report, which was issued in September, the Department did not inform us about the continuing and worsening problems with the system. Instead, it chose to reveal the true picture in a written answer in November, which explained that it was experiencing further problems affecting benefit claims for as many as 300,000 people, many of whom were pensioners. There was a major crisis in a system that had so recently been the subject of a critical report by the Committee. Clearly, that should have been brought to our attention. The Department's response was unsatisfactory and, no doubt, we will revisit that issue this Session.
  Finally on accountability, our most recent report on the Ministry of Defence major projects statement demonstrates the tendency in some parts of Government to fail to act promptly on our recommendations. We sometimes feel that we are making the same points to a small number of Whitehall Departments year after year. In this debate last year, my hon. Friend the Member for South-West Hertfordshire (Mr. Page), who is here today, highlighted that point when dealing with the long-running problems of the British Library. This year, in the report on the Ministry of Defence's major projects, we highlight the repeated findings of the PAC of weaknesses in the procurement of defence equipment. If we wanted to press

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  the point, we could cite one case that predates the last Liberal Government—those with a strong sense of history will know that that was a long time ago indeed.
  Mr. William Cash: Will my right hon. Friend give way?
  Mr. Davis: If the intervention is brief.
  Mr. Cash: It is. Has my right hon. Friend noticed the letter in The Times today from Geoffrey Martin, head of the European Commission in the United Kingdom, which suggests that much of the fraud problem in the European Union is the responsibility of national Parliaments? Does he agree that there is a strong case—as I suggested during debates on the European Communities (Finance) Bill in 1995—for closer working relations between our Public Accounts Committee—which expresses a view based on real accountability, unlike other national Parliaments—and the Court of Auditors?
  Mr. Davis: I will come to European fraud later. We take an interest in that through the publications of the European Court of Auditors and our reports on them. It will be easier if I deal with my hon. Friend's comments at length when I reach that point.
  I have made my concerns about accountability in Whitehall known to the Cabinet Secretary, and it is clear that he understands them. The Committee successfully combines its clear role on accountability, casting a retrospective eye over events, with a forward-looking approach. We might be accused of exercising judgment solely with the benefit of hindsight, but our purpose is not simply to criticise poor performance, but to ensure that lessons are learned. By highlighting examples of good and bad practice, we have provided Departments with practical assistance. We have placed emphasis on assisting the development of new and innovative public management techniques such as performance measurement, resource accounting and the private finance initiative.
  Our forward-looking approach is illustrated most strikingly by our 61st report, the thematic report on privatisation, which drew on some 35 reports spanning nearly 20 years and containing a wealth of experience gained from studying privatisation throughout the previous Administration. The lessons that we identified will be relevant to future privatisations. I was pleased to note the Government's positive response to it. I hope that the Treasury will ensure that the lessons that we set out are spread across Government. We expect soon to publish a similar report on the lessons arising from the early PFI projects and are considering the scope for compiling good practice guidance from our work on computer failures and on the higher and further education sectors.
  The Committee aims to be constructive and to react positively to developments in government. We will give criticism where it is due, but we will do so to prompt change and ensure that mistakes do not recur. To do that well, the Committee requires comprehensive rights of access for the Comptroller and Auditor General and the National Audit Office. It requires new access rights to match developments in government.
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  That is the first of four themes that have run through the Committee's work in the past year. There has been considerable progress in that time. The Government wisely conceded the Public Accounts Committee's request for National Audit Office access to the grants in aid for royal transport and the royal palaces. The greater transparency will renew public confidence in the monarchy.
  Access to the lottery operator was essential. I congratulate the Secretary of State for Culture, Media and Sport on his willingness to drive through the necessary change in lottery legislation. I am also pleased that the Comptroller and Auditor General has been appointed auditor of all the 17 executive bodies set up by this Government. However, more could be done.
  I repeat my call for the CAG to be appointed auditor of all non-departmental bodies. The current arrangements are illogical and confused. Some bodies spend huge sums of public money but escape the rigour of the CAG's audit scrutiny. For example, the Legal Aid Board spends some £1.2 billion of public money each year. The decision to replace it with a legal services commission presented an opportunity to address the point but the current proposals do not. I am writing to the Minister to ask that this be reconsidered and the accountability arrangements for legal aid brought in line with those for other areas of public expenditure.
  Mr. Geoffrey Clifton-Brown: Does my right hon. Friend agree that it is not only illogical and confusing that the National Audit Office does not have access to non-departmental Government bodies but dangerous, because fraud could be taking place? There is a gap between the Audit Commission and the National Audit Office in which there is no rigorous auditing. The NAO should be given access to such bodies.
  Mr. Davis: My hon. Friend is right. It is a question not only of fraud, but of waste. All parties have been concerned about the sheer cost of legal aid over the years. Information that would have returned to Parliament from value-for-money studies arising out of the Comptroller and Auditor General's access would have provided a valuable common foundation for the sorts of reforms for which all parties are on side.
  Mr. Alan Williams: As I do not want to sneeze my way through a speech, I will not be able to make a speech today so may I emphasise to the Minister that the point that has just been raised by the Chairman is not only a personal point or a point made by only one side of the Committee, but a House of Commons point? The Committee feels that very strongly and we hope that the Minister will respond to the point.
  Mr. Davis: I thank—I almost said my right hon. Friend, but 1 do not want to do him that much damage—the right hon. Gentleman for that important intervention. I am sorry that he is not able to speak today. His contribution to the Committee has been one of the most valuable and one on which I have rested throughout the year.
  The point made by my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) is illustrated even better by the example of the Housing Corporation and the

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  housing associations. The Housing Corporation spends some f1.1 billion per annum, but the Comptroller and Auditor General and, therefore, Parliament has no right of access to the records of housing associations. There are 2,600 such bodies in the United Kingdom, and they receive £1.2 billion of public money. Their assets—the houses that they rent out—were largely provided by public finance. However, the Comptroller and Auditor General has to negotiate every time that he wants access to a housing association.
  Our predecessor Committee in 1994 noted significant weaknesses in the Housing Corporation's control of housing associations. I regret to say—this relates to the point made by my hon. Friend the Member for Cotswold—that weaknesses of long standing in one association's procedures have come to light involving alleged corruption and fraud. I cannot say any more because the case may come to court. It is clearly time for Parliament to have a right to information from housing associations. The way to ensure that it does is for the Comptroller and Auditor General to have a right of access.
  I also have concerns about the adequacy of the scrutiny arrangements in matters that arise from the constitutional changes as a result of devolution. In total, some £20 billion has been paid in grants to Scotland and Northern Ireland from taxes raised by this Parliament for which this Parliament is accountable to taxpayers. We should recognise that devolution will reduce Parliament's ability to call to account those responsible for spending taxpayers' money in Scotland and Northern Ireland. I am pleased that the Government accepted my call for independent audit arrangements in the Northern Irish and Scottish devolution Bills, but a very real accountability gap has been built into the new arrangements.
  Three reports from the year illustrate my point. Our work on cataract surgery in Scotland, the privatisation of Belfast international airport and the administration of disability living allowance in Northern Ireland would not have been possible under the new arrangements. Those who disagree will argue rightly that the local PACs—which, incidentally were set up at our request by the Government—will deal with such issues, but in each case a large part of United Kingdom taxpayers' money and subvention will go to Northern Ireland and Scotland.
  I reiterate the point made last year by my hon. Friend the Member for Bexhill and Battle and since echoed by my predecessor as Chairman of the PAC, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), that it is unacceptable that the Comptroller and Auditor General's rights of access are less extensive than the powers of the European Court of Auditors in respect of the final recipients of EU grants. Without such access, the Comptroller and Auditor General's ability to report to Parliament for EU spending in the United Kingdom is seriously impaired. On today of all days, we should take that issue seriously. I shall deal with the issue of the European Union later.
  The next theme running through our work this year has been the need to combat fraud. Central Government spend more than £300 a week on behalf of every family in the country. It is our duty to those families that we ensure that their money is spent properly in their interests, and that we minimise the risk that taxpayers' hard-earned money is stolen, defrauded or misappropriated within government. Our interest ranges from the systematic defrauding of large social security budgets to the
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  misappropriation of relatively small sums by individuals at overseas embassies that I mentioned earlier. The magnitude might differ, but the principle remains the same.
  In our 27th report, the Committee considered the measures introduced by the Department of Social Security to combat housing benefit fraud. We found it totally unacceptable that housing benefit fraud exceeded £900 million a year—about 8 per cent. of the total spending on that benefit. Our report emphasised the need for the benefit system to strike a balance between the addressing of needs fairly, and simple and secure administration. We were concerned about the impact of the interaction between benefits in creating opportunities for fraud. The failure of the Department of Social Security and the benefits agencies to control properly claims for other benefits, such as income support and jobseeker's allowance, creates a gateway to fraud in housing benefit. The Committee stressed the need to design fraud out of the benefit system—that is very important for the Treasury in planning for future years.
  I am pleased that the Government appear to be taking fraud seriously and welcome their commitment to examine the funding arrangements that best suit a robust counter-fraud strategy. It is too early for us to judge the effectiveness of that strategy; it clearly did not reduce the level of fraud, as was shown by the accounts published during the past few weeks. However, as the strategy bites, we hope to reconsider that matter.
  In our report on the irregular payments at the British embassy in Amman that I mentioned earlier—and in the interests of time, I will shorten my remarks now—the Committee focused mainly on the importance of ensuring that financial control systems work and, most important, that the people who abuse them are punished appropriately. The report emphasised the need to regard sound financial management as an essential feature of any successful organisation, and that it should not be seen as a second order activity—a point made by my hon. Friend the Member for Bexhill and Battle in Committee. We were not satisfied with the disciplinary measures taken against those who should have prevented the fraud—a point made by another hon. Member—and negligence in fiduciary duties should be regarded as a very serious offence.
  Finally, I turn to irregularity on a grand scale in the European Union—a matter on which I have already taken two interventions. Our 35th report pointed out the serious institutional difficulties that arise when proper controls are not in place. The Committee expressed serious concern that, for the third successive year at that point, the Court of Auditors could not provide a positive statement of assurance on the legality and regularity of European Community payments because of the large number of errors that had been identified. Those errors cost about £3.5 billion.
  All that took place before the current debacle, which is coming, or will have come, to a head today in the vote in the European Parliament. I will not comment on the vote itself, but hon. Members might find it valuable if I give a brief history of the issue, which might help them to put the current arguments in context.
  As long ago as 1990, there were allegations of fraud in the European Community's tourism unit. In 1995, there were allegations of irregularities in the Commission's

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  management of assistance to Mediterranean countries. In March 1998, the European Parliament postponed its decision to discharge the Commission from responsibility for the 1996 budget, citing the urgent need to improve accountability in the fight against fraud. In July 1998, the European Court of Auditors published a highly critical report on the effectiveness of the Commission's task force for co-ordination of fraud prevention—the so-called UCLAF. At that time, I called for major improvements in the approach taken to tackling fraud within the Commission, as the extant arrangements clearly were not working.
  In autumn 1998, there were allegations of irregularities and fraud in the European Community's humanitarian aid office and the European Parliament called for an independent European anti-fraud office to be established, similar to that which I had suggested in July 1998. Around that time, Jacques Santer accepted the need for such an office—but it also seemed to be accepted that it would take 18 months to two years to put in place. In December 1998, Parliament again postponed its discharge decision about the 1996 Budget, citing that the Commission had failed to satisfy it about improvements in combating fraud and corruption. We now know about the revelations of the European Union official that have caused the current crisis.
  Irrespective of the outcome of the parliamentary vote, if the European Union does not come to grips with the fraud within its ranks, the citizens of the Union will lose faith and trust in the EU's ability to spend taxpayers' money. That would be a very damaging outcome. I believe that the simplest way for the European Union to get a grip on the fraud problem that it clearly faces is by instituting the anti-fraud office—which I called for last July—not in two years, but immediately. I know that it cannot be set up tomorrow, but it should be established within a few months—as near to immediately as possible.
  The third theme running through our work this year was privatisation. There is not necessarily a consensus of view on the Committee about the policy of privatisation. I believe that it has proved extremely successful and that former public services have thrived under the privatisation policy. I note also that some £12 billion in assets are earmarked for release to the private sector under this Government. However, the Committee is interested not in privatisation policy, but in the effectiveness of its delivery, and that has been our focus this year.
  Our 61st report brought together the cumulative lessons learnt from 35 studies of asset sales undertaken by the Committee and its predecessors. Over the past 20 years, more than 150 state-owned businesses have been privatised, raising some £90 billion for the taxpayer at current prices. The general lessons upon which we reported included the need for proper valuations to be conducted before the sale—that would seem to be fairly straightforward—the need for clawback arrangements to be included when a high degree of uncertainty surrounds the sale, and the advisability of selling shares in stages in order to deal with the ferocious difficulty of establishing fair market valuations before the capacity to thrive in the private sector has been demonstrated.
  I could cite several such cases from this year, which I am sure that other hon. Members will also wish to highlight. Therefore, in the interests of brevity, I shall
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  leave them to one side. However, as the case is important to Northern Ireland, I shall pick up consideration of the sale of Belfast international airport, which provided a stark example of some of the problems. In our report, we drew attention to the need to follow proper privatisation procedures and to achieve transparency in the conduct of a sale. That is vital if public and market confidence are to be maintained when public assets are being sold. We were concerned that the Department had not investigated more thoroughly why the successful bid from the management buy-out team had dropped by more than £6 million to within £900,000 of the next highest bid. That struck us as being a singularly suspicious outcome.
  Our work has raised a major privatisation strategy issue regarding the need for the taxpayer to receive a fair price based not just on the performance of the industry in the public sector, but on the prospective performance of the industry in the private sector. The true value of a business cannot crystallise until it operates in the private sector. That consideration is not confined to the public sector. It has been noted on several occasions that, in the case of management buy-outs, spin-offs from major companies can enjoy phenomenal increases in profitability when management is allowed—and, indeed, motivated—to exercise its initiative in running the company.
  Many major companies have underestimated the value that can accrue from privatised parts of their concerns. Therefore, I suppose that it is no surprise that Governments make the same mistake. Nevertheless, it highlights the need for an improved privatisation strategy. Clawback provisions in the case of a private sale and the need to sell shares in stages in order to achieve the best price once the true value of a company is known are simple but effective measures that provide an improved strategy.
  In addition to seeking to secure economic and efficient public services, we spent a substantial proportion of our time investigating issues of effectiveness, which has been the fourth theme of the year. Effectiveness is the quality of service that taxpayers receive. Our work in that area has covered the timely and effective delivery of services, the regulation of service providers and management and control processes. Again, our interest is broad, ranging from large public services such as social security to small-scale spending on vital public services such as cataract surgery in Scotland. Where public services fail, we have sought improved delivery.
  In considering the starkest example, the Child Support Agency, we picked up on the work of our predecessors, who had significant concerns about the operation of the system, in particular the level of inaccuracy in assessment. We reviewed progress and concluded that unless firm action was taken, the Child Support Agency would continue to bring unnecessary hardship and suffering to thousands. We urge the Department of Social Security and the agency to look long and hard at the complexity that is built into the system and at ways of clearing away the errors and irrecoverable debt of the past. It is unacceptable that the agency's current accuracy target of 85 per cent. means that one in six cases—almost 80,000 cases in 1997–98—are wrong if the agency hits its target.
  Our report on cataract surgery in Scotland was different. We examined the performance of the national health service in Scotland in increasing the proportion of cataract operations carried out as day cases and ensuring equality of access to cataract surgery across Scotland.

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  The National Audit Office report considered day care surgery in the round and found that its use increased the number of operations possible and reduced costs.
  Although cataract surgery in Scotland requires a relatively small budget of £14 million, it is one of the most effective operations carried out in the national health service. It gives back sight to many elderly people and improves their quality of life. We were therefore dismayed by the slow progress in raising levels of day surgery for cataracts and by the wide variation in the level of day surgery across the trusts. It is shocking that many patients are effectively blind by the time they are referred for cataract surgery. The report is a good example of work that is based on one part of the United Kingdom but which has resonance throughout. I very much hope that the audit arrangements after devolution will explicitly allow for the sharing of good practice because that is a vital consideration.
  My final theme, as my colleagues will be glad to hear, arises from changes that are afoot in the way in which Government policy is delivered to the public.
  Mr. Charles Wardle: One minute, Chairman.
  Mr. Davis: The Minister sees the discipline that is exercised in our Committee being applied to the Chairman, for a change.
  The Prime Minister announced only recently the development of public service agreements to focus on outcomes, examining the implementation of policy in the round. He rightly pointed out that the public care little about who delivers a service—whether it is delivered by local or national Government—and they do not care at all about interdepartmental wrangles that might occur. They care about the effective delivery of service. The Prime Minister calls that joined-up government. I prefer to call it performance-driven government, because that is what matters.
  Performance measurement has the potential to be the great governmental reform of this era. It is not a party political issue. Several Governments around the world, most famously in New Zealand, have undertaken initiatives on performance measurement. It has been a major component of speeches made by the leader of the Liberal Democrats. It was started in this country some years ago by the previous Administration in the "Competing for Quality" White Paper and other initiatives. It will continue under this Government with the introduction of resource accounting, public service agreements and specific initiatives in health and education.
  There is wide acceptance of the value of performance measurement, but there are dangers, too. Public performance measurement will be effective only if the information that it delivers is of iron-clad integrity and is seen as such by the public and the public sector managers whose successes and failures are judged by it. The temptation to bias performance measurement for party political interest will be enormous, but must be resisted if the reform is to achieve its potential. The introduction of resource 'accounting illustrates the point.
  Resource accounting is the most important development in public accounting for almost a century and a half. It will introduce commercial-style accrual
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  accounting for central Government Departments and, most important, it will include analysis of expenditures by aims and objectives, relating them to outputs where possible. It is due to take effect this year and will impact directly on the measurement of performance. Our 67th report on resource accounting and resource-based supply explored in some detail the implications of this.
  In our view, if we are to have good, clear accounts for the public sector, we also need a similar system of good, clear performance information to go with it, but Departments must identify the right measures and targets for their performance—measures that will properly serve the needs of the Departments, the Treasury, Parliament and, of course, fundamentally, the public.
  The political will seems to be there. There is scope for greater focus on performance in Government policy with more tangible accountabilities. Information technology has developed to provide a new, powerful tool for collecting and evaluating information which can be used to make these accountabilities real and catalyse significant improvements in performance. However, if we are to believe in this, we must ensure that the information we receive is seen and accepted by all as proper performance information, not political propaganda in any sense. This requires independent validation of performance measures. The proper way forward would be for the Comptroller and Auditor General and his staff at the National Audit Office to do this and to report to Parliament regularly.
  The National Audit Office is developing an appropriate validation methodology for setting, compiling and presenting the output and performance analysis. The Public Accounts Committee should be looking forward to regular reports from the Comptroller and Auditor General on the validation of performance measures, but we are disappointed that the Treasury has not yet committed to independent validation. At present, validation will be left with the appropriate Minister, and I am afraid that the public will view that with the same scepticism that they might view a school report written in the child's own handwriting.
  Parliament should have an input into the debate on performance measures that will be adopted and should have independent confirmation that the targets set are being achieved. The importance of this cannot be overstated. It will affect the service that constituents get for the money they pay. It will be the way of the future for holding the Government to account, and Parliament's rights and responsibilities should be clear from the outset. Done badly, it will corrode the citizen's faith in government; done well, it will materially improve government, and continue to do so far into the future.
  Gladstone, the founder of our Committee, once said that it was the duty of government to make it difficult for people to do wrong, and easy for people to do right. Properly executed, properly audited performance measures will make it difficult for the Government to do wrong and easy for them to do right.
  I urge the Minister to consider carefully and to accept that all Government performance measures should be subject to independent audit by the Comptroller and Auditor General of this Parliament. It is a crucial part of Parliament's duty to scrutinise the actions of the Executive and to hold the Executive to account. Accordingly, in measuring the delivery of public services

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  to all our constituents, it should be Parliament, through its instrument—the National Audit Office—which should be the final arbiter of what is a true and fair measure.

  ROYAL ASSENT
  Mr. Deputy Speaker (Mr. Michael J. Martin): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Act:
  European Parliamentary Elections Act 1999.
  2.9 pm
  Mr. Charles Kennedy: On that happy note—from our point of view, and from that of those who share common interest with us in these matters—I am grateful for the opportunity to contribute to this debate, at not too great length, I hope, and to follow the distinguished Chairman of the Public Accounts Committee whom I congratulate on his speech. More important, I congratulate the right hon. Gentleman, his colleagues, the civil service and all the other staff on the excellent and—as is evident to anyone who has been to the Vote Office to collect the papers—the voluminous outpourings of the Public Accounts Committee.
  The motion stands also in the name of my right hon. Friend the Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan), who is a long-serving and senior member of the PAC. On his behalf, I convey his apologies for not being present. Owing to arrangements made before the recess and before the change in the timing of our sittings, it is impossible for him to be present for the debate.
  I shall address only the 42nd report, which deals with the Skye bridge in my constituency, and the Treasury memorandum in reply. I thank the Chairman of the Public Accounts Committee, who in the course of his duties has been courteous and concerned to deal directly with my constituents. They have, over many years, raised persistent financial, political and legal concerns about the entire contract.
  The protesters welcomed—as I do—the PAC report and its scathing appraisal of the Government of the day and the sad and sorry background to the contract and to the difficulties that have resulted. Although the present Government inherited this mess—it was not of their making—at the end of my remarks I shall put one or two thoughts to the Minister, which I hope she will take on board. If she cannot reply today, perhaps she will explain after the debate what the Government see as the way forward.
  The history of the contract goes back a long way. It covers the stewardships of Malcolm Rifkind, Ian Lang and Michael Forsyth as successive Secretaries of State, as well as that of the present incumbent of that office. The Public Accounts Committee rightly inquired into the background. The most telling conclusion of its generally damning report was that the terms on which the bridge was provided, including the real rate of return to equity investors in the project of 18.4 per cent. a year, were not "determined competitively." In a casino, 18.4 per cent. is a pretty good rate of return if it has not been determined competitively.
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  The Committee felt that it was not possible to be satisfied that the costs of the bridge were reasonable. It questioned whether value for money has been secured for the taxpayers as well as the toll payers who have to foot the bill. Anyone who has visited that part of the United Kingdom will know that it is a short crossing from the mainland at Kyle of Lochalsh to the south end of the Isle of Skye. The single toll fare for an average car with only the driver in it is in excess of £5. An astronomical burden is being placed on a fragile community whose members have low incomes compared with the national average. The bridge is an important gateway to the western isles of Scotland, which have an even more fragile economy. The charges applied to commercial vehicles are quite astronomical. That is the background to this vexed issue.
  The Treasury minute was produced by the Scottish Office Development Department—which in this context sounds like a contradiction in terms. I do not believe in shooting the messenger, but I am concerned that the civil servants who advised Ian Lang, Malcolm Rifkind and Michael Forsyth are, in large measure, the same civil servants who are now advising the present Secretary of State. I am not surprised that many of them are not exactly volunteering to come forward with their hands up and admit that they made a complete and utter dog's breakfast of negotiating the contract—at such an advantageous rate to the developer and such a disadvantageous rate to my constituents and the users of the bridge.
  The minute that the Scottish Office Development Department produced in response to the PAC report can at best be described as casual in the extreme. It says:
  "The Department notes the Committee's comments. Given the low level of traffic, high dependency on tourist traffic and the novelty of the project"—
  note that word "novelty"—
  "the Department could not have reasonably expected to secure guarantees. Provision had to be made in the contract to cover the possibility of a longer toll period, and tolls which might have exceeded the original target, although the Department was confident at the time of the negotiations that these eventualities would not arise."
  That is very reassuring. What the minute is saying in civil service speak is that the Department was making it up as it went along. This project was the forerunner of the private finance initiative programme for the United Kingdom as a whole. It is no wonder that we have ended up with the political and economic fiasco that has been the subject of so much of my in-tray for the past five years.
  Not only is the question whether the taxpayer has been well served worthy of debate, but we have reason to question the National Audit Office figures on which the PAC report was based. Those figures were based on the developer's financial project model for the contract, yet the financial model differs substantially from the figures in the accounts of Skye Bridge Ltd.
  The financial model shows the developer's input for 1991 as £12.3 million, whereas the audited accounts show the developer's contribution for 1991 as £0.6 million. In 1991–96, the financial model, which the NAO accepted, shows the developer's costs as £27.3 million, whereas the audited accounts show the costs for the same period as only £19.3 million. If the model overplays the developer's contribution, equally, it underplays the cost to the taxpayer. The model shows the taxpayers' contribution for 1991–96 as £10.6 million, whereas the actual contribution revealed in the accounts is £11.6 million.

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  It is not our function to question the accuracy of the NAO's figures. My argument is not with the NAO, but the fact that it has had to accept figures provided by the developer and has not apparently had access to or checked the audited accounts is cause for serious concern. The developer's version of the figures seems to have been seriously inaccurate. It is hardly surprising that all the apparent errors worked in the developer's favour.
  The NAO, not surprisingly, is as confused as everyone else by the fog surrounding the funding of the Skye bridge contract. For example, figure 10 on page 45 of the audit report gives the construction costs as £20 million, whereas figure 13 on page 49 of the self-same report gives them as £27.3 million. This issue is riddled with difficulties, complexities, contradictions and confusions, so it is no wonder that the contract has led to the problems that are before the Scottish courts.
  For years, I have pursued this issue with four Secretaries of State in the House, in the Scottish Grand Committee and in Adjournment debates. There is a serious case for the Treasury taking the matter by the scruff of the neck before Scottish devolution and before it becomes the remit of the Scottish Parliament, and conducting a properly independent examination of the entire financial background to the Skye bridge contract. The cost to the public purse is a damn disgrace, and this major scandal must be investigated.
  I am not satisfied that I am consistently receiving information or the relevant answers to my questions from the institution of the Scottish Office—I am not referring to the Secretary of State personally. Moreover, the Treasury should have a searching look into the effect on the public purse before responsibility for the matter is passed to Edinburgh following devolution.
  Skye Bridge Ltd—which is essentially the Bank of America—and its agents are allowed to recover £23.64 million in tolls over the lifetime of the contract. That is not as simple as it would seem—nothing is simple in this world. The toll revenue is counted in constant 1991 prices, discounted at 6 per cent. a year to a 1991 base year. That acts as a sort of negative form of compound interest. In year one—1991—£1,000 in tolls would count as £1,000 off the debt. If it is discounted by 6 per cent. each year, by year 10, the compounding effect would mean that £1,000 in tolls to count as only £573 off the accumulated debt. Therefore, a great deal more than £23.64 million in real terms would need to be taken to clear the debt, which is hanging like an albatross around the community's neck.
  It gets worse. The cost of collecting the tolls is running at £750,000 per year. In other words, about £1.40 of the cost of each crossing is used to service the cost of collecting the toll. On present prices, over a 25-year period, that comes to the unbelievable figure of £18.75 million. As I have said, that is just to collect the tolls, not the value of them.
  Why does it cost so much? Surely, that figure knocks a huge hole in any repayment of the notional figure of £23.64 million. Can one assume, therefore, that £23.64 million is a net figure after operating costs have been taken into account?
  Taking into account both those points, the Minister should ask the Treasury to estimate what will be collected in tolls before the net figure of £23.64 million, counted in constant 1991 terms and discounted at 6 per cent. a year, is cleared. Will it be £60 million or £70 million? We have never been given an accurate figure.
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  The toll takings should be made public. A few months ago the national Mod, the highlands and islands equivalent of the Eisteddfod in Wales, took place on the Isle of Skye. It is a huge cultural celebration and a major event in the Scottish calendar. As one would expect, there was a huge influx of people for that week. Out of interest, I wrote to the toll company to find out how much more was taken in tolls given the vast influx of people for that event at the end of the summer season. I received a courteous reply saying that the company does not reveal its figures. As the local Member of Parliament I am not allowed to know how much the company made out of that major national event. That is a disgrace. A few days ago, we were debating freedom of information. I look forward to that legislation because private companies such as the toll company, which have signed a deal with the Government of the day at a cost to the public purse, should not be immune from having to declare their profits and takings in the same way as any other company in a public position.
  My constituents and the House have a right to know how much has been collected from the public purse and how much has been paid to the private developer. Currently, we only have estimates of how much is being taken in. We have every right to know.
  The House will be pleased to know that I have now reached my final point. It concerns matters that are currently before the Court of Session in Scotland. I know that the Clerk to the Public Accounts Committee is concerned that we should not breach the sub judice rule. I can assure you, Mr. Deputy Speaker, and the Chairman of the PAC that I have no intention of doing that.
  There is a case before the Court of Session now. It was heard on December 10 and 11. It involves one of my constituents questioning the legality of the toll regime. We are awaiting the final written judgment from the court, which is expected sooner rather than later. It is an interdict that has been brought in a Scottish court and, under Scots law, the sub judice provisions do not apply as it is not a criminal case and it has already been aired publicly in court. The only basis for applying the sub judice rule would be the basis of prejudice against the respondent, my constituent. I can place on record the fact that he has waived any right to such privilege and he is happy for me to discuss one or two aspects of the case.
  There has been a civil disobedience campaign associated with the toll regime. My constituents have been subject to criminal prosecution on the basis of a toll order that was never published and an assignation statement that only ever appeared with a draft order and was completely inaccurate by the time the actual order was made. That cannot be right. The Secretary of State gave his written approval. The then Secretary of State wrote to me in December 1997:
  "The assignation of rights to charge and collect tolls is contained in the Concession Agreement between the Secretary of State and Skye Bridge Tolls Limited, the concessionaire. The Secretary of State was aware of and agreed to the appointment of Miller … Joint Venture to collect tolls as part of the management and operation of the bridge."
  The tolls are collected by Miller Civil Engineering. That company—I have tabled written questions about this—is apparently registered as dormant at Companies house. It collects the tolls on behalf of MDJV, of which there is apparently no record at Companies house, on behalf of Skye Bridge Tolls Ltd, which is wholly owned

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  by the Bank of America. Clause 23 of the concession agreement states that there will be no change in the financial arrangements without the written consent of the Secretary of State. No written consent has ever been produced in public at any of the legal hearings that have been taking place in Edinburgh. One can only assume that it does not exist.
  I shall now come to the nub of this sorry saga—which represents a ludicrous affront to public finance—to which the Public Accounts Committee draws attention in its report. Huge sums of public money went into the Skye bridge project. My constituents and others are now being forced to pay massive tolls against their wishes. In such circumstances, surely the public and Parliament have a right to know the truth about such vital matters as ownership. The previous Government placed out-of-date documents in the official records of Parliament without any amendment to show the change in ownership details. As a result, I believe that that Administration was guilty of downright deception.
  The Scottish Office is continuing to maintain that everything is wholly above board, proper and correct, despite the change in ownership which was never properly notified, the fact that the document was never made available and the fact that the tolls are being collected by a company different from that specified by the Secretary of State at the time. That strikes me as entirely implausible.
  As I have said, further complications are now coming to light over the legal trading status of Miller Civil Engineering and MDJV. As I have said, Miller Civil Engineering is registered as a dormant company and there is a further suggestion—I have raised this in another written question—that MDJV is not even registered for value added tax. It has been confirmed to me by the Department of Trade and Industry that Miller Civil Engineering Ltd did not trade on its own account—those are the words of the DTI—during the last financial year, but it seems able to operate the collection of tolls on the Skye bridge.
  There are too many unanswered questions in this quagmire. I am grateful to the Chairman and the Committee for exposing the affair and for bringing the luminosity of truth to bear on some of the shortcomings behind it. However, I remain convinced—I commend this suggestion to the Minister—that, prior to this issue falling within the jurisdiction of the Scottish Parliament at Holyrood, we need the Treasury to instigate a complete and thorough overhaul and independent investigation of this entire sorry and shabby tale.
  2.29 pm
  Maria Eagle: I am grateful for an opportunity to speak in this debate. I congratulate the right hon. Member for Haltemprice and Howden (Mr. Davis), who has been the Chairman of the Public Accounts Committee for nearly two years, although it probably feels more like 10. When I spoke in this debate last year, I welcomed him to his job and wished him a long and distinguished tenure. I should like to reiterate that. The right hon. Gentleman's predecessor, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), had an extremely long tenure and he remains one of those
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  Members who is most respected on issues of public accounts, public spending and holding the Executive to account. If the current incumbent continues in his current vigorous form, I hope that in due course, perhaps after 14 years, he will also be as well respected as my right hon. Friend the Member for Ashton-under-Lyne.
  I do not wish to insult the right hon. Member for Haltemprice and Howden gratuitously. I also recognise and welcome the vigour that he has shown in all debates in the House on public accounts. He has also been very active in the devolution debate. In his speech today, he made some valid and thoughtful points on the future of the Public Accounts Committee and on the way in which the National Audit Office and the Comptroller and Auditor General will be able to operate in an environment in which public sector and Government institutional and auditing arrangements change fast. Who would dare to say that the Public Accounts Committee is backward-looking or retrospective in all its activities? The right hon. Member has clearly shown that it is not.
  I add my voice to that of the right hon. Member for Haltemprice and Howden in congratulating the Comptroller and Auditor General and his staff at the National Audit Office on their year-round work. Without their efforts and dedication, the Committee could not be anywhere near as effective as it has generally been recognised to be. Undoubtedly, our ability to scrutinise the Executive and to examine public spending would be almost completely destroyed were we not able to count on their efforts.
  Over the next few years, the CAG and his staff face a massive increase in their work load. However, there are some concerns about diminished access because of changes in constitutional arrangements, the advent of resource accounting and the necessity of meeting other auditing bodies and new public accounts committees to try to keep a grip on public sector auditing. All those changes will massively increase their work load. I wish them well in coping with it. I hope that they will receive the resources that are necessary to continue contributing towards achieving the public sector savings that can be made using their auditing expertise.
  I finish my preliminary thanks by saying that the Committee would be much less effective than it is were it not for its Clerk and his staff. I thank them and congratulate them on the work that they did for us in the previous Session.
  I support the Chairman's comments on increasing access to information on public money. I know of no reason why Parliament, the National Audit Office and its auditor, the Comptroller and Auditor General, should not be able to follow public money raised by Parliament regardless of where it is spent. Achieving such tracking would be Committee members' nirvana and is our desired end result. I realise that practical considerations and changing institutional arrangements mean that achieving that goal is not possible, but it is our aspiration. I should welcome any suggestions on increasing access. I believe that the Government have been particularly open to such suggestions.
  There is nothing like transparency—or a Public Accounts Committee—to make people wonder whether their spending arrangements and spending supervision are in order. I should therefore welcome any further action taken by the Government to increase access. The

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  Chairman mentioned the Legal Aid Board and the Housing Corporation. There is no reason why such organisations should not be audited by the Comptroller and Auditor General.
  I am happy to be participating in my second annual public accounts debate. Earlier today, while considering what to say in the debate, I wondered why our Committee has an annual debate, as not all Select Committees have that privilege. I suppose that our annual debate demonstrates the Committee's seniority and prestige in the House. It demonstrates also the historical importance of Parliament's role of scrutinising public spending and supply. Our annual debate also gives hon. Members, such as the hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy), an opportunity to make very detailed, prescient comments on matters such as the Skye bridge. It allows us to examine a specific matter closely, which the House is usually unable to do. That is the value of our annual debate, which I hope will continue.
  Our annual debate also reflects the prestige of the Committee and of its work. One role of all Back Benchers, regardless of which party they belong to at a particular time, includes asking questions about how well we hold the Executive to account. When I say "the Executive", I do not mean only Ministers. I realise that many of our constituents think of the Executive as the Government and think of Cabinet Ministers, but one should not—especially when one is a member of the PAC—think of the Government in that way. The Committee deals not with Ministers but with accounting officers; we deal with Whitehall, not Downing street. When I think of the Executive, I tend to picture the "permanent" Executive rather than the "transient" Executive, which is the Government—although our current Government will be less transient than most.
  We should consider the effect that the PAC can have on Whitehall. Committee members realise that the civil service and Whitehall accounting officers often feel nervous about appearing before the PAC, as we have often been told that they have such feelings. People are often concerned about having to appear at an evidence-taking session. We often receive feedback saying that we have perhaps been tough on Mr. X or Miss Y, who thought that we were a bit unfair. However, Committee members sometimes have to ask themselves a few uncomfortable questions. How well does the Committee perform? How well do we manage to promote the role of all hon. Members in scrutinising public spending? Are we doing well enough? Are there ways in which we can improve our performance?

  The CAG and the PAC are very good at dealing with specific issues, such as fraud and propriety in spending—which are the Committee's bread-and-butter tasks. The Chairman mentioned the report on the Amman embassy scandal. It was scandalous that an official wrongly gave the PAC the assurances that we were given. However, the case demonstrated the fact that Whitehall generally resists dealing with the findings in the PAC's reports. I think that such inaction is not a vast conspiracy to ignore Parliament, but arises from Whitehall's culture of the permanent Executive, as opposed to the transient culture of politicians and Governments.
  Whitehall accepts the vast majority of the PAC's recommendations. Therefore, why do some Committee members—I am certainly one of them—think that
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  Whitehall does not always act on our recommendations? The Amman embassy report provides one example of inaction. I should like briefly to consider why that might be. However, I should first apologise to the Ministry of Defence, because I shall be using it as an example.
  As I said, there is a culture of permanence in the civil service. Those who staff its senior ranks generally depend for career advancement not on Ministers, who come and go, but on one another, on the Whitehall network and on conventions on seniority. I should not say it depends on Buggins's turn, although I just did. One gets the feeling that senior civil servants' advancement does not depend on Ministers, which is perhaps a good thing and is often regarded as a strength. It is good that civil servants, including senior civil servants, and advisers can give their advice without fear or favour, but it can also be a weakness.
  Civil servants must deal with a different culture and think about a different hierarchy. They have a different way of ensuring that they get on in life, which means that they do not always listen to Ministers or act quickly on the instructions of Ministers, who come and go. Whitehall sticks together and resists attacks from outside. The more senior staff become, the more they depend on one another for advancement.
  The right hon. Member for Haltemprice and Howden mentioned the Committee's report this Session on a major Ministry of Defence project. Although I realise that the report is not part of today's motion, it revealed—not for the first time in defence procurement—a startling picture of chronic overspending, very poor control of contracts and lengthening delays in bringing contracts to fruition. It is not a new problem, which has been outlined also in previous reports on major projects. The Ministry of Defence is a chronic overspender and shows chronic poor management. The reports that we have had from it during my time on the Committee suggest that it resists criticism from the PAC. It never seems to improve. Our 51st report, on the MOD appropriation accounts, showed poor day-to-day management.
  It should be a matter of shame to have to come before the PAC when accounts have been qualified. That should be avoided at all costs by any self-respecting accounting officer, but the MOD regularly comes before the Committee. It has overspent its appropriation accounts in five of the past 10 years. When there are excess votes, they are from the MOD more often than not. It sometimes even overspends its excess votes.
  The 51st report highlighted many significant day-to-day issues, illustrating the fact that the Ministry seems not to have a grip on its spending. One increase in spending that should have required Treasury authority—the decontamination of an MOD site at Waltham Abbey—went ahead without the Ministry following the rules to secure that authority. Another reason for the accounts being qualified was that the MOD was unable to account for the day-to-day payment of its military personnel. Suspense accounts had to be closed because they could not be balanced, resulting in £40 million having to be written off. The new account established as a replacement was out of control within weeks and could not be balanced, leading to another write-off of £19.5 million. Almost every time the MOD comes before the Committee, we see its failure to control its spending.

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  When we question them, representatives of the Ministry do not like to admit that they have done anything wrong. They tend to resist questioning that suggests that they should be fairly humble and should look for a way to improve. The major projects report—which should not be mentioned in the debate, but I am the second person to refer to it—is illustrative. It quotes some of the criticisms that the PAC made 100 years ago. The complaints that have been made over the past few years are in the same vein. The Ministry believes that it is too important to have to worry too much about controlling its expenditure. It is dealing with the defence of the realm, after all. The Committee is not as effective as we would like. We can congratulate ourselves on being effective in some ways, but we have not managed to change the culture of the MOD and make the civil servants and accounting officers understand that appropriation accounts are not targets to be aimed at, but absolute limits to be kept. As I have tried to illustrate, the problems go wider than just appropriation accounts.
  We produced a report on the sale of the married quarters dealing with the amazing phenomenon of a Ministry selling houses for vastly less than they were worth—£77 million to £136 million less than a cautious valuation. There was no competition and they were sold in a job lot to one outfit—Annington Homes, as I recall. They were not properly sold, because the Ministry managed to retain liability not only to repair the properties—imagine selling a house and still having to repair it—but to pay rent on the properties that were vacant but not declared surplus. Having sold the properties, the Ministry took long leases back on them. What is the point of doing that? Even in a big project in which a job lot of houses was sold, the Ministry showed itself unable to consider properly the matter of accounting for public money and ensuring that we get value for it.
  I do not want just to be unpleasant to the Ministry of Defence. I want to move to another Department to consider whether Departments learn from their mistakes when faced with a value-for-money report from the NAO and scrutiny from the PAC. Is there an identifiable change in their subsequent behaviour? Do they listen to us, learn and make changes? To illustrate that, I shall consider the NHS executive and its information technology procurement.
  I am sorry to hear that my right hon. Friend the Member for Swansea, West (Mr. Williams) cannot speak today. He made the analogy of standing up and walking into a brick wall and asked what would be thought if someone picked themselves up and did it again. Would the casual onlooker think that they were mad or drunk? The NHS executive did that three times on IT procurement with the Wessex health authority, then on the hospital information support systems and, perhaps most notorious of all, on the Read codes.
  The report on that was particularly interesting. The issue is of great importance to the future of the NHS. The system will enable medical records and records of treatment to be put on computer—preferably on a common system throughout the NHS. One has only to outline that to realise what a vast undertaking it is and what a difficult job it might be. The codes are ways of classifying particular treatments, outcomes or other items
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  that should be in health records. They have to be common and everyone who might access the system has to understand it and be able to use it.
  The Committee's 62nd report, on the purchase of the Read codes by the NHS executive and the management of the NHS centre for coding and classification which deals with them, is damning. Some £32 million has been spent so far on developing a system about which many of us who examined the evidence are dubious. I do not have confidence that Read version 3 will ever work. It has not yet been implemented. To our knowledge, it has been trialled in 12 NHS units. I have no evidence that version 3 has suddenly spread beyond that into general use. If that happened, it would cost many millions of pounds more to implement across the NHS.
  The report is damning not just because of the £32 million that has been spent without any business case being made for the development of the codes. The money has been spent with no clear development plan or time scales. There was also a clear conflict of interest, because Dr. Read, who developed the codes, was paid to hand over the copyright and was then appointed to run the NHS outfit that would develop them, while his private company had sole rights to sell them. Dr. Read has been estimated to have made about £8 million so far, although I do not know how accurate that press report was.
  The NHS executive had already suffered two seriously embarrassing reports from the Committee on IT procurement, but it got itself into a similar problem, if not a worse one, on the same issue. Since the publication of the report, the NHS executive has sought to justify its position, despite the clear worries in the NHS and among those who follow such issues in the computing world that Read codes will never work. Has the NHS executive taken that on board and learnt from the report? Do Departments ever accept that too much money has been spent on a system that will not work, and decide to bite the bullet and abandon it in favour of something else? So far, as far as we are aware, the NHS is continuing to develop the Read codes.
  Mr. Alan Williams: Is that point not emphasised by the fact that, several times during the Committee's sitting, the NHS executive witness said that there had been no conflict of interest, whereas Dr. Read himself said that there had been a conflict of interest?
  Maria Eagle: My right hon. Friend has a very good memory. He is right to say that there was a contradiction in the evidence. As the hon. Member for Ross, Skye and Inverness, West pointed out, Whitehall can sometimes produce obstructive responses to our reports. Although the people who took decisions and gave advice are defensive of their actions, and do not want to admit that they were wrong, if the Committee is to be effective and produce improvements, they sometimes have to do so. I hope that, next year, problems will be identified and people will say, "Mea culpa," promise to put things right and then do so. I do not blame Ministers of any party; it is the culture of Whitehall to say, "We are running this. We rather resent you looking too closely at it and, if you criticise us, we shall defend ourselves."
  I hope that the Government will encourage Whitehall and its permanent staff to be less uptight and more objective and to make sure that the lessons that the PAC

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  and the National Audit Office can bring to the implementation of public policy and spending public money are well learned, so that we all benefit.
  2.52 pm
  Mr. Richard Page: I took the precaution of looking at the Hansard reports of the last few annual debates on public accounts, including my own immortal words. I discovered that, almost every year, I started my speech by saying how disappointing it was that so few people had attended the debate. This year, I have to alter my start line because there are a few more of us. I hope that that trend continues, because it is a significant debate that sends an important message to the mandarins in Whitehall.
  I start by welcoming the Minister to her new position. She has moved from small businesses to big businesses. I can tell her that the problems are the same; it is just the amount of money that is different, and it will be more dramatic if she gets things right—or indeed, if she gets them wrong.
  Before dealing with the report, I thank my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), the Chairman of the PAC, for guiding our Committee through the previous year. He has a contrasting style to his predecessor, but all roads lead to Rome and I am glad to say that the Committee produced some hard-hitting and effective reports with unanimity. Ever since I have been on the Committee, 100 per cent. of the Committee has endorsed its reports. I was first on the Committee in 1987 and I believe that our unanimity gives us strength. United we stand and divided we fall. We must make sure that, whenever possible, our reports are 100 per cent. endorsed.
  I also thank the PAC staff—led by Ken Brown—who have always provided an effective and efficient service, for which we are exceedingly grateful.
  My few words will follow in the footsteps of my right hon. Friend the Chairman. Obviously, that is a wise and sensible thing to do. It also involves a degree of crawling in that I hope that I shall be called to speak in the Committee earlier rather than later, so that all my ideas and questions will not have been taken by others. However, I mildly disagree with the hon. Member for Liverpool, Garston (Maria Eagle) in that, although I wish my right hon. Friend the Member for Haltemprice and Howden every success, I would be quite happy if his tenure were for only three years, but time will tell.
  Of course, the Committee would not be able to function without the work of the Comptroller and Auditor General, Sir John Bourn, and his highly professional staff in the National Audit Office. I have every respect for their skills and for the way in which they report their findings to the Committee. Their skill and expertise are recognised by many countries throughout the world, who call on the National Audit Office for help and advice.
  The Committee needs to recognise that the reports that come before us are the product of a long process of investigation and the result of negotiations between the Department, public body or agency under scrutiny. Naturally, those bodies are not anxious to be severely criticised and usually argue, as I know from experience, for potentially damaging comments or statements to be reworded by what could be described as a process of plea bargaining. That sometimes makes the task of reading the
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  NAO reports rather like the old art of Kremlinology: one has to be able to read between the lines to find out where there have been disputes. I am not complaining about that. It is part of what makes being a member of the Public Accounts Committee a little more challenging and makes one work a little harder.
  Today, I shall concentrate more on the way in which the PAC operates than on the reports themselves, as I believe that there is room for advancement. I promise the House that there has been no collusion between myself and my right hon. Friend the Chairman, except on one small aspect, which I shall raise at the end of my speech.
  I am concerned about the questions and potential conflicts that are posed by the Government's rushed devolution measures. Already, many regard the establishment of a Scottish Parliament as a stepping stone to Scottish separation. It is important that national sentiment is not allowed to block access by the NAO and PAC to how the money has been employed. The hon. Member for Garston said that we should have the power to follow wherever the money goes, and I am greatly concerned that shutters will be brought down to stop us doing that.
  I understand that, under the Barnett formula, there is considerable financial support for Scotland—above the average amount per head that applies in England. If those extra sums of money are allowed to continue, the NAO should be allowed to follow the financial trail. I should also emphasise that the skills and ability that have been built up by the NAO over the years should not lightly be put to one side in a misplaced enthusiasm to have everything under Scottish control.
  My first main point regarding the operation of the Committee concerns the way in which reports are brought before the Committee. I believe that, when we consider a report, the accounting officer responsible for that report should be there to answer questions. How many times has the Committee found that, within seconds of a report hitting the desk, the accounting officer has either moved or retired to Chichester to tend his roses? I believe that all retired accounting officers go there and the new man sits in front of us and says with much sucking of teeth, "I agree with you. It is a deplorable situation. However, I am new to the job and that is what I will do to put it right." We, being a lot of softies, say, "It is not his fault, is it? We can't be hard on him." Therefore, we tend to be too kind and forgiving.
  I believe that it should be the norm and the custom and not an exception to call former accounting officers back to be examined on their records in their Departments or agencies. There should be no hiding place or escape route if commitments given in the past to the Public Accounts Committee in good faith are not honoured. We are entitled to question those responsible for the implementation of those policies.
  I wish to refer to my concerns regarding what I call the fire-and-forget principle on which the Committee operates. There are varying degrees of noise, lightning flashes and smoke when a National Audit Office report is published and is followed by the Public Accounts Committee inquiry. It is then usually followed by a period—perhaps years—of deafening silence. We have no idea of what is going on, or of whether the recommendations have been implemented. We have no idea whether they have been successful or not. All too

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  often the matters are revisited years later by the Committee, and we find that little has been done to alter the way in which the Department has been tackling those problems.
  One of the advantages, or disadvantages, of serving on the Committee for some 10 years, as I have—I know that the right hon. Member for Swansea, West (Mr. Williams) has served even longer—is that one sees the same problems coming around time and time again. As an example, the House should consider the difficulties faced by the Child Support Agency in collecting maintenance payments from absent parents. The subject will be familiar to all right hon. and hon. Members, as we have all had surgeries full of people complaining about the way in which the CSA has operated.
  Successive chief executives and accounting officers of the CSA explained to us how they would deal with the backlog of cases, incorrect assessments and appeals. The message consistently was that the problem was being solved. Unfortunately, as the PAC work in the early months of 1998 revealed, the situation has not significantly improved since the earlier days of the CSA work. Now, the Department of Social Security, the CSA and—more importantly—taxpayers are having to face writing off much of the uncollected arrears accumulated during the previous and present Parliaments. That is the penalty that we are paying for the insufficient attention that has been paid to the Committee's reports. We heard assurances during our last examination, but I have serious doubts that we shall find the situation improved at all in the future.
  It is possible to cite several other examples. We looked several months ago at the problems that the same Department was facing over the transfer of data from the old computer system for national insurance contributions to the new one. There had been technical difficulties with that in earlier stages. Like other members of the Committee, I was sceptical about the likelihood of the target date for completion of the operation being met, as it was less than two months away. We were assured by the witness that the target would be met but, within weeks, it was announced that the completion date had had to be put back—at a cost of many millions of pounds.
  It is not in the public interest for the PAC to be offered what I can describe only as a hopeful statement about solving a problem. It would be far better to tell us the facts and the odds that a solution will not be forthcoming. In turn, that would enable the Government and the Minister involved to do something about the problem.
  The Committee took the unusual step in its last report—on the procurement of major Ministry of Defence projects—of producing a summary of previous reports, going back over decades, to show that the same mistakes were being made time and time again. It appears that the Ministry of Defence has been quite happy just to proceed as if the reports had no relevance. This time, we have been told that the smart procurement initiative will solve the problems of cost overruns and delays before major projects enter service. I hope I that am wrong, but I am cynical. I will not be holding my breath about this matter.
  Mr. Clifton-Brown: I wonder whether I might put to my hon. Friend a suggestion that will cause ripples
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  throughout Whitehall. Does he think that an accounting officer who has been in charge of such a gross financial mismanagement ought to be subject to no further preferment?
  Mr. Page: I would not want to fire such an Exocet until I was thoroughly satisfied that the situation was completely and utterly in the hands of that particular accounting officer. There may have been the beneficial and guiding hand of a Minister behind him which has prevented certain things from happening. Tempting as my hon. Friend's suggestion might be, I would want to make sure that we were targeting a genuine wrongdoer, rather than someone who has been put into a set of circumstances that may not be completely of his own doing.
  There have been times when senior civil servants have admitted that mistakes have been made. The Committee had the classic example this year of a serious case in the British embassy in Amman. Having been reassured by the former permanent under-secretary of state at the Foreign Office that new, tighter proceedings would mean that such a thing could never happen again, within a short time we had a second example of embezzlement, which caused a great many red faces in the Department.
  I shall draw my remarks to a close, although the wealth of material is such that one could filibuster about the PAC and its activities for hours on end. However, I wish to touch on the various references to the situation within the EU at the moment, the discussions about fraud and the problem, which is occupying the headlines, of the hundreds of millions of pounds that have been misappropriated. I find it most peculiar that the European Parliament can elect Commissioners one by one, but can sack them only en bloc. That seems to me to be a crazy situation. Surely the Parliament should be able to direct its fire on one or two particular Commissioners if they seem to be failing in their particular tasks.
  The Committee Chairman mentioned the need for an EU anti-fraud squad, and I should be more than happy to endorse that. However, it does not go far enough, and more is needed. The European Court of Auditors signs off the accounts and points out if there has been a fraud, but it goes no further. It does not have a value-for-money aspect. Our National Audit Office, and our forms of government accounting, took a step forward in 1983 when we introduced value for money and the examination of the three criteria of economy, effectiveness and efficiency. Since then, we have seen how the Government can spend money in a more effective way, which benefits the taxpayer.
  The one slight collusion between myself and my right hon. Friend the Member for Haltemprice and Howden is to ask whether we should recommend that we go over to Brussels and visit the European Court of Auditors to talk to people. That would do two things—first, we could give them some of the benefit of our experiences, and secondly, we could learn about some of their problems, which would help us, in turn, to see that we, as a nation, spend EU money more effectively.
  I believe that the Committee has worked hard and diligently through the year, and I have no doubt that it will have plenty to do in the year to come.
  3.9 pm
  Jane Griffiths: Thank you, Mr. Deputy Speaker, for allowing me to speak in this first debate on our new Thursdays. I join others in paying tribute to the Chairman of the Committee, the Clerk and all his staff, and pay particular tribute to the Chairman for the way in which he has guided and helped us all over the past year and more.
  Yesterday, during a debate initiated by my hon. Friend the Member for Thurrock (Mr. Mackinlay) on Select Committee reform, requests were made for more time for debates on reports of Select Committees on the Floor of the House. A number of speakers emphasised the importance of such debates to scrutiny of the Executive. That makes me all the more pleased to speak in today's debate.
  In my short speech, I shall concentrate on two reports: the 61st, "Getting Value for Money in Privatisations", and the 27th, "Measures to Combat Housing Benefit Fraud". My hon. Friend the Member for Liverpool, Garston (Maria Eagle), both here and in the Committee, has used the "banging your head against a wall" analogy, and that is certainly my experience as a member of the Committee. One learns that banging one's head against the wall hurts, and that not doing so does not hurt; the problem is getting others to understand that, and to stop banging their heads—and, inevitably, ours—against the wall.
  That brings me to the 61st report, which identified a number of key lessons to be learnt in the selling of public assets. The Government welcomed that in a Treasury minute, and it is to be hoped that we and they learn from past experience when it comes to the sale of shares in the Commonwealth Development Corporation, National Air Traffic Services and Belfast port. Otherwise, the public will lose out.
  Billions of pounds of public money were lost as a result of the failure to follow the PAC's recommendations in regard to selling shares in stages. That has already been mentioned today. In 1986 and 1987, the Department of Trade and Industry and the Department of Transport sold British Airways and the British Airports Authority. When the PAC reviewed the sale in 1987–88, it recommended that Departments should consider the phased sale by tranche that was used successfully in the sale of British Aerospace and Associated British Ports. As we have seen, the Government did not learn that lesson. In 1990, the DTI sold the regional electricity companies. Reviewing those sales in 1992–93, the Committee regretted that a phased sale had not been undertaken. I am not discussing the merits or otherwise of privatisation, because that is not the Committee's brief; I am talking about the effects of it.
  It seemed that someone had learned that banging one's head against a wall hurts. In 1991, only 60 per cent. of PowerGen and National Power was sold by the DTI. In 1996–97, the report on the sale of the remaining 40 per cent., which had taken place in 1995, revealed that an additional £2.3 billion had been realised because not all the shares had been sold in 1991. Some lessons have been learnt; but a National Audit Office report published on 16 December last year, which the Committee has yet to consider, reveals that the sale of Railtrack in May 1996 would have raised an extra £600 million if 20 per cent. of the shares had been retained and sold later. We all know that the sale of Railtrack was governed by more than the concept of raising
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  money. It is likely that the taxpayer lost millions if not billions of pounds, because other factors were involved—but perhaps that is more head-banging.
  How are Departments to be induced, encouraged or instructed to learn the lessons, and to implement the findings that the PAC worked so hard to obtain? The Treasury minute in response to the 61st report says:
  "The Treasury will ensure that the lessons set out in this report are drawn to the attention of all departments involved in sales and reflected in guidance for departments."
  That is good, but how do we ensure that the guidance is followed? I suggest to my hon. Friend the Minister that, as well as guidance for Departments, there should be a checklist outlining the procedure that should be followed when a sale is made, and the issues that should be considered at each stage. That would allow future sales to be audited better. Departments would have to provide evidence that they had considered all relevant matters at each stage, and give reasons for decisions that were made.
  I agree with my Conservative colleagues on the Committee that, all too often, the official appearing before it had nothing to do with the process that is being reviewed. If a checklist were introduced and could be monitored, it would be possible to ensure that guidance had been followed; otherwise, we would want to know the reason why. That should minimise the wasting of public money.
  In the 27th report, on measures to combat housing benefit fraud, the issue was examined for the second time in seven years. It was revealed that more than £900 million had been lost as a result of fraud. The Department of Social Security was not even able to show whether fraud was on the increase, and could not provide all the information that was needed about types of fraud, including landlord fraud, and about variations at regional and local level. That essential information simply was not available. The absence of such reliable information should cast doubt on decisions made by the Department to invest in anti-fraud work. If it did not have the information that it needed, how could it be sure that its investment was targeted correctly?
  The Government have committed themselves to reducing fraud in public finances. That commitment is intended to produce a welfare state that is fit for the new millennium that we shall enter in less than 12 months. An important part of the fight to reduce poverty and welfare dependency is the battle against fraud, which is founded on three principles. The first is fairness, and the restoration of public confidence in a social security system that ensures that benefits go to those who need them rather than those who seek to profit at the expense of the needy. The second is responsibility: fraud is anti-social, and that is contrary to responsible citizenship. Government assistance to the drive against fraud is the right expression of responsible citizenship. The third is honesty—ensuring public confidence in a social security system that deals effectively with those who act dishonestly.
  The PAC has a crucial role to play in all that. Admittedly, it will involve taking a backward look, but the information is there, because of the work of the National Audit Office. The Committee can also seek and receive assurances that past mistakes and bad practice will not be repeated.
  What we have not secured, over many years, is a cast-iron guarantee of the implementation of those assurances. Officials come and go, and it seems that, if a

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  new official does not do what the last one recommended, there are few sanctions, and there is little opportunity for the Government to act.
  The Social Security Administration (Fraud) Act 1997 was a big step, perhaps the biggest that any Government have taken in the fight to reduce housing benefit fraud. I am sure that all members of the Committee, and other hon. Members, welcome the strong new powers given to the DSS and local authorities to tackle such fraud. The PAC rightly noted that those who design benefit systems
  "have to strike the right balance between addressing different needs equitably and fairly on the one hand and simplicity and security on the other. However, the present system does not find the right balance."
  The Government are undertaking a fundamental review of housing benefit and its relationship to housing policy. I urge Ministers to note document HC 164 1997/98—also called "Measures to Combat Housing Benefit Fraud"—and the subsequent 27th report of the PAC as part of the process.
  Like other Committee members, I welcome the establishment of the benefit fraud inspectorate, and its aim to drive up standards in anti-fraud work by inspecting individual local authorities. I am not aware of any local authority that has been inspected that regards the process as anything but helpful. It is right and proper that, following inspectorate action, all local authorities are required to provide the Secretary of State with action plans.
  It is also right that, if the Secretary of State considers that a local authority has failed to respond sufficiently to the inspectorate's recommendations, or has failed to carry out its action plan, he or she can decide to issue directions to that authority. If that authority does not respond to the directions, there are powers to impose subsidy sanctions, or, in extreme cases, compulsory outsourcing of benefit delivery services—I think that that is privatisation. In addition, both the inspectorate's sharing of lessons that have been learnt in its inspection with other authorities and the exchange of good practices can only be helpful in the fight against housing benefit fraud.
  In October, the Government statistical service published the results from the 1997–98 national housing benefit accuracy review. Although the report was welcome, the results made gloomy reading. The main findings were that, on average, 16 per cent. of housing benefit claimants receive incorrect payments; that includes both under and over-payments. The cost of that to the taxpayer is £840 million a year.
  There are several ways in which that £840 million a year is lost—official error, claimant error, mildly suspected fraud, strongly suspected fraud—and that is only the money lost that we know about. Prevention is the key to cutting benefit fraud.
  I am pleased to note that 85 local authorities are improving the standard of initial evidence that is gathered at the start of housing benefit claims—it seems self-evident that, if a claim looks dodgy, officers should not go any further with it—through the new verification framework. It is also welcome that £200,000 of Government money is being used to pilot a new initiative where local authorities will, for the first time, I believe, be able to use Department of Social Security solicitors to prosecute housing benefit fraudsters.
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  The commitment to put in place training from April 1999 to improve the skills of fraud investigators is welcome, but—here is another warning from the Public Accounts Committee:
  "Fear of detection can be an effective deterrent against committing fraud, but only if it is backed up by sufficient prosecutions and effective penalties. Yet the level of prosecutions by local authorities is incredibly low, at under 1 per cent. of detected frauds, and suspected fraudsters have a 99 per cent. chance of getting off Scot free."
  It is like saying, "Mr. Fraudster, come here. There is a coffer of public money for you. Just take what you want." Can my right hon. Friends on the Treasury Bench assure me that the Government are willing to commit the resources that are necessary to ensure that 99 per cent. of fraudsters do not get off scot free?
  I take great encouragement from the fact that we are having the debate and from the way in which the House's business has been arranged on this new Thursday. I hope that, as the House considers further modernisation of its working practices, hon. Members on both sides of the House will have further and increased opportunity to debate Select Committee reports and thereby question and hold to account the Government of the day, based on cross-party findings and reports.
  3.23 pm
  Mr. Charles Wardle: It is clear from what has been said in the debate that there is agreement among hon. Members on both sides of the House that both the volume and incisive quality of the National Audit Office case load that is served up to the Committee by its excellent Committee Clerk are formidable. So is the chairmanship of the Committee by my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis). Not one of us on the Committee failed to find himself on the receiving end of a little yellow piece of paper when we were in danger of over-running our allotted time. On that paper were the words, "One minute", so it was fun this afternoon to return the compliment in kind to the Chairman.
  It would be worth drawing the House's attention to a wide range of subjects, but I should like to make some general comments first and then to focus on a few specific reports.
  My first comment has already been headlined by the Committee Chairman and others, and I make no apology for repeating it for emphasis. There is a continuing pressing requirement for an extension of the Comptroller and Auditor General's remit to allow him access for audit purposes to sectors of public expenditure that he cannot currently examine.
  If he is to be fully effective in his responsibilities and to present a complete picture of how taxpayers' money is being spent, the CAG needs not only access to non-departmental public bodies that are audited by private firms which are appointed by the relevant Secretary of State, but access, without hindrance or hassle, to private companies that take on work that is contracted out by central Government and paid for by the taxpayer.
  The CAG should be able to pursue his investigations in local spending bodies, public sector companies, recipients of Government and EU grants, housing associations and many other such organisations. It should be a standard condition of all Government contracts that the CAG has the right to inspect the contractor's books where he considers it necessary.

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  My second observation is about the ability of the Public Accounts Committee to question consultants or professional advisers, along with the relevant accounting officer, when taking evidence. I believe that several Committee colleagues would agree that we could have done a better job probing where the use of public funds may have gone awry if we had been able to question such consultants.
  I understand that merchant bank advisers or consultants may appear before the Committee in the near future. I hope that the Minister, whom I congratulate on her appointment to the Treasury, will agree that it could improve accountability if we could vet some of the consultants and advisers.
  My third general observation is a small, but, I hope, constructive criticism about appropriation accounts. All too often, the format of those accounts is anything but user friendly to anyone but professional accountants and a few officials in the know. As they are public documents, it would be helpful if the accounts were presented in a less obscure fashion.
  My fourth observation is a word of praise for the chief accountancy adviser to the Treasury and his resource accounting team. That has been touched on by the Chairman and others today, but it is worth emphasising.
  The Committee's 67th report provides detailed evidence from the chief accountancy adviser of the basis on which financial management in Whitehall can be modernised. I hope that the House will keep in mind the key advantages that the Treasury plans to deliver when Whitehall switches to resource accounting. I am delighted that the Government are continuing the work on resource accounting that was begun by the previous Government.
  There should be better management information about costs and assets, greater scope to control working capital and cash flow, a chance to focus on outputs as well as inputs and a more switched-on approach to financial control systems. That should empower middle-management ranks in the civil service as well as senior officials if it is used properly.
  The hon. Member for Liverpool, Garston (Maria Eagle) spoke about Whitehall culture being difficult to change. If there is one initiative that will bring about welcome changes in the Whitehall management culture, it is resource accounting. It will enable the Government of the day to allocate resources in the public expenditure round more rationally if they so choose.
  It is sometimes said that some members of the Committee, myself included, are readier to criticise witnesses than to praise them. I hope that my praise for the resource accounting team shows that credit is given where credit is due. I am sure that colleagues would agree that there have been other instances during the previous Session when witnesses have been warmly commended. Her Majesty's Coastguard is one example that comes to mind. However, it has to be said that the preponderance of NAO reports that are considered by the Committee draw attention to cock-ups, confusion, inaction and inefficiency. It is right that we should give vent to our criticism where it is intended to be constructive.
  The Committee report that leaps out for attention and is highly topical, bearing in mind this week's debate in Strasbourg, is the 35th report, which is on the 1996 annual report of the European Court of Auditors. I could not find a Treasury minute responding to that report, but this
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  week's protests from Members of the European Parliament, although they proved to be in vain today, rightly put Jacques Santer and his commissioners in the dock for many of the same reasons that prompted the Committee to condemn the EC's hopelessly inept and corrupt financial performance in the previous year. For several years, the Court of Auditors has been unable to provide a positive assurance on the legality and regularity of Community payments. The Public Accounts Committee endorsed the damning verdict from the Comptroller and Auditor General that the European Commission still has a long way to go before it attains the quality of financial reporting expected as the norm for Government accounts in this country.
  The Committee expressed concern about, among other things, the high level of unnecessary expenditure resulting from the failure of common agriculture policy regulations to take account of movements in world market prices. It was also worried that the systems for ensuring that recovery of customs duties payable to the European Commission did not operate effectively, and about the high level of errors and delays in structural fund payments.
  In short, the Committee drew attention to a complete shambles at the Commission. Although total expenditure in 1996 was a relatively modest £57 billion, the House cannot ignore the Commission's transparent ambition, following hard on the introduction of the single currency and European monetary union, first to harmonise EU taxation and then to ensure that the greater part of taxation is raised at the federal centre rather than within member states. Therefore, it is fundamentally important that we make known such criticisms of the administration in Brussels.
  Sometimes the European sickness of chronic maladministration, highlighted this week in Strasbourg, affects the United Kingdom directly. The Committee's 52nd report revealed that the Intervention Board Agency, which accounts to Parliament for the £4.2 billion gross cost of implementing CAP measures in this country, could not reconcile transactions of £30 million on its accounts, and that it had spent almost £11 million—a figure that beggars belief—on consultants in a failed attempt to balance its books. However, no one at the agency felt the need to resign to atone for those shortcomings.
  The 33rd report, into the Crown Prosecution Service, revealed a similar determination on the part of its then director to shrug off responsibility for the failure to establish a computer system to keep track of cases across the service. In spite of a virtuoso performance of self-advocacy before the Committee, the director lost her job shortly afterwards. I do not think that that was down to the Committee directly, but at least there was some action in that case.
  No such fate befell the permanent secretary at the Foreign Office or his director of resources, who feature in the 34th report. Unfortunately for them, as we heard earlier, they had to explain away a horror story involving a false payments scam at the British embassy in Amman, Jordan. That was barely a year after the permanent secretary's predecessor had blandly assured the Committee that financial controls in Amman were all hunky-dory, even though the embassy had been taken for an embarrassing ride in connection with bogus pension payments. I do not think that anyone ever got to the bottom of that scam.

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  The Committee hearing with the accounting officer from the Foreign and Commonwealth Office, Sir John Kerr, attracted some defensive letters to the press from old FCO hands, but those letters made their authors sound fearfully old fashioned. I am pleased to say that a video of the session in which the Committee took evidence from the permanent secretary—I nearly said of its interrogation of him—is now used as a case study by the Civil Service College.
  I should add that, to his credit, Sir John Kerr—for whom I have the highest personal regard—has sought to rid the Foreign Office of its previous rather haughty indifference to the need for professional financial management by appointing a squad of qualified accountants and young executive types with masters degrees in business administration. They have replaced the amateur generalists who, after two weeks' training, were traditionally put in charge of the books. I am sure that those changes are to be welcomed. They will help remind our diplomats that, although they do an absolutely excellent job for the United Kingdom abroad, they incur an expense for taxpayers whenever they represent our country.
  The 43rd report showed that the taxpayer was treated much more shabbily, both in the scale of the rip-off and in terms of barefaced greed, by the privatisation of Belfast international airport. In a management buy-out, a team of civil servants were able to pay £32.7 million for the airport. Just two years later, they sold it at a profit of £74 million, with no clawback for the taxpayer. As I said in Committee at the time, I am all for people getting rich through hard work, but the group gained more than £3 million a month during its brief ownership of the airport. That was a cynical exercise in profiteering, over which there were scarcely any checks. Given the rather terse official response to the Committee's criticisms of that case, I am sorry to say that it was difficult to judge whether lessons essential to the taxpayer's future wellbeing had been learned.
  Finally, I turn to the 37th report on contingent liabilities in the dependent territories. The Foreign Office's responsibilities for governance, disaster preparedness, risk management and financial controls are diverse, and it cannot be easy to maintain improvements. However, the most pressing concern is drug trafficking. The Committee was told that 30 per cent. of the cocaine reaching the UK comes via the Caribbean. The United Nations estimates that 400 tonnes of cocaine destined for the United States and Europe transits the Caribbean.
  The Foreign Office, with the help of the National Criminal Intelligence Service, and two Royal Navy frigates, is helping the five Caribbean dependent territories to resist drug trafficking but, ominously, Sir John Kerr told the Committee that the fight against drugs is taken less seriously in some independent Caribbean countries than in the dependent territories.
  Among the former British colonies and protectorates in the Caribbean, Belize—formerly British Honduras—became especially vulnerable to drugs transhipment after the British defence forces withdrew in 1994. As other countries in the region have begun to tighten their efforts against narcotics, there is no doubt that traffickers exploit
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  Belize, which is a convenient back door to the cocaine route to the United States via Mexico, Jamaica or the Cayman Islands.
  As the United States Drug Enforcement Administration has confirmed, Belize has a long unprotected coast line, large tracts of rainforest and unpopulated areas that facilitate the movement of much of the south American cocaine trade to the United States market. I hope that a future NAO report will consider the effectiveness with which British taxpayers' money is deployed to help resist drug trafficking in the wider Caribbean area and not just in the dependent territories.
  There is no doubt that there is growing public awareness and interest in clearer accountability from those who spend taxpayers' money. Demands on the National Audit Office will undoubtedly grow but I am sure that it will respond well to the challenge. Whitehall will face inescapably greater pressure to reform and modernise its financial and management controls. That reform is long overdue, and can only be a good thing.
  3.38 pm
  Mr. Christopher Leslie: In 1799, a Tory Prime Minister, William Pitt the Younger, introduced income tax in this country, in part to fund the Napoleonic war. The Inland Revenue has commemorated that momentous innovation with an exhibition at Somerset house, although I am sorry to say that tomorrow is the last day on which it will be open to the public.
  Some people may say that we should not celebrate the invention of income tax. People may call me eccentric, but I resent paying my income tax least of all the bills that come through my door because, as a Member of Parliament, I have a fairly good idea about where my income tax is spent. It is spent on schools, hospitals, social housing, transport and all the other vital public services without which we would all be a lot poorer.
  After about 200 years of income tax, it is important that we recognise that the main public sector safety valve ensuring that taxpayers' money is spent efficiently and effectively and that it achieves value for money is the Public Accounts Committee, working in co-operation with the National Audit Office.
  I was privileged to serve on the Public Accounts Committee until November last year, when I moved on to pastures new. The Committee certainly provided me with a great education in how government works, where money is spent and problems can occur and what solutions might be available. I join other hon. Members in paying tribute and thanks to the staff of the PAC as well as to Sir John Bourn, the Comptroller and Auditor General and the other staff of the National Audit Office for all their excellent advice and assistance in the previous Session. I also pay tribute to the chairman of the PAC, the right hon. Member for Haltemprice and Howden (Mr. Davis), for all his help and assistance and for his impressive scrutiny and his collegiate approach throughout our non-partisan hearings.
  About a tonne of reports must have been produced from the many hearings. The evidence is on the Table, which is weighed down by the bulk of blue paper that the Committee approved, often paragraph by paragraph, in many of our sittings. So we have worked hard. I cannot go into all of the reports, but I will focus my attention on some of the most important findings of the past year. Unsurprisingly, most relate to privatisations, to which other hon. Members have referred.

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  The findings on water privatisation have not been mentioned. A year ago, the PAC heard evidence from the Office of Water Services into the regulation of the quality of services for customers. We questioned Mr. Ian Byatt, the Director General of Water Services, about his duty to secure the proper financing by water companies of quality water and sewerage functions and the fact that that depends on getting the privatised companies to give priority to reinvestment in the utility's infrastructure. Clearly, Ofwat regarded the main trade-off as finding ways to get money to the customer, by ensuring that prices were reduced, or to get companies to spend their resources on infrastructure, the drainage network and so forth.
  Those are not the only options for those companies, which are making a large profit. In that hearing, we learned that massive dividends were paid out to shareholders. The profits were leaking out of the water companies. Rather than being reinvested in better-quality services, the money was going to the shareholder. Two interesting statistics came out during the hearing. More than two thirds of the total pre-tax profits of the water companies go out of the industry into dividends, so it is not reinvesting as much as it should be. That has meant that, on average, nearly a quarter of the typical customer's bill has gone straight to finance dividend payments.
  The PAC's 36th report concluded that dividend payments were at an unacceptable and unsustainable level, potentially putting at risk investment and the quality of services to customers. Therefore, we recommended that Ofwat, in particular, should consider instituting further safeguards to protect customers.
  Ofwat has responded fairly well, by reiterating its belief in RPI minus X as a regulatory system and saying that
  "dividend policy should be transparent and must not put at risk the companies' ability to discharge their functions".
  We must reconsider, though, how better to ensure that price cuts and infrastructure investments are achieved as a matter of priority and that profits are not put before the services that need to be provided to the customer.
  The other privatisation inquiry that stands out most clearly in my mind was that into the railway rolling stock companies. I do not know whether hon. Members saw on the news yesterday that a baseball hit by Mark McGwire, which set the record-breaking 70th major league home run, was sold in New York for £1.65 million by the man in the stand who had caught it. Anyone who thinks that that was a fortuitous windfall may not have heard the story of the railway rolling stock companies and the few former British Rail managers—three in particular—who made an absolute killing during the privatisation exercise. For example, Mr. Jukes from Forward Trust, which is now called Eversholt, invested £110,000 as his initial stake and sold the company on only 12 months later for a personal profit of £15.9 million. Mr. Anderson of Porterbrook put in £120,000 and sold the company after only eight months for £33.5 million. Dr. Prideaux of Angel put in no money—he got the banks to front the company—and received £15 million.
  It was enlightening to have the opportunity to question those three former British Rail managers about why they deserved that windfall. What special effort had they put in to earn that amount of money? The answer given to the PAC was that the risk that they had taken justified the massive return. When asked whether they deserved
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  the profit or felt a little guilty at having ripped off taxpayers so massively, it was not surprising that we did not get much of a response.
  What annoys me, the public and other members of the PAC most is that the assets—the family silver—could be sold off by the previous Government at such an undervalued rate. They were almost given away. Those people made all that profit because, when they sold, the market recognised the true value. Unfortunately, the taxpayer did not get the money. That is why, in that report and subsequently, we looked into ways to reduce such windfalls. I was glad to see in the Treasury minute on that report that the Government accept that those windfall gains certainly risk discrediting privatisation and that they
  "will consider carefully in future sales mechanisms to prevent any purchasers from enjoying excessive windfall gains."
  Such mechanisms are sometimes known as the clawback clause and we need to use those arrangements much more frequently.
  Many other aspects of privatisation were raised in our hearings. Hon. Members have mentioned our over-arching report into value for money in privatisations. One aspect of that is a clawback arrangement that will ensure, particularly when high levels of uncertainty are associated with the sales, that we build into contracts ways to get the windfall right for the taxpayer and the Government. Another recommendation is that we must value companies properly in the first place, to ensure that the best price tag is put on them before privatisation so that the proper market value is gained for the taxpayer and that we do not merely give assets to the private sector because of dogma or ideology. If they are to be given away, there is a reason and there should be a gain to the public at large.
  It is true that the report recommends that, if shares in privatisations have to be sold, it should be done in stages to test the market more effectively. I am glad to see signals that that is becoming a more acceptable practice for the public sector.
  I do not think that any hon. Member has touched on the fact that the PAC recommended that close scrutiny should be given to pre-sale restructuring, so that the Government do not spend millions of pounds of taxpayers' money putting aspects of the public sector right and then hive them off to the private sector. If major amounts of public expenditure go on restructuring, the public should gain some reciprocal benefit.
  On a number of issues, one felt that one could ask the same question of whatever witness came before the Committee. Advisers' and consultants' fees are always being raised in the PAC, and members of the Committee become exasperated. I think especially of the inquiry into design, build, finance and operate roads under the Department of Transport. We must consider advisers' and external consultants' fees throughout government to ensure that we always get value for money.
  Fraud is part of the bread and butter of our inquiries. The right hon. Member for Bexhill and Battle (Mr. Wardle) reminded me of the fraud at the Amman embassy. Extrapolated downwards, the stationery budget equated to, I think, 300,000 biros. The amount of fraud on the mileage budget would have taken a car around the world 12 times—physically impossible in the time available. We must ensure that our accounting officers more rigorously monitor such day-to-day expenditure.

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  Many other management issues and lessons emerged. Those lessons should be internalised in the day-to-day operations of the Government.
  I was pleased by the development of the new public service agreements initiative which evolved from the comprehensive spending review in the summer. Contracts between the Treasury and Departments mean that extra cash is provided to secure not only the services but modernisation and reform of the way in which Departments operate and of the services that they provide. That is a strong step towards better incentives for best practice in Departments, and places more responsibility on accounting officers and Departments.
  Other hon. Members have mentioned the news on fraud going around the European Union. That is a clear example of a lack of good democratic auditing procedures as strong as those that we have established over the many years that the Public Accounts Committee has been going and it has led to great problems in European institutions. As a strong European, I think that, if we need government in Europe, it must be publicly accountable and the money spent must clearly be shown to be good value for money and to have been efficiently and effectively spent. Developing auditing processes in the EU is important.
  I had to come off the Public Accounts Committee in November. I learned a lot from it and am sad to leave, but I was pleased that today's speeches showed that the robust tradition of scrutiny and good accountability for public accounts will continue for many years to come.
  3.54 pm
  Mr. David Atkinson: I echo the congratulations offered by my hon. Friends to the new Financial Secretary on her recent promotion. She has been very helpful to me on the issue to which I shall confine my remarks; it will come as no surprise to her that it is the subject of the Public Accounts Committee's 66th report, "Managing the Millennium Threat". It was published last July and the Treasury responded in October. Given its importance, I am sorry that the issue was not highlighted in the motion.
  As the first hon. Member to raise the issue way back in 1995, I want to use this debate to warn that we are not doing enough and have not done enough to avoid problems that are now inevitable, as more and more experts are concluding. It is essential that contingency plans are in place well before the end of this year.
  When I first raised the issue at Prime Minister's questions, the entire House fell about in response to the warning that I gave my right hon. Friend the Member for Huntingdon (Mr. Major) about the consequences for business and Government if it was not addressed. I do not suppose that there were many in the House then who knew what I was talking about; most probably thought that what I was suggesting was silly, sensational and apocalyptic. To be honest, that had been my view. It was only because a constituent in the computer business had raised the issue with me at a surgery that I made inquiries and became convinced that he was right to be concerned that no one was responding adequately.
  Although my right hon. Friend the Member for Huntingdon did not refer to it in replying to my question, I had already learned from him that his Government were
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  planning and implementing measures that were to put this country ahead of most others in terms of awareness and taking action in the public sector. That is contrary to the picture painted by Ministers of this Government, who suggest that they found the cupboard bare when they came into office. The proof of that, if it were necessary, can be found in the report of the National Audit Office published on 21 May 1997, "Managing the Millennium Threat", which was clearly prepared before the general election.
  I accept that some of the answers that I received to the questions that I tabled to every Department in early 1996 were complacent and short on detail. However, as the NAO report confirmed, the central information technology unit of the Office of Public Service, supported by the Central Computer and Telecommunications Agency, was ensuring that central Government were preparing our public services in good time to anticipate and avoid problems in the three years before the millennium.
  In reply to my Adjournment debate in June 1996, the first detailed debate in the House on the matter, the Minister responsible for information technology, my hon. Friend the Member for Esher and Walton (Mr. Taylor), announced the establishment of TaskForce 2000, a Department of Trade and Industry-sponsored, private sector-financed public awareness campaign aimed at ensuring that British business would be millennium ready.
  I apologise for harking back to the past, but, to my knowledge, no one has put the record straight in the House on the previous Government's response on the millennium bug. It is, of course, not mentioned in the 66th report. However, I stress, as I always have, that I do not believe that voluntary action by business, in response to DTI exhortation and the TaskForce 2000 campaign, will be enough to ensure our millennium readiness. That will have a knock-on effect on the provision of public services.
  Such is the nature of the issue that it is not enough to ensure that the necessary action on the computer systems of Departments and public sector agencies, as well as those in the business sector, has been taken, including sufficient time to allow the testing essential to ensure millennium compliance. If the systems with which those computer systems are linked, such as those of their suppliers or receivers, are not compliant, theirs will also fail to perform after the first midnight of the new millennium. As is becoming more widely understood, it is an all-or-nothing situation. In a network of computer systems, the chain is strong as its weakest link. If one system is not compliant, all those with which it is linked are also at risk.
  There will always be reluctance to disclose true millennium readiness, especially in the private sector. There are many reasons for that, including maintaining competitiveness, the risk of future legal liability and the difficulty of obtaining insurance. As the Chairman of the Public Accounts Committee said, the civil servants who assured the Committee that we will be all right on the night next new year will not be around to pick up the pieces. That is why the Pledge 2000 initiative mentioned in the Treasury response, which the Government have signed, to the 66th report will prove not to be worth the paper on which the signatures are written.
  The non-legally binding abstracts issued by the urgent issues task force sub-committee of the Accounting Standards Board on disclosures on millennium

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  compliance relating to business, to which the Financial Secretary referred in her reply to me last year in her previous role at the Department of Trade and Industry, will prove to be totally inadequate as the only yardstick of progress in this country. Both serve only to encourage over-optimistic and complacent conclusions that do not reflect the reality.
  For the reasons that I have given, I felt that there was no alternative but to legislate to introduce a statutory requirement on company directors to assess the millennium compliance of their company's computer systems and to report the outcome of that assessment in their annual report to shareholders—the owners of the company—together with the action that they were taking to safeguard the company and the shareholders' investments in it if its systems were found not to recognise the year 2000. That was the object of the private Member's Bill, the Companies (Millennium Computer Compliance) Bill, which the House allowed me to introduce under the ten-minute rule procedure in November 1996. The Bill had reached its Report stage by the time of the general election. I had amended it in Committee in response to suggestions that I received from the top 100 companies that I had approached, many of which supported my Bill.
  I contend that, if the previous Government had allowed my Bill to become law before the dissolution of Parliament, this country would now be far and away ahead of all others in the millennium readiness of both its public and private sectors. Company annual reports for the years ending 1998 and 1999 would have seen to that. Even the present Government had an opportunity to support the Bill when the House allowed me to reintroduce it in June 1997 after the general election. I appreciated the fact that the Minister courteously listened to my arguments on that occasion. Instead of supporting my Bill, the Government chose to suspend TaskForce 2000 before replacing it with Action 2000 almost six months later. In hindsight, I believe that that delay of almost six months will prove to have serious consequences in terms of missed targets and escalating costs.
  The concerns about the millennium bug are reflected in the Public Accounts Committee's 66th report. It concludes:
  "we cannot be sure that government business will not be disrupted in the year 2000…we are concerned about the readiness of the wider public sector to cope with the Year 2000 issue".
  In response to the Committee's concerns that the NHS executive could not give an assurance on the safety of patients, the Treasury was right to say that it would be dishonest to guarantee that there would not be a single unforeseen mishap. The truth is that no one can guarantee that, where date-related computer systems are involved, nothing will go wrong at the end of this year. No one knows for sure how widespread the year 2000 problem is likely to be.
  We know that many modern computer systems are vulnerable to flawed software. Even Windows 98 is not millennium compliant unless action is taken and then tested, despite the assurances of Microsoft. The PAC was therefore right to urge in its report that the Office of Public Service should
  "Ensure that contingency plans are in place, and are tested."
  It said:
  "We look to the Office of Public Service to require all public bodies to have comprehensive robust business continuity plans in place by January 1999."
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  The Treasury has responded by saying that a number of Departments and agencies have yet to begin work on dedicated year 2000 business continuity plans. I suspect that that situation applies throughout the entire public and private sectors of this country. There will be all too few contingency plans in place, and they will be too late to be effective.
  We still have the time, just, to replace a reliance on a voluntary requirement to have in place contingency plans with a statutory one. That is why this morning I secured from the Public Bill Office the opportunity to introduce a new Bill under the ten-minute rule procedure to require organisations responsible for providing essential public services and critical infrastructure to draw up contingency plans in the event of their computer systems failing to deal with calendar dates after 31 December 1999; to require such plans and the names of those responsible for them to be notified to an appropriate authority; and to require the plans to be made available on demand. I shall seek the leave of the House to bring in the Computer Millennium Non-Compliance (Contingency Plans) Bill on Tuesday 2 February.
  If enacted, my Bill would do much to ensure that the essential public services on which all of us rely, especially the most vulnerable, will be protected in less than a year from now; otherwise, we shall see develop over this year a growing mood of uncertainty and alarm, which will alter the behaviour of the public and of financial markets. We still have time to avoid that situation.
  4.6 pm
  Mr. Alan Campbell: I am pleased to be able to speak in this debate and pleased, too, that this year we are dealing with our own reports rather than with reports inherited from the previous Committee—although I suppose the Minister may not share my sense of familiarity with them. I associate myself with the comments made about the work of the Chairman of the Public Accounts Committee, the Clerks and the National Audit Office. I add my warmest wishes to my hon. Friend the Minister in her new role. She brings with her a considerable reputation from the Department of Trade and Industry. I wish her well.
  The Committee produced 67 reports over the year. The House will be relieved that I do not intend to comment on all of them. I shall limit my comments to three—the 48th report "Ministry of Defence: Sale of the Married Quarters Estate", the 61st "Getting Value for Money in Privatisations" and the 65th "Privatisation of the Railway Rolling Stock Leasing Companies". I wish to comment on those reports for two reasons. First, privatisation is an on-going issue. The Government have signalled their intention to sell shares in the Commonwealth Development Corporation, the National Air Traffic Services and Belfast port. We have also collected a national asset register that presupposes that in the fulness of time those assets will also be sold off.
  Secondly, the 61st and 65th reports were published when the House was in recess. The 65th attracted some attention, such was the scale of public concern. The reports raise important issues for the House: they should be debated on the Floor of the House and our debates should be on the record of the House.
  My hon. Friend the Member for Shipley (Mr. Leslie) has already alluded to the 65th report. In July 1992, the then Department of Transport issued proposals for railway

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  privatisation. That was followed in 1993 by the Railways Bill, which provided the legislative background to privatisation. British Rail began to reorganise its operations for sale. The three rolling stock companies or roscos were to lease stock to the train operators. That was to be a long-term investment. It was assumed that the rolling stock would have a lifespan of about 30 years. I suspect that there are people travelling on trains who would regard 30-year-old stock as something of a luxury, but it would be a long-term investment. In 1996, the roscos were sold off for about £1.8 billion, but the important point is that, within a few months, they were sold on for £2.7 billion. In that process, the taxpayer lost out considerably and British Rail managers in post and former British Rail managers made personal fortunes. We have already heard that, for personal investments of between nothing at all in one case, and £120,000 in another, those managers received windfalls of between £15 million and £33 million. Perhaps to rub salt into the wounds, they admitted to the Committee that, when they sold the companies on, none of them paid capital gains tax.
  The Committee found it significant that two of the three buyers of the roscos were management buy-outs. Employee buy-outs were envisaged in section 113 of the Railway Act 1993, but, with hindsight, I am quite sure that the employee buy-outs and the sell-offs were not the type of management buy-outs envisaged in the Act. I am very much in favour of employees owning their own companies, or certainly having shares in their companies, but that type of management buy-out does not fit my model, either.
  It became clear that being a manager in British Rail at that time gave certain advantages. All the potential bidders who came before the Committee said that they had access to what they called the basic information—in one case, they said that they had had too much information—but much of that information was provided late, and the British Rail managers were in a much better position to deal with it and to realise its importance. There is an enormous difference between having information about a company and understanding how that company works—that is of fundamental importance for all privatisations where management buy-outs are involved. The British Rail managers had that understanding so, as the Committee pointed out, the playing field was not level.
  Furthermore, one potential bidder, who came before the Committee and who later bought one of the roscos, said that, when he had contacted the sellers asking for an indicative price, he had been told £1 billion each. Even when the roscos were sold on, they did not attract £1 billion each. Mr. Souter was able to shrug his shoulders at that when he appeared before the Committee; he had lost out the first time, but presumably thought that he would gain the second time. I am sure that it is in the nature of Mr. Souter's work that he believes that what goes around comes around, and that his time will come. The question for the Committee and for the House is when the taxpayer's time will come in these deals.
  The Department of Transport was aware of the loss-making potential of those deals and yet, as we have already heard, no clawback arrangement was made. The funding arrangements for the channel tunnel rail link
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  contained a clawback provision over the next 15 years. It is not impossible to arrange such provisions, but the Committee was told that clawback was not seriously considered and it did not find its way into the final arrangements for the sale of the roscos. The Department was told to get on with it: it was told by Ministers to carry on regardless, and that the shortfall could be blamed on market conditions. It is clear that, by selling those companies in the way that they did, the Government helped to create the very market conditions about which they had been talking.
  In April 1994, the plan was put to the Prime Minister and sanctioned at the highest level. Warnings were put in a memorandum; the Committee pointed out—and I point out again—that it wished that the accounting officers had put that information in a letter. The officers have a responsibility not only to their Departments and to Ministers but to the House, and it would have been nice if they had discharged that responsibility by putting their information and warnings in a letter.
  We were told that political uncertainty had affected the sale, but most of the people who appeared before the Committee said that railways would have be on the Government's agenda whichever party won the election. They were told that investment could not come only from the taxpayer, which suggested that the companies would have to look to the private sector. As most of those who came before the Committee admitted, they realised that the new arrangement would carry Government subsidy and that if—almost unimaginably—it all went horribly wrong for the railways, the Government would have to step in.
  Where was the uncertainty in that? The people who recognised that there might well be uncertainty but who could recognise the potential were, of course, the managers themselves, who went on to buy and sell on the roscos. Almost predictably, the Government went for a quick sale, the market got the depressed sale that it had anticipated and quick profits were made. Although I agreed with much that my hon. Friend the Member for Liverpool, Garston (Maria Eagle) said about the role of civil servants, I want to point out that those sales were ministerially led; they were not led by departmental civil servants.
  Mr. Phil Hope: Was not the period that elapsed between the management buy-out and the time when the managers sold on the rolling stock companies as little as seven months? It is difficult to justify the assertion that market conditions were responsible for the conditions of the original sale, given that, only a few months later, the companies were sold on for such huge and unacceptably high profits.
  Mr. Campbell: I am grateful to my hon. Friend for making that comment. It is precisely the point that there appears to have been some miraculous change in market conditions, and I shall return to that matter in due course.
  I should like to move on to the Committee's 48th report, dealing with the sale of the MOD married quarters estate. Although it is easy to see how rolling stock might deteriorate over time and fall in value, it is hard to understand how property prices for the married quarters estate could fall in value over a period of 25 years. The evidence to the Committee showed that the MOD's

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  preferred option in 1994 was some kind of housing trust. In summer 1994, new Ministers at the MOD again sanctioned the sell-off and again it was sanctioned by the highest authorities. Annington bought the houses, which, as we have already heard, are rented back to the MOD. Annington paid £1,662 million; that is a considerable amount, but, on the MOD's estimate, it is still £140 million less than it would have cost the MOD to run the houses for the next 25 years, and at the end of that time the MOD would, presumably, still have owned the properties.
  The Committee was told, in most of sessions at which privatisation was discussed, that privatisation is about the transfer of risk. It is hard to see where the real risk lies for Annington in that deal, but I know where the risk lies for the taxpayer. The MOD spends about £350 million a year in rent, whether or not the houses are occupied, and in December 1997 some 13,600 MOD homes were unoccupied, at a cost to the taxpayer of more than £60 each a week in rent. The MOD spends at least £1,500—probably considerably more—on each house every year on maintenance costs, and it admitted that it still pays £11 million a year to keep families in private accommodation. If we add up the costs of the sale and of the outgoings over the next 25 years, we see that the taxpayer, or the then Government, received £1.6 billion for the deal, but that the actual cost to the taxpayer would be £3 billion over that period. To rub more salt into the wounds, Annington did not ask to pay the money in two tranches, but was asked to do so. Again, the taxpayer lost out. I understand that one anonymous employee of Annington described the matter as a "licence to print money". However, yet again there was a huge sale for which Ministers created the market conditions.
  I have a number of concerns about that and other privatisation matters and welcome the 61st report, on best value for privatisation. I hope that the Government learn lessons from it, for in the past it seems that despite all the warnings, minutes and guidelines that existed, if Ministers wanted to push decisions through, they did so.
  I was interested to hear the comments of the hon. Member for Faversham and Mid-Kent (Mr. Rowe), who unfortunately has left the Chamber. He spoke about examining public expenditure or privatisations before they actually happened. I shall return to that theme later.
  As has already been pointed out, it is not for the Committee to be for or against the policy of privatisation: to some extent, we are all privatisers. However, the Committee has a role to play when the implementation of that policy fails to give value for money to the taxpayer. The more privatisations we looked at, the more some of us became convinced that there had been a headlong rush towards sell-offs under the previous Government, either to fill the coffers or to spread the perceived benefits of privatisation. That is for others to judge. However, that policy produced what my right hon. Friend the Member for Swansea, West (Mr. Williams) memorably called a "scorched earth" policy—or perhaps a "final solution" would be a better term.
  It is not as though there are no watchdogs in this area. However, if I owned a watchdog—perhaps I should say that I do in case there are any burglars in my neighbourhood—I would not be very happy if it did not bark until the deed was done. It is no good the dog's barking after the burglar has been in and run off with the family silver. I wonder whether there should be earlier
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  scrutiny. I appreciate that it would be difficult to identify who should carry it out: issues of commercial confidentiality would presumably preclude the House from assuming that role. The National Audit Office and the Public Accounts Committee already have a scrutiny role, but that comes into play after the event, and it would muddy the waters if they provided advice on the process beforehand.
  Would it make that much difference if the decision to proceed were made almost come what may? By the time the Public Accounts Committee considers the matter, the Minister concerned has often left office or moved on, as has the accounting officer. I think that the charges pending against accounting officers should be considered before they move on so that the Public Accounts Committee could become involved earlier in the process.
  This debate is not about closing the stable door after the horse has bolted. These reports are made more difficult to swallow because we were told for a long time that the horse was a nag that was not fit to enter the 2.30 race at Hexham. However, we often discovered within a few weeks of the sale that the horse had turned into a grand national winner. The jockey who rode off with the horse not only received no share of the winnings but did not achieve the asking price. Yet we see the occasional glimpse of a jockey opposite.
  The taxpayers deserve better. Governments are very good at collecting and spending taxes: they should be better at safeguarding taxpayers' interests. We hear a lot about tax at election time, usually from aging rock stars and game show hosts who threaten to leave the country if taxation is increased—although unfortunately they seldom do so. They are probably in a position to look after themselves. I am concerned about the small business people, the teachers, nurses, pensioners and the girls on the check-outs at Morrisons who do not have to earn very much before they start paying tax. Their parents and grandparents paid tax that was used to buy and sustain public companies, and they deserve better from their investment.
  I hope that the Government recognise those concerns, because the issues remain current. The Public Accounts Committee will continue to hold current Ministers and accounting officers responsible for their decisions.
  4.23 pm
  Mr. Alasdair Morgan: I wish to refer to the 42nd report of the Public Accounts Committee, which deals with the Skye bridge. I shall be relatively brief, as many of the issues were covered by the hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy).
  The Skye bridge was the first private finance initiative project—the former Tory policy has apparently now become new Labour orthodoxy and been re-branded public-private partnership. The handling of the project was a disaster which the Committee rightly criticises. A few quotes from the report will illustrate that fact. The report states:
  "This was a serious omission in their evaluation of the project which leaves a question mark over its value for money…Toll payers' interests were insufficiently protected…We are not satisfied that the costs of the bridge are reasonable … This was contrary to good practice, unfair and imprudent…It is highly unsatisfactory…A question mark must remain over the extent of value for money obtained."

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  The project was a disaster which, thankfully, the Government responsible paid for, together with their other mistakes. One might argue that at least we got a bridge at the end of it. The Public Accounts Committee recognises that fact in its first conclusion, which states:
  "The Department achieved their primary objective, the provision of a privately financed tolled crossing to Skye."
  In its eagerness to find a statement that was not critical of it, the Scottish Office responded to the Public Accounts Committee by saying:
  "The Scottish Office Development Department is pleased that the Committee recognises that the bridge brings benefits."
  It is hardly likely to have done anything else, given that Skye was previously an island unconnected to the mainland. Any bridge built by anyone would presumably have brought some benefits to the people of Skye. However, the anger in Skye and in Scotland remains.
  The Labour party in opposition peddled the story in the highlands and islands that it would abolish tolls when it came to power. However, there has been only a reduction in tolls—to which the Committee refers in paragraph 17 of its report—for frequent users of the Skye bridge. If one is prepared to shell out £26, one can get one's tickets at a discount.
  Many car owners on Skye, in my constituency and throughout rural Scotland would not own a car if they lived in an urban area. They cannot afford to run their cars: they do so because it is a necessity, as sufficient public transport does not exist. A disproportionate part of their family budgets is devoted to running a car. The annual MOT test can cause a family budget crisis if the car fails to pass. It is claimed that £26 is somehow a concession for those people, but I think that the charge is most unfair as it bears so heavily on those who can least afford to pay. The Government must do more work in order to bring the benefits of a really low toll to the people of Skye and the highlands and islands. Why should the people of Skye and the highlands pay for a defective scheme and for the mistakes of the previous Administration?
  In 1997, this Government were prepared to write off £62 million in debt on the bridge across the Humber and to reduce interest payments on the remaining debt. Will the Government explain why the people of Skye are somehow less deserving of having their debt written off? After all, the fee for a return crossing on the Humber bridge is £2.60 and it is £11.20 on the Skye bridge.
  Mr. Charles Kennedy: I have already had my shout, so I am loth to intervene. However, I must raise a point about the Government's concessionary package—which was much less than Labour implied at the time of the election. I know from my own experience that those in the poorest categories, particularly the elderly, might make the crossing only two or three times a year, mostly to travel to Inverness for hospital visits. Forcing such people to purchase a book of 20 tickets for £26 adds to the disadvantage and discrimination that they already suffer.
  Mr. Morgan: I thank the hon. Gentleman for making that valid point. Added to the cost of the crossing is the substantial cost of petrol in rural areas, which has not been helped by some of the Government's policies. It is a
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  mistake to think that people travel regularly from Skye to Inverness. The hon. Gentleman is correct to say that some people must wait two or three years before they realise any benefit from their £26 investment.
  The Government have said that there is no funding available to buy out the concession contract. In light of the Committee's report, do the Government consider that a variation of the windfall tax might be appropriate in the case of the excess profits that are clearly being made by the concessionaire? Would it be appropriate to use such a tax to buy out the contract? The Bank of America now owns 97 per cent. of the bridge and is presumably clawing back 97 per cent. of the profits from its concession. It is currently being sued in the United States to the tune of £1 billion by the city of San Francisco and some 250 other local authorities in that country. There could be no more apt a target for a windfall tax.
  The report also says that there is no guarantee that the toll will be removed even once the debt is repaid and the concession ends. Will the Government now give a guarantee in that respect? The Scottish Office's response to the part of the Committee's report that broached that subject was fairly opaque and was included in a series of responses that the hon. Member for Ross, Skye and Inverness, West described as casual.
  The hon. Gentleman also mentioned that Professor Robert Black of Edinburgh university said last week that the fact that the assignation statement identifying the authorised concessionaire had not been published along with the toll order was a fatal flaw. The legal basis for collecting tolls now seems to be on shaky ground. Surely the legitimacy of the whole operation urgently needs investigating, as the hon. Member for Ross, Skye and Inverness, West has already suggested. Once the result of the current action before the Court of Session in Edinburgh is known, that investigation must be set up as a matter of urgency.
  We need a thorough inquiry into the complex web of financing and contractual obligations. The inquiry must be conducted in a transparent manner because throughout the saga we have lacked any such transparency. As every year goes by, the public and hon. Members become more and more confused about the matter.
  I turn finally to another matter that has been mentioned in the debate. The Chairman of the Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), referred to the nature of scrutiny arrangements under the new Scottish Parliament. I believe that the system will increase the scrutiny of public expenditure in Scotland. No United Kingdom committee, even one with the appetite for work that the Public Accounts Committee seems to have, could hope to give the amount of scrutiny to Scottish expenditure that it will receive from a committee of new Members of the Scottish Parliament, who presumably will be eager to call to account the civil servants in St. Andrew's house. That has too seldom happened in the past.
  The hon. Member for South-West Hertfordshire (Mr. Page) followed the same line, but his suggestion that the Public Accounts Committee should continue to investigate activities in the devolved departments in Scotland is a recipe for chaos and conflict and would be

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  deeply resented in Scotland. My party wants the new Scottish Parliament to work effectively, but it will not be assisted in that if Committees in this House interfere.
  Mr. Page: I made that suggestion only in regard to the extra moneys that will be paid by the English taxpayer to the Scottish taxpayer.
  Mr. Morgan: I do not think, Mr. Deputy Speaker, that you would allow me to rehearse the argument that Scotland is not subsidised by the UK taxpayer and that, if anything, the cash flows in the other direction. I would be willing to have an argument about all kinds of expenditure against all kinds of income which I think we would win, as we have done in the past, but I shall move on.
  Later in his speech, the Chairman of the Committee referred again to the need for parts of the United Kingdom to learn from the experience of other parts. He cited the Committee's report on cataract surgery in Scotland. After devolution, any report produced by the Scottish Parliament would be just as readily available to Departments elsewhere in the United Kingdom as a report by the House on Scotland currently is. What matters is the willingness of Departments and agencies throughout the United Kingdom to learn from the experience of others in the UK and, for that matter, in Europe.
  4.34 pm
  Mr. Geraint Davies: I, too, thank all those at the National Audit Office, Sir John Bourn, the Committee Chairman and, in particular, my right hon. Friend the Member for Swansea, West (Mr. Williams), whose experience was helpful to all members of the Committee.
  I also congratulate the new Financial Secretary on her appointment; I am sure that she will bring a wealth of experience to her new role. Last night, I hosted a forum of 50 businesses in the House, which was attended by her successor, by Lord Clinton-Davis, and by the Minister for Energy and Industry, who all sang her praises. She will bring a businesslike approach to her new role.
  It is a great privilege to be a member of the Public Accounts Committee because it is the premier Select Committee. Other Select Committees receive minuscule support in terms of the numbers of staff they have compared with the National Audit Office. That is right, because there is £5,000 of Government expenditure for every man, woman and child in the country. It is of key importance that Governments deliver value for money. The new Government, with their focus on outputs and value and the public service agreements that have been referred to, are in favour of that approach. It is important that we are pushing in the same direction.
  My background is in multinational companies, where I managed product development, marketing and advertising for Europe and Britain before starting my own businesses. I was also leader of Croydon council, the largest council in London. I came to the Committee with those perspectives. I was surprised that Departments did not adopt proper accounting techniques and, in particular, that they had no apparent idea of cashflow or asset management. That is now being changed through the introduction of resource accounting, which is welcome. Through more rational asset management in individual Departments, we shall be able to make great savings and create opportunities for the taxpayer.
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  Local government is often regarded as the poor relation of central Departments, but councils already perform asset and capital management and use performance indicators, which are now being included in public service agreements. Previous speakers have mentioned parliamentary accountability for that expenditure. Councils are audited by the Audit Commission, but there is not a Select Committee considering their expenditure. Perhaps the Environment, Transport and Regional Affairs Committee should do that, as the Chairman of that Committee has suggested. Other hon. Members have mentioned the lack of accountability of the Housing Corporation, housing associations and quangos and the need for more rigour in European expenditure to bring greater confidence as we move towards a new Europe.
  Hon. Members have referred to the accountability of those who are meant to be responsible for expenditure—the so-called permanent secretaries, who are in fact semi-permanent because, as career civil servants, they move on from a post as soon as the Public Accounts Committee catches up with them. We need to consider a system of accountability for those individuals. A problem in many of the Departments that we have studied is that many civil servants have not had sufficient financial training. Departments do not have enough accountants and financial or commercial experts to focus on value for money and outputs. There are great people in the civil service, but we need to strike a commercial balance.
  The Government are considering more partnerships with the private sector under the private finance initiative, which the Committee has examined. It is crucial that when the public sector engages with the private sector, the former is enabled to get the best deal through commercial negotiation. I look forward to a new era of secondment and switched experiences in which we can ensure that we get the best value for the taxpayer.
  Several hon. Members have referred to privatisation, and I shall not dwell on the points that were made so well by my hon. Friends the Members for Tynemouth (Mr. Campbell) and for Shipley (Mr. Leslie). The issues considered by the Committee are not political; they relate to management and to getting the best deal for the public, but there is a grey area about when timing becomes policy.
  As has been said, different people have different views on privatisation, but let us assume for a moment that we agree with a given privatisation. If that is so, we have to accept that timing is important in respect of value for money. If rolling stock suddenly has to be sold before a general election, as was the case, what happens to value for money for the taxpayer? There is a false sale, which means a lower price. The rolling stock cannot be sold in stages so the market cannot be tested, and, even more crucial, the people who thought that there might be a Labour Government—wise people knew that there would be—wonder what the commercial value of the privatised rolling stock of a formerly nationalised railway would be under a Labour Government.
  Some people might think that a Labour Government would not want to encourage that, but because the previous Government were hastily pushing civil servants into the premature sell-off of railway stock, what happened, among other things, was that the price was deflated but later took off in a real market and was then exaggerated by the political changes. In the interests of the Government and the taxpayer, the sale should have

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  been delayed for the sake of value for money, instead of being pushed forward for ideological reasons. There is a similar story with the Ministry of Defence property, a scandal that has already been mentioned.
  Public service agreements are measurable performance targets that the new Government have introduced and I shall focus on how they fit in with the activities of the NAO and the PAC. The old way of allocating Government expenditure was on a yearly basis. Every year, each Department would tell the Treasury that it wanted a certain amount of money because it had it last year and that it must have it again or there would be problems.
  The new way—the third way, as it were—is for expenditure to be output-based. New money is allocated on the basis of what is to be done with it, whether what is to be done is measurable and what it will mean for the public. This involves a three-year planning phase—the comprehensive spending review—and alongside it we are to have resource accounting. It all adds up to a much more professional, strategic approach to the management of public funds.
  Obviously, we have all heard about the extra £40 billion that will be spent on health and education, but the watchphrase is "investment for reform". That is what the public service agreements are about: 350 performance targets and 150 efficiency targets. We shall be able to see things coming which the PAC needs to review—for example, truancy needs to be down by one third in three years, car crime needs to be down by 30 per cent. in five years, and there needs to be 3 per cent. efficiency savings a year in the national health service.
  Let us not pretend that there will not be debates over the priorities, whether there should be local variations and whether there needs to be a shift in priorities over time. However, the key point is to make it clear that we look for a return on investment in terms of the outputs that the public enjoy.
  The right hon. Member for Haltemprice and Howden (Mr. Davis) mentioned in passing independent verification and scrutiny. I am sure that they will be instituted. My understanding of the current position is that they will be overseen by a Cabinet Committee, but clearly the NAO and the PAC are also well placed. The public service agreements will be linked to performance information, which will be part of the resource accounting regime. It is the view of the NAO, the PAC, the Treasury Select Committee and the Procedure Committee that the performance information in resource accounting should be independently validated, preferably by the NAO and the PAC. I hope that the Government will consider that.
  Efficiency statements were announced at the same time as the public service agreements by the former Chief Secretary. I mention them especially in relation to fraud, procurement and absenteeism, which were the former Chief Secretary's focus in this instance, and to the work that the PAC has undertaken in the past year or so.
  As has been said, the Committee recognised that there was some £900 million of housing benefit fraud, something like 8 per cent. of total spending. It concluded in its report not only that the Government needed to be fair and to ensure that the people who deserved housing benefit and were entitled to it in fact received it, but that they had a robust system to deter fraud.
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  Benefit interaction and confusion provided the opportunity for benefit fraud. In particular, the Department of Social Security and the Benefits Agency failed to control claims for income support and jobseeker's allowance—people applied for housing benefit at the same time, and the resulting gateway led to enormous benefit fraud. The problem is being tackled, and we should pay tribute to the work of the NAO and our Committee in bringing the problem to the fore. The Government welcomed what the Committee said.
  The Government spend something like £20 billion on procurement. That is big money, and it is important that if we can make savings on Government purchases, we do so. In our report on the Ministry of Defence's stores management, we identified that for every £1 million of expenditure, between £30,000 and £100,000 could be saved or, to look at it another way, was lost because stores were not issued directly to the people using them. Again, that is being taken on.
  As for NHS supplies, we examined the need for systematic analysis of price differences—the price of items being supplied other than to the NHS—in a bid to drive down supplier costs. Indeed, we are interested in the development of various new procurement techniques, be they linked to the PH, or be they procurement cards, the streamlined purchase of something like 1,750,000 low-value goods or electronic procurement.
  As hon. Members will know, the target is that something like 90 per cent. of routine items should be electronically procured by March 2001, and a model is being devised for procurement excellence. There are also Ministry of Defence smart procurement initiatives and a joint departmental strategy. All these issues are key to the Government's value-for-money strategy and were examined by the NAO and the PAC.
  Sickness absence is a problem that the Government need to tackle. The Committee did some work on the Metropolitan police service whose sickness average is 14.4 days a year. One day costs £6.3 million, and the implementation of some of our recommendations has already led to various savings.
  We also did some work on the Child Support Agency. It is clear from what has been said that there are various problems. The basic message is that we need a simpler, standardised system, and that message has clearly been taken on board in the Government's recommendations.
  In conclusion, the NAO and the PAC have been and will continue to be an enormous stimulus to Government success. The advent of public service agreements will bring a new stimulus in terms of value for money for the taxpayer. Alongside a revolution in information technology and a new accountability, we can look forward to ever higher standards of quality services for the public, tailored to the priorities of the people of Britain.
  4.48 pm
  Mr. Geoffrey Clifton-Brown: I congratulate the hon. Lady the Member for Hornsey and Wood Green (Mrs. Roche) on her appointment as Financial Secretary. With the introduction of the euro, she takes over the job at a challenging time. I wish, her well in t hat task, because it will be vital for all of us that she gets it right. Like other members of the Public Accounts Committee, I pay tribute to the Comptroller and Auditor General, Sir John Bourn, for the excellent job that he does

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  in charge of the National Audit Office. As a member of the Public Accounts Commission, which sets the budget for the NAO, he is in charge of a lean and efficient organisation. He scrutinises every area of public expenditure extremely well.
  I should also like to pay tribute to the Committee Clerk, Ken Brown, and his staff, who order our affairs with meticulous efficiency and distribute the paper work on time and in the correct order. Many hon. Members—[Interruption.] Sorry, I forgot to pay tribute to my Chairman for his outstanding efficiency and courtesy. I would have been struck off the Committee if I had not done so. Please, Mr. Chairman, call me early and allow me to speak at great length at the next Committee sitting.
  Many hon. Members have referred to the Committee's effectiveness. The ideal would be for the Committee to have no work to do, because that would mean that there was no misappropriation of taxpayers' money. The Government would set their departmental spending priorities and each Department would draw up its budget and present the relevant motion to Parliament, which would approve it or not. Supplementary and excess votes would become an extreme rarity, and retrospective Treasury approval would be non-existent.
  Perhaps there is some light at the end of the tunnel. We may be able to achieve something resembling that nirvana by the introduction of resource accounting, which will be introduced in 1999–2000, and will replace the current system of appropriation accounts. Perhaps I am being over-optimistic, but I believe that its introduction is the largest change in the delivery of our public services since the Committee was established more than a century and a half ago, so we should have high expectations of it.
  Will the Financial Secretary give the House an idea of when the present system of appropriation accounts will be phased out? I note that the Treasury has not asked the PAC for approval to phase it out, so no date has been set. Will she tell the House what trigger points will have to be reached in the resource accounting process before it will be safe to phase out the existing system, which has been in place for so long?
  I hope that the resource accounting system will enable Parliament to obtain financial transparency from and exercise far greater control over every Department of State. Other right hon. and hon. Members have referred to the Ministry of Defence—our 23rd report in 1996–97 shows that it overspent on class I votes 1, 2 and 3 by a staggering £234 million. When the Treasury was questioned by the Committee, I asked for a note on this matter. The MOD was fined £168 million, which came out of its budget for the subsequent year. The Secretary of State for Defence prepared a report, which went to the Chief Secretary. It is a very serious matter when a Department overspends its parliamentary voted money.
  Permanent secretaries, who, as accounting officers, are involved in such excesses deserve to have their promotion prospects carefully examined. They should realise that their duty as accounting officers is paramount. The right hon. Baroness Thatcher, when she was Prime Minister in charge of the civil service, instructed her Cabinet Secretary to examine the effectiveness of permanent secretaries before they were promoted. We should return to that practice.
  The 23rd report criticised the financial controls at the MOD. As the hon. Member for Liverpool, Garston (Maria Eagle) said, the costs on the Waltham Abbey Royal
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  Gunpowder Mills project escalated out of control by more than £10 million and retrospective Treasury approval was sought. That is an extremely rare occurrence—it has happened only three times since 1992. Some sanction should have been applied against the responsible MOD officials.
  Worst of all, that report highlighted the fact that between 1988 and 1996, a staggering £50 billion was passed through uncontrolled suspense accounts. There were 2,705 suspense accounts, and £40 million had to be written off in 95 of them, including £19.5 million through the Army pay disbursement suspense account. The operation of such financial controls in a major Department of State are a disaster, and the accounting officers should be accountable for such gigantic errors.
  I wonder whether the Financial Secretary can tell us whether the resource accounting shadow programme is on track. The programmes were supposed to be completed by 31 December 1998 so that a full shadow financial resource account could be produced by the end of the financial year on 1 April 1999. If the implementation of that process has slipped, for example in the Department of Social Security or the Ministry of Defence, which are the most likely candidates, it will be difficult to produce that first shadow resource account. I should be grateful if the Minister would give us some idea about that.
  Other hon. Members have mentioned the fact that devolution will change the role of the PAC. That may be a good thing, but I am concerned that there should be no underlap or overlap between the current PAC functions and the functions that will be carried out in the future by the regional audit offices. We must watch that carefully. I am sure that my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), the Chairman of the PAC, would be only too pleased, if asked, to give help and advice about how the procedures could be carried out in those auditing bodies.
  As has already been mentioned by right hon. and hon. Members, we have carried out some important regional surveys. For example, our 44th report points out the difficulties with the payment of disability allowance in Northern Ireland where as much as £17.8 million out of a total of £250 million, was incorrectly paid out in benefit. Such scams must be brought to the attention of the House and it is important that the Northern Ireland Grand Committee is properly able to examine such matters.
  Other hon. Members have mentioned the 32nd report which says that 17 per cent. of NHS bodies in Scotland are not confident that they will be millennium compliant by 31 May 1999. My hon. Friend the Member for Bournemouth, East (Mr. Atkinson) spoke at length on millennium compliance. A total of £56 million will be required to put that problem right. I hope that I am not unlucky enough to be on a life support machine in a Scottish hospital on 31 December this year or, if I am, I hope that it will continue to function.
  The 32nd report also deals with cataract surgery, which is a quality-of-life issue. If a cataract operation is not carried out in a timely manner it is possible to go blind. Our report found that of the completion target of 80 per cent. for day cases, only 43 per cent. was achieved. That is a staggering shortfall that should have been rectified much earlier. As a result, the NHS was unable to benefit from various savings of £1.5 million.

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  Although the bulk of the PAC's work is about ensuring value for money, rooting out fraud is just as important. After examining some of the latest figures today, I have a robust figure for fraud in the Department of Social Security of at least £4 billion. That is a staggering figure. Time after time in Treasury debates in the House the Government chide the Opposition and ask them to say where savings can be made when we say that their budget is unsustainable. The Financial Secretary should look at that figure of £4 billion in fraud. I shall break it down for her so that there is no doubt that it is robust.
  In the Benefits Agency, the figure for fraud is reckoned to be about £2.3 billion. In housing benefit, the figure for fraud is reckoned to be £900 million although, in our later report this year, that may be coming down, and I welcome that. Gross errors in income support—that is overpayments less underpayments—account for £424 million and those relating to the jobseeker's allowance account for £167 million. That makes a total of almost £4 billion.
  There are some fairly elementary things that could be done quite quickly to reduce that figure. For example, it is estimated that the loss to the national insurance fund account arising from the fraudulent encashment of giro cheques and other order books may be as high as £64 million and is certainly confirmed at £13.2 million. It would be a fairly simple process to have a system of bar codes so that we could be certain that the person cashing the giro cheque is the person entitled to do so.
  I pay tribute to the National Audit Office, which last week, for the 12th year running, has qualified the Benefit Agency's accounts, and, for the 10th year running, has qualified the national insurance fund's accounts. It is a very serious matter when accounts have been qualified for such a long time. If I were one of the accounting officers at the Department of Social Security, I would be pretty ashamed of that record.
  Hon. Members have already mentioned the NIRS2 computer system, which was dealt with also in the Committee's 46th report, which was produced on 1 July 1998. The NIRS2 is one of the Government's largest computer systems and should be supporting the Contributions Agency in its endeavours to make payments to pensioners. However, even today, six years after the tender was let, the agency is still having to pay out compensation to those who did not receive proper payments into their pension funds. That is an utter disgrace. The Department of Social Security should have got on top of the matter far more quickly than it did. In February, the matter will be brought before the Committee. I hope that, in line with the request of my hon. Friend the Member for South-West Hertfordshire (Mr. Page), we ask for Andersen Consulting to send a senior, answerable partner to tell us why the system has been so delayed.
  We should very seriously examine fraud in the Department of Social Security. Time after time—probably four times since 1990—the problem has come before the Committee. We must devise mechanisms to ensure that real and positive action is taken when such matters are dealt with by the Committee.
  My right hon. Friend the Member for Haltemprice and Howden has already mentioned the National Audit Office's other remits. When the Public Accounts
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  Commission set the National Audit Office's budget, the Comptroller and Auditor General made it quite clear to us that he was completely dissatisfied with the fact that the European Court of Auditors, based in Brussels, has greater access to non-departmental government bodies and executive agencies than our own National Audit Office. The Government should rectify that anomaly forthwith.
  The standard of our NAO is considerably higher than that of the European Court of Auditors. In our 35th report, which hon. Members have already mentioned, we state that fraud in the Community is a serious matter. I am not surprised that, today, the matter has been subject to a vote in the European Parliament. Paragraph 5 of our 35th report states:
  "We are disappointed to find that standards of financial management and accounting across the Community are still too low; and that there is evidence of waste, error and fraud in the Community's expenditure programmes."
  It continues:
  "we endorse the Comptroller and Auditor General's conclusion that the Commission have some way to go before they attain the quality of financial reporting expected of public sector financial statements, such as government accounts in the United Kingdom".
  When our NAO has been so damning about the European Court of Auditors, the latter should consider how the former conducts its work and try to adopt some best practice.
  As I am dealing with our 35th report, it is worth highlighting the four major areas in which the European Community is falling short—the very subject of today's vote in the European Parliament. First, the report states that agricultural compensation schemes do not take into account movements in world prices. It is fairly elementary that they should do so. The second problem is the media's oft-quoted example of high tobacco subsidies that have absolutely no effect on improving tobacco quality. The third problem is that the recovery of customs duties are not always collected properly. The final matter, and perhaps financially most important, is the high error level in the payment of structural funds. My right hon. Friend the Member for Haltemprice and Howden has said that total errors amount to £3.5 billion per year. As we are the third largest net contributor, at £1.7 billion, the issue directly affects Parliament and the, taxpayers of this country.
  We should be very concerned about such matters in Europe. Will the Financial Secretary tell us what action the Government took to rectify the problems when they held the presidency last year? What follow-up has there been? If we are to renegotiate our financial arrangements with the European Commission and our Fontainebleau rebate is to be reduced, the continuing financial irregularities will be of even greater concern to us.
  The work of the NAO is of the highest quality, ensuring savings of more than seven times its running costs. It performs a great service to the House and the nation in monitoring the financial probity of the uses to which taxpayers' money is put, but it has less access to UK institutions than the Brussels-based European Court of Auditors. That is an anomaly. I hope that the Financial Secretary will say something about it. If not, I hope that my right hon. Friend the Chairman of the Public Accounts Committee and the Chairman of the Public Accounts Commission will pursue the matter vigorously with the Chancellor until we have a solution.

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  It is a privilege to be a member of the Public Accounts Committee, which does an effective job in monitoring the NAO's work. I commend its work to the House.
  5.6 pm
  Mr. Barry Gardiner: Mr. Deputy Speaker, imagine that you are a shareholder in a large national corporation. You do not normally pay close attention to the company's dealings, but you read the annual report, which has just arrived on your doorstep. As you read it over your morning orange juice, you find that the company has divested itself of an arm of what it calls its non-core business. At first you nod with approval as you read that the sale realised £12 million for the corporation, but as you turn to the appendix you become puzzled. You discover that for the division of the company to be sold, it had to be restructured. That restructuring cost £2.2 million. You check the appendix once more to find that the sale also had costs amounting to £3.1 million. The sale price of £12 million has cost £5.3 million to realise, so the real price that the company received was only £6.7 million—or was it?
  You look at the fixed assets in the accounts to find that assets valued at £5 million were transferred with the sale. The price that your company has received seems to have diminished to £1.7 million from that original £12 million—at least it would have been £1.7 million but for the guarantees. Your company gave 63 guarantees to the purchaser regarding levels of work and income. Because the work in one or two areas was less than forecast—although overall work was considerably greater—your company had to pay compensation to the purchaser totalling £1.542 million.
  Your mental arithmetic is in overdrive as you calculate that the original purchase price of £12 million now looks more like just £158,000. Well, it would look like that if the final sale price had been £12 million. In fact, because of a post-sale adjustment in the value of the transferred assets, a further £600,000 was clawed back off the original sale price by the purchaser. Your company appears to have paid—not been paid—£442,000 to divest itself of that part of its business.
  Perhaps you console yourself with the thought that it must have been a loss-making part of the company—a non-profitable division that the company is better off without. If that were the case, it is hard to see why, because your company has guaranteed it an income of £111 million over the next six years. Few businesses get a better start-up. On reading that annual report, would you not determine to get rid of your shares in that dreadfully managed company as quickly as possible?
  I regret to inform you, Mr. Deputy Speaker, that this is not some fanciful thought experiment. You were a shareholder in that company and so were the rest of the British public. The company was Great Britain plc under the previous Government and the sale was that of the facilities services division of the Atomic Energy Authority in March 1995.
  I am delighted to say that the shareholders expressed their view of the board's incompetence at a quinquennial meeting held on 1 May 1997 and the company is under new—perhaps I should say new Labour—management.
  The Public Accounts Committee has done Parliament a great service by its thorough investigation into Atomic Energy Authority privatisations, first of its facilities
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  services division and subsequently in September 1996 of AEA Technology. In the sale of AEA Technology, the Department of Trade and Industry received a gross sum of £227.75 million following a flotation valuing the shares at £2.80 each. After deducting the costs of restructuring at £121 million and the £8.1 million paid to the Government's so-called advisers, the sale achieved a net figure to the Treasury of just £98.65 million. How strange then that on the very day of the sale, the markets placed a £34.8 million premium on the offer price. Within 20 months, the share price had almost tripled, valuing the company at more than £622 million. The taxpayer had netted just £98 million.
  When the Public Accounts Committee asked the DTI to explain why AEA Technology so spectacularly outperformed the FT support services index in the month after the sale, the response was that although it no longer had responsibility for the company post-privatisation, the Department believed that the new management had been
  "assiduous in talking to their shareholders and explaining to them their plans as they gradually began to develop."
  So it was a matter of spin. If assiduous talking can push a company's performance 30 per cent. higher than the FT index for the sector, Charlie Whelan should leave the BBC and come on down to the City because there will always be a job for him there.
  It is vital that the mistakes of the past are not reproduced in future privatisations. The PAC reports are littered with references to previous advice which has been ignored, with Departments blindly trying to reinvent the wheel and protecting their own dignity rather than requesting advice from other Departments that have broader experience and have learned from past mistakes. If there were ever a case for collegiality and joined-up government, it is here, in the custodianship and disposal of public assets.
  I shall briefly set out the lessons that I hope will never have to be relearned about the process of privatisation and how the Government can maximise returns and ensure value for money for the British taxpayer.
  The beginning of the privatisation process is marked by pre-sale restructuring. It is unacceptable for Departments to seek to inflate net sale proceeds by ignoring restructuring costs related to that sale. If restructuring is carried out, it should not bring benefits to the private purchaser without realising commensurate returns for the public.
  I have mentioned the £121 million restructuring of AEA Technology. It can be argued that without such a restructuring, the business would have been unsaleable. However, I believe—this is not a recommendation in the 61st report—that after any restructuring, the Government should also consider afresh whether more value may now be achieved by retaining the asset post-restructure, rather than by selling it. Pre-sale restructuring should take place if it will enhance proceeds for the taxpayer. However, on no account should the Government seek to inflate proceeds to the Department by ignoring the restructuring costs when calculating net returns—as has been done in the past.
  I wish to refer to, the objectives of the sale. Departments should ensure that such objectives are carefully set prior to the privatisation process. In the sale of Scottish Power and Scottish Hydro-Electric, no benchmark or target ranges were identified either as to the number of

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  shareholders or, indeed, the length of time that those shares were to be held by those shareholders. Yet only by quantifying those in advance would it have been possible to have analysed whether the much-vaunted objective of increasing individual share ownership had been achieved.
  On benchmarking, the process of considering how a business is valued gives the Government some grasp of the potential worth of the enterprise and can act as a guide to whether the terms of the sale are likely to achieve full value for the taxpayer. In August 1988, the Rover group was sold to British Aerospace. Before entering into negotiations, the Government had not undertaken a comprehensive valuation of the company. Benchmarking is an essential tool of privatisation. Only a fool—or, perhaps, a Conservative Minister—attempts to sell something without having any idea of its value.
  Book-building can be a useful tool in acquiring that knowledge, where brokers seek indications of demand at a range of prices to see where that demand begins to fall away. In book-building, it is vital that the range is not focused too narrowly, lest a similar result to that of AEA Technology occurs—where the sale price of £2.80 was the top of the range which was canvassed in the book-building process, and no significant tapering occurred during that process. That led to the gross undervaluing of the company and the corresponding loss to the taxpayer.
  Departments should always consider retaining a proportion of the shares because that enables the Government to extract the maximum value for the taxpayer from post-sale enhancements in value. It is noted by the PAC in the 61st report that in the privatisation of the 12 regional electricity companies, not only were no benchmarks used, but, because no shares were retained, the public did not benefit by the rapid escalation of the share price which occurred shortly after the sale. By contrast, the successful phasing of the sale of British Aerospace, Associated British Ports, National Power and PowerGen enabled the taxpayer to benefit from additional proceeds of £2.3 billion. That shows how critical phasing can be.
  The timing of privatisations is also critical. Privatisations which are offered too close to each other—like Railtrack and British Energy—can lead investors to regard the two as just one investment opportunity, thereby reducing the revenue gained.
  On the role of external auditors and their appointment, it is vital that the appointment of advisers should be transparent and by competitive tender. The financial and legal advisers for the award of the first three passenger rail franchises were appointed by the Office of Passenger Rail Franchising without competition. Their fees accounted for nearly £19 million.
  Competition not only lowers cost; it ensures propriety in the appointment process. When completion and success fees are agreed with advisers, it is ridiculous to rely on valuations made by the potential beneficiary of the success fee. Independent valuations must be obtained, and the performance criteria should be defined at the start of the' process as far as possible.
  Schroders' £1.99 million success fee for the sale of AEA Technology was based on its own valuation of AEA, which was not independently validated. The success fee
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  paid to N. M. Rothschild and Son Ltd. was not formally agreed until two of the stages used as the basis for determining success had already been completed. That is not just to set one's own target and fix one's own reward; it is to place one's arrows in the bull's-eye before the game has even begun. Any criteria for success fees must be set out, preferably before the appointment of advisers, and based on independent reference points.
  My hon. Friend the Member for Shipley (Mr. Leslie) mentioned clawback. After the sale of the rolling stock leasing companies, all were resold within two years, with the profits that my hon. Friend mentioned. The Government, however, were aware that the timing of the sale might not be conducive to the achievement of best value for the taxpayer. A clawback provision relating to gains from further on-sales would have protected the taxpayer's interest, but no such provision was introduced. That should have happened. If a clawback provision had been inserted in the sale agreement for the 12 regional electricity companies, the public would have received their rightful share of the £214 million of excess pre-tax profits beyond the forecast profits used in agreeing the sale. In future sales, clawback should always be considered.
  The United Kingdom has built up an enormous pool of experience relating to privatisation. There are many things that the Treasury has pioneered, and has got right. The use of partly paid offer structures is an excellent example. Investors have proved ready to pay a premium for partly paid shares, with minimal problems from non-payment of the second instalment. Sadly, much of Britain's experience has come in a bitter form, through the failures and mistakes so assiduously documented by the Public Accounts Committee. I pay tribute to the work that the Committee has done.
  I join others in welcoming my hon. Friend the Financial Secretary to her post. I also welcome the recent interchange between the Department of Trade and Industry and the Treasury. I believe that it will enhance the willingness of the two Departments to work constructively together. The mistakes of the past must not be repeated: that is the message that the House must send to Government, throughout Whitehall, on the basis of the PAC reports.
  5.24 pm
  Mr. David Rendel: I wish to concentrate on the 46th report, on the replacement of the national insurance recording system, something that, as the report clearly demonstrates, has been a comprehensive shambles.
  The report, published on 10 June last year, refers to a system, the original contract for which was to cost about £134 million. We are not talking peanuts; we are talking about big sums, even in Government terms, and the fact that a large part of that money has been comprehensively wasted because the programme has been so late is a serious matter that we should all consider. As the Chairman of the Committee made clear, when the report came out, it seemed that there had been many problems, but, as far as the report showed, most of those, apparently, were resolved and the programme was due to come into operation. On July 13, it became clear via newspaper reports that the whole system had, apparently, gone live.
  It was not until about the middle of September that it began to be clear that, far from the problems being all over and done with, there were still serious problems with

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  the new system, that it could not yet make the calculations—all the records were not there and ready to be used for calculations of new benefit claims—and that, in effect, all contributions-based benefit claims, plus linked housing benefit and council tax benefit claims, were being paid blind. It was not until 4 November, when we had the written answer to a written question to the Secretary of State for Social Security that I tabled and that was referred to by the Chairman, that it became clear how many problems there still were with the system.
  The Chairman was, rightly, a bit angry that the Government had not come clean earlier and admitted that there were still many problems with the system. I accept that he is right to be angry, but I was a bit surprised that the Government did not come clean earlier as the major share of the blame for the failure of NIRS2 has to lie, not with the current Government, but with the previous Government, who originally arranged the contract, and then failed to look into it carefully enough and to realise that it was totally inadequate and that the programme as originally envisaged was not going to meet the needs.
  The Government made the situation even worse by failing to admit openly at an early stage what the problems were, but the problems were not down to them originally. That would have made it easier perhaps—it should have made it easier; I am surprised that it did not—for them to be open about what problems still existed.

  That written answer still left several questions. I should welcome the Minister giving some answers in her winding-up speech, if she can, to the questions that I intend to put. Clearly, there is still a major backlog of benefit claims that have not been properly processed through the computer because the programme is not yet able to do that. That backlog has to be cleared, even though a number of people have been paid benefits on the basis of manual calculations—the best that the various agencies can do is to work out roughly what the benefit claims should be.
  Even though manual calculations are being done, all those claims will have to be re-checked once the computer system is up and running, so the first question is: how quickly is that backlog going to be cleared? What extra resources are the Government going to put into the clearing of that backlog and what are the costs of those resources? Clearly, that is an extra cost to the taxpayer, unless it can be reclaimed from Andersen Consulting, the contractors.
  Secondly, personal pension providers have worries because they, too, have suffered as a result of the inadequacies of the programme and the fact that it has been so delayed. What compensation does the Minister expect to have to pay to personal pension providers as a result of the programme's failures?
  Thirdly, do the Government foresee any additional compensation being paid by Andersen Consulting? Will the Contributions Agency seek any extra compensation? The report makes it plain that, apart from the compensation that has already been won from Andersen Consulting—some £3 million—there is a lot of lost savings due to the late implementation of the programme. Will the Government be adequately compensated for the lost savings as a result of the long delays?
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  Perhaps the most important question of all is: what will happen to the individuals who suffered as a result of the failure of the whole project? The answer that I received said that compensation would be considered for the individuals concerned within the normal rules of the departmental special payments scheme. I do not suppose that many of the people involved know what those rules are. I am not familiar with the full set of rules, and I do not know whether the Minister is. However, it would be interesting to know, for example, whether there will be any compensation for those who have had to pay extra costs just to fight their cases.
  I took part in a local radio programme earlier this week dealing with telephone calls from people who had suffered as a result of the project's failure. Many callers complained about the number of letters that they had had to write and telephone calls that they had had to make to obtain a manual calculation of their benefits, given that those calculations could not be done by computer.
  It seems unfair that those extra costs should be borne by people who by definition—because otherwise they would not be claiming the benefits involved—are among the poorest in society. They include new pensioners who may have to rely entirely on the state retirement pension, and who are therefore among the poorest of all our citizens. It is not fair that they should have to bear the cost of fighting for benefits that should have been paid automatically as a result of a computer calculation.
  Hon. Members earn in the region of £40,000 a year and some of us may regard as comparatively small the amounts of money that are not being paid after the manual calculation has been performed. Those sums may be as little as £1.25 a week, but they are not insignificant for a person on a retirement pension of only a few tens of pounds. If the rules contain a threshold governing when compensation may be paid, it is possible that some of the amounts involved may be below that level. If so, I should be very sorry if, because of the project's failure, people were to lose out for ever on benefits to which they were entitled.
  Will the Minister say what will happen in those rare but sad cases in which people die before the backlog is cleared and their payments are properly calculated? Given that many of the people involved are old age pensioners, such cases must exist. Will the relevant payments be made into those people's estates, or will the money simply be lost altogether?
  It is not the fault of this Government that the contract was so badly managed, but people who have lost out deserve full compensation from the state, regardless of which Government are in charge. That compensation should take account of the back payments: it should also include a real allowance to cover the interest incurred in the cash flow costs that they have suffered and the extra costs involved in fighting for benefits that should have been paid automatically.
  Finally, we need to learn the lessons from the fiasco of a project that has gone badly wrong. I was delighted to hear the hon. Member for Cotswold (Mr. Clifton-Brown), who unfortunately has left the Chamber, say that the matter will be brought back before the Public Accounts Committee. However, I believe that we need a full independent inquiry into how and why such a totally inadequate contract came to be let to Andersen Consulting. Such an inquiry should also determine why

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  the Government have recovered so little in compensation payments when the project went so badly wrong. It is one for thing for such a project to go wrong; it would be much worse if we did not learn the lesson and get it right next time.
  5.33 pm
  Mr. Nick Gibb: First, I congratulate the Financial Secretary to the Treasury, the hon. Member for Hornsey and Wood Green (Mrs. Roche), on her appointment. I hope that her career at the Treasury will be as successful as her predecessor's seems to have been.
  I also pay tribute to my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), and to all the members of the Public Accounts Committee, for their work over the past 18 months: 67 reports in that period is a prolific output and a heavy work load.
  The Committee's work and the investigations by the National Audit Office are crucial in helping all hon. Members to carry out one of our primary duties, which is to scrutinise the Executive. Bearing in mind what has happened in Europe, I hope that my right hon. Friend the Member for Haltemprice and Howden will never find himself suspended and on half pay as a result of blowing the whistle on waste and fraud and reporting such matters to Parliament.
  In November 1997, my right hon. Friend summarised the role of the PAC in a typically pithy phrase:
  "we in the PAC look for good practice to encourage and disseminate, bad practice to discourage and eliminate and improper practice to condemn and punish. In short…the good, the bad and the ugly."—[Official Report, 20 November 1997; Vol. 301, c. 476]
  The PAC and the National Audit Office concentrate on the bad, but scattered throughout the reports are nuggets of interesting and revealing good news about our public services. For example, the 32nd report on cataract surgery in Scotland points out that the number of operations to remove cataracts carried out there increased from 10,000 a year in 1992 to about 16,000 a year by 1997.
  The 61st report on getting value for money in privatisations points out that, for nearly 20 years, the United Kingdom has led the world in the privatisation of state-owned businesses. The report could also have pointed out, but did not, that, as a result of the privatisation programme, state industries that once cost the Exchequer £50 million a week now contribute to it £65 million a week in corporation tax revenues.
  The 28th PAC report on the Charity Commission points out that Britain has 184,000 registered charities, with an annual total income of £16 billion and assets of about £35 billion, which must be a good news story.
  As we have heard, the 36th report on the water industry in England and Wales points out that, since privatisation, the quality of service has improved in a number of respects. It also highlights the fact that the privatised water companies are investing around £3 billion a year compared with £1.75 billion a year when they were state owned. The 59th report on the coastguard points out that, in 1995, it dealt with more 12,000 incidents in the UK search-and-rescue region.
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  One could find many more such examples, but the key role of the NAO is to find fault and there is plenty of fault to find, as we heard from the hon. Member for Brent, North (Mr. Gardiner). The hon. Members for Ross, Skye and Inverness, West (Mr. Kennedy) and for Galloway and Upper Nithsdale (Mr. Morgan) highlighted their and the PAC's concern about the Skye bridge project.
  The hon. Member for Liverpool, Garston (Maria Eagle), in a thoughtful and interesting contribution on the nature of government and the ethos of the permanent Executive, used the Ministry of Defence to illustrate how Whitehall is not always as responsive as it ought to be to PAC reports and their conclusions.
  Reflecting a continuing theme of the debate, my hon. Friend the Member for South-West Hertfordshire (Mr. Page) expressed his concern over the NAO's role following devolution and the problems that that may cause in terms of access. He made the important point that individual accounting officers, whether or not they are still in post, should be answerable to the Committee—a similar point to that made by the hon. Member for Croydon, Central (Mr. Davies) about permanent secretaries.
  The hon. Member for Reading, East (Jane Griffiths) was slightly more optimistic about the PAC's advice being adopted, citing its 61st report on privatisation as an example. She praised the Social Security Administration (Fraud) Act 1997 as an effective first step in tackling social security and housing benefit fraud.
  My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) emphasised, as have others members of the PAC in this debate, the need for the Comptroller and Auditor General to be given access to non-departmental bodies and even into private sector companies that have contractual relationships with the state. He emphasised the fundamental importance of the PAC's work in exposing the complete shambles in the European Commission.
  The hon. Member for Shipley (Mr. Leslie) is the only person I know who is pleased to receive his income tax bill, which I find slightly odd, so I will move straight on to my hon. Friend the Member for Bournemouth, East (Mr. Atkinson), who raised the important issue of the millennium bug, which was the subject of the PAC's 66th report.
  In a slightly more partisan speech than was otherwise heard in the debate, the hon. Member for Tynemouth (Mr. Campbell) said that market conditions were being blamed for the sale of the rolling stock leasing companies. He failed to mention that market conditions were severely affected by the statements of the right hon. Member for Birmingham, Ladywood (Clare Short) when she was Labour's principal spokesman on transport.
  My hon. Friend the Member for Cotswold (Mr. Clifton-Brown), in a moving speech on resource accounting, highlighted the lack of accounting controls in the Ministry of Defence. He also mentioned fraud, both in the Department of Social Security and the European Union and made the important point that the National Audit Office does not have the same access powers as the European Court of Auditors.
  The 46th report, on the contract to develop and update the national insurance recording system, or NIRS, caused concern and was mentioned by several hon. Members. The measured but critical conclusions of the Public Accounts Committee report foresaw the impending

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  disaster that struck the computer system only three months after its publication, despite the fact that not all the requested information was given. It stated:
  "We are very concerned that the implementation of the new system is already nearly 18 months behind the date agreed…the Agency face an immense task catching up with their operations".
  As the hon. Member for Newbury (Mr. Rendel) pointed out, last September the time came to transfer some 65 million records from NIRS1 to NIRS2, the biggest and most complex information technology project in Europe. The system collapsed. Thousands of records were wiped out, causing chaos in benefit offices and, undoubtedly, cases of hardship. Many newly retired pensioners have been paid pensions that ignore later year contributions. As my right hon. Friend the Member for Haltemprice and Howden informed the House, this will be the subject of a future NAO and PAC report. The many lessons to be drawn about how to structure and manage such a colossal project are well documented in the 46th report, which will provide useful guidance for similar private finance initiative projects.
  The 27th report, on measures to combat housing benefit fraud, reveals a catalogue of unacceptable complacency and waste. Some 4.5 million people receive housing benefit, costing £11.5 billion a year, of which some £1 billion to £2 billion is lost through fraud. That figure is unacceptably high. The PAC is right to conclude:
  "The waste of public money on Housing Benefit fraud is massive and inexcusable, and it has gone on for far too long."
  Much has been done in recent years to crack down on benefit fraud. The fraud hotline and all the spend-to-save initiatives are successful examples. Such initiatives must continue. Paragraph 7 states:
  "Investment in anti-fraud work can be very cost effective".
  That is true. The southern command team of the Benefits Agency Security Investigation Service, or BASIS, was so successful in the first sixth months of the year that its £2 million budget has been spent. Since September 1998, the BASIS teams have been standing idle. That is accounting madness; penny wise, pound foolish, as my grandmother would say. It is important that the Government continue to demonstrate that they are serious about tackling fraud and properly resource the spend-to-save initiatives.
  The report also makes important observations about prosecuting those caught defrauding the system. It states:
  "Fear of detection can be an effective deterrent against committing fraud, but only if it is backed up sufficient prosecutions and effective penalties."
  However, the level of prosecutions by local authorities is incredibly low, at less than 1 per cent. of detected frauds.
  On a Social Security Committee visit to the Benefits Agency a year ago, I asked a senior official about prosecutions. His response was that being caught was the deterrent and that prosecutions were therefore an unnecessary expense. I believe that that is wrong. If the only downside to putting in a fraudulent benefit claim is having perhaps to repay it one day, there is nothing to lose in putting in such a claim. That does not provide an effective deterrent. As the hon. Member for Reading, East said, the lack of prosecutions is an open invitation to fraudsters to help themselves to the pot of gold. Criminal prosecutions followed by the possibility of gaol is a deterrent. Local authorities and the DSS should, in the view of Conservative Members and of the PAC, prosecute far more often.
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  Despite repeated PAC criticisms over many years, it seems that the DSS is not adequately dealing with the issue. Last week, for the 10th successive year, the Benefits Agency had its accounts qualified by the National Audit Office because of fraud. Yesterday, the NAO qualified the accounts of the national insurance fund because of fraud.
  Social security fraud pales compared with fraud in the European Commission. The 35th report examined the European Court of Auditors for 1996 and concluded:

  "We are disappointed to find that standards of financial management and accounting across the Community are still too low; and that there is evidence of waste, error and fraud".
  It is estimated that £6 billion is lost through fraud from the total EU budget of £65 billion. That is 10 per cent. Fake contracts, non-existent building projects and a culture of jobs for the boys or jobs for one's dentist seem to be rife in the European Commission. EU fraud is a black hole into which billions of pounds of taxpayers' money is pouring. Neither the European Commission nor, I am afraid to say, the British Government, are doing enough about it.
  According to Paul Van Buitenen, the Dutch auditor who was rewarded for his disclosures by suspension on half pay, a number of EU Commissioners were themselves involved in irregularities. Even more worrying is the claim by Bernhard Friedmann, the German president of the European Court of Auditors, that his investigations had been hindered in every way and that the Commission had told him untruths.
  My hon. Friend the Member for South-West Hertfordshire made a telling point when he said in last year's PAC debate that the National Audit Office should extend its work into examination of European financial affairs. He said:
  "I suspect that the NAO might be slightly more rigorous than some other bodies in tracing where the money goes, finding out how it is spent and ensuring that we get value for money."—[Official Report, 20 November 1997; Vol. 301, c. 489.]
  Subsequent events have proved that something is needed to deal with the problem of EU fraud.
  In last year's debate, the then Financial Secretary, now the Paymaster General, said that the NAO had been invited to audit the assumptions underlying the forecasts of public finances. The Chancellor, the Financial Secretary and other Treasury Ministers have made much of that as an important step in openness. However, the Opposition fear that that innovation has not been properly implemented, and that the good offices of the CAG have been used simply to serve the Government's political purpose.
  I cite as an example the CAG's first report in June 1997 on the Government's assumptions on unemployment. He said:
  "As a level assumption for claimant unemployment, the figure of 1.65 million would seem consistent with the available independent assessment of unemployment prospects."
  In other words, 1.65 million was a reasonable assumption for a flat unemployment level for the years covered by the Red Book. However, in subsequent government documents, that figure was reduced. In the November 1998 pre-Budget report, a figure of 1.3 million unemployed was used as the assumption on which the public finances were based.
  The NAO was not asked by the Government to audit any of the changed figures. If the Government wish the figures that they use in documents to be audited by the

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  NAO, that must be done consistently or not at all. Otherwise, all that the Government are doing is abusing the office of the CAG, something that the Opposition would condemn.
  As my right hon. Friend the Member for Haltemprice and Howden has said, the integrity of measures of public performance needs to be iron-clad. So, instead of asking the NAO to provide them with political cover, the Government would be better advised to ask it to audit the value for money of some of their flagship schemes such as the new deal, which the Opposition feel represents poor value for money for taxpayers.
  This has been an important debate on the vital work of the NAO and the PAC. As my hon. Friend the Member for Daventry (Mr. Boswell) said during a previous PAC debate, for corruption or waste in the public finances,
  "sunlight is the best disinfectant".—[Official Report, 20 November 1997: Vol. 301, c. 517]
  The PAC has done a great deal to shed light on such issues. We look forward to the Financial Secretary's telling us about the Government's proposals to strengthen further the role of the NAO and the PAC in their work as guardians of the taxpayer's money.
  5.50 pm
  The Financial Secretary to the Treasury (Mrs. Barbara Roche): I thank most warmly all the right hon. and hon. Members who have participated for the high standard of the debate. This is my first appearance at the Dispatch Box in my new role as Financial Secretary to the Treasury and I thank most heartily all the hon. Members who have welcomed me; I cannot think of a more important debate on which to make my first appearance in my new role. My officials and my predecessor told me about the high standard of work, the dedication and the all-party approach that these vital issues command, and I am delighted that their comments have been vindicated by today's debate.
  I thank the Public Accounts Committee for all its hard work over the past year. By any standard, the Committee has had an exceptionally busy year, producing 67 reports, which must be close to a record. A feature of all those reports is the thoroughness with which the members of the Committee have tackled the subject and the fact that, quite rightly, the reports are hard hitting. Much has been made this afternoon of the historic role of the PAC and the fact that it exists to hold the Executive to account, to carry out the most important part of Parliament's scrutinising role by ensuring that taxpayers' money is spent properly and wisely, and to ensure that Ministers and officials account for that money properly.
  The Committee must be congratulated on the way in which it has highlighted waste, inefficiency and fraud, as well as identifying and promoting good practice. The Opposition spokesman, the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), whom I thank for his kind words, made a good point when he emphasised good practice. The reports contain outstanding examples of good practice, and both the Government and the Committee want that to be promulgated throughout Whitehall.
  One of the reasons why the Committee has been so productive is the chairmanship of the right hon. Member for Haltemprice and Howden (Mr. Davis). Both the House
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  and the country are well served by his hard work. We should also be grateful to the new members of the Committee and to those who have done sterling work over many years, including my right hon. Friend the Member for Swansea, West (Mr. Williams), and the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan), who cannot be with us today. It is a particular pleasure for me to serve in this area with the hon. Member for South-West Hertfordshire (Mr. Page), who was my immediate predecessor at the Department of Trade and Industry. I also thank the hon. Member for Bexhill and Battle (Mr. Wardle), who has continued to serve as a member of the Committee in the new Parliament.
  Our thanks must also go to the National Audit Office and the Northern Ireland Audit Office and their respective Comptrollers and Auditors General for all their work. Good-quality auditing is essential to provide an assurance that public money has been well and properly spent. The task facing all those bodies is enormous and no one should underestimate it. We are lucky to have organisations of such calibre, which carry out their work so effectively.
  No fewer than eight of the Committee's reports deal with privatisation and all make important and valuable points. The hearing on the sale of the rolling stock companies was one of the most memorable, as the Committee heard how a small number of former British Rail managers had made huge windfall gains of between £15 million and £33 million through their investment in those companies. That issue was dealt with by my hon. Friends the Members for Shipley (Mr. Leslie) and for Tynemouth (Mr. Campbell). The Committee was absolutely right to draw attention to those excesses. Gains like that risk discrediting privatisation as a whole, and, in future sales, we will need to put in place mechanisms designed to prevent any recurrence.
  The Committee's 61st report, "Getting Value for Money in Privatisations", sets out lessons derived from all the Committee's reports on privatisation. My hon. Friends the Members for Shipley, for Brent, North (Mr. Gardiner) and for Reading, East (Jane Griffiths) pointed out correctly that lessons must be learned. We agree that the lessons set out in this valuable report should be taken into account by Departments. However, it is important that Departments be allowed to exercise judgment in seeking the best possible deal for the taxpayer, rather than slavishly following a detailed set of rules. I assure all hon. Members that those lessons will be widely disseminated, and I shall ensure that they are learned by all Departments. That is absolutely essential as far as the Treasury's role is concerned: we must ensure that this guidance is recognised centrally and reflected in all Departments.
  There has also been discussion of other areas. The hon. Member for Newbury (Mr. Rendel) referred to the 46th report, "The Contract to Develop and Update the Replacement National Insurance Recording System". As he will be aware, that system contains 65 million accounts, and there were bound to be major challenges in changing to a new computer system of that size. However, in all honesty, I must admit that it is disappointing that delays have occurred in relation to retirement pensions and widows benefit, for example. The hon. Gentleman highlighted very well what that means to the people who value and gain from that service. He was right to point out the consequences for those individuals.

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  I assure the hon. Gentleman and the House that every effort is made to minimise the impact on clients. In most cases, any delays have been overcome by using contingency measures. I also reassure the hon. Gentleman that no records were destroyed during the development and conversion or as a result of live processing.
  The hon. Gentleman raised several other points. The contractor, Andersen Consulting, has had to bear the associated costs of the revised implementation plan. In addition, Andersen's has had to pay £3.7 million in compensation to date. The hon. Gentleman also raised some wider points regarding social security issues, and I shall undertake to ensure that he receives a satisfactory reply to all those questions.
  Turning to wider issues, I am delighted to inform the House that excellent progress continues to be made on public and private partnership projects, including private finance projects. I shall bring the House up to date on a few developments. Since May 1997, we have signed projects with an aggregate capital value of £4 billion—which, incidentally, compares with approximately £7 billion in the five years before then. Hospitals and schools and other vital public services across the country will benefit.
  There was a discussion about the Skye bridge to which the hon. Members for Ross, Skye and Inverness, West (Mr. Kennedy) and for Galloway and Upper Nithsdale (Mr. Morgan) contributed. I assure them that we are aware of their keen interest in this subject and understand the sensitivities of tolling in this case. It is important to remember that tolls have always been lower than the equivalent ferry fares, but as the hon. Gentlemen would acknowledge, the Government acted quickly to reduce tolls for regular users.
  I am absolutely confident that my right hon. Friend the Secretary of State for Scotland has thoroughly considered the many points put to him by the hon. Gentlemen. I understand that the courts in Scotland have also considered various issues relating to procurement for the bridge. The Government welcome the Public Accounts Committee's recognition of the important role that public-private partnerships can play in delivering public services. I can tell the hon. Gentlemen that the lessons from the Skye bridge project have already informed best practice guidance for subsequent projects.
  The hon. Member for Ross, Skye and Inverness, West put several detailed points to me. I assure him that the Government will respond to those in full.
  Many of the reports produced by the Committee during the past year focus on the need to improve value for money in the provision of public services. Two such reports are mentioned in the motion. The 32nd report, on cataract surgery in Scotland, calls for greater consistency of performance between similar institutions and advocates greater use of benchmarking. I entirely accept that benchmarking, whether between institutions or regions, is a valuable technique for improving value for money.
  There has been much discussion this afternoon about devolution and its effects, and the contribution of the right hon. Member for Haltemprice and Howden has been acknowledged. I say to all hon. Members that we want to make sure that the lessons of best practice after devolution are widely spread. The Committee, the Government and I want that.
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  The 44th report, on the administration of the disability allowance in Northern Ireland, provides a valuable insight into the performance of the Social Security Agency. The report is valuable in so far as it highlights the need for the agency to keep abreast of developments in Great Britain in protecting its systems against fraud.
  The Government are absolutely determined to improve value for money in public services. Two initiatives have been mentioned: the introduction of public service agreements and greater cross-departmental working in the delivery of public services. My hon. Friends the Members for Shipley and for Croydon, Central (Mr. Davies) spoke about the importance of public service agreements, which were first published last month in a White Paper entitled "Public Services for the Future: Modernisation, Reform, Accountability". The White Paper sets out clear aims and objectives and specific targets for improving the effectiveness and efficiency of the services that the public receive and are entitled to receive at a high standard.
  Linking the investment of public money to the delivery of specified outputs and standards of efficiency is a major step forward in improving value for money. It is also a significant improvement in accountability—that is the aim of the Committee's work—making it much easier for Parliament and the general public to judge the Government's effectiveness in meeting their objectives.
  The second initiative concerns a much greater emphasis on effective cross-departmental working. The right hon. Member for Haltemprice and Howden and I might have a discussion about what phrase should be used. I like the phrase "joined-up government". Using resources well is not just a matter of providing stability, flexibility and the right incentives; it is also important to ensure that Departments and other bodies work effectively together to deliver public service objectives, as all hon. Members want. The key challenges in joined-up government are not only to identify better routes for delivering services to the public but to ensure that we maintain clear lines of accountability.
  There has been much discussion about resource accounting and budgeting. Important points were made by Conservative Members, including the hon. Members for Cotswold (Mr. Clifton-Brown) and for Bexhill and Battle, and by my hon. Friend the Member for Croydon, Central.
  We greatly welcome the Committee's continuing vigilance over the introduction of resource accounting and budgeting, as set out in its 67th report. We have absolutely no doubt that resource accounting and budgeting will enhance the quality of financial information available to the House and will enable Departments to manage their resources more effectively on behalf of the taxpayer. There is considerable agreement about the fact that that is the way forward.
  As the Committee knows, our intention, subject to Parliament's approval, is to implement resource accounting and budgeting fully from 2001–02. In the meantime, in response to the question put to me by the hon. Member for Cotswold, we propose to report to Parliament on progress at defined "trigger points". The Committee's approval of the trigger point strategy is most welcome, and I am delighted that all Departments have Successfully achieved the first trigger point—stage 1 approval—before the December 1998 deadline. I can tell the hon. Member for Cotswold, and my hon. Friends who raised the same issue, that it is an important matter for the

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  Department and for me, and I shall work with the Committee to make sure that we get the implementation absolutely right. I fully share the Committee's view of its importance.
  The right hon. Member for Haltemprice and Howden also mentioned parliamentary involvement in the validation of performance information. I understand what he says, but I hope that the right hon. Gentleman and the Committee will recognise that, unlike the position with regard to financial information, there is as yet no agreed set of standards for performance information. My Department believes that the appropriate way to proceed is to develop such standards. I undertake to keep the matter under review and to consult other interested parties, including the NAO. I may not be able to give the right hon. Gentleman the reply that he seeks, but I undertake to keep in close contact with him and the Committee on this issue.
  Mr. Clifton-Brown: Would the hon. Lady be prepared to examine the performance indicators published by executive agencies to see whether there were any useful lessons to be learned for Government Departments?
  Mrs. Roche: I certainly undertake to consider that, and I thank the hon. Gentleman for his helpful suggestion.
  Quite rightly, mention was made this afternoon of the great concern felt about the loss of public funds through fraud, which was highlighted in several of the Committee's reports. The motion that we are debating refers to the Committee's 34th report, which deals with the further fraud at the British embassy in Amman. The Foreign and Commonwealth Office has rightly acknowledged that there were failures in basic financial controls, and financial controls and disciplinary arrangements are being tightened.
  Frankly, I fully accept that one of the most disturbing features of the case is that it happened so soon after the Committee took evidence on other irregularities at the same embassy. It is imperative—I hope that careful note will be taken of what I say—that, where the Committee highlights failings, effective corrective action is taken swiftly.
  Another issue dealt with this afternoon—my hon. Friend the Member for Reading, East referred to it in great detail—is the content of the Committee's 27th report, entitled "Measures to Combat Housing Benefit Fraud". The Green Paper on fraud, which was published in July, sets out what we intend to do to tackle welfare fraud. I know that my right hon. Friend the Secretary of State for Social Security is determined to minimise losses that occur through fraud and error so that he can increase the resources available to meet genuine need, which is what we all want.
  My predecessor, the Paymaster General, took part in a joint Treasury-NAO seminar on the subject of tackling the risk of fraud. She was impressed by the determination and expertise that Departments bring to bear to counter fraud risks. She also noted the valuable contribution of the national audit agencies, including the work of the Audit Commission, in areas such as data matching.
  Hon. Members have referred to the European Union. The Government have consistently supported measures to strengthen the financial management of the EU budget,
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  and we shall do everything we can to fight fraud. We used the United Kingdom presidency of the European Union to ensure that Council conclusions focused on the real areas of concern—over-budgeting, poor objective setting, over-complex legislation and little real evaluation of results.
  I dealt with structural funds in a former incarnation in the Department of Trade and Industry, so I understand the points that were made about delays in payment. We welcome the German presidency's proposals for an independent, high-level group to consider ways to strengthen the fight against fraud.
  Mr. Christopher Gill: Does the hon. Lady agree that fraud is endemic in the European Union? The only way to eliminate fraud is to do away with the regimes in which fraud is deep-rooted and endemic.
  Mrs. Roche: I have great respect for the hon. Gentleman, but I suspect that he and I have different views on the European Union. The Government and members of the PAC are committed to ensuring that proper proposals are in place. We shall act vigorously in conjunction with our European Union colleagues, particularly in the Council of Ministers, to ensure that, when fraud occurs, every possible measure is taken to deal with it.
  Mr. Wardle: When the hon. Lady talks to her German counterparts about the initiative that they are proposing under their EU presidency, will she suggest that one of the players in that investigation should be our Comptroller and Auditor General, Sir John Bourn?
  Mrs. Roche: I note the hon. Gentleman's point, but he will forgive me if I do not give him an instant reply. That point has also been made by other hon. Members.
  I shall deal with the important issue of NAO access, which has been raised by several hon. Members. I agree with the hon. Member for Bognor Regis and Littlehampton that my hon. Friend the Member for Liverpool, Garston (Maria Eagle) made a thoughtful speech on this subject. I listened carefully to the points made in the debate. When I came to this brief, I recognised that this was a major issue for the Committee.
  I hope that the Committee and the House will appreciate that we have approached the issue of access positively. We were quick to legislate to provide the NAO access to the lottery operator for the purposes of auditing the national lottery distribution fund. We have also made arrangements for NAO access in connection with the grants in aid for the occupied royal palaces. I think it is right to say that the right hon. Member for Haltemprice and Howden has acknowledged some of the improvements that we have made. When we have created new agencies, such as the regional development agencies, we have proposed that the Comptroller and Auditor General should be the auditor. Those are positive steps forward.
  I am aware that there have been a number of discussions in the past year on other access issues, such as the possibility of giving the Comptroller and Auditor General a right of access to Government contractors and making him the auditor of publicly owned companies.

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  On Government contractors, the Government's approach is to provide for NAO access where that is necessary for the financial or value-for-money audit of a Department or agency. Broadly speaking, that will be when all the information necessary for the audit is not held by the audited body.
  On publicly owned companies, I understand that the NAO already has access to many of the bodies concerned. Where statute requires the auditor of an non-departmental public body to be a Companies Act auditor, the NAO will have inspection rights. It will also have access through contract clauses to bodies such as training and enterprise councils.
  In the short time since taking on my new post, I have not been able to form a final view on whether any further concessions should be made, although I am aware that there are strong arguments against making further changes. Nevertheless, before reaching a final decision, I would be happy to talk through the issues with the right hon. Member for Haltemprice and Howden and the Comptroller and Auditor General. I hope that that approach will be helpful to the PAC. I was conscious of the fact that I wanted to listen to what hon. Members had to say in this debate and to have some further discussions with them before reaching a final view. I hope that that will be helpful to the House.
  I was delighted that, in October, the four national audit agencies launched the Public Audit Forum with the very clear message that
  "Good government needs good audit".
  That is a positive example of the spread of good practice. It will strengthen co-operation among the national audit agencies, promote the setting of common standards and help to minimise the burden of audit on audited bodies.
  The hon. Member for Bournemouth, East (Mr. Atkinson) spoke about the millennium bug difficulties. The hon. Gentleman and I have not always agreed on the method by which one tackles that important issue, but I shall take this opportunity to pay tribute to him. He was the first hon. Member to raise the issue and he has done the House a great service. When the issue was raised initially, it was not thought to be important. In fact, it is very important and the hon. Gentleman has pioneered work in that respect.
  As the hon. Member for Bournemouth, East knows, the Government take this issue seriously. That is why we formed Action 2000 and gave it the resources necessary to continue the job. It is also why, under the chairmanship of my right hon. Friend the Leader of the House, there is considerable action taking place throughout Government. I pay tribute to the hon. Gentleman for his tireless work.
  A great deal has been said today about follow-up activity and there have been many thoughtful remarks about the very nature of the PAC. A great deal of work goes on, but do the Government and Whitehall listen? It is for all of us to ensure that we do, and it is for the PAC to look at how the follow-up activity is implemented. I very much want to work with the Committee to ensure that that takes place.
  We all realise that good managers, whether in Government or outside, need to remember the old lessons as well as the newer ones. In looking back, I was struck by how the Committee's reports continue to illustrate both those points. Some of the most notable instances of fraud arise because of basic failures in the elementary oversight of basic controls, in authorising payments on the basis of hand-written documents or treating delivery notes as
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  invoices. We need to make sure that basic controls are being implemented. As to newer lessons, I am confident that the Committee's recommendations on privatisation will provide a coherent and constructive source of guidance.
  More generally, I was struck by the clear, firm and constructive nature of the reports, even when they were critical, as they often were. I am sure that the breadth of the Committee's efforts and its energy will keep us all on our toes.
  I look forward to working next year with the right hon. Member for Haltemprice and Howden, with the Committee and with the House in ensuring that the House and the people of the United Kingdom—whom we are so privileged to serve—get value for money from their public services and receive the very best public services we can possibly provide for them.
  Question put and agreed to.
  Resolved,
  That this House takes note of the 1st to 67th Reports of the Committee of Public Accounts of Session 1997–98, and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm 3880, 3893, 3894, 3936, 3955, 3973, 4004, 4015, 4021, 4041, 4055, 4060, 4069, 4075) with particular reference to the following Reports:

  Twenty-seventh, Measures to Combat Housing Benefit Fraud (HC 366);

  Thirty-second, Cataract Surgery in Scotland (HC 546);

  Thirty-fourth, Foreign and Commonwealth Office: Irregular Payments at the British Embassy in Amman, Jordan (HC 553);

  Forty-fourth, Northern Ireland Social Security Agency: The Administration of the Disability Allowance (HC 527);

  Forty-sixth, The Contract to Develop and Update the Replacement National Insurance Recording System (HC 472);

  Sixty-first, Getting Value for Money in Privatisations (HC 992);

  Sixty-seventh, HM Treasury: Resource Accounting and Resource-Based Supply (HC 731).

  NORTHERN IRELAND GRAND COMMITTEE
  Ordered,
  That—

  (1) the Order of the House of 2nd December relating to sittings of the Northern Ireland Grand Committee shall have effect with the substitution of the words '2.30 p.m.' for the words '10.30 a.m.';

  (2) the matter of the Discussion Paper entitled "Putting it Right—the case for change in Northern Ireland's hospital service", being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Grand Committee for its consideration; and

  (3) at the sitting on Thursday 28th January—

  (i) the Committee shall consider the matter referred to it under paragraph (2) above;

  (ii) the Chairman shall interrupt proceedings at 5 p.m.; and

  (iii) at the conclusion of those proceedings, a motion for the adjournment of the Committee may be made by a Minister of the Crown pursuant to Standing Order No. 116 (5) (Northern Ireland Grand Committee (sittings)).—[Mr. Dowd.]

  Ordered,
  That Mr. Neil Gerrard be added to the Environmental Audit Committee.—[Mr. Dowd.]

  Fisheries
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]
  6.21 pm
  Mr. Shaun Woodward: I am grateful for this opportunity to address the House on a serious issue which I hope will interest the House—the sustainability of fisheries.
  Few hon. Members will be aware of a significant conference that was held in London last Monday. It was essentially a workshop to consider the crisis facing the world's oceans, in preparation for the April United Nations meeting, in America, on sustainable development. The conference was sufficiently important for the Deputy Prime Minister to agree to give the keynote address, in which he identified some of the concerns which he felt were becoming increasingly prominent not only among the scientific community but among the world's responsible fishing communities. However, the need to act swiftly was urged not on the British Government but on others. I believe that the British Government could be doing much more to take a lead in protecting both our own and other countries' fishing stocks.
  If we are to discuss and make proposals on managing the world's oceans, it is critical that we should understand the over-fishing crisis. My belief—which has been formed by consulting with scientists and responsible bodies working on the issue; there are no party political points to be made on the issue—is that the policy currently being pursued by the British and other Governments, by continuing to set quotas that are incompatible with sustainable fisheries, is presenting huge risks. The fact is that more than half the stocks exploited by United Kingdom fishermen are below safe limits or are in danger of falling below those limits.
  Sustainability is far from being treated as a crucial, central issue in debates on the future of the common fisheries policy. I acknowledge that sustainability plays its role in debates, and that lip service is paid to it, but, when it comes to the crunch, it is not at the heart of the way in which common fisheries policy is formulated. Current fishing practices have been based on inaccurate data, sometimes on a wilful disregard of scientific evidence and on a failure to consider the long-term consequences of current policies.
  In some ways, the arguments about sustainable fisheries, and the way in which those arguments are reported, resemble the debate, a decade ago, on fears about global warming. A decade ago, that evidence was ignored, and the scientists dealing with it were dismissed as eccentric or as scaremongers. Today, we are facing the consequences of ignoring their advice, of failing to understand that they were not eccentric and of undermining what they were telling us. Global warming is now a crisis, and the world must face a more serious problem than it would have had to face had we been more responsible and appreciated the demands of a sustainable environment and of sustainable environmental policy.
  At least some of the Deputy Prime Minister's arguments about oceans reflected a growing body of opinion in this country. Those opinions come from organisations such as the World Wide Fund for Nature and the Royal Society for the Protection of Birds, which
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  is interested in oceans because of its concern about the conservation of sea birds, as well as newer bodies such as the Marine Stewardship Council, in which I declare an interest as an unpaid director.
  The Deputy Prime Minister spoke about the crisis facing fisheries. It is well known that 60 per cent. of the world's fish resources are in danger of being over-exploited. He spoke of the need for effective regional agreements to encourage responsible fisheries and sustainable harvests. He assured the conference that the Government take the issue seriously, but that demands much more than they are currently delivering—not rhetoric, but action now.
  In summing up, the Deputy Prime Minister said that the thrust of his remarks was to improve public understanding of what is happening to the seas. He spoke of the need for a barometer that people understand. The real need now is not for greater public understanding—the public are beginning to understand ever more about the problem—but for more Government action and help to create a climate in which we can move significantly towards a more responsible and sustainable fisheries policy.
  Tonight's debate goes to the heart of the subject of the oceans workshop and concerns about the future of our seas. It is significant that it is to be answered not by a Minister from the Department of the Environment, Transport and the Regions, but by one from the Ministry of Agriculture, Fisheries and Food. That is not a surprise, because that is how we have always done business, but as we have learnt ever more about sustainable fisheries, we have come to understand the need for close integration of environmental policy with fisheries policy. That division is one of the Government's problems in addressing the issue. The Minister replying to this debate speaks from one Department, but the Deputy Prime Minister speaks from another. Would the speech that the Minister will make tonight be the same if he had the environmental brief as well?
  Mr. John Gummer: Does my hon. Friend accept that the difficulty with fisheries, particularly in the European Union—although this is also true elsewhere—is that fisheries Ministers could more correctly be referred to as fishermen's Ministers? They are fighting for their fishermen's share of the fish rather than ensuring that fish will be there for the fishermen of the future.
  Mr. Woodward: My right hon. Friend makes a crucial and telling point, which I would like to develop. The fact that the debate is dealt with by the Ministry of Agriculture, Fisheries and Food, not the Deputy Prime Minister is a symptom of the problem, not just for fish stocks, but for those employed in the fishing industry. Up to 200 million people across the world are employed in fishing and related industries. There has been an increase in the number of fishermen in the UK in the past year. A future fisheries policy must be more environmentally sensitive if fishing stocks are to be preserved and are to continue to provide jobs for people. The Government need to say more and to act more clearly to demonstrate that they understand that sustainable exploitation of natural

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  resources on land, in the sea or in the air that we breathe must be considered in the round. That will require more restraint, tougher quotas set by the Government and more difficult trade-offs with the industry.
  There is no better example of the failure to grasp the need for sustainability than the devastation caused to fishing stocks and fishermen's livelihoods after the collapse of the Canadian grand banks in 1992. Until then the area was considered one of the world's richest sources of cod. Of course there had been the scaremongers—the scientists who had warned about over-fishing—but their warnings were regarded as simply eccentric. In 1992 one of the world's richest sources of cod collapsed overnight as a result of chronic over-fishing. The consequence was not only the devastation of the fish stocks and the appalling collapse of the cod stocks, but the loss of 40,000 jobs—nearly twice the number employed as fishermen in the United Kingdom today.
  The fishery remains closed and there has been no significant recovery of the fish stocks. The ecosystem has undergone irreversible change. It is no longer a matter for the Canadian equivalent of MAFF because there are now no fishing interests to protect in the area. It is no longer a concern to the environmental interests in Canada because the fishing stock has been wiped out. We need to take note of the failure of the two Departments there to work hand in hand.
  It would be interesting to hear from the Minister this evening what steps he believes need to be taken by his Department to achieve greater co-operation in terms of the action plans that need to be made by his Department and the Department of the Environment, Transport and the Regions.
  There have been many arguments for a precautionary approach. I welcome the steps taken by the European Union and I pay tribute to the role which I am sure the Minister played in the direction taken in the Council in December 1998—to apply a precautionary approach to catch limits.
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): It was not uncontroversial.
  Mr. Woodward: Indeed. No environmental policy is likely to be uncontroversial. I recognise that problem and that is why this is not a party political issue and an opportunity for the Opposition to take potshots at the Government. It will require consensus, but that needs to be built. The British Government can play a significant role in achieving that consensus.
  Before one makes too much of the precautionary approach that was achieved at the Council in December 1998, it has to be recognised that it is no more and no less than what EU Ministers signed up to at the 1995 North Sea conference when they pledged to apply the precautionary principle to managing our fish stocks. There were three years between those two meetings, and that crucial loss of time will make a difference. We cannot say that we shall have another agreement now and in three years' time we may achieve another implementation and perhaps everything will be all right. We are being warned—just as we were warned about global warming 10 years ago—that action needs to be taken now, and not in three years' time.
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  It is interesting to refer back to the North Sea conference in 1995. The follow-up intermediate ministerial meeting conference in Bergen in 1997 pledged to draw up recovery plans for the most depleted stocks, giving priority to cod. In 1997 the EC conceded in its progress report on the IMM:
  "Up till now it has not been possible to establish a specific recovery plan for cod."
  It is a disaster. Not months but years have elapsed, yet there is no specific recovery plan for cod. The establishment of a coherent recovery plan for cod remains a priority for EU member states. The problem is that the elements of such a recovery plan require much more robust protection of the seedcorn of the year-class. That requires agreements on no take zones to protect key stock concentrations. The British Government must punch above their weight to bring about far better responsible good practice by the fishing industry. The Government must begin to think about what they are going to do to reward those who do well and to discourage and punish those who are irresponsible.
  Mr. Adrian Sanders: I am grateful to the hon. Gentleman, to whom I gave notice of my wish to intervene. I should like the Minister to clarify the position on conservation gone too far. I have a number of wreck fishing vessels for hire in my constituency, and owners are concerned that they will be restricted to three finned fish per boat. Those boats take 12 or more people out to sea, and they cannot share out three fish among 12 people. Anglers simply will not hire those vessels, and a very important industry—which is fishing-related, but not fundamentally about fish stocks—will be in trouble as a consequence of over-conservation. That aspect of the debate must be addressed by the Minister.
  Mr. Woodward: It will be interesting to hear what the Minister has to say about that. However, it would be breathtaking to hear from the Minister this evening that he thought for one moment that in anything related to fishing policies we were in a state of over-conservation. The reality is far from that: the situation is desperate.
  The hon. Member for Torbay (Mr. Sanders) should look at what has been said by organisations such as the RSPB. The society said that, with hindsight, the 40,000 Newfoundland fishermen who have been out of work since 1992 because of the grand banks cod collapse would have preferred a tough precautionary approach to the endless compromise, and what the hon. Gentleman described as "over-conservation". If we had had at that time a tough precautionary approach—which might have made it very difficult for the fishermen—there still would have been a fishing industry today, supplying jobs for those people.
  The failure to look ahead and the preoccupation with the here and now in the face of the evidence means that we not only face a crisis but are marching knowingly and irresponsibly towards a position in which we will exhaust our fishing stocks around the world.
  Mr. Sanders: I accept the hon. Gentleman's point, but I am referring to pleasure boats which have a restriction of one fish per angler, or 12 fish in a 12-person boat. Allegedly, that is being reduced to three finned fish per

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  boat. This is, to coin a phrase, a drop in the ocean in comparison with the problem that the hon. Gentleman is raising.
  Mr. Woodward: I should not spend too much time in this debate being preoccupied with drops in the ocean. Nobody wants to see anglers disturbed; as is the case with many other aspects of wildlife conservation, those engaged in a sport are often the best stewards for the continuation of an industry. It will be interesting to hear whether the Minister supports that view beyond fisheries and into other areas.
  In the debate on the common fisheries policy a month ago, the Minister was at pains to speak of balance. The balance of which he speaks—albeit a politically understandable balance which he must produce in his Department—is, in fact, not a balance at all; it is a business of trading off the demands of the fishing industry with the growing sense of the crisis of the fishing stocks.
  For the reasons outlined by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) this evening, I believe that the difficulties that the Minister faces within the Department are historical. However, surely we should now break out of those historical chains, and recognise that they are doing enormous damage to the prospects of creating a sustainable fisheries policy.
  The scale according to which the Government judge the balance is based on a critical assumption: what is the most that the catching sector can get away with? What is the largest amount of fish that can be extracted?
  On the basis of the data and evidence that we now have, it appears that the position is, at best, a lottery. Given increasing scientific evidence about the way in which fishing stocks are being exhausted, it is hugely irresponsible to continue with some of our fishing policies, which will simply cause more and more devastation.
  Let us take the example of Canada's grand banks. Getting it wrong will not only destroy fishing stocks, but throw thousands of people on to the dole. That will be the new deal for Britain's fishermen if the Government are not brave enough in the months ahead to come up with some tough and different policies on fisheries for the future.
  The current safety thresholds for fishing stocks of European fish are based on defining the greatest number of fish that can be extracted—not safely extracted, just extracted. The calculation then becomes a target: the target is to leave the minimum number of fish in the sea. The Government are presiding over a policy that ignores the warnings that we are being given. We are gambling with very high stakes. Surely the time has come for the Government to ask not what is the most that can be extracted, but what is the most that we can responsibly extract. We should not think in terms of quotas for the most than can be extracted, per se.
  At present, given the data that we have, the margins for error are all over the shop. If the wrong calculation is made, the results will be catastrophic. It is clear from the evidence that our current fishing policy is tantamount to a culture of chronic crisis.
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  The RSPB says:
  "The sustainability of these stocks has, for the past few years, been dependent on the unpredictable incidence of the occasional year of above-average recruitment. This is a lottery and it is no substitute for rational management"
  in the face of the information that we now have. The Government need to end the lottery and to preside over a process of rational management.
  In some ways, the Deputy Prime Minister recognised that at the oceans workshop. We have learnt a little from the problems that were caused when the scientists' warnings about global warming were ignored a decade or so ago. Rhetoric, however, is not the same as action. We know that 60 per cent. of the world's most commercially important fish stocks are fully fished, over-fished or severely depleted, and Britain is not exempt from the crisis.
  Can the Minister tell us this evening that the information on which he has based his quotas for this year is so reliable and comprehensive that the current fishing of the North sea definitely will not lead to a position like that of the grand banks in Canada? In fairness to him, I must say that he cannot tell us that. He should read the evidence provided by his own Ministry's 1988 report. On page 134, it states:
  "In 1997–s Agency, the Centre for Environment, Fisheries and Aquaculture Science…monitored the level of 31 stocks of fish and contributed detailed advice on their size composition to ICES.
  A measure of the state of the stocks is the proportion fished by the UK and other EU fleets considered to be above the level (known as the minimum biological acceptable level) necessary to avoid an increasing risk that they will fail to reproduce themselves".
  That figure might have been expected to decline if we were operating a responsible, sustainable fisheries policy; but in 1994 it was already 42 per cent. above the desired level. In 1995 it rose to 43 per cent. above the level, and in 1996, the last year for which the Ministry has published data, it rose to a massive 51 per cent. above it. The risk has increased every year; it has not gone down. The jump from 1995–96 should alarm everyone—and it should alarm the Minister most of all.
  As the Deputy Prime Minister said, we do not simply need the general public to understand more; we need them to be reassured that the Government understand the figures and will not just speak about the problem, but take action on it.
  The deputy director of CEFAS—the Centre for Environment, Fisheries and Aquaculture Science—warned in 1995 that
  "we have never been here before and we don't know how long we can sustain viable fishing stocks…or whether the marine ecosystem will allow stocks ever to recover to previous levels."
  Those are not my words, but those of the deputy director of CEFAS. Surely, that is at the heart of the issue that we need to discuss. There is no question of over-conservation when we have a warning of that nature.

  The former Minister of Agriculture, Fisheries and Food, the right hon. Member for Copeland (Dr. Cunningham), showed again that he understood the danger in a letter of August last year, where he cited concern about the state of North sea cod stocks:
  "It is certainly the case that North Sea cod stocks are now at 'uncharted low levels' and all fisheries managers are aware of the poor state of those stocks."

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  However, the problem is that, instead of taking heed of that warning and doing something about it, he immediately drew comfort:
  "Even at these low levels there are still some 400 million individual cod in the North Sea of one year of age or more and I understand that the latest scientific information is that there has been a good recruitment of juvenile cod to the fishery."
  Hooray—there has been a good recruitment of juvenile cod to the fishery, but the problem is that that demonstrates all too sadly that there is only partial understanding. UK waters may be awash with juvenile fish, but that is exactly all that there is. The recruitment may be there because that is all there is left; we have exhausted the older, mature fish.
  The crucial question for the Minister is not how many individual cod of one year of age or more may be in the North sea, but how many individual cod of four years of age or more are in the North sea, because it is only at the age of four years or more that those fish will begin to breed. Again, it would be interesting to know whether the Minister could tell us that figure. I suspect that he cannot because, in all fairness, we have not understood, until now, the crucial nature of having such information.
  Mrs. Margaret Ewing: I am listening with great interest to the hon. Gentleman. Is he suggesting that there should be a total closure of North sea cod fisheries, or that there should be an alternative mechanism for catching cod that would involve the extension of the net mesh? I am interested to hear what he puts forward as alternative suggestions.
  Mr. Woodward: I am grateful to the hon. Lady for her intervention. I will come specifically to that point.
  I know that, like his predecessor, the Minister has been concerned with the problem of discarding; I know that he cares about the issue. The scale of juvenile undersize fish has undoubtedly been a root cause of the tragic rise of discard rates in recent years. If one thinks that through, one is saying that a high proportion of the fish that are caught have to be discarded because they are below the legal minimum landing size.
  If that problem is not dealt with adequately, it will simply compound itself. The tragedy in the North sea for cod can be seen all too clearly from the fact that half, by number, of all the cod and haddock that are caught in the North sea are thrown back dead into the sea because they are too small. Those figures are alarming in themselves. We know that the North sea cod fishery is also riding its luck. It would be foolish in the extreme to suggest that an exceptionally good recruitment year in 1996 demonstrates that fish stocks have recovered completely. Far from it: one good year of recovery is cause neither for celebration nor complacency.
  As we discussed earlier, Ministers promised in 1997 to prioritise a cod recovery plan. The 1996 juveniles are now the three-year-old mainstay of the fishery, but only if they have not been caught or were not part of the half by number thrown back dead into the sea. The Minister will know that the scientific evidence worries bodies such as the International Council for the Exploration of the Seas, which has stated that it remains
  "pessimistic about the likelihood of noteworthy improvement of the cod stock in the medium term."
  That is surely very worrying.
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  Tonight, the Minister has an opportunity to say whether he believes in the quotas in whose agreement he played a part, and whether they go far enough. He will know that scientists recommended a cut of 11 per cent. in the 1999 cod quota. That was moderated by the European Commission—not up, but down to just 5 per cent. Will the Minister say whether the Government will be party to any further dilution of the advice designed to restore North sea cod stocks? I hope that he will confirm that they will not.
  I accept that the fishing industry would be very angry at such a response. However, that is the difficulty facing a Minister who must recognise the importance of the environmental factors involved. If those factors are not taken into account, there will be no fishing interests to preside over in the future, because neither the fish stocks nor the jobs will exist.
  The German presidency has launched an initiative to protect young cod from over-fishing and to give them a chance to mature. Will the Minister take this opportunity to align the Government behind that initiative, as the Royal Society for the Protection of Birds has asked already, to create an area in the German bight that would be closed to cod fishing in 1999?
  The acid question is not "Where are we now?", but "Where will sustainable fisheries, fish stocks and the fishing industry be in five years' time?" Unilever, which makes Bird's Eye fish fingers—and I could cite other corporations—has begun to face the problem square on. It has realised that there will be no cod for fish fingers in five or 10 years' time unless sustainable fisheries are adopted as the way forward. At present, the fishing industry presides over dwindling fish stocks that depend on the lottery of rare years of good recruitment. Should not the Minister be saying more to bring together the interests of the industry and of the environment, and to produce a concerted effort to restore stocks to a level that will provide long-term and sustainable catches, with high proportions of mature fish? That would guarantee that the 200 million people in the world whose livelihoods depend on such factors will continue to have jobs.
  Although it will be difficult, Britain has an opportunity to set an example, to take a lead in the matter and to punch above its weight—not only in the radical reform of the EU's common fisheries policy but also in the world as a whole.
  Mr. Christopher Gill: I sense that my hon. Friend is approaching the end of his remarks, but will he say whether he intends to refer to the huge tonnage of mature, saleable fish that is dumped back, dead, into the sea? I listened carefully to his description of the huge number of fish thrown back dead because they are considered to be too small. Is he worried that the European Commission's recent reduction in the minimum landing size for certain species will make the problem even worse? It will not have escaped my hon. Friend's attention that, under the new quotas for this year, the quotas for sand eels will be maintained at their previous rate. Many people regard that species as an essential food for future fish stocks in general.
  Mr. Woodward: I am grateful to my hon. Friend for his intervention and I hope that he will understand from what I am about to say that I have recognised that

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  problem. However, in a relatively short Adjournment debate it is impossible to explore all aspects of the matter. My hon. Friend and other hon. Members rehearsed many of the arguments in the debate shortly before the House rose for Christmas. I am concentrating on this aspect this evening, because I want to tease out from the Minister whether we can move on from simply recognising that this is yet another problem and can arrive at a situation where we see all the problems and begin to recognise the need to do more before there is nothing left to be done.
  I and certain organisations believe that a full study of all the United Kingdom fish stocks needs to be carried out over a number years with directly comparable figures. As the Minister will readily recognise, no full study has been carried out with comparable data and so we have constant difficulty in producing meaningful information. Without the information it is difficult to produce constructive policies with which we can proceed sensibly. Perhaps the Minister will tell the House whether the Government will agree to make additional funding available for that sort of exhaustive study of UK fish stocks to produce the comparable data.
  In addition, certification schemes are beginning to emerge. Can the Minister tell us tonight to what extent he believes that voluntary certification is the way forward for the fishing industry? I make no apology for pushing that matter. As a director of the Marine Stewardship Council, I know that it has been at the centrepiece of the work that that organisation has been doing since it was set up by an initial grant from Unilever and the World Wide Fund for Nature. The MSC wants certification to be at the heart of future fisheries policies and wants consumers to be made aware of the labelling that would go with certification so that they are encouraged to choose those products over non-certified fish.
  So far, the response from retailers and the industry in the United Kingdom has been constructive and there have been constructive approaches from those within the fishing industry, who recognise that the long-term policies that we are pursuing will probably leave us with no fishing stocks to fish.
  At the oceans conference, the Deputy Prime Minister talked of the need for
  "a whole series of actions where international agreement and support is needed to respond to the threats from human activities to the seas."
  The certification programme would offer just that.
  The Deputy Prime Minister has said that we need to find such a solution. The truth is that we have found it. The industry, retailers and consumers believe that certification can work—they have demonstrated it in other areas of environmental policy. Tonight, the Minister has an opportunity to tell the House his views on the policies of the MSC—if he is not fully aware of them, I am sure that the council will willingly brief him, or, if he has had one briefing, give him another. The British Government have the opportunity to join other signatories and bodies from around the world that are queuing up to come behind that policy. Other countries are beginning to recognise that sustainable fisheries can be produced only through international co-operation, which has to be based on market solutions. Those will best come about speedily through a voluntary certification programme.
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  Perhaps the Minister will tell the House his views of the certification programme this evening. The crucial thing is that the Minister is stuck in a Department that has historically been concerned with the fishing industry.
  It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
  Mr. Woodward: It is vital that the Minister recognise the demands of the fishing industry and the fishermen. No one would suggest that that cannot be done, but the long-term interests of fishermen in Britain, the European Union and around the world will be protected only if we fundamentally shift fisheries policies away from the current minimum target quota system to a responsible, sustainable, environmentally friendly policy that, in the long term, will continue to provide jobs for people in Britain and throughout the world.
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  Mr. John Gummer: I declare an interest as the unpaid chairman of the Marine Stewardship Council and as the Member for a constituency with 74 miles of coastline and many small fishermen. I welcome the opportunity that the debate secured by my hon. Friend the Member for Witney (Mr. Woodward) creates to consider sustainable fishing.
  I congratulate the Minister on the tough stance that he has taken several times in fighting for the sustainability of our fish stocks. I recognise that his job—I did it longer than anyone—is not easy because the fishing industry is self-destructive in that every section finds reasons to defend its practices against those of other nations or other parts of the nation.
  I well remember fishermen on the west of Scotland telling me that if only those on the east of Scotland behaved as they did, everything would be all right. Fishermen in the south-west explained that if only the Scots behaved like them, it would all be all right. The British said that if only the rest of Europe behaved like us, it would all be all right. Exactly the same is said in Holland, Denmark, France, Germany, Spain and Portugal; it is always someone else who is at fault.
  The House has a responsibility, as far as possible, to support measures, albeit unpopular ones, that a Government of any sort seek to take to protect the future of our fishing industry. Having congratulated them, we must press the Government to move further. I have some practical suggestions that the Minister might like to accept.
  First, the Minister is right to realise that the answers cannot be found nationally. Fish do not carry any flag on their fins; they swim where they wish. There is no such thing as a Scottish, English, French or German fish. We have always shared fishing grounds and argued about them. There is nothing wrong with a common fisheries policy. It is the policy, not the commonness, that is wrong. We must find a common answer for a common stock in a common resource. That has always been true.
  The Minister must find the answers within the common fisheries policy, which has given the UK defence of an amount of fish in line with our historic position. If one looks back over the matter, it has been rather more

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  generous than many would have thought. I have looked back very carefully because of the sort of criticisms that are made. He is right to work within the Community, but I hope that he will take a series of clear stands. I hope that all hon. Members will support him if he does.
  Mr. Gill: I know that my right hon. Friend is a staunch defender of the common fisheries policy. Does he recognise that that which everyone owns, no one owns? There is no incentive for fishermen to protect or conserve stocks when they know that what they conserve benefits someone else. "Someone else" in the context of the European Union is another member state. When my right hon. Friend gave examples of countries that were dissatisfied with the present arrangements, he listed only members of the EU. Has it not occurred to him that some countries are satisfied with their fisheries regime? Some feel that conservation activities are conducted in a much more satisfactory way under the present arrangements and that they have satisfactory fisheries. I instance Norway, Iceland, the Falkland Islands and even Namibia.
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman is exceeding his licence.
  Mr. Gummer: My hon. Friend is fiercely opposed to the EU, and I understand that, but fisheries are a common resource because we all own them. The only way in which the Icelanders could introduce their system was by stealing a resource that they previously shared. They decided that what was previously a shared resource was theirs. If my hon. Friend thinks that we are going to say to the French, "That which we have shared with you for ever we are going to take into our control", he is talking nonsense. There is no possibility of managing our fisheries except together.
  It is a terribly sad view of the world to suggest that we cannot co-operate with our neighbours; that we can deal only with stuff that we own in a narrow, partisan way. That is not the way forward for the future. That is not what is happening throughout the EU. It is not what is happening in the rest of the world. It is not what the Canadians have discovered in dealing with the Americans over Atlantic salmon. That is not what any country is discovering. The only way in which we can manage our fisheries other than according to present arrangements is to return to the old practice of bashing the fishermen over the head with a marlin spike because people took what they said was theirs.
  That practice was all right when we had so much fish that we could all fish it, but now that we have so little and we have equipment that enables us to find fish so easily, we must operate in common. My hon. Friend the Member for Ludlow (Mr. Gill) has the advantage of representing a landlocked constituency. Unlike me, he is not subject to the daily influence of fishermen. He does the fishing industry a grave disservice by suggesting that there is an alternative way forward. We must make the system work. I want to suggest some tough measures to the Minister to make it work.
  Mr. Gill: Will my right hon. Friend give way?
  Mr. Gummer: I really must not. I have been asked to finish in time for the Minister to answer.
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  Will the Minister return to a policy that I reached and continued to pursue for the last three years of my time as fisheries Minister? Will he maintain the United Kingdom's opposition in principle to any kind of industrial fishing? Will he support the European Union in its desire to ensure that fish-meal is no longer used in a range of products for which it is clearly unsuitable when the requirements for fish rejuvenation are borne in mind?
  Will the Minister recognise that, however tough the quotas and the total allowable catches may be, if they are all that the fish stocks can sustain, he needs to appeal to men and women of good will to support him in holding out for them? It is no longer any good saying, "We want a bit more ourselves, so we will give them a bit more." If that happens, in the end the figures just do not stand up.
  Will the Minister press the EU to say in negotiations with countries beyond the Union, especially African countries, that no agreements to fish in their waters will be entertained without the EU paying for and running proper policing mechanisms? That will show that what we have promised to do, we will do and that what we have promised that we will not take, we will not take. It is no good asking Namibia, Togo or Senegal to police those fisheries. If we want to fish in their waters and zones, we must provide proper restrictions on our own fishermen and pay that cost; otherwise, we shall contribute to the unsustainability of their waters, as we already have to our own.
  Mr. Gill: Will my right hon. Friend explain why, in answer to my previous question, he referred to the waters of Iceland and the British Isles as a common resource, whereas he is now talking about African countries having their own waters? He is getting his argument terribly confused.
  Mr. Gummer: The fact is that we are part of the European Union and we have signed up to sharing the waters that we happen to have shared, in different ways, for many centuries. That is not true of Senegal, which does not have shared waters. Its geography means that it is a long way across the Atlantic before any other country is reached with which its waters could be shared. In addition, Senegal cannot exploit its waters within its sustainable commitments, so it properly makes use of its waters by doing deals with others who want to exploit them. Under those deals, others agree to certain restrictions and my point is that, although those restrictions cannot be properly policed by Senegal, they can be policed by the countries with which Senegal does those deals, and I want us, within the European Union, to set an example of doing so. I am sure my hon. Friend recognises the clear distinction between those two cases.
  Next, I want the Minister to recognise that, in the end, we shall have to change the methods of control, away from those that encourage the discarding of fish, both juvenile and larger fish. My hon. Friend the Member for Ludlow was right to say that the problem is not only one of juvenile fish being discarded.
  We in Britain suffer significantly because we failed to carry through the days-at-sea measures that we should have taken. I have hard words for the Scottish nationalists, who are generally in favour of conservation, but who always vote against any particular conservation measure that they think might be electorally unpopular. Should the

  541
  Scottish nationalists acquire more power—I understand that such an eventuality might arise in Scotland—I hope that they will act with greater responsibility. Scottish nationalism has done more than any other factor to stop the sort of conservation measures that we need. The nationalists constantly deploy in Scottish constituencies the argument that one can have conservation without any restriction on the activity of fishermen, but that is not possible.
  I hope that the Minister accepts that we need a days-at-sea system. We have to introduce really tough measures and to insist that others carry those measures through when common stock is involved. My hon. Friend the Member for Ludlow is right: my fishermen in Suffolk will not accept restrictions on their activities if the men of Lowestoft are not similarly restricted; likewise, the men of Lowestoft will not accept restrictions if the men of Holland, Scotland, Germany or any other place within the UK or the EU are not subject to the same restrictions and to the same policing.
  In the past, the Minister has asked for practical measures. I want him to be prepared to go to the European Union to beef up the EU's inspection methods—to increase the powers and the number of the inspectors—and to insist that that is a matter of utmost importance. The previous Government agreed that we needed a common inspection system for a common resource. I believe that we need a stronger inspection system, one in which inspections can be made without notice being given, because it is no good telling people that inspectors are coming in three months' or two weeks' time to check that they are keeping the books properly.
  If we are going to employ a days-at-sea system and other restrictions, those measures must be properly enforced throughout the European Union. I hope that the Minister will find the resources and the will to ensure that the EU is better able to police both its own resources and those of others which it agrees to take over.
  7.14 pm
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): I warmly congratulate the hon. Member for Witney (Mr. Woodward) on his thoughtful and sensible speech-I confess that, when I saw the title of the debate, although the subject is a laudable one, my feelings were somewhat jaundiced by my previous experience of some of his colleagues on the Opposition Benches and my fear that some of them would attempt to use fisheries as a stick with which to beat the European Union. I am delighted that the debate has focused on the real and important issue of sustainability. I hope to address the hon. Gentleman's points and also those raised by the right hon. Member for Suffolk, Coastal (Mr. Gummer), who, as he said, was a fisheries Minister. He knows that that is one of the most difficult briefs in Government and he is aware of the problems that go with the post. He has drawn on his knowledge to make several pertinent points, which I shall try to address in my response.
  I accept absolutely that sustainability is the key to fisheries management not only in this country but in Europe and internationally. The hon. Gentleman referred to my relationship as a Ministry of Agriculture, Fisheries
  542
  and Food Minister with my colleagues in the Department of the Environment, Transport and the Regions. He asked whether I would say different things if I were an Environment Minister. I assure him that I would say nothing different, as I believe that there is no contradiction involved in adopting an environmental position and caring about the entire marine ecology as part of a fisheries programme. If we do not have healthy seas, we will not have a sustainable fishing industry. Those two elements go together.
  I work closely with my colleagues in the DETR and with those in the Foreign and Commonwealth Office in relation to international sustainability. Only this week, I have discussed the problems of the over-exploitation of the Patagonian tooth fish and the threat to the wandering albatross caused by fishing methods and potentially unregulated international fishing. I take an interest in the international dimension and discuss such matters thoroughly. Important international forums include the intermediate ministerial conference—to which the hon. Gentleman referred—which comprises Environment Ministers. The United Nations agreement on straddling stocks involves the Foreign and Commonwealth Office, and the Government strongly support its implementation internationally.
  We are responsible for the sustainable management of our fish stocks, which we achieve through the common fisheries policy. Criticisms of that policy are well known to me, and I concede that it has great scope for improvement. As I have said before, we are seeking ways of securing that improvement. I accept also that several fish stocks in the North sea—indeed, in all our seas—are under threat and that some are seriously threatened. That is why, during the recent round of discussions on total allowable catches and quotas, we accepted that some quotas must be reduced because of the pressures on stocks. I shall return to that point in a moment.
  The Government view the science issue seriously. The hon. Gentleman sought an assurance that the Government will support proper science and research in relation to fisheries. protection. Last year, we committed £36.8 million to fisheries science in the areas of research and development and in monitoring and researching fish stocks. We are making considerable financial commitments to the industry.
  As the right hon. Member for Suffolk, Coastal kindly noted, I accepted the precautionary principle during this year's discussions at the Council of Ministers. The matter was raised in the intermediate ministerial meeting and, for the first time, the precautionary principle was taken to the Council of Ministers and the Fisheries Council and applied to the setting of TACs and quotas. I made it clear that I accepted the principle, which is not uncontroversial in the eyes of the industry. I also said that, although I believed that there was scope for discussion regarding the impact on the industry of cuts in fish stocks, I would take decisions on the basis of scientific advice. That is how we approached the negotiations in this year's round of discussions.
  It is true that we mitigated the impact of the proposed cuts compared with the original proposals. That mitigation was based on advice that we received from our scientists through the Centre for Environment, Fisheries and Aquaculture Science and what we believed that we could accept without endangering the stocks. Where we accepted that there were severe problems, we agreed to

  543
  substantial cuts in catches, which will be difficult for the industry. For example, as the hon. Member for Witney said, cod in the North sea will be reduced by 5 per cent. However, haddock will be reduced by 23 per cent. and whiting by 27 per cent. Those are significant cuts.
  When I took over this brief in 1997, I made it clear to the industry that I was prepared to make and implement tough decisions that had been outstanding for some time, including decisions on enforcement, the problem of black fish and the overcapacity of our fishing fleet. Those were not easy decisions, and I cannot ignore their impact on our fishing fleet and our fishing communities. I have to take into account the consequences of those decisions, and I know that the hon. Member for Witney accepted that.
  I emphasise that we came away from this year's negotiations with a balanced agreement. The balance was that we accepted the precautionary principle and the scientific claims that some stocks were over-exploited and under threat, and we took the necessary action. However, we also took into account the views of the fishing industry and examined the ways in which we could mitigate the effects of those cuts, for example, by finding alternative species that were available for the industry and ways of reducing the cuts. The industry understood that we achieved that balance.
  We are taking a range of practical measures. First, if there are regulations, there must be enforcement. We have stepped up enforcement with, I believe, some success, particularly on black fish. We are making progress on that. The industry recognised that illegal landings and depressed prices do it no good. We have introduced designated ports and agreed to the satellite monitoring of larger vessels. Again, I cannot ignore the impact of those measures on the industry.
  Mr. Gill: I remind the hon. Gentleman that, in an earlier debate, he agreed that the measures to which he has just referred, particularly the designated ports, will result in more dead, adult, saleable fish being dumped into the sea than before. We are tonight talking about conservation and we must come up with a better answer to those problems than more regulation, which is becoming an intolerable burden on an industry that is already over-regulated.
  Mr. Morley: I do not recall saying exactly that. I shall deal with discards in a moment.
  We have made progress with the multi-annual guidance programme. We have managed to match the capacity of most of the demersal fleet to the availability of fish stocks in line with our obligations under the MAGP. In areas where there is still overcapacity in relation to efforts in the pelagic and beam-trawl sectors, we have reached agreement with the industry about measures to reduce effort based on days at sea.
  The difference between that measure and the scheme that was opposed by the previous Administration is that we gave the industry a choice in how it administered effort reduction. We wanted the industry to be involved in the management and implementation of effort reduction, which it has done in the pelagic and beam-trawl sectors. We made it clear that if the industry did not want to do that, the Ministry would have taken on the task. We preferred the industry to take on the measure, and we are glad that it is implementing it.
  544
  The hon. Member for Witney asked me for my views on marketing. I believe that there is a role for marketing and certification of the kind that the Marine Stewardship Council has proposed. That applies not only to fish, but to forestry products and even food products. Consumers are increasingly interested in such certification, and I view the MSC's actions with considerable interest and closely follow its actions. MAFF has a role in some trial areas such as black-water herring, where we have a particular interest in what the MSC is doing.
  I have consistently stressed marketing and traceability to the industry, and said that sometimes it is necessary to concentrate not so much on quantity as on quality—fewer but better-quality fish can improve prices. Although the industry might land less fish, it would not necessarily lose out financially. In some cases, even when quotas are cut and fewer fish are landed, fishermen are compensated by the increased prices. Incidentally, we saw that happening last year and, indeed, running into 1999.
  As for technical measures, we have supported the industry on things such as square-mesh panels, and we are looking at ways to manage the quota for the inshore fleet. We have underpinned the quota for sectors such as the mackerel handliners, which are low impact, in order to create a more sustainable fishery. We have banned such things as automatic grading machines, which waste fish at sea, and we have supported the V-notching of lobsters so that female lobsters in berry can be released and allowed to breed.
  I have consistently made it clear that industrial fishing can have very undesirable consequences. In many cases, it is a waste of a very good resource; it can have an impact on commercial fish stocks by removing a food source; and, of course, it can affect marine mammals and sea birds, and, indeed, the whole ecology of the sea. That is why we have proposed seasonal closed areas running from the Orkney to the Humber, areas of the North sea in which industrial fishing will not take place. That will protect sea birds in particular, but has consequences for migrating salmon and sea trout. Spring-running salmon are under considerable threat. We intend to take this issue forward at the next Fisheries Council. We have also supported closed areas for bass stocks and the phasing out of drift nets because of their impact on not only marine mammals but a range of non-target species, including sharks.
  I certainly do not agree that we are in danger of instituting over-conservation, but I can reassure the House about angling boats. MAFF has no proposals to limit the number of fish landed by angling boats. We are of course anxious to make sure that angling boats supposed to be for sport and recreation are used for sport and recreation, and are not landing fish for the commercial market. If we have evidence that that is not the case, we shall enforce sanctions rigorously. Fishermen and sea fish committees are anxious that we do that. However, we cannot ignore the impact of sports fishing. It is a large and important sector, and when we unfortunately have to close the channel cod fishery, as we did last year, we cannot exempt it. We are looking for measures to help the inshore fleet that will benefit the sports angling sector too.
  I accept that fisheries science is not precise, but I must point out that, last year, the fishing industry agreed not to take the full recommended allocation of cod. It was a good year for cod, but the industry wanted to leave some cod to mature and thus allow stocks to increase for future

  545
  years. I do not think that that has been done before, and it is to be welcomed that the fishing industry itself is taking conservation and sustainability seriously and is working with us in the Ministry and with other groups to deal with it.
  We have also put more species on quota because quotas are important to conserve stocks. Dogfish is the most recent species to have been agreed.
  I want to make it clear, especially to the hon. Member for Ludlow (Mr. Gill), that a recent study of North sea cod fishery showed that 90 per cent. of discards were
  546
  under-sized fish, not marketable fish. Although it is certainly true that some marketable fish are caught, which no one wants to happen, the majority of discards are under-sized fish. The answer lies in technical measures, in matching the capacity to fish stocks and in long-term sustainability. The proper way to reduce discards is proper management, proper enforcement and—I fully agree with the hon. Member for Witney—putting sustainability at the heart of all our fisheries policies.
  Question put and agreed to.
  Adjourned accordingly at half-past Seven o'clock.

NORTHERN IRELAND

  Planning Applications
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland how many planning applications have been submitted in the past year for major developments with particular reference to shopping complexes in the Newtownbreda Purdysburn and Saintfield Road area of South Belfast. [65108]

  Mr. Paul Murphy
  Responsibility for the subject in question has been delegated to the Planning Service under its Chief Executive, Mr. T. W. Stewart. I have asked him to arrange for a reply to be given.

  Letter from T. W. Stewart to Rev. Martin Smyth, dated 14 January 1999:
  The Secretary of State has asked me to reply to your recent question about planning applications for major developments with particular reference to shopping complexes in the Newtownbreda, Purdysburn and Saintfield Road areas of South Belfast.
  During the period January—December 1998, the Planning Service received two such major applications. One is for the development of a Class 1 foodstore and petrol filling station on lands at 170 Newtownbreda Road, Newtownbreda. The other is for a site for a retail unit, petrol filling station and park and ride facility at the junction of new Link Road, adjacent to Beechhill Road and Saintfield Road, Castlereagh. Both applications have been designated under the Article 31 procedures of the Planning (NI) Order 1991 and are at an early consideration stage. Retail and Traffic Impact Assessments have been received on both applications. No decision has yet been made on the need for a Public Inquiry to be held.
  You will be interested to know that the Planning Service is also considering a Crown Development submission from the Roads Service for a park and ride scheme to include car park, terminal building and small scale retail at Saintfield Road, Purdysburn Road, Castlereagh.
  I do hope this is helpful.

  Conspiracy
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland how many persons have been(a) arrested, (b) charged and (c) convicted of conspiracy in the UK to commit offences abroad. [64207]

  Mr. Ingram
  The information requested is not available, as the police and Court databases do not currently record arrests, charges or convictions against the heading "conspiracy in the UK to commit offences abroad".

  Local Government Finance
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland what plans she has to provide data on Northern Ireland Government and local authority accounts consistent with the National Accounting Convention. [63972]
  232
  Mr. Paul Murphy
  [holding answer 16 December 1998]: Government departments in Northern Ireland produce annual accounts in accordance with guidance issued by the Department of Finance and Personnel—this guidance is based on that issued by HM Treasury to GB departments. Similarly, Northern Ireland district councils produce accounts which are broadly in line with those produced by local authorities in Great Britain

SCOTLAND

  Scottish Enterprise
  Mr. Jim Murphy
  To ask the Secretary of State for Scotland when he last met the Chairman of Scottish Enterprise to discuss strategy. [66005]

  Mr. Dewar
  My noble Friend Lord Macdonald, the Minister with responsibility for business and industry, last met Sir Ian Wood, Chairman of Scottish Enterprise, to discuss the Scottish Enterprise strategy on 4 December 1998. At my request Scottish Enterprise has been reviewing its strategy over the last year. This process has involved extensive public consultation. The new strategy will be launched today. I have placed copies in the House of Commons Library.

  Departmental Expenditure
  Mr. Don Foster
  To ask the Secretary of State for Scotland what has been the total expenditure and the breakdown of expenditure in his Department since May 1997 on(a) public opinion research, (b) television, radio and newspaper advertising and (c) direct mail. [63915]

  Mr. Dewar
  [holding answer 11 January 1999]: Expenditure on public opinion research undertaken by my Department since May 1997 was £43,000. Expenditure on information campaigns totalled £2,439,000 of which £1,130,000 was spent on television, £598,000 on radio and £711,000 on Press. Direct mail amounted to £22,000.

  Hospital Treatment (Island Residents)
  Dr. Brand
  To ask the Secretary of State for Scotland what financial support is available to Scottish island residents travelling to mainland hospitals for specialist treatment and advice. [65275]

  Mr. Galbraith
  The Highlands and Islands Patients Travelling Expenses Scheme provides for the reimbursement of travelling expenses in excess of a contribution, currently £8.00, for patients attending hospital, where the distance travelled from the patient's home (or place of residence) to the hospital is 30 miles or more, or involves a journey by sea of more than 5 miles.

  Salmon Fisheries
  Mr. Kirkwood
  To ask the Secretary of State for Scotland when he expects to receive the report of the Task Force appointed to review the arrangements surrounding protection orders issued under the Freshwater and Salmon Fisheries (Scotland) Act 1976; and if he will make a statement. [66316]

  Mr. Macdonald
  Copies of the report have been placed in the Library. It will also be available on the Scottish Office website.
  233
  I am grateful to the Task Force for their deliberations. They have made a number of recommendations for improving the transparency of the application process and for enhancing the operation and monitoring of Protection Orders approved. These recommendations have been incorporated in the revised guidance and application forms.

  Dounreay
  Ms Roseanna Cunningham
  To ask the Secretary of State for Scotland what is the timescale for the clean-up of the area within two kilometres of the outfall pipe of UKAEA Dounreay; what action has been taken by UKAEA to identify the source of the escaped irradiated nuclear fuel fragments; what action has been taken by UKAEA to clear Sandside beach of all such fragments; when the fishing restriction in this area will next be reviewed by SEPA; what is the nature of SEPA's monitoring of the specified area; what monitoring is carried out on the land and sea adjacent to the specified area; and what scientific advice he has been given, and from whom, regarding the risk to humans on Sandside beach from direct contact with radioactive particles from UKAEA Dounreay. [65051]

  Mr. Macdonald
  The timescale for clean-up operations can only be considered when survey work has been completed and properly assessed.

  The United Kingdom Atomic Energy Authority (UKAEA) has undertaken a substantial programme of work to determine the source and extent of particles on the seabed adjacent to the Dounreay site. The study takes advantage of state-of-the-art diving and other monitoring technology. The results of this study are expected to be published shortly. My right hon. Friend the Secretary of State for Trade and Industry will then consider possible courses of action.

  Since 1983 three particles have been found in Sandside Bay and removed. UKAEA currently monitors the strandline at Sandside Bay weekly, and nearby public beaches twice yearly or following storm activity. UKAEA undertakes such remedial action as is necessary in line with the requirements of the regulators to ensure public safety.

  The Scottish Environment Protection Agency (SEPA) will review the fishing restrictions when more complete information is available on the contamination of the seabed and local marine environment or if new information relating to offshore contamination comes to light.

  SEPA undertakes monitoring of seafood (collected on a quarterly basis) from within the restricted area and the results are provided to the Scottish Office as well as being published annually. No fragments of irradiated nuclear fuel have been detected in the samples taken from the area.

  UKAEA also carries out monitoring of seafood from within the restricted area and further afield. In addition to monitoring nearby public beaches, UKAEA currently monitors the foreshore at Dounreay fortnightly.

  The National Radiological Protection Board (NRPB) supplied scientific advice on the risks to human health from encountering fragments of irradiated nuclear fuel. That advice was contained in the report "Fragments
  234
  of Irradiated Nuclear Fuel in the Dounreay Local Environment" submitted by SEPA to my right hon. Friend the Secretary of State for Scotland, a copy of which was placed in the House of Commons Library following a parliamentary question answered on 15 December 1998, Official Report, column 418, number 64389. The report includes an assessment of the risk to Sandside Bay bait collectors, the group likely to spend more time in contact with the sediment than most other users. NRPB considered the probability of the bait collectors encountering a fuel fragment to be a round 1 in 200,000. The views of the Committee on Medical Aspects of Radiation int he Environment (COMARE) were taken into account by the NRPB.

  Organic Aid Scheme
  Mr. Dalyell
  To ask the Secretary of State for Scotland what resources he is providing for the Organic Aid Scheme in Scotland in the current financial year. [65647]

  Mr. Macdonald
  I expect expenditure on the Organic Aid Scheme in Scotland to be about £0.24m in 1998–99. This will represent a rise of 64 per cent. over expenditure in 1997–98.

  Asylum Seekers
  Mr. Gorrie
  To ask the Secretary of State for Scotland if he will ensure that, in making arrangements for dealing with asylum seekers, his Department holds discussions with organisations expert in the provision of(a) social welfare, (b) housing and (c) legal advice to (i) Vietnamese boat people and (ii) Bosnian refugees. [65254]

  Mr. Dewar
  The new arrangements for dealing with asylum seekers will apply to the United Kingdom so that they are treated equally across to whole country. Responsibility for these matters rests with the Home Office which is consulting extensively about the arrangements for the future, including with those organisations expert in the areas mentioned.

  Mr. Gorrie
  To ask the Secretary of State for Scotland if, in the implementation of the proposals in the Asylum Seekers White Paper, he will ensure the retention of the partnership arrangements between the Scottish Office, COSLA and local authorities for supporting asylum-seekers while their applications are being considered. [65116]

  Mr. Dewar
  The new asylum support system proposed in the White Paper will be administered by an Asylum Support Directorate in the Immigration and Nationality Directorate in the Home Office. My Department and the Home Office are currently considering what arrangements should apply when the asylum seekers are placed in Scotland.

  Mr. Gorrie
  To ask the Secretary of State for Scotland what discussions he has had with the Home Office regarding the proposals in the White Paper on Asylum Seekers to disperse asylum seekers outside London. [65117]

  Mr. Dewar
  I was fully involved in collective consideration of the White Paper, as were other ministerial colleagues. My officials are in regular contact
  235
  with officials in the Home Office as the details of the support scheme—including arrangements for dispersal of asylum seekers—are developed.

  Agricultural Business Improvement Scheme
  Mr. Charles Kennedy
  To ask the Secretary of State for Scotland when he expects to issue revised details and guidelines in respect of the Agricultural Business Improvement Scheme; and if he will make a statement. [65644]

  Mr. Macdonald
  An announcement will be made in March about a range of improvements being introduced to the Objective 1 Agricultural Business Improvement Scheme.

  Hospital Beds
  Mr. Moore
  To ask the Secretary of State for Scotland if he will list the hospitals in Scotland which have acute beds and in each case the number of(a) intensive care beds, (b) high dependency beds and (c) other acute beds. [65082]

  Mr. Galbraith
  Information on the numbers of intensive care and other acute beds is shown in the table. Separate numbers for high dependency beds are not collected and such beds are therefore included in the figures shown for other acute beds.

  NHS hospitals in Scotland—intensive care and other acute beds by hospital as at 31 March 1998

  Average available staffed beds

  Intensive Care1

  Other acute 2

  Argyll and Clyde Health Board Area

  Campbeltown Hospital

  —

  20

  Dunoon and District General Hospital

  —

  48

  Helensburgh Victoria Infirmary

  —

  8

  Inverclyde Royal Hospital

  15

  310

  Islay Hospital

  —

  24

  Lorn and Islands DGH, Oban

  —

  70

  Mid Argyll Hospital

  —

  15

  Rothesay Victoria Hospital

  —

  20

  Royal Alexandra Hospital

  11

  421

  Vale of Leven District General Hospital

  —

  139

  Ayrshire and Arran Health Board Area

  Arran War Memorial Hospital

  —

  20

  Ayrshire Central and Maternity Hospital

  —

  49

  Ballochmyle Hospital

  —

  12

  Crosshouse Hospital

  5

  457

  Davidson Cottage Hospital

  —

  28

  Lady Margaret Hospital, Millport

  —

  14

  The Ayr Hospital

  6

  307

  Borders Health Board Area

  Borders General Hospital

  4

  243

  Coldstream Cottage Hospital

  —

  11

  Hawick Cottage Hospital

  —

  23

  Hay Lodge Hospital

  —

  20

  Kelso Hospital

  —

  16

  Knoll Hospital

  —

  13

  Sister Margaret Cottage Hospital

  —

  6

  Dumfries and Galloway Health Board Area

  Castle Douglas Hospital

  —

  8

  Cresswell Maternity Hospital

  —

  12

  Dumfries and Galloway Royal Infirmary

  13

  289

  Garrick Hospital

  —

  40

  236

  NHS hospitals in Scotland—intensive care and other acute beds by hospital as at 31 March 1998

  Average available staffed beds

  Intensive Care1

  Other acute2

  Kirkcudbright Hospital

  —

  14

  Moffat Hospital

  —

  10

  Newton Stewart Hospital

  —

  9

  Fife Health Board Area

  Adamson Hospital

  —

  25

  Cameron Hospital, Windygates

  —

  2

  Forth Park Hospital

  —

  39

  Glenrothes Hospital

  —

  12

  Netherlea Hospital

  —

  6

  Queen Margaret Hospital

  11

  248

  Randolph Wemyss Memorial Hospital

  —

  15

  St. Andrews Memorial Hospital

  —

  29

  Victoria Hospital, Kirkcaldy

  11

  312

  Forth Valley Health Board Area

  Falkirk and District Royal Infirmary

  7

  251

  Stirling Royal Infirmary

  9

  293

  Grampian Health Board Area

  Aberdeen Maternity Hospital

  —

  40

  Aberdeen Royal Infirmary

  23

  947

  Aboyne Hospital

  —

  11

  Campbell Hospital

  —

  5

  Chalmers Hospital

  —

  39

  Dr. Gray's Hospital

  —

  153

  Fleming Cottage Hospital

  —

  9

  Fraserburgh Hospital

  —

  21

  Glen O'Dee Hospital

  —

  11

  Huntly Jubilee Hospital

  —

  30

  Hyperbaric Centre

  —

  1

  Insch and District War Memorial Hospital

  —

  13

  Inverurie Hospital

  —

  20

  Kincardine Community Hospital

  —

  1

  Kincardine O'Neil War Memorial Hospital

  —

  6

  Leanchoil Hospital

  —

  23

  Maud Hospital

  —

  4

  Peterhead Cottage Hospital

  —

  26

  Roxburghe House

  —

  21

  Royal Aberdeen Children's Hospital

  2

  92

  Seafield Hospital

  —

  15

  Spynie Hospital

  —

  30

  Stephen Cottage Hospital

  —

  10

  Tor-na-dee Hospital

  —

  69

  Turner Memorial Hospital

  —

  19

  Turriff Cottage Hospital

  —

  13

  Woodcot Hospital

  —

  15

  Woodend General Hospital

  —

  120

  Greater Glasgow Health Board Area

  Canniesburn Hospital

  —

  75

  Glasgow Royal Infirmary

  8

  663

  Queen Mother's Hospital

  28

  —

  RHSC, Glasgow

  12

  260

  Royal Maternity Hospital, Glasgow

  10

  29

  Ruchill Hospital

  —

  19

  Rutherglen Maternity Hospital

  —

  17

  Southern General Hospital

  12

  550

  Stobhill Hospital

  9

  351

  Victoria Infirmary, Glasgow

  15

  438

  Western Infirmary, Glasgow

  19

  850

  Highland Health Board Area

  Belford Hospital

  —

  45

  Caithness General Hospital

  —

  63

  Dunbar Hospital

  —

  15

  Gesto Hospital

  —

  14

  Ian Charles Hospital

  —

  11

  Lawson Memorial Hospital

  —

  15

  Mackinnon Memorial Hospital

  —

  24

  Nairn Town and County Hospital

  —

  19

  237

  NHS hospitals in Scotland—intensive care and other acute beds by hospital as at 31 March 1998

  Average available staffed beds

  Intensive Care1

  Other acute2

  Portree Hospital

  —

  12

  Raigmore Hospital

  10

  493

  Ross Memorial Hospital

  —

  30

  Royal Northern Infirmary

  —

  52

  Lanarkshire Health Board Area

  Bellshill Maternity Hospital

  —

  34

  Hairmyres Hospital

  10

  336

  Kello Hospital

  —

  22

  Lady Home Hospital

  —

  22

  Law Hospital

  11

  411

  Lockhart Hospital

  —

  28

  Monklands District General Hospital

  17

  425

  Stonehouse Hospital

  —

  128

  Victoria Cottage Hospital

  —

  17

  Lothian Health Board Area

  Astley Ainslie Hospital

  —

  83

  Belhaven Hospital

  —

  12

  Eastern General Hospital

  —

  120

  Edinburgh City Hospital

  —

  88

  Edinburgh Royal Infirmary

  16

  619

  Edington Cottage Hospital

  —

  9

  Princess Margaret Rose Hospital

  —

  76

  RHSC, Edinburgh

  6

  114

  Roodlands General Hospital

  —

  21

  Royal Victoria Hospital, Edinburgh

  —

  2

  Simpson Memorial Maternity Pavilion

  —

  37

  St. John's Hospital at Howden

  10

  295

  Western General Hospital, Edinburgh

  15

  458

  Orkney Health Board Area

  Balfour Hospital

  —

  61

  Eastbank Hospital

  —

  78

  Shetland Health Board Area

  Gilbert Bain Hospital

  —

  54

  Tayside Health Board Area

  Aberfeldy Cottage Hospital

  —

  9

  Arbroath Infirmary

  —

  22

  Blairgowrie Cottage Hospital

  —

  26

  Brechin Infirmary

  —

  21

  Crieff Community Hospital

  —

  26

  Dundee Limb Fitting Centre

  —

  17

  Dundee Royal Infirmary

  —

  211

  Forfar Infirmary

  —

  26

  Irvine Memorial Hospital

  —

  11

  Kings Cross Hospital

  —

  94

  Montrose Royal Infirmary

  —

  12

  Ninewells Hospital

  17

  539

  Perth Royal Infirmary

  8

  230

  Royal Victoria Hospital

  —

  21

  St. Margaret's Hospital

  —

  16

  Stracathro Hospital

  4

  134

  Western Isles Health Board Area

  Daliburgh Hospital

  —

  13

  Lochmaddy Hospital

  —

  4

  St. Brendan's Hospital

  —

  2

  Western Isles Hospital

  —

  98

  Scotland

  353

  14,799

  1Comprises the following facilities: Intensive Care Unit and Cardiac Care Unit

  2Includes Acute, Supra-Area and Special Categories speciality groups. Excludes Obsterics and Intensive Care

  Source:

  ISD Scotland

HOUSE OF COMMONS

  Standing Committee on Regional Affairs
  Miss Melanie Johnson
  To ask the President of the Council what plans she has for the Standing Committee on Regional Affairs. [65972]

  Mrs. Beckett
  The Government have been considering the means of improving the way in which Parliament can debate the affairs of the English regions. I shall shortly be submitting a memorandum to the Modernisation Committee inviting it to examine the possibility of reviving and adapting the Standing Committee on Regional Affairs already allowed for under the Standing Orders of the House.

PRESIDENT OF THE COUNCIL

  Millennium Compliance
  Mr. Cotter
  To ask the President of the Council on what dates(a) the Ministerial Group on the Millennium Date Change (MISC4) and (b) the Sub-Group (MISC4(P)) have met; and what meetings are planned for the future. [64822]

  Mrs. Beckett
  Details relating to the meetings of Cabinet Committees are not normally made public. This is in line with the practice of successive Administrations.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Emissions
  Mrs. Brinton
  To ask the Secretary of State for the Environment, Transport and the Regions what contribution he expects the electricity generation sector to make towards reducing CO2, emissions by 2010, other than the reductions resulting from use of new CHP plant. [65333]

  Mr. Meale
  The Government intend to develop a balanced and equitable strategy across all sectors to meet the UK's international and domestic climate change targets. As a first step, on 26 October 1998, the Government published a consultation paper describing progress to date in reducing greenhouse gas emissions in the UK and setting out a variety of policy options for further action. The consultation paper refers to a number of options which could be taken in the electricity generation sector to reduce carbon dioxide emissions including increased use of CHP, increased use of renewable energy, improvements in energy efficiency, implementation of Integrated Pollution Prevention and Control (IPPC) regulation and improved utility regulation.

  Driving Tests
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what the income was from practical driving tests in(a) 1990 toh

  239
  30 June 1996, (b) 1 July 1996 to 31 December 1996 and (c) 1 January 1997 to date; and what it has been for theory tests since 1 July 1996. [65345]

  Ms Glenda Jackson
  The figures requested are as follows:

  £ million

  Period

  Practical Test Fee Income

  1 April 1990–30 June 1996

  298.8

  1 July 1996–31 December 1996

  32.8

  1 January 1997–30 November 1998

  86.5

  Period

  Tests conducted

  Tests passed

  Pass rate (per cent.)

  Failure rate (per cent.)

  1 January 1990–30 June 1996

  10,257,744

  5,019,145

  48.93

  51.07

  1 July 1996–31 December 1996

  855,037

  381,263

  44.59

  55.41

  1 January 1997–30 November 19981

  2,038,122

  950,479

  46.64

  53.36

  1Figures for November 1998 are the latest currently available

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what effect the closure of driving test centres has had on waiting times for driving test appointments. [65343]

  Ms Glenda Jackson
  Test centre closures have not affected average waiting times for driving test appointments as the overall capacity to conduct tests has not been affected. The driving examiners from the closed centres have been re-deployed to adjoining centres.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how many people who have taken the theory test and passed have not applied to take a practical driving test; and what steps the DSA has taken to ensure that those who have passed the theory test apply for a practical driving test within two years. [65341]

  Ms Glenda Jackson
  We estimate that there are around 300,000 people who have passed the theory test but do not currently have an appointment for a practical test.

  Theory test pass certificates have always shown the date of test pass and stated that the certificate has a two year life. The expiry date on certificates have been given greater prominence since August 1998. The Driving Standards Agency has been sending reminder letters on a quarterly basis to theory test pass holders since last spring. reminders were sent in April to 80,000 people whose theory test pass certificates were over 14 months old, and shortly afterwards to 5,000 people whose certificates were 10 to 13 months old. the Agency has since written in August and November to everybody holding a certificate then over 14 months. The Agency will continue to issue reminder letters until all extant certificates are those carrying a prominent expiry date.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what plans the DSA has to reduce the period within which candidates who have passed a theory test are expected to take a practical test. [65344]
  240
  Figures for November 1998 are the latest currently available.

  The income from theory test fees from 1 July 1996 to 30 November 1998 was £48.6m.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how many practical driving tests were conducted in the periods(a) 1990 to 30 June 1996, (b) 1 July 1996 to 31 December 1996 and (c) 1 January 1997 to date; and what percentages were (i) passes and (ii) failures in each period. [65339]

  Ms Glenda Jackson
  The figures my hon. Friend requested are shown in the table.

  Ms Glenda Jackson
  Theory test pass certificates are valid for two years. This provides an ample period for a successful theory test candidate to prepare for the practical driving test. We have no current proposals to reduce that period, but will keep the matter under review.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what reductions in examiner staffing levels have occurred following driving test centre closures; what effect future closures will have on examiner staffing levels; and if redundancies are planned. [65362]

  Ms Glenda Jackson
  No driving examiner redundancies have occurred as a result of test centre closures. Staff were transferred to adjoining test centres to cover the expected increase in demand there. No redundancies are planned, in fact the Driving Standards Agency plans to recruit 85 new examiners during this year.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what service improvements have resulted from savings acquired from the closure of driving test centres; and what future improvements are anticipated. [65357]

  Ms Glenda Jackson
  Restructuring the test centre estate has helped the Driving Standards Agency to provide a fair and consistent standard of test. Savings have helped fund improvements to the remainder of the estate and to administrative systems, including the new driving test booking system that becomes operational later this year. There has been a series of improvements in customer service targets and new customer service features introduced. These were recognised by the Charter Mark award last year. Savings from future closures will be used to help pay for service improvements in the same way.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions if he will set out the consultative process used by the Driving Standards Agency in areas affected by the closures of driving test centres. [65358]
  241
  Ms Glenda Jackson
  The Driving Standards Agency normally consults interested parties locally, such as the Member of Parliament, the local authority and instructors when considering whether to close a driving test centre. A public consultation meeting is usually held, and all the results of the consultation process are considered before a final decision is taken.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what are the current waiting times for driving test appointments in each region. [65361]

  Ms Glenda Jackson
  At 8 January 1999, the average waiting time for a practical car driving test in each of the Driving Standards Agency's operational areas was:

  London & South East: 6.28 weeks

  Midlands & Eastern: 4.16 weeks

  Wales & Western: 3.63 weeks

  Northern: 5.19 weeks

  Scotland: 4.81 weeks.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what steps will be taken by the Driving Standards Agency to monitor demand in areas where test centre closures have occurred. [65353]

  Ms Glenda Jackson
  Following closure of a driving test centre, we monitor the pattern of demand at adjoining centres to ensure it is in line with forecasts. Should demand at these centres give cause for concern, steps are taken to ensure that additional examiners are allocated.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what further plans there are for the closure of driving test centres over the next five years apart from those already identified for closure in the next two years; and if he will list the centres affected. [65360]

  Ms Glenda Jackson
  We do not have a planned list of driving test centre closures over the next five years. We regularly review requirements against demand for driving tests, operational suitability, and the need to provide accommodation that offers a safe working environment for examiners and candidates at a reasonable cost. Should a centre fall short of these criteria its continued viability is considered, each case being considered on its merits with due regard to local factors.

  We are currently consulting about the future of the following car driving test centres: Didsbury (Manchester); Washwood Heath (Birmingham); Newport (Monmouthshire); Minehead (Somerset); and Holyhead Road (Coventry).

  Consultation has also been completed about the proposed closure of the following centres, but no final decisions have yet been reached: Hartlepool, Rochdale, Cheltenham, Oswestry (Shropshire), Sevenoaks, and Tunbridge Wells, and the Ore (Hastings) lorry and bus driving test centre.
  242
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how many driving theory tests have been conducted since 1 July 1996, and how many and what percentage of these were(a) passes and (b) failures. [65340]

  Ms Glenda Jackson
  The figures requested are given in the tables. For cars and motorcycles they are shown separately for the periods 1 July 1996–30 September 1996 and 1 October 1996–30 November 1998 to reflect the change in the pass mark:

  1 July 1996 to 30 September 1996 Pass mark 26/35

  1 October 1996 to 30 November 1998 Pass mark 30/35

  Car

  Motorcycle

  Car

  Motorcycle

  Passed

  310,765

  2,022

  1,596,315

  13,276

  Percentage pass

  85.5

  92.1

  62.9

  55.9

  Failed

  52,823

  173

  943,718

  10,478

  Percentage fail

  14.5

  7.9

  37.1

  44.1

  The lorry and bus theory tests were introduced on 1 January 1997, the figures requested in respect of these tests are as follows:

  1 January 1997 to 30 November 1998 Pass mark 21/25

  LGV

  PCV

  Passed

  42,005

  15,990

  Percentage pass

  88.4

  87.8

  Failed

  5,496

  2,215

  Percentage fail

  11.6

  12.2

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what effect the proposed extended driving test will have on waiting times for customers. [65363]

  Ms Glenda Jackson
  There may be a surge in demand ahead of the new, longer test which could increase waiting times by one to two weeks above the target for the next three months. The Driving Standards Agency will seek to minimise the effects of any surge by ensuring that additional examiners are deployed where necessary.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what research is being carried out to identify reasons for falls in demand for theory and practical driving tests; and what results are available. [65365]

  Ms Glenda Jackson
  When in April 1998 the Driving Standards Agency wrote reminder letters to 85,000 theory test pass certificate holders, around 10,000 were asked why they had not completed the test process. About 1,700 responded. The majority had attempted the practical test and had failed but intended to keep trying. Nearly a quarter had delayed learning for financial or health reasons.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how many driving test centres have been closed since the inception of the Driving Standards Agency; in what parts of the country such closures have occurred; and what reasons for closure were given in each case. [65359]
  243
  Ms Glenda Jackson
  Since the launch of the Driving Standards Agency in April 1990, 61 driving test centres have been closed without direct replacement in the immediate vicinity, in the following areas:

  Number

  London & South East

  11

  Midlands & Eastern

  15

  Wales & Western

  14

  Northern

  12

  Scotland

  9

  Total

  61

  In addition, Edinburgh (Newington) and Wealdstone (North London) have been agreed for closure later this month.

  Closures were caused by routes becoming operationally unsuitable, the expiry of property leases, a rationalisation of centres in the area, for health and safety reasons, or on the grounds of operational costs. The effort involved in documenting the reason, or reasons, for each closure would be disproportionate.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions for what reasons the books on the theory driving test were produced in quick succession; and what steps were taken by the DSA to defray the costs of those customers who bought faulty material. [65372]

  Ms Glenda Jackson
  The question bank for each type of theory test is revised annually to reflect changes in legislation and other developments. The Driving Standards Agency publishes books containing the question banks before the adoption of new questions so that candidates can prepare for their test.

  The edition of the car and motorcycle theory test book published in June 1998 contained a number of errors. A revised edition was issued in August 1998. Candidates who had purchased the June edition were not disadvantaged. Test papers containing questions where a candidate may have been misled by the June edition were withdrawn. Where such questions appeared in test papers before they were withdrawn, incorrect answers were ignored in the marking. Amendment slips were inserted in all unsold copies of that edition, and sent to theory test candidates with their appointment letter.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what increases in the cost of the driving test are being proposed. [65364]

  Ms Glenda Jackson
  The fee for driving theory test appointments made from 6 April 1999 will be £15.50, an increase of 50 pence on the current fee.

  The fees for practical driving tests taken from 4 May 1999 will be as follows:

  £

  Category of test

  Proposed new fee

  Current fee

  Increase

  Weekday Tests

  Car

  36.75

  32.75

  4.00

  Motorcycle

  45.00

  39.00

  6.00

  244

  £

  Category of test

  Proposed new fee

  Current fee

  Increase

  Saturday/Weekday Evening Tests

  Car

  46.00

  43.00

  3.00

  Motorcycle

  55.00

  52.00

  3.00

  The fees for minor categories, such as tractor driving tests, will remain the same as for car tests. Moped tests will be charged the same as motorcycle tests. The fees for lorry and bus tests will remain unaltered at £73.50 for weekday tests and £92.00 for Saturday and weekday evening tests.

  Driving Instructors
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what the purpose is of check tests of approved driving instructors; and what effect such tests have had on pass rates since their introduction. [65367]

  Ms Glenda Jackson
  The check test was introduced in the early 1970s to allow the Department to test an Approved Driving Instructor's continued ability and fitness to give instruction, in the interest of both road safety and consumer protection. It allows the supervising examiner to identify any weaknesses in an instructor's tuition and offer constructive criticism on how he or she might improve their teaching methods.

  Although the pass rates for the practical driving test are the same today as they were at the time the check test was introduced its introduction saw a levelling out of a falling pass rate that had gone from 50 per cent. in 1950 to 51 per cent. in 1960 and to 46 per cent. in the early 1970s. The current pass rate is 48 per cent.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how many approved driving instructors left the register in the periods(a) 1990 to 30 June 1996, (b) 1 July 1996 to 31 December 1996 and (c) 1 January 1997 to date. [65346]

  Ms Glenda Jackson
  The number of instructors who left the register during the specified periods were:

  Date

  Instructors

  1 January 1990 to 30 June 1996

  17,715

  1 July 1996 to 31 December 1996

  1,469

  1 January 1997 to 30 November 19981

  7,086

  1Figures for November 1998 are the latest currently available

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how many approved driving instructors have ceased to practise but whose licences still have a period to run in the periods(a) 1990 to 30 June 1996, (b) 1 July 1996 to 31 December 1996 and (c) 1 January 1997 to date. [65348]

  Ms Glenda Jackson
  The information requested is not available. We do not know how many of the instructors whose names appear on the register at any given date are not currently practising.
  245
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how many approved driving instructors have been removed from the register since check testing was introduced. [65349]

  Ms Glenda Jackson
  Since April 1995, 247 instructors have been removed from the register for failing the check test. Statistics for removal for check test failure are not available for the period prior to that date.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions if it is the Driving Standards Agency's intention to use the proposed log book as a means of regulating the teaching methods of approved driving instructors. [65366]

  Ms Glenda Jackson
  We see merit in introducing a training logbook for learner drivers. This will be introduced on a voluntary basis in the spring. A logbook will provide instructors and their pupils, and others who supervise learners, such as parents, with a syllabus and encourage them to adopt a structured and progressive approach to driver training. The syllabus, which has been developed in consultation with the driving instruction industry, will enable progress to be charted. The logbook identifies the areas that need to be taught. It does not define the teaching methods to be adopted when covering each topic.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how many complaints about the check test have been received by the DSA since the test was introduced, broken down by(a) test centre and (b) the nature of the complaint; and what steps the DSA has taken in response to such complaints. [65373]

  Ms Glenda Jackson
  The Driving Standards Agency does not keep consolidated statistics about the numbers of check test complaints it receives, analysed by test centre or the nature of the complaint. Any complaint from an instructor about a check test would be carefully considered.

  Cycling
  Mr. Malcolm Bruce
  To ask the Secretary of State for the Environment, Transport and the Regions by what means he plans to deliver his target of quadrupling cycling by 2012; and if he will make a statement. [65679]

  Ms Glenda Jackson
  The target of quadrupling the number of trips by bicycle (on 1996 figures) by the end of 2012, was established by the National Cycling Strategy (NCS). In the White Paper "A New Deal for Transport" published last year, we endorsed that target and recognised the positive contribution that cycling can make towards a transport system that is safe, efficient, clean and fair. The Department requires local authorities as part of their local transport plans to establish local cycling strategies which will contribute to the target of increased cycle use. We will continue to offer guidance to authorities on policy and technical issues, and to work in partnership with other organisations in achieving the NCS objectives.

  Telecommunications Masts
  Mrs. May
  To ask the Secretary of State for the Environment, Transport and the Regions when he expects to issue supplementary guidance to planning guidance on telecommunications masts under PPG(8). [65616]
  246
  Mr. Raynsford
  In July 1998, we published for public comment our proposals for changes to the control of development by licensed telecommunications code system operators under the Town and Country Planning (General Permitted Development) Order 1995 (GPDO). In November, we announced the outcome of this consultation, and, in particular, our intention to proceed with a new single-stage "prior approval" procedure of 42 days for ground-based masts. The Department is currently preparing the necessary GPDO amendment Order and guidance to implement the changes and will consult on drafts shortly.

  A404(M) (Noise Amelioration)
  Mrs. May
  To ask the Secretary of State for the Environment, Transport and the Regions when he expects to be able to announce his decision on the funding of noise amelioration measures on the A404(M) following the recommendation of the independent report commissioned by the Highways Agency. [65615]

  Ms Glenda Jackson
  In our White Paper "A New Deal For Trunk Roads" we announced that we intended to set aside budget for the purpose of providing noise mitigation measures for some of the most serious and pressing cases along existing roads. We also said that we would make a separate announcement regarding the criteria to be used. These criteria are still being finalised and we will make a statement setting them down as soon as we can. It is important that the selection criteria we choose are as fair as possible. Decisions on individual cases such as the A404(M) must wait until those criteria are published.

  Millennium Compliance
  Mr. Alasdair Morgan
  To ask the Secretary of State for the Environment, Transport and the Regions what steps he has taken to ensure that United Kingdom passenger aircraft are millennium compliant. [65084]

  Ms Glenda Jackson
  My Department has notified all major UK airlines of the need to consider whether their systems will be millennium compliant and advised them to take any remedial action necessary. We are also in close and regular contact with the Civil Aviation Authority (including National Air Traffic Services) who are considering the problem in their role as safety regulator. As part of this process, the CAA are seeking to confirm compliance status of the 2,000 organisations (including UK airlines) which they currently approve. The situation has been and will continue to be monitored on a regular basis. Once the industry has completed their compliance programmes later this year, we will be asking the Chairman of the CAA to provide the Department with appropriate assurances as to the state of readiness of the UK aviation industry. If the CAA have any safety doubts arising from millennium compliance problems, operating authorisations will be withdrawn or withheld.

  Air Traffic Services
  Ms Osborne
  To ask the Secretary of State for the Environment, Transport and the Regions if he will publish the report by Credit Suisse on the proposed public/private partnership for national air traffic services and assess its implications for the private finance initiative contract for the new Scottish centre. [65418]
  247
  Ms Glenda Jackson
  The Government have retained Credit Suisse First Boston (CSFB) to provide investment banking advice in developing proposals for a public private partnership for National Air Traffic Services Ltd. (NATS). The advice produced by CSFB is commercially sensitive and is provided to the Government in confidence as part of the policy development process for the NATS PPP. As such, it would not be appropriate to publish it.

  Ms Osborne
  To ask the Secretary of State for the Environment, Transport and the Regions if the International Civil Aviation Organisation has agreed that the UK Government will continue to provide air traffic services for the Northern Atlantic operation in the event of a public/private partnership for national air traffic services. [65419]

  Ms Glenda Jackson
  As my right hon. Friend, the Minister of Transport explained in his answer of 18 November 1998,Official Report, column 676, we are consulting ICAO on our proposals for National Air Traffic Services Ltd.

  Highway Works (Compensation)
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions what discretion the Highways Agency has to compensate individual organisations for loss of trade as a result of highway works. [65270]

  Ms Glenda Jackson
  Where works have been properly carried out by a highway authority under a statutory power, there is no legal liability to compensate for loss of trade. Only in extraordinary circumstances would the Highways Agency consider a discretionary or ex-gratia payment. Where works are carried out on land which has been compulsorily purchased, there may, in certain circumstances, be compensation for injurious affection but not for loss of trade.

LORD CHANCELLOR'S DEPARTMENT

  Legal Aid (Funding Code)
  Jacqui Smith
  To ask the Minister of State, Lord Chancellor's Department when the legal aid board will publish its consultation document on the proposed funding code. [66360]

  Mr. Hoon
  The consultation document, "The Funding Code—a new approach to funding civil cases", will be published tomorrow. Copies will be placed in the Libraries of both Houses. Consultees have until 30 April 1999 to respond.

TRADE AND INDUSTRY

  Industrial Tribunal Claims
  Mr. Levitt
  To ask the Secretary of State for Trade and Industry how many applications to industrial tribunals in respect of pensions claims have been abandoned since 1994 because the claimant has died. [64233]

  Mr. Ian McCartney
  The Employment Tribunals Service does not record the reasons why cases are withdrawn and cannot therefore provide any information on the number of pension claims that have been abandoned because the claimant has died.

  Home Shopping
  Mr. Pike
  To ask the Secretary of State for Trade and Industry what representations he has received from the home shopping industry in relation to consumer credit agreements; and if he will make a statement. [65306]

  Dr. Howells
  I have received a number of representations from the home shopping industry, both independently and in response to the question posed in a consultation paper the Department issued last year on whether the legislation should be changed to make unsigned consumer credit agreements for mail order sales enforceable.

  I have carefully considered the evidence which all consultees representing many interests put to the Department. I have decided not to make unsigned agreements enforceable since I have been given clear evidence that some consumers are suffering detriment from the practices adopted by some mail order firms. In addition to signing nothing, some consumers are not receiving copies of mail order credit agreements. This leads to confusion about the debt owed and the terms and conditions on which the credit has been provided, which can also reflect unfairly on credit worthiness. I am concerned that some mail order companies may not be satisfying the requirements of the European Consumer Credit Directive and the Distance Selling Directive on giving written information to consumers.

  Social Chapter
  Mr. Evans
  To ask the Secretary of State for Trade and Industry what assessment he has made of the consequences of the introduction of Social Chapter legislation for employment in the UK; and if he will make a statement. [64054]

  Mr. Ian McCartney
  I refer the hon. Member to the reply I gave to the hon. Member for Ruislip-Northwood (Mr. Wilkinson) on 12 December 1997,Official Report, columns 725–26.

  Millennium Compliance
  Mr. Alasdair Morgan
  To ask the Secretary of State for Trade and Industry what guidelines have been issued to the manufacturing and retail industries regarding the millennium bug; what steps have been taken to ensure that new products are millennium compliant and are labelled as such; and if he will make a statement. [65085]

  Mr. Wills
  Information on the Millennium Bug and guidance on how to deal with it is available to businesses from Action 2000. My Department set up Action 2000 last year to lead the work on behalf of the Government in raising awareness of the private sector of the need to take action and to provide help to companies.

  Under the Sale of Goods Act 1979, goods sold by traders must among other things "correspond with description" as to fitness for purpose and satisfactory quality. The description of the goods includes any information given about them, by the seller directly or by any other means. Controls already exist to prevent new products being falsely described or labelled as millennium compliant. The Trade Descriptions Act 1968 makes it a criminal offence to apply false or misleading statements to products.

  Energy Investment
  Mr. Alasdair Morgan
  To ask the Secretary of State for Trade and Industry what sums of money have been invested by the Government since May 1997 in(a) Scotland and (b) the United Kingdom as a whole, into (i) the nuclear industry, (ii) the coal industry, (iii) the oil and gas industries and (iv) the renewable energy industry, in each case including funds for research and development. [65083]

  Mr. Battle
  Most of my Department's programme expenditure is in support of national objectives, with expenditure not separately identified for Scotland. Exceptions are DRAWMOPS (decommissioning of nuclear facilities) and nuclear safeguards R&D (although the latter is spent in the UK, its objectives are to provide services for the International Atomic Energy Agency). Between May 1997 and December 1998, programme expenditure in the categories mentioned was as follows (in £ million, includes estimates for Q4 1998):

  Scotland

  UK

  Nuclear

  Fusion

  —

  23.78

  DRAWMOPS

  127.94

  255.88

  Safeguards

  0.14

  2.05

  Coal

  Clean coal combustion1

  —

  4.42

  Oil and Gas

  Offshore environmental programme

  —

  0.14

  Hydrocarbon Additional Recovery programme

  —

  5.30

  Renewables2

  —

  15.70

  1Other clean coal technology related projects are being supported via the Foresight Challenge competition and the Engineering and Physical Sciences Research Council.

  2Support for renewables research via the Engineering and Physical Sciences Research Council was £4.04 million between May 1997 and December 1998.

HEALTH

  Emissions (Mortality and Morbidity Rates)
  Mrs. Brinton
  To ask the Secretary of State for Health if he will estimate the effect on mortality and morbidity rates which would result from annual reductions in emissions of (i) 425,000 tonnes of SO2, (ii) 137,000 tonnes of NOx, (iii) 14,000 tonnes of fine particulates and (iv) 6,000 tonnes of black smoke; and what evaluation he has made of the estimates of mortality and morbidity given in quantification of the effects of air pollution on health in the United Kingdom (Committee on the Medical Effects of Air Pollutants, 1998). [65334]

  Ms Jowell
  A detailed estimate of the effects of air pollution on health was published in a Report issued last year by the Committee on the Medical Effects of Air Pollutants (COMEAP),Quantification of the Effects of Air Pollution on Health in the United Kingdom. The Committee concluded that current levels of air pollution probably play an important role in bringing forward the deaths of at least between 12,000 and 24,000 vulnerable people each year and a similar number of hospital
  250
  admissions, though it stressed that air pollution is likely to be one of a number of factors affecting the clinical condition of seriously ill people.

  The review of the national air quality strategy, as announced by my right hon. Friend the Deputy Prime Minister on 13 January 1999, Official Report, columns 214–15, re-examines the prospects for reducing emissions of eight pollutants covered by the Strategy and the effect that this would have on ambient levels of air pollution. This Department's Report, Economic Appraisal of the Health Effects of Air Pollution, also published yesterday in association with the review, contains an overview of the health effects of air pollution adding to that presented in the COMEAP Report.

  Attention Deficit Disorder Syndrome
  Mr. Nigel Jones
  To ask the Secretary of State for Health what research commissioned by his Department has been carried out into attention deficit disorder syndrome in the last three years. [64910]

  Ms Jowell
  We 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—which receives most of its income via grant-in-aid from the Office of Science and Technology in the Department of Trade and Industry—funds medical research as part of the Government's funding of the science and engineering base.

  Details of projects directly funded by the Department or supported through the NHS research and development levy can be found on the National Research Register (NRR). This is available in most medical libraries and in the Library 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.

  NHS Executive, South Thames have commissioned a project "Pathways to treatment in children at risk of attention deficit/hyperactivity disorder and hyperkinetic disorder" at Kings College Hospital.

  The MRC supports a number of studies into the causes and treatment of attention deficit hyperactivity disorder. Current support is centred on cognitive and behavioural strategies carried out at the MRC Child Psychiatry Unit in London. There have also been some recent MRC funded genetics studies carried out at the Institute of Psychiatry and the University of Manchester.

  The NRR indicates that other NHS trusts are undertaking research in the field.

  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 research and development programme, priorities

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  take account of widespread consultation with those using, delivering and managing services, with 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, Government priorities and take account of the responsibilities and work of other funders.

  Regional offices of the NHS Executive run response mode funding schemes to which applications of relevance to the NHS can be made. The MRC also always welcomes high quality applications for support into any aspect of human health and these are judged in open competition with other demands on funding. Awards are made by both the NHS and the MRC according to the scientific quality and importance of proposals.

  Autism
  Dr. Ladyman
  To ask the Secretary of State for Health what data his Department have collated with respect to the incidence of autism in children; and if he will list the number of such children in each of the last 20 years. [64912]

  Mr. Hutton
  The Department does not collate information about the incidence of autism in children. It is for the local statutory authorities to determine the needs of children with autism in their area and work together effectively to ensure that these needs are met.

  Services for Older People
  Dr. Brand
  To ask the Secretary of State for Health what the timetable is for the development of a National Service framework for the care of older people; and when the consultation will take place. [65324]

  Mr. Hutton
  The process for the development of the national service framework for the care of older people is already underway, and the framework will be operational from April 2000. Co-chairs of the External Reference Group that will advise the Government on the development of the framework were announced on 21 December 1998 and it is expected that the External Reference Group will be formed within the next month.

  The External Reference Group will draw on views from all stakeholders in the care of older people throughout the process.

  Children's Rights
  Mr. Dawson
  To ask the Secretary of State for Health if he will make a statement on progress made on the Government's report on the implementation of the United Nations convention on children's rights; and if he will make a statement. [65255]

  Mr. Hutton
  The Government have been making good progress with the preparation of the Second United Kingdom report on the United Nations Convention on the Rights of the Child. The process was launched in February 1998 with a national conference in London which discussed key timetable and procedural requirements. Reports from across Government Departments and non-governmental organisations (NGOs) were assembled into a consultative draft which was circulated to NGOs in November. In addition, the Government have been greatly assisted by an advisory group which has included NGOs 252
  from across the UK. Ministers will be considering the final draft of the UK report in the New Year and it is expected to be sent to the Committee on Children in Geneva in March 1999 and published shortly thereafter in the UK.

  Mr. Dawson
  To ask the Secretary of State for Health what assessment he has made of the role of(a) children's rights commissioners, (b) children's ombudspersons and (c) independent officers for children in other European countries; and if he will publish the results. [65256]

  Mr. Hutton
  We have recently made a number of announcements which take into account the recommendations of the Health Select Committee on Children Looked After by Local Authorities (July 1998) and the Children's Safeguards Review (1997). In the White Paper on Social Services (November 1998) and the Government response to the Health Select Committee (December 1998), we made commitments to introduce new mechanisms which will enable it and other responsible agencies to keep issues of children's rights and safeguards under careful scrutiny. These include establishing children's rights officers in each of the eight Commissions for Care Standards; periodic joint reporting from all the inspectorates dedicated exclusively to children; and continuing the work of the ministerial task force on children's safeguards. In addition, work on listening to and responding to the views and aspirations of children is a priority area for grant to local authorities within the quality protects programme.

  These announcements were made having taken into account information on the 10 or so other countries known to have national Children's Rights Commissioner or posts with similar titles. We are not in present circumstances persuaded that it would be desirable to create such a national mechanism additional to the roles of the courts, the police and the prosecuting authorities, the various Commissions (Parliamentary, Health and local government) which already exist, the responsibilities of local and health authorities to deal with complaints and the various inspection and regulatory arrangements for ensuring that safeguards for children are properly implemented, and that their voices are heard.

  Asylum Seekers
  Mr. Forth
  To ask the Secretary of State for Health (1) how many asylum seekers have required treatment for(a) nutritional disease, (b) psychological illnesses and (c) AIDS-related illnesses in the last three years; [65470]

  (2) what has been the cost to the NHS of treating asylum seekers in each of the last three years [65469]

  Mr. Hutton
  National Health Service hospital treatment, received by a patient who has made a formal application to the Government for permission to take refuge in the United Kingdom, is the responsibility of the health authority for the district in which they are residing. Details on the types of treatment required, the numbers and the total cost to the NHS of such patients is not held centrally.

  Trust Merger (Bedfordshire)
  Sir David Madel
  To ask the Secretary of State for Health when he expects to make a decision on the
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  proposal to merge the South Bedfordshire Community Health Care Trust and the Bedford and Shires Health Care Trust; and if he will make a statement. [65516]

  Mr. Denham
  The submission is currently with Ministers and a decision will be announced shortly.

  Anglusia and Anosmia
  Mrs. May
  To ask the Secretary of State for Health how many people in the United Kingdom suffer from(a) anglusia, (b) anosmia, and (c) both anglusia and anosmia; what research his Department (i) is conducting and (ii) has commissioned into the (A) cause and (B) treatment of these problems; and if loss of these senses is defined by his Department as a disability. [65619]

  Mr. Hutton
  The National Health Service does not collect centrally the numbers of people suffering from anglusia (we believe this is an incorrect name for a disease resulting in loss of smell) and anosmia, and is not currently commissioning any research in this area.

  The Disability Discrimination Act 1995 defines a disability as
  "A physical or mental impairment which has a substantial and long-term adverse effect on a person's ability to carry out normal day-to-day activities".

  The Department would use this definition, which may be applicable to these cases.

  Medicines Control Agency
  Mr. Mitchell
  To ask the Secretary of State for Health if the draft Statutory Instrument published on 6 November by the Medicines Control Agency in Consultation Document MLX 249 was at that time circulated to right hon. and hon. Members; if he approved that draft Statutory Instrument; and if it is the intention of the Agency to seek implementation of that draft Statutory Instrument by 1 April. [65722]

  Ms Jowell
  As is the usual practice, copies of the Medicines Control Agency's Consultation Letter MLX 249 were placed in the Library. We will decide in due course whether and when legislative proposals are to be brought before the House.

CABINET OFFICE

  Civil Service (Delegations)
  Dr. Naysmith
  To ask the Minister for the Cabinet Office what delegations have been made in 1998 under the Civil Service (Management Functions) Act 1992; to whom those delegations were made; and what were the main conditions attached to them. [66129]

  Dr. Jack Cunningham
  Since the last report to Parliament, on 13 January 1998,Official Report, column 162, Ministers and statutory office holders in charge of departments1 have been given delegated authority (from 1 April 1998) under the Civil Service (Management Functions) Act 1992 to determine in respect of home civil servants in their respective departments the recruitment standards for health and coping with the demands of the job.
  254
  The delegation was subject to the condition that recipients comply with the provisions of the Civil Service Management Code as amended from time to time. Copies of the Civil Service Management Code are available in the Library of the House.
  1The statutory office holders are:

  Commissioners of Inland Revenue

  Head of the Registry of Friendly Societies, being the Chief Registrar of Friendly societies and the First Commissioner of the Building Societies Commission

  Chief Charity Commissioner

  Commissioners of Customs and Excise

  Crown Estate Commissioners

  Director General of Electricity Supply

  Director General of Fair Trading

  Director General of Gas Supply

  Director General of National Lottery

  Director of National Savings

  Director of Passenger Rail Franchising

  Director General of Telecommunications

  Director General of Water Services

  Director of Public Prosecutions

  Director of the Serious Fraud Office

  Government Actuary

  Her Majesty's Chief Inspector of Schools in England

  Her Majesty's Chief Inspector of Schools in Wales

  International Rail Regulator

  Public Works Loan Commissioners

  Parliamentary Commissioner for Administration and Health Service Commissioners

  Rail Regulator

  Registrar General for Scotland.

FOREIGN AND COMMONWEALTH AFFAIRS

  Nuclear Fuels
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the proliferation risks posed by the use of plutonium-mixed-oxide based nuclear fuels. [64816]

  Mr. Battle
  I have been asked to reply.

  I refer my hon. Friend to the answer given by my right hon. Friend the Minister of State, Foreign and Commonwealth Office, on 2 December 1997, Official Report, column 122.

  Ambassador's Residence
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what prices were accepted by his Department for the British Ambassador's residence and associated property which were for sale by public tender on 2 December. [65683]

  Mr. Fatchett
  I refer the hon. Member to the answer I gave on 14 December 1998,Official Report, column 403, in respect of the sale of the Glencairn Estate in Dublin. Tenders have now been evaluated, but we have not yet closed the sale. Even when we do, it is not our policy to reveal details of price and other terms agreed in such transactions.

  Sudan
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the human rights implications of the trial of Hilary Boma and Lino Sebit in Sudan; and if he will make a statement. [64841]

  Mr. Fatchett
  There have been a number of disturbing allegations about the trial of those people charged with plotting and carrying out the bombings in Khartoum in June 1998. We have raised these with the Sudanese authorities in Khartoum and in London.

  At the end of December, the Constitutional Circle of the Sudanese High Court ruled that the trial of 20 defendants, including the two Catholic priests Hilary Boma and Lino Sebit, be suspended while the High Court considers an appeal challenging the legality of the defendants being tried before a military court.

  Sierra Leone
  Mr. Howard
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in Sierra Leone. [65699]

  Mr. Tony Lloyd
  We are very concerned by the current situation in Sierra Leone. The democratically elected government remains under direct threat from a strong rebel force. We are closely monitoring the humanitarian situation. We fully support the democratically elected government of Sierra Leone; and the efforts of the Military Observer Group of the Economic Community of West African States (ECOMOG) to restore peace and security. We are providing £3 million worth of direct logistic assistance to ECOMOG and the Government of Sierra Leone. HMS Norfolk, a Type 23 frigate, has been instructed to move to the region as a precautionary measure. We are monitoring events in Sierra Leone carefully. We are in close touch with the United Nations and others about the situation on the ground.

  Mr. Howard
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken by the Government to publicise the legal position on the supply of arms to Sierra Leone since the publication of the Legg report; and if he will make a statement. [65704]

  Mr. Tony Lloyd
  Following the adoption by the Security Council on 5 June 1998 of a new resolution on the supply of arms to Sierra Leone, my right hon. Friend the Foreign Secretary issued a press statement welcoming its adoption. On 16 June 1998 I described the content of the resolution in my written answer to my hon. Friend the Member for Bolton, North-East (Mr. Crausby),Official Report, column 199, drawing attention to the fact that the resolution would ensure that the arms embargo on Sierra Leone applied to non-governmental forces but made explicit exemption for ECOMOG and the United Nations. I also explained that Orders in Council were being prepared to give full effect to the resolution in UK law.

  In addition to my right hon. Friend's press statement the FCO News Department briefed the media extensively on the details of the resolution both before and after its adoption. In addition a telegram issued on 23 July informing all FCO and Whitehall Departments, and posts overseas, of the scope and implications of the provisions of the Orders in Council.
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  These steps were taken before the publication of the Legg report on 27 July.

  Iraq
  Mr. Howard
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on reports that information obtained by UNSCOM inspectors in Iraq was made available to the United States Government; if any such information was made available to Her Majesty's Government; what inquiries he has made into such reports; and what discussions he has had with the US Government concerning these reports. [65696]

  Mr. Fatchett
  Both the UK and US Governments have made clear that all information exchanges between themselves and UNSCOM have been strictly in pursuit of UNSCOM' s mandate to dismantle Iraq's Weapons of Mass Destruction capability.

  Mr. Howard
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in Iraq. [65697]

  Mr. Fatchett
  We are currently considering ideas with friends and allies for a way forward on Iraq. Discussions in the Security Council are focusing on disarmament questions and the humanitarian situation in Iraq. We are also looking with EU partners at proposals for alleviating the suffering to which Saddam Hussein continues to subject the Iraqi people.

  Arms Supplies
  Mr. Howard
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what evidence he has obtained of British companies supplying weapons to(a) the Congo, (b) Uganda and (c) Liberia; and if he will make a statement; [65698]

  (2) what evidence he has obtained of possible breaches of the UN embargo on arms supplies to Sierra Leone; what investigation he has ordered into reports of such breaches; and if he will make a statement; [65703]

  (3) what evidence he has obtained of British companies supplying weapons to Sierra Leone; what investigation he has ordered into reports of such supplies; and if he will make a statement. [65702]

  Mr. Tony Lloyd
  A recent newspaper article alleged that two British companies may have been involved in supplying arms to Sierra Leone, via the Gambia and Liberia, in breach of the UN arms embargo. The article also alleged that one of the companies may have delivered arms to the DRC via Uganda and Rwanda. The FCO have drawn these allegations to the attention of Customs and Excise who are responsible for the investigation and prosecution of any alleged breaches of UK legislation implementing arms embargoes.

  Kosovo
  Mr. Howard
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in Kosovo. [65682]

  Mr. Tony Lloyd
  The OSCE-led Kosovo Verification Mission (KVM) has already demonstrated its ability to make real difference to the situation on the ground by negotiating local ceasefires in Podujevo during the
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  Christmas weekend and playing an instrumental role in negotiations concerning the release of 8 Yugoslav soldiers seized by the UCK on 8 January. There are currently 745 KVM personnel on the ground in Kosovo, 110 of whom are British.

  It is crucial that the ceasefire be maintained. We are concerned at the rising tensions in recent weeks, with provocations from both sides. We have called on both sides to show restraint and pursue their objectives through negotiations.

  The UK is pressing for rapid progress on the political track which alone can tackle the roots of the problem, and fully supports the efforts of US Envoy Ambassador Chris Hill and EU Special Envoy Ambassador Petritsch. This is not a conflict which either side can win militarily, and now above all is the time for the Government in Belgrade and the leaders of the Kosovo Albanians to show the courage and vision to engage seriously in negotiations with direct international involvement.

EDUCATION AND EMPLOYMENT

  Teachers
  Sir David Madel
  To ask the Secretary of State for Education and Employment if he will make a statement on his plans for the future of the teaching profession. [64049]

  Ms Estelle Morris
  The Government are investing £19 billion extra over the next three years to improve education in the UK. Part of this investment is intended to modernise the teaching profession. The Green Paper, "Teachers: meeting the challenge of change", published in early December, set out a wide-ranging vision of stronger school leadership; rewards for success and incentives for excellence; a stronger culture of personal development; and better support in the classroom.

  Numeracy Hour
  Caroline Flint
  To ask the Secretary of State for Education and Employment what evidence he has obtained of the effectiveness of the numeracy hour in primary schools. [64050]

  Ms Estelle Morris
  Reports from OFSTED and the National Foundation for Educational Research both point to the success of the daily mathematics lesson piloted in the National Numeracy Project. The daily lesson is an important part of the National Numeracy Strategy and will begin in primary schools this September.

  Sex Education
  Dr. Lynne Jones
  To ask the Secretary of State for Education and Employment if he will make a statement on the effectiveness of sex education in schools. [64053]

  Mr. Charles Clarke
  Reports from the Office for Standards in Education have indicated that standards of sex education are adequate or better in most schools. The Government wish to build on the good practice which exists.

  Information Technology
  Mr. Stunell
  To ask the Secretary of State for Education and Employment what plans the Government have to encourage greater use of information technology in education. [64055]

  Mr. Charles Clarke
  The Government's plans for Information and Communications Technologies in education were set out in 'Our Information Age' and in the Government's National Grid for Learning Challenge, 'Open for Learning, Open for Business', which were published last year. Copies are available in the Library.

  Mr. Allan
  To ask the Secretary of State for Education and Employment if he will make a statement on the role of information technology in reducing the administrative work load of teachers. [64073]

  Mr. Charles Clarke
  Information and communication technologies (ICT) have a central role to play in reducing the bureaucratic burden on teachers, particularly in reducing the burdens involved in administration and in preparing for lessons. Key targets for the National Grid for Learning (NGfL) include that by 2002, serving teachers should feel confident and be competent to teach using ICT within the curriculum, and all general administrative communications with schools and collection of data from schools should largely cease to be paper-based.

  These targets were set out in the NGfL consultation paper Connecting the Learning Society and subsequent challenge paper Open for Learning, open for business. They were re-affirmed in our Green Paper on modernising the teaching profession. We are taking forward a wide-ranging programme of work to ensure they are met, including:
  providing over £700m for ICT in UK schools up to 2002, and a further £230 from the New Opportunities Fund from 1999 for teacher training in the curriculum use of ICT;
  developing high quality materials for the National Grid for Learning and the DfEE Standards Site, including non-mandatory schemes of work to help teachers plan their work. We are also working with and encouraging other public and private sector organisations to do the same;
  improving our ability to collect and share data electronically and communicate electronically with schools and Local Education Authorities.

  But improving the use of ICT is not the only way to cut bureaucracy. We need to reduce burdens on teachers in other ways too, including cutting the amount of unnecessary paper they have to deal with and ensuring they have adequate support in their work. We are working vigorously to ensure that happens, so that teachers can focus on raising standards for all children.

  Disabled People (Civil Rights)
  Mr. Stephen Twigg
  To ask the Secretary of State for Education and Employment what progress he has made in securing civil rights for the disabled. [64056]

  Ms Hodge
  The Disability Rights Task Force, which I chair, has reported on the role and functions of a Disability Rights Commission and the Government have recently introduced a Bill to establish the Commission. The Task Force is now looking at what further rights disabled people might need and is due to make its final recommendations by July.
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  In the meantime we are pressing ahead with the implementation of the later rights in Part III of the Disability Discrimination Act 1950. The first phase will come into force in October, with the second phase due in 2004. They will give disabled people important new rights in relation to access to goods, facilities and services.

  We have also taken an early opportunity to reduce the Disability Discrimination Act 1995 exemption threshold and bring more small employers into the DDA's employment provisions. Other Government initiatives include the extension, from October 1999, of Part M of the building regulations Access and Facilities for Disabled People to cover all new dwellings with the aim of enabling disabled people to visit friends and relatives more easily and to manage reducing mobility better, remaining in their own homes for longer.

  The Rail Vehicle Accessibility Regulations came into effect in November 1998. Full guidance will be issued to all those affected early this year. The guidance will be a source of information to the industry on a range of issues, for example, the use of colour contrast in vehicle liveries and will apply to all new rail vehicles entering service from 1 January 1999.

  New Deal (Medway)
  Mr. Shaw
  To ask the Secretary of State for Education and Employment what the total investment in schools in Medway through the new deal has been to date. [64058]

  Mr. Charles Clarke
  Medway schools were included in those projects which were supported by Kent Local Education Authority in the first round of the New Deal for Schools in September 1997. The Department allocated £1,159,927 to Kent Local Education Authority to support projects costing £1,267,173 in this round. A further £1,186,618 was allocated specifically to the Medway Unitary Authority in April 1998 as part of the second round of the New Deal for Schools to support projects costing £1,228,134.

  Higher Education Funding
  Mr. McWalter
  To ask the Secretary of State for Education and Employment if he will make a statement on funding of higher education. [64061]

  Mr. Mudie
  As a result of the modernisation of funding arrangements for higher education, an extra £776 million will be available for higher education over the next two years, 1999–2000, and 2000–2001 under the plans announced on 8 December 1998.

  This very good settlement will allow for growth in student numbers, for improving quality and raising standards, for investment in teaching and IT infrastructure and for boosting research.

  Disability Rights Commission
  Ms Christine Russell
  To ask the Secretary of State for Education and Employment when he plans to establish the Disability Rights Commission. [64062]
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  Ms Hodge
  The Disability Rights Commission Bill was introduced into Parliament on 3 December 1998 and had its second reading in the House of Lords on 17 December 1998. Subject to Parliament enacting the Bill we would expect the Commission to be established in the year 2000.

  Mr. Baker
  To ask the Secretary of State for Education and Employment what steps he is taking to ensure maximum access to the Disability Rights Commission. [64045]

  Mr. Blunkett
  We want the Disability Rights Commission to help as many people as possible. The Commission will be expected to ensure that its services are accessible to all those who seek to use them taking full account of the needs of disabled people.

  Drugs Misuse
  Mrs. Ann Winterton
  To ask the Secretary of State for Education and Employment what guidance relating to drug-misuse has been issued to schools by his Department since the appointment of the UK anti-drugs co-ordinator in October 1997. [64063]

  Mr. Charles Clarke
  The Department published on 18 November 1998 guidance on good practice in drug education in schools and the youth service. It includes advice for teachers and youth workers on the effective delivery of drug education, and on dealing with drug-related incidents. The guidance was sent to all Chief Education Officers of local education authorities, and is available to all schools free of charge.

  The Department also published in March last year a booklet summarising a number of innovative drug education projects supported through the Department's Grants for Education Support and Training (GEST) programme in 1996–97. It offers a number of examples of the range of different approaches teachers and others may like to use in the delivery of drug education.

  Copies of both publications are in the Library

  Literacy Hour
  Mr. Heppell
  To ask the Secretary of State for Education and Employment what impact the literacy hour has had on standards of literacy in primary schools. [64064]

  Ms Estelle Morris
  The Literacy Hour began in primary schools in September 1998. The vast majority of teachers are teaching the daily hour, which has had a considerable impact on teaching methods and organisation of lessons. Evaluations of the pilot National Literacy Project, published last month by OFSTED and the NFER, confirm that the Literacy Hour is based on teaching methods that will raise standards. Children who started some way below the national average in their reading scores made eight to 12 months progress above what would normally be expected, in less than two years.

  Higher Education
  Mr. Ben Chapman
  To ask the Secretary of State for Education and Employment what actions he is taking to encourage access to higher education. [64065]

  Mr. Pound
  To ask the Secretary of State for Education and Employment what action he is taking to encourage access to higher education. [64068]
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  Mr. Mudie
  We have doubled Access Funds and extended them to part-time students; increased the number of student places; enabled the Higher Education Funding Council for England to allow funding of £30 million per annum for widening participation activities and provided for fees to be waived for part-time students on benefits or who have lost their jobs during their study. Further measures are under consideration.

  Further Education Funding
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Education and Employment if he will make a statement on his plans for funding of further education. [64066]

  Mr. Mudie
  This Government have announced that further education colleges will have £725 million more over the next two years. This will enable major progress to be made towards providing for an extra 700,000 students in further education by 2001–02 and raising standards across the sector.

  School Councils
  Mr. Rowe
  To ask the Secretary of State for Education and Employment what estimate he has made of the number of schools which currently have school councils. [64067]

  Mr. Charles Clarke
  The Department does not collect such data centrally. However, in a survey for the Institute of Citizenship Studies—Citizenship Education in Primary Schools (Kerr 1996), 14 per cent. of the 144 schools responding said they had a school council; some 75 per cent. said they involved pupils in negotiating rules on behaviour. In a similar survey of secondary schools—Citizenship Education in Secondary Schools—a national survey (Fogelman 1991)—around 60 per cent. of the 455 schools surveyed said they had school councils.

  Education Welfare Officers
  Mr. Cohen
  To ask the Secretary of State for Education and Employment what proposals he has to improve the training and qualifications of education welfare officers. [64069]

  Mr. Charles Clarke
  I refer my hon. Friend to the reply given to him on 22 October 1998,Official Report, columns 1189–90.

  Three-year-olds
  Mr. Chaytor
  To ask the Secretary of State for Education and Employment how much has been allocated to local authorities to enable them to provide pre-school places for three-year-olds. [64070]

  Ms Hodge
  On 30 December 1998, the Department announced that we would be making available £390 million additional funding for over the next three years. This will enable the participation rate for three-year-olds in early education to approximately double to 66 per cent. by 2002. I should also add that there has been an increase of 9½per cent. in Local Education Authority's standard spending assessments. Local Education Authorities can spend this money on early years education if they wish.

  School Reforms
  Mr. Blizzard
  To ask the Secretary of State for Education and Employment what steps he is taking to monitor the implementation of his reforms in schools. [64071]

  Ms Estelle Morris
  The overall effect of our education reforms on schools standards will be monitored through the annual collation and publication of examination and test results, and through the continuing inspection programme of OFSTED. There will also be evaluation of the impact of individual policies.

  Internet
  Mr. Gordon Prentice
  To ask the Secretary of State for Education and Employment what estimates he has made of the number of schools connected to the Internet; and if he will make a statement. [64072]

  Mr. Charles Clarke
  Latest estimates indicate that over 12,000 schools are connected to the Internet. Our aim is that all schools should be online and able to benefit from access the National Grid for Learning by 2002. To help achieve this target we are supporting over £700 million of ICT-related expenditure in UK schools over this period.

  Youth Service
  Barbara Follett
  To ask the Secretary of State for Education and Employment if he will make a statement on his plans for the youth service. [64074]

  Mr. Mudie
  I refer my hon. Friend to my oral answer today,Official Report, column 431, to my hon. Friend the Member for Corby (Mr. Hope).

  Class Sizes
  Mr. Bercow
  To ask the Secretary of State for Education and Employment if he will estimate the number of children between the ages of seven and 11 years currently being taught in classes of over 30 in maintained schools in England. [64075]

  Ms Estelle Morris
  In January 1998 there were 832,668 pupils in Key Stage 2 classes of more than 30 pupils taught by one teacher.

  Special Needs
  Mr. Todd
  To ask the Secretary of State for Education and Employment what assessment he has made of the potential impact of delegation of spending on the provision of support for children with special educational needs. [64059]

  Ms Estelle Morris
  The new arrangements for school funding continue to allow flexibility for spending to support children's special educational needs to be made by local education authorities or by school governing bodies as appropriate.

  PFI Projects
  Mrs. May
  To ask the Secretary of State for Education and Employment if he will list his Department's approved
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  PFI projects together with the relevant local education authorities and the amount of finance involved in each case. [65112]

  Mr. Charles Clarke
  [holding answer 11 January 1999]: The schools PH projects that have been approved so far by the Department and the Treasury chaired Project Review Group are as follows:
  Individual School Projects and Local Education Authority

  Colfox Secondary School; Dorset

  new secondary school; Enfield

  new secondary school; Essex

  new secondary school; Hillingdon

  Victoria Dock Primary School; Kingston upon Hull

  Swanscombe Secondary School; Kent

  Lillian Bayliss Secondary School; Lambeth

  Fleetwood High School; Lancashire

  Speke Forward Learning Centre; Liverpool

  Cardinal Heenan Secondary School; Leeds

  Temple Primary School; Manchester

  new secondary school; Portsmouth

  Mulberry School; Tower Hamlets

  new secondary school; Waltham Forest

  Pimlico School; Westminster

  Grouped Schools Projects (Repair/Rebuild/Refurbishment schemes) and Local Education Authorities

  10 schools; Birmingham

  36 schools; Cornwall

  6 schools; East Riding of Yorkshire

  5 schools; East Sussex

  10 schools; Haringey

  7 schools; Leeds

  4 schools; North Yorkshire

  6 schools; Nottinghamshire

  6 schools; Sheffield

  2 schools; Staffordshire

  126 schools; Stoke on Trent

  schools rationalisation scheme; Tameside

  2 schools; Torbay

  47 schools; Tower Hamlets

  3 schools; Wiltshire

  9 schools; Wirral

  104 schools (Information Technology project); Dudley

  90 schools (catering project); Lewisham.

  The majority of these projects are currently in, or about to enter, contractual negotiations with potential private sector partners. It would not, therefore, be appropriate at this stage to release details of the funding for individual projects. Individual local education authorities, however, may be prepared to release details of the funding that has been approved. The overall total funding to be provided by central Government through PFI credits for all of the above projects is £705 million. Three projects have completed negotiations and have signed contracts. PFI credits have been approved for these projects as follows:

  Colfox Secondary School; Dorset—£15 million;

  new secondary school; Hillingdon—£19 million; and

  Victoria Dock Primary School; Kingston upon Hull—£2 million

  Age Discrimination
  Mr. Winnick
  To ask the Secretary of State for Education and Employment what recent representations he has received on age discrimination. [64052]

  Mr. Waterson
  To ask the Secretary of State for Education and Employment what proposals he has to discourage age discrimination; and if he will make a statement. [64051]

  Mr. Andrew Smith
  With key partners such as TUC, CBI and Age Concern, we have been developing a draft code of practice to promote age diversity in employment. It covers all aspects of employment, including recruitment, selection training, development, redundancy and retirement.

  The most recent representations on age discrimination in employment have been on the subject of the draft Code which was published for wider consultation on 16 November 1998. We are pleased with the wide interest the draft prompted, with copies being distributed to individuals, businesses, interest groups representing older people and Trades Unions. The consultation came to an end on 8 January and we are currently analysing the responses and representations we have received. The full version of the Code will be launched in the Spring.

  Digital Broadcasting
  Mr. Peter Ainsworth
  To ask the Secretary of State for Education and Employment (1) what role his Department has in the tendering process for the provision of digital broadcasting services to support the GCSE curriculum; [65690]

  (2) how many bids have been received in response to the tender for the provision of digital broadcasting services to support the GCSE curriculum; and from which companies; [65689]

  (3) what advertising, subscription and sponsorship revenue sources will be permitted to the provider of digital broadcast services to support the GCSE curriculum; [65691]

  (4) if he will place in the Library a copy of the tender document for the provision of digital broadcasting services to support the GCSE curriculum; [65686]

  (5) which national curriculum subjects will be supported by a digitally broadcast education service; [65688]

  (6) what estimate he has made of the cost to public funds of establishing a digital broadcast service to support the GCSE curriculum in (a) year one, (b) year two and (c) year three of operation; [65684]

  (7) what plans he has to encourage (a) schools, (b) individuals and (c) others to subscribe to a new digital broadcast channel to support the GCSE curriculum. [65693]

  Mr. Charles Clarke
  The Department for Education and Employment has invited companies with a broadcasting or transmission licence and experience in the provision of educational broadcast material to submit tenders on a competitive basis for the provision of specific digital broadcasting services to support the GCSE curriculum. These services will support GCSEs in English, mathematics, double award science, history and geography.
  265
  Bids are currently being considered and information relating to them is commercial in confidence. The precise cost and nature of the services, plans to promote them and permitted sources of revenue will depend on the outcome of the tender exercise and will form part of any contract. A copy of the Invitation to Tender for the digital broadcasting services is being deposited in the Library.

  The Department has no plans for a new digital broadcast channel to support the GCSE curriculum. Decisions on such a channel, and on its possible funding, would be for individual broadcasters.

  Competitive Bidding (Education Grants)
  Mr. Don Foster
  To ask the Secretary of State for Education and Employment (1) for how many of the specific grants for education competitive bidding was required in(a) 1985, (b) 1992, (c) 1997 and (d) 1998; [65511]

  (2) if he will list, for each annual programme of specific grants for education since 1992, whether the circulars issued were submitted for consultation. [65512]

  Ms Estelle Morris
  The number of specific grants requiring competitive bidding by local education authorities was (a) 14 in 1985, (b) 15 in 1992, (c) 20 in 1997 and (d) 15 in 1998, representing bids for programmes starting the following financial year. Circulars covering specific grant programmes were submitted for consultation through local government organisations in 1992, 1993, 1994, 1995 and 1996.

  Phono-graphics
  Mrs. May
  To ask the Secretary of State for Education and Employment what assessment his Department has made of the phono-graphics method of teaching children to read, with particular reference to children with dyslexia. [65618]

  Mr. Charles Clarke
  The Standards and Effectiveness Unit (SEU) has had discussions with the authors of the scheme, and remain in contact. The National Literacy Strategy enshrines many of the principles underpinning the scheme, including the importance of phonemic awareness for making progress in literacy. The strategy is a practical programme for raising standards in primary schools which aims to ensure that all children, including those with specific learning difficulties such as dyslexia, are taught to read and write well. All teachers are being trained in the most effective methods of teaching literacy, and schools are implementing a structured daily Literacy Hour.

PRIME MINISTER

  Cabinet Meetings
  Mr. Baker
  To ask the Prime Minister if he will list(a) the dates on which Cabinet meetings have taken place since 1 September 1998 and (b) which of those meetings were attended by (i) the Minister of Transport and (ii) the Minister for the Environment. [65517]
  266
  The Prime Minister
  In accordance with longstanding practice, information about proceedings of the Cabinet is not made public. However, when the new Cabinet was announced in July 1998 it was made clear that, although not a member of the Cabinet, the Minister of Transport would be invited to attend its meetings.

  Official Spokesman
  Mr. Dalyell
  To ask the Prime Minister if the phrase used by his official spokesman on 21 December 1998 concerning the intellect of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) was used with his authority. [65680]

  The Prime Minister
  My Official Spokesman was questioning the argument that action against Saddam Hussein should be taken only if he were removed from power. It was, and is, my view that this argument is not valid.

WALES

  Crickhowell House
  Mr. Wigley
  To ask the Secretary of State for Wales what, under the current arrangements made by the Welsh Office for the tenancy of Crickhowell House in Cardiff, are(a) the length of the lease and its final year, (b) the current rent and the provisions for review, (c) the repairing and other responsibilities of the lease and (d) the financial liability other than the rent at the commencement or termination of the lease. [65283]

  Mr. Michael
  (a) The Welsh Office entered into a 30 year lease starting in 1993.

  (b) For reasons of commercial confidentiality, it is Government policy not to disclose information about rent levels for individual properties. There is provision for 5 yearly reviews on 29 September 2003, 29 September 2008, 29 September 2013 and 30 August 2018.

  (c) It is a full repairing lease.

  (d) The financial liability, other than rent, is for rates maintenance costs, and works to house the Assembly. At the termination of the lease, dilapidations and reinstatement of the building will fall due.

  Objective I Status
  Mr. Ruane
  To ask the Secretary of State for Wales if he will list the(a) dates and (b) venues for public seminars on Objective I status for West Wales and the Valleys organised by his Department. [65414]

  Mr. Hain
  The European Task Force will be organising a series of public seminars across Wales to discuss the outline national development strategy it has prepared. The national development strategy will explicitly cover the needs of all of Wales—though clearly allowing for local variances—and the policy objectives for the Objective 1 development plan will emanate from it. The seminars will be held during March in the middle of the consultation period. Exact dates and locations will be announced shortly.

CULTURE, MEDIA AND SPORT

  Digital Broadcasting
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport (1) what plans his Department has to fund a digital broadcasting service to support the GCSE curriculum; [65685]

  (2) what steps he has taken to inform digital television licence holders of his plans for a digital broadcast education service to support the GCSE curriculum; [65695]

  (3) what advice he has received from commercial broadcasters as to the ability of a digitally broadcasting education service to be self-financing; [65687]

  (4) if he will make a statement on the implications for BBC Education Services of the establishment of publicly funded digital broadcast service to support the GCSE curriculum. [65694]

  Mr. Charles Clarke
  I have been asked to reply.

  The Department for Education and Employment has invited companies with a broadcasting or transmission licence and experience in the provision of educational broadcast material to submit tenders on a competitive basis for the provision of specific digital broadcasting services to support the GCSE curriculum. These services will support GCSEs in English, mathematics, double award science, history and geography. Bids are currently being considered and information relating to them is commercial in confidence. The precise cost and nature of the services, plans to promote them and permitted sources of revenue will depend on the outcome of the tender exercise and will form part of any contract. A copy of the Invitation to Tender for the digital broadcasting services is being deposited in the Library.

  The Department has no plans for a new digital broadcast channel to support the GCSE curriculum. Decisions on such a channel, and on its possible funding, would be for individual broadcasters.

INTERNATIONAL DEVELOPMENT

  Hurricane Mitch
  Miss Geraldine Smith
  To ask the Secretary of State for International Development what plans the Government have to provide long-term aid for the reconstruction of Nicaragua and Honduras after the period of the current emergency aid. [65336]

  Mr. Foulkes
  We are looking at a number of ways of giving help to those affected by Hurricane Mitch, both in the short and long term.

  During the immediate emergency phase, we provided funding for food, medicine and shelter through non-governmental organisations and four British ships did tremendous work during the relief effort, including rescuing people stranded in remote areas.

  Following a Department for International Development (DFID) mission to the region in November, a further programme of assistance was announced which included rebuilding secondary roads and bridges, repairing water
  268
  and sanitation infrastructure, restoring primary health and education services and work on epidemiological surveillance and epidemic control.

  Our plans for help in the long term include a fund to strengthen the capacity of local organisations to enable them to make fuller use of loans provided by the Inter American Development Bank and a project aimed at regenerating crop production through provision of appropriate seed.

  We are also currently investigating the possibility of working with the Pan American Health Organisation on health projects in the region, a programme of longer term support alongside the emergency road-building project announced in my statement of 4 December, a micro finance scheme, and support to a regional rural development and natural resources technical assistance unit (RUTA).

  On debt, we are pleased that the World Bank has now approved a multilateral Trust Fund to help with the servicing of multilateral debts. The UK has pledged £10 million to this fund, and total pledges now stand at well over $100 million. When the Paris Club met at the beginning of December, they agreed a debt relief package worth over £100 million.

  Inter University Council
  Mr. Gorrie
  To ask the Secretary of State for International Development if she will make a statement on the Government's responsibilities to people recruited through the Inter University Council as regards pensions and superannuation. [65115]

  Mr. Foulkes
  The British Government are responsible for the payment supplements to pensions of only the specific former Inter University Council staff who qualify under the "Scheme for the Application of Supplementation and Pension Increases to FSSU Benefits of British Staff who retire from an IUC Associated University Overseas". The Scheme is administered by the British Council.

DEFENCE

  Territorial Army
  Mr. Swayne
  To ask the Secretary of State for Defence for what reasons the unposted list for Territorial Army officers is to be discontinued. [62179]

  Mr. Doug Henderson
  I will write to the hon. Member and a copy of my letter will be placed in the Library of the House.

  HMS Invincible
  Mr. Dalyell
  To ask the Secretary of State for Defence for what reasons HMS Invincible has been deployed to the Gulf. [65378]

  Mr. George Robertson
  HMS Invincible together with HMS Newcastle and RFA Fort Austin have deployed to the Gulf to reinforce our capability to keep Saddam Hussein contained. In parallel to further diplomatic discussion this sends the clearest possible signal that we mean business.

  Kuwait (Air Bases)
  Mr. Dalyell
  To ask the Secretary of State for Defence what assurances he has received from the Government of Kuwait about the use of Kuwaiti air bases for future bombing missions against Iraq. [65377]

  Mr. George Robertson
  We have regular discussions with the Government of Kuwait on a wide range of issues surrounding the basing and activities of UK forces in Kuwait. The details of these discussions are confidential and I am withholding them under Section 1b (International Relations) of the code of practice on access to Government information.

  Southern Watch
  Mr. Dalyell
  To ask the Secretary of State for Defence what discussions he has had with the Prime Minister of France about French participation in Southern Watch, based in Saudi Arabia; and if he will make a statement. [65374]

  Mr. George Robertson
  I have had no discussions with the Prime Minister of France but have spoken to the French Minister of Defence, Mr. Richard, on a wide range of issues of mutual concern, including Operation Southern Watch. French aircraft have not participated in Operation Southern Watch flights since missions resumed following Operation Desert Fox last month. We hope French aircraft will participate shortly.

  Armed Forces (Ethics and Discipline)
  Mr. Keith Simpson
  To ask the Secretary of State for Defence if he intends to publish a joint service guide to ethics and discipline for the armed forces. [65628]

  Mr. Doug Henderson
  No.

  The armed services each issue a variety of guidelines which identify the conduct expected from their personnel and accommodate the differences between individual service environments. These guidelines, which are periodically reviewed, make it clear that high standards of behaviour are expected from individuals at all times.

  Iraq
  Mr. Dalyell
  To ask the Secretary of State for Defence for what reason the Baghdad Museum of Natural History was hit by US and UK forces; and what is his assessment of the damage done. [65681]

  Mr. George Robertson
  The Baghdad Museum of Natural History was not targeted by US or UK forces during Operation Desert Fox. At most, it may have sustained light superficial damage from an attack on an Iraqi command and control facility located approximately half a mile away.

  Mr. Tony Geraghty
  Mr. Dalyell
  To ask the Secretary of State for Defence for what reasons the home of Mr. Tony Geraghty has been searched by MoD Police and his computer files and other material seized. [65472]
  270
  Mr. Doug Henderson
  This is a matter for the Chief Constable of the Ministry of Defence Police Agency. I have asked the Chief Constable to write to my hon. Friend.

  Letter from W. E. E. Boreham to Mr. Tam Dalyell, dated 14 January 1999:
  I am replying to your Question to the Secretary of State for Defence about the house search and property seized by the Ministry of Defence Police from Tony Geraghty, as this falls into my area of responsibility as Chief Constable/Chief Executive of the Ministry of Defence Police Agency.
  Computer files and research material were seized, under warrant, from the home address of Mr. Geraghty, as part of an investigation in connection with alleged offences against the Official Secrets Act. The property seized is currently under evaluation.

SOCIAL SECURITY

  Pensions
  Mr. Gordon Prentice
  To ask the Secretary of State for Social Security if Liberal Democrat members of the Cabinet Joint Consultative Committee received briefings on the green paper on pensions before its contents were disclosed to hon. Members. [64772]

  Mr. Darling
  After discussion with the right hon. Member for Yeovil (Mr. Ashdown), I have discussed matters in relation to pensions with the Liberal Democrat pensions spokesman, the hon. Member for Northavon (Mr. Webb). I am always prepared to discuss any aspect of my Department's policy with right hon. and hon. Members. I have held no discussion on pensions policy with the right hon. Member for Berwick-upon-Tweed (Mr. Beith), nor have I attended the Joint Consultative Committee.

  Mr. Field
  To ask the Secretary of State for Social Security (1) if he will break down into its constituent parts the £150 billion figure he has given for the privatisation of the state pension system; [65005]

  (2) if he will break down into its constitution parts his £150 billion estimate for privatising current state pension provision. [65175]

  Mr. Timms
  [holding answer 11 January 1999]: The figure of £150 billion for the privatisation of the State Pension system is the cumulative Public Sector Borrowing Requirement cost to 2040 of introducing the previous Government's policy Basic Pension Plus. This sum represents the increased cost of National Insurance rebates (approximately £300 billion) less savings from changing the tax treatment of pensions (approximately £150 billion).

  Mr. Webb
  To ask the Secretary of State for Social Security what plans he has for the structure and level of national insurance rebates for those who take out stakeholder pensions. [65580]

  Mr. Timms
  I refer the hon. Gentleman to the reply I gave to my right hon. Friend the Member for Birkenhead (Mr. Field) on 11 January 1999,Official Report, column 66.

  Mr. Webb
  To ask the Secretary of State for Social Security, pursuant to paragraph 21, page 4, of "Partnership in Pensions", Cm 4179, what is the basis for the statement
  271
  that the minimum income guarantee provides a minimum income in retirement without the stigma some people associate with income support. [65594]

  Mr. Timms
  We have completed research into why some pensioners do not claim their benefit entitlements and pilots into the best ways of encouraging them to do so. We are using the results to develop a strategy to overcome the barriers to claiming, including the problem of stigma. For example, we propose to run a publicity campaign in 1999 which will emphasise that the minimum income guarantee is an entitlement, not a hand out.

  Fraud
  Mr. Field
  To ask the Secretary of State for Social Security how many local authorities have taken up the Government's offer of computer terminals to provide access to "Benefits Agency data", set out in the Green Paper, "Beating Fraud is Everyone's Business", paragraph 8.5. [65451]

  Mr. Timms
  Of the 409 Local Authorities (LAs) approached, 355 (87 per cent.) have applied for installation of a remote access computer terminal (RAT) and we are currently installing them; by the end of December 1998 some 120 LAs were operating RATs and we are aiming to install the balance by the end of March this year.

  Mr. Field
  To ask the Secretary of State for Social Security what plans the Government have to replace the London Organised Fraud Investigation Team with a new anti-fraud body. [65445]

  Mr. Timms
  We are carrying out a review of how organised fraud within Social Security benefits, including fraud in those benefits that are primarily administered by local authorities, can be countered.

  The Government are pursuing this within the anti-fraud strategy announced earlier this year in the Green Paper, "Beating Fraud is Everyone's Business: Securing the Future".

  Mr. Field
  To ask the Secretary of State for Social Security when the code of practice for data-matching between different agencies, mentioned in the Green Paper, Beating Fraud is Everyone's Business, paragraph 5.2.7 was published. [65449]

  Mr. Timms
  The code of practice was published on 12 October 1998.

  Mr. Field
  To ask the Secretary of State for Social Security how many reports have been completed by the Benefit Fraud Inspectorate; how many have been submitted to ministers; and how many have been published. [65450]

  Mr. Timms
  The Benefit Fraud Inspectorate (BFI) have completed eight reports. Of these, five have been submitted to Ministers and published. The remaining three completed reports are to be submitted to Ministers and published shortly.

  We expect to receive and publish 12 more BFI reports by the end of March 1999.

  Mr. Field
  To ask the Secretary of State for Social Security if he will make a statement on the progress made so far on implementation of the personal details computer system for the Benefits Agency. [65452]
  272
  Mr. Timms
  The Personal Details Computer System (PDCS) will provide the Department with a consistent set of customer personal details for use by all benefit systems. This will improve the accounting and security of benefit expenditure.

  All personal details formerly held on the individual Child Benefit and Income Support computer systems, and all personal details from new claims to these benefits, are already being maintained on the PDCS. Additionally, new personal details for Jobseekers Allowance (JSA) and benefits maintained on the pensions computer system (including Retirement Pensions, Incapacity Benefit, Widows Benefit and Maternity Allowance) are being entered directly onto the PDCS.

  Presently there are 11.8 million customer records on PDCS. This number will rise to 23.6 million during 1999 following the transfer of existing JSA and pensions computer system records.

  Mr. Field
  To ask the Secretary of State for Social Security how many local authorities have implemented the new verification framework to protect against housing benefit fraud; and how many authorities he expects to implement it in the near future. [65453]

  Mr. Timms
  In 1998–99 funds were made available to help 85 local authorities to implement the verification framework. On 23 December 1998, we announced that extra funding was available to enable all local authorities to implement the framework over the coming year. £100 million extra will be made available to run the framework over the next three years.

  Mr. Field
  To ask the Secretary of State for Social Security how many benefit fraudsters have been punished to date by administrative penalties; and how many have been given formal cautions. [65444]

  Mr. Timms
  Of those offered by the Benefits Agency, 599 administrative financial penalties, and 544 cautions have been accepted. Such information is not collected centrally for local authorities.

  Mr. Field
  To ask the Secretary of State for Social Security (1) what progress has been made on the creation of a comprehensive performance measurement framework for fraud and anti-fraud activity; [65441]

  (2) if he will make a statement on the results of the Benefits Agency trials of new performance indicators to measure anti-fraud activity; [65442]

  (3) what progress has been made on the development of a national framework for the use of sanctions by agencies involved in social security administration; and when the Government plans to publish the framework; [65443]

  (4) what the results have been of the Government's exploration of risk-management techniques to analyse benefit processing in order to shape anti-fraud policies; [65454]

  (5) what recent changes have been made to the rules governing replacement of lost Giro cheques; [65446]

  (6) when the Government plans to repeat the research aimed at benchmarking public attitudes to benefit fraud, as set out in the Green Paper, "Beating Fraud is Everyone's Business", paragraph 4.18; [65458]
  273
  (7) if the development of common core skills and training for fraud investigators has been completed; and when the Government plans to implement the further principles of good practice and continuous learning and development for investigators set out in "Beating Fraud is Everyone's Business", paragraphs 7.6 and 8.4–5; [65460]

  (8) if he will make a statement on the measures taken to strengthen the vetting procedures for staff involved in issuing national insurance numbers; [65462]

  (9) what steps have been taken to implement methods of cross-checking records within the National Insurance Recording System; and whether the delays in respect of NIRS2 have affected the timetable for implementation; [65464]

  (10) if the Government have come to a conclusion on the value of investing in a national intelligence system to counter serious fraud; [65447]

  (11) what conclusions the Government have reached as a result of its review of data protection legislation, mentioned in the Green Paper, "Beating Fraud is Everyone's Business", paragraph 5.2.7; and what further possibilities for data-matching beyond his Department have been identified; [65448]

  (12) when the Government plans to publish the results of its review of the most commonly broken benefit rules, mentioned in the Green Paper, "Beating Fraud is Everyone's Business", paragraph 5.1.8; [65455]

  (13) what progress has been made towards developing a public communication strategy for fraud and welfare reform; [65457]

  (14) what conclusions have been reached by the Government in its review of benefit funding arrangements with regard to security against fraud; [65459]

  (15) what new steps the Government intends to take to combat landlord housing benefit fraud; and what research it is undertaking or plans to undertake into this problem. [65463]

  Mr. Timms
  We will publish shortly, our strategy for combating Social Security fraud in the light of the consultation on the Green Paper "Beating Fraud is Everyone's Business: Securing the Future".

  Mr. Field
  To ask the Secretary of State for Social Security what proportion of debt owed by fraudsters to his Department is currently being recovered; what is the average length of time between successful prosecution and recovery of debt; and what the equivalent figures were for each of the previous five years. [65439]

  Mr. Timms
  The information is not available and could be obtained only at disproportionate cost. A new Debt Accounting and Management system to improve management, control and accounting of debt is being designed and developed during 1999.

  Mr. Field
  To ask the Secretary of State for Social Security on what dates the ministerial group established to oversee anti-fraud strategy, announced in the Green Paper, "Beating Fraud is Everyone's Business", has met. [65461]
  274
  Mr. Timms
  "Questions of Procedures for Ministers" makes it clear that information relating to the proceedings of Cabinet or Cabinet Committees is not normally made public, in order to protect the principle of collective responsibility.

  Asylum Seekers
  Mr. Forth
  To ask the Secretary of State for Social Security how many asylum seekers have been found guilty of benefit fraud in the last three years [65471]

  Mr. Timms
  The information could be obtained only at disproportionate cost.

  Mr. Forth
  To ask the Secretary of State for Social Security what has been the cost of benefit payments to asylum seekers in the last three years. [65466]

  Angela Eagle
  The information is in the table.

  Asylum seekers—estimated Income Support, Housing Benefit and Council Tax Benefit annual expenditure

  £ million

  Year

  Total estimated annual expenditure

  1995–96

  300

  1996–97

  310

  1997–98

  325

  Notes:

  1. Information on other non-contributory benefits is not available.

  2. Estimated annual expenditure figures are rounded to the nearest five million pounds. Figures may not sum due to rounding.

  3. Estimates for February 1997 onwards will include a number of non-asylum seekers who receive Urgent Case Payments for other reasons.

  4. Annual expenditure figures for Income Support have been based on an average of four quarters for the relevant financial year, using number of cases and average weekly amounts.

  5. Housing Benefit and Council Tax Benefit estimates have been calculated using the Housing Benefit Management 1 per cent. sample and Departmental Reports, and exclude asylum seekers receiving Housing Benefit who are not receiving Income Support.

  Source:

  1. Income Support Statistics Quarterly Enquiries, May 1995 to May 1997.

  2. Housing Benefit Management Information System, annual 1 per cent. sample of claimants in receipt of Income Support, at the end of May in each year given.

  3. Departmental Report.

  Unemployment Benefit Costs
  Mr. Malcolm Bruce
  To ask the Secretary of State for Social Security what is his estimate of the average net cost to public funds of the social security payments made to each unemployed person included in the monthly claimant count for the latest year for which figures are available. [65648]

  Angela Eagle
  The information is in the table.

  Main benefits received by claimants of unemployment-related Jobseeker's Allowance (JSA)

  Average amount £ per week

  Total Caseload

  JSA

  HB

  CTB

  All unemployed claimants

  1,562,000

  50.02

  21.98

  4.00

  Contribution based JSA

  181,000

  46.11

  7.91

  1.52

  Income based JSA

  1,225,000

  56.98

  26.81

  4.86

  275

  Main benefits received by claimants of unemployment-related Jobseeker's Allowance (JSA)

  Average amount £ per week

  Total Caseload

  JSA

  HB

  CTB

  No entitlement to JSA (Receiving National Insurance Credits only)

  156,000

  0.00

  0.39

  0.09

  Notes:

  1. JSA, Housing Benefit (HB) and Council Tax Benefit (CTB) are the benefits most likely to be received by a person claiming benefit on the grounds of unemployment. The expenditure figures shown represent the estimated average benefit payment made to claimants of unemployment-related benefit at a single week in May 1997. This is the latest date for which information on all of the benefits concerned is available.

  2. Figures relate to Great Britain.

  3. Numbers are rounded to the nearest thousand.

  4. JSA claimants can receive either contribution-based JSA or income-based JSA, but cannot receive both.

  Source:

  1. JSA Statistics Quarterly Enquiry May 1997 (5 per cent. sample).

  2. Housing Benefit Management Information System, annual 1 per cent. sample enquiries with and without Income Support/JSA (Income Based), taken at the end of May 1997.

HOME DEPARTMENT

  Young Offenders
  Mr. Cox
  To ask the Secretary of State for the Home Department if he will make a statement on his Department's policy as to the separation between juveniles and young adults who have been remanded in custody or sentenced to a period of detention. [65286]

  Mr. George Howarth
  Prison Service policy on the separation of male prisoners is set out in Instruction to Governors 48/1995, a copy of which is in the Library. The Prison Service is currently finalising, in consultation with the Youth Justice Board, the proposals for a new distinct estate for boys aged 15 to 17-years-old, remanded or sentenced to custody, which will better meet their needs.

  Girls aged between 15 and 20 sentenced to custody should be held in young offender accommodation, unless a direction under section 1C of the Criminal Justice Act 1982, as amended by the Criminal Justice Act 1988, has been made. 15 and 16-year-old girls are remanded to the care of the local authority; section 43(2)(c) of the Prison Act 1952 requires that 17-year-olds who are remanded in custody are held in prison accommodation.

  An assessment is also underway of the needs of girls under 18-years-old.

  Mr. Cox
  To ask the Secretary of State for the Home Department how many(a) boys and (b) girls up to the age of 16 are at present serving sentences in prisons in England and Wales. [65287]

  Mr. George Howarth
  The currently available information relates to the population on the last day of November 1998 and is given in the table.
  276

  Population of 15 and 16 year olds under sentence in prisons in England and Wales on 30 November 1998 1 by sex

  Number

  Age

  Males

  Females

  15

  162

  6

  16

  488

  24

  1Provisional figures

  Illegal Immigrants
  Mr. Hancock
  To ask the Secretary of State for the Home Department how many illegal immigrants who arrived at Dover Ferry Port have been granted political asylum in each of the last 12 months. [64752]

  Mr. Mike O'Brien
  The available information on the numbers of persons granted asylum in the 12 months from 1 July 1997 to 30 June 1998 who had been issued with notice of illegal entry by immigration officials at Dover is given in the table.

  Persons granted asylum in the period 1 July 1997 to 30 June 1998 who had been issued with notice of illegal entry by immigration officials at Dover

  Date

  Number of persons

  July 1997

  0

  August 1997

  1—

  September 1997

  1—

  October 1997

  1—

  November 1997

  1—

  December 1997

  1—

  January 1998

  1—

  February 1998

  1—

  March 1998

  3

  April 1998

  0

  May 1998

  1—

  June 1998

  6

  1Represents 1 or 2

  Mr. Hancock
  To ask the Secretary of State for the Home Department how many illegal immigrants are currently being detained who arrived at Plymouth Ferry Port; and what were the equivalent figures for each of the last six months. [64756]

  Mr. Mike O'Brien
  The available information is that, as at 7 January 1999, no more than two persons who had been served with a notice of illegal entry by immigration officials at Plymouth were detained solely under immigration Act powers. Information relating to the previous six months could only be obtained at disproportionate cost.

  Mr. Hancock
  To ask the Secretary of State for the Home Department how many illegal immigrants who arrived at Poole Ferry Port have been refused entry and removed from the UK within seven days of arrival in each of the last 12 months. [64751]

  Mr. Mike O'Brien
  The available information on the numbers of persons removed or departing voluntarily within seven days of being issued with a notice of illegal entry by immigration officials at Poole, between 1 July 1997 and 30 June 1998 is given in the table.
  277

  Persons removed or departing voluntarily within 7 days of being issued with a notice of illegal entry by immigration officials at Poole, 1 July 1997 and to 30 June 1998

  Number of persons

  July 1997

  1—

  August 1997

  0

  September 1997

  0

  October 1997

  4

  November 1997

  1—

  December 1997

  0

  January 1998

  0

  February 1998

  0

  March 1998

  0

  April 1998

  0

  May 1998

  0

  June 1998

  0

  1represents 1 or 2

  Mr. Hancock
  To ask the Secretary of State for the Home Department how many citizens of the former Yugoslavia are currently being detained in the UK as illegal immigrants; and what the figures were in each of the last three years. [65297]

  Mr. Mike O'Brien
  I will write to the hon. Member.

  Michael Menson
  Mr. Love
  To ask the Secretary of State for the Home Department what progress has been made by the Police Complaints Authority in its investigation of the police inquiry into the murder of Michael Menson in January 1997; and when the report is expected to be completed. [65067]

  Kate Hoey
  The Commissioner of the Metropolitan Police informs me that Michael Menson's family, the Metropolitan Police and the Police Complaints Authority have all agreed that the death of Michael Menson should be reinvestigated.

  This reinvestigation is being carried out by Deputy Assistant Commissioner (DAC) John Grieve, who heads the Metropolitan Police Racial and Violent Crime Task Force. This investigation will not be subject to Police Complaints Authority supervision, but there will be lay involvement and very close liaison with the family.

  The formal complaint, made by Michael Menson's family, about the initial investigation made by the Metropolitan Police, is still pending. All concerned understand that the family will be given the opportunity to pursue their complaint once DAC Grieve has completed his reinvestigation.

  All parties have agreed that it would not be appropriate to conduct a complaints investigation alongside the reinvestigation.

  Immigration and Nationality Directorate
  Mr. Vaz
  To ask the Secretary of State for the Home Department how many complaints were made about the service at IND in 1998. [65168]

  Mr. Mike O'Brien
  478 complaints were received during 1998 under the formal arrangements for handling complaints against members of the Immigration and 278
  Nationality Directorate staff. There is no central record of other complaints, for example, about delays or the merits of individual decisions.

  Visas (Students)
  Dr. Harris
  To ask the Secretary of State for the Home Department what estimates he has made of the number of foreign language students visiting the UK who outstay the residence rights under the terms of their visas; and what investigations he has made of this matter. [65279]

  Mr. Mike O'Brien
  I regret that the information requested is not available. It is not possible to produce estimates of students overstaying as no recordings of passengers leaving the United Kingdom is undertaken. The statistics available on deportation action against overstayers do not show the category under which the person was admitted to this country.

  Asylum Seekers
  Mr. Hancock
  To ask the Secretary of State for the Home Department how many citizens of Slovakia have sought political asylum in the UK in the last three months; how many applications have been accepted; and what were the figures in each of the last three years. [65263]

  Mr. Mike O'Brien
  The available information is given in the table.

  Applications1 received for asylum in the United Kingdom, excluding dependents, and initial decisions on applications, September to November 1995, 1996, 1997 and 1998 for nationals of Bulgaria and the Czech Republic.

  Total applications

  Total decisions

  Grants of asylum

  Grants of ELR

  Total refusals

  1995

  Slovakia

  n/a

  n/a

  n/a

  n/a

  n/a

  1996

  Slovakia

  15

  35

  —

  —

  35

  19972

  Slovakia

  160

  205

  —

  —

  205

  19982

  Slovakia

  380

  210

  —

  —

  210

  1Figures rounded to the nearest 5

  2Provisional figures

  Mr. Hancock
  To ask the Secretary of State for the Home Department how many citizens of(a) Bulgaria and (b) the Czech Republic have sought political asylum in the UK in the last three months; how many applications have been accepted; and what were the equivalent figures for each of the last three years. [64754]

  Mr. Mike O'Brien
  The available information is given in the table.

  Applications1 received for asylum in the United Kingdom, excluding dependants, and initial decisions on applications, September to November 1995, 1996, 1997 and 1998 for nationals of Bulgaria and the Czech Republic.

  Total applications

  Total decisions

  Grants of asylum

  Grants of ELR

  Total refusals

  1995

  Bulgaria

  145

  15

  —

  —

  15

  Czech Republic

  n/a

  n/a

  n/a

  n/a

  n/a

  279

  Applications1 received for asylum in the United Kingdom, excluding dependants, and initial decisions on applications, September to November 1995, 1996, 1997 and 1998 for nationals of Bulgaria and the Czech Republic.

  Total applications

  Total decisions

  Grants of asylum

  Grants of ELR

  Total refusals

  1996

  Bulgaria

  75

  115

  *

  —

  115

  Czech Republic

  15

  15

  —

  —

  15

  19972

  Bulgaria

  135

  175

  —

  —

  175

  Czech Republic

  120

  85

  —

  —

  85

  19982

  Bulgaria

  25

  35

  —

  *

  35

  Czech Republic

  230

  75

  —

  —

  75

  1Figures rounded to the nearest 5, with '*' = 1 or 2

  2Provisional figures.

  Dr. Cable
  To ask the Secretary of State for the Home Department what representations he has received concerning the accommodation of medically-qualified asylum seekers as regards(a) the adequacy of the accommodation and (b) its proximity to institutions where they could use their qualifications or requalify. [65595]

  Mr. Mike O'Brien
  There is no central record of the representations received from medically qualified asylum seekers.

  Mr. Clappison
  To ask the Secretary of State for the Home Department what consultation he(a) has carried out and (b) plans to carry out with (i) local authorities and (ii) other relevant bodies regarding his proposals for a new support scheme for asylum seekers. [65565]

  Mr. Mike O'Brien
  Consultation with local authorities and other relevant bodies regarding the proposals for the new support scheme has been carried out principally in the following ways:

  (a) through the White Paper: "Fairer, faster and firmer—a modern approach to immigration and asylum";

  (b) through the formation of a stakeholder group which contains representatives from local authorities, housing associations and the voluntary sector and who have been consulted extensively on a wide range of issues associated with the support proposals;

  (c) through consultation on a "process manual" setting out the way in which the support scheme is intended to operate and which I hope to publish shortly;

  (d) through ad hoc meetings between the relevant bodies and the asylum seekers support project team which has been set up to carry forward the proposals in the White Paper.

  In addition the Asylum Seekers Support Project Team includes the seconded deputy chief executive of the Refugee Council and two seconded officers from local authorities.

  Dr. Cable
  To ask the Secretary of State for the Home Department on what basis transitional funding relief to local authorities for asylum seekers will be allocated for(a) passported refugees, (b) asylum seekers who declared their intention at the port of entry and (c) other asylum seekers. [65573]
  280
  Mr. Mike O'Brien
  Asylum seekers who declare their applications at their ports of entry may be eligible for income support and housing benefit. Other asylum seekers who would otherwise be destitute may be eligible for support from local authority social services departments under the terms of the National Assistance Act 1948 and the Children Act 1989. In these circumstances, it is the Government's intention to reimburse local authorities in this financial year on the basis of a maximum unit cost provision of £165 per week for single adults; £230 per week for families (£240 per week for families in Inner London), £400 per week for unaccompanied children aged 15 or under; and £200 per week for unaccompanied children aged 16 and 17. Those asylum seekers who are subsequently recognised as refugees may also qualify for income support and housing benefit.

  Mr. Forth
  To ask the Secretary of State for the Home Department how many asylum seekers have been found to be requiring NHS treatment on arrival in the United Kingdom in the past three years. [65468]

  Mr. Mike O'Brien
  The information is not available to the Home Office.

  Medway Secure Training Centre
  Dr. Stoate
  To ask the Secretary of State for the Home Department when the report of the Inspection of Medway Secure Training Centre will be published; and if he will make a statement. [66319]

  Mr. Boateng
  The report has been published by the Social Services Inspectorate (SSI) today, and copies of the report have been put in the Library. The report identifies shortcomings in the management of the Secure Training Centre (STC), and makes 32 key recommendations for improving the standard of service being provided by the contractor. All the recommendations have been accepted, and Rebound are taking urgent action to implement these recommendations. The Home Office will be monitoring progress in conjunction with SSI.

  The report made a number of recommendations which required immediate action to strengthen management at the centre, and to improve operational procedures and monitoring. The Director at Medway has been working closely with SSI to implement these recommendations, and to introduce more effective strategies for dealing with difficult young people. A stronger management structure has been put in place to support the staff who were praised in the report for their enthusiasm and commitment. More staff are being recruited, and a programme of repair work has been completed.

  The Government remain committed to the public/ private partnership approach, and to making a positive difference to the lives of persistent young offenders, who despite repeated efforts by the Youth Justice system continue to offend. STCs are a new and challenging initiative, and Medway as the first centre of its kind has had a difficult beginning, but action is now being taken to introduce the positive regime we require. I will be monitoring closely the position at Medway, and a further inspection will be undertaken by SSI later this year.

  Mortgage Fraud
  Mr. Clappison
  To ask the Secretary of State for the Home Department (1) if he will list for each of the last five years(a) the number of individuals imprisoned following conviction on charges of false accounting, (b) the average sentence and (c) the longest sentence; [65606]

  (2) if he will list for each of the last five years (a) the number of individuals imprisoned following conviction on charges of obtaining property by deception in cases of mortgage fraud, (b) the average sentence and (c) the longest sentence; [65602]

  (3) if he will list for each of the last five years the number of offenders convicted of offences of obtaining property by deception involving mortgage fraud sentenced to community service; [65605]

  (4) if he will list for each of the last five years the number of offenders convicted on charges of false accounting sentenced to community service; [65604]

  (5) if he will list for each of the last five years (a) the number of individuals imprisoned following conviction on charges of false accounting in cases of mortgage fraud, (b) the average sentence and (c) the longest sentence; [65603]

  (6) if he will list for each of the last five years the number of individuals convicted of offences of false accounting involving mortgage fraud sentenced to community service; [65599]

  (7) if he will list for each of the last five years (a) the number of individuals fined following conviction on charges of obtaining property by deception in cases of mortgage fraud, (b) the average fine and (c) the highest fine; [65600]

  (8) if he will list for each of the last five years the number of offenders convicted on charges of obtaining property by deception sentenced to community service; [65601]

  Number of persons prosecuted at magistrates' courts and convicted at all courts for certain fraud offences by result, 1993–97, England and Wales

  Offence description and court proceedings

  1993

  1994

  1995

  1996

  1997

  False accounting

  Prosecutions

  502

  620

  550

  800

  1,095

  Convictions

  438

  449

  475

  700

  1,109

  of which given a Fine

  66

  71

  57

  84

  83

  Average fine (£)

  483

  605

  536

  379

  564

  Highest fine recorded (£)

  11,000

  20,000

  15,000

  5,000

  5,000

  Community service order

  134

  142

  133

  196

  356

  Immediate custody

  71

  90

  122

  187

  301

  Average sentence length (months)

  14.2

  11.0

  11.6

  12

  11.4

  Longest sentence length recorded (months)

  84

  36

  48

  60

  60

  Obtaining property by deception

  Prosecutions

  15,096

  17,040

  15,141

  14,330

  14,388

  Convictions

  11,461

  12,072

  10,785

  10,178

  9,978

  of which given a Fine

  2,639

  2,407

  1,909

  1,624

  1,579

  Average fine (£)

  137

  206

  175

  154

  152

  Highest fine recorded (£)

  5,000

  3,000

  7,500

  8,500

  5,000

  Community service order

  1,958

  2,047

  1,959

  1,718

  1,645

  Immediate custody

  1,483

  1,702

  1,823

  1,774

  1,757

  Average sentence length (months)

  10.2

  9.8

  8.8

  9.0

  8.1

  Longest sentence length recorded (months)

  96

  102

  84

  96

  84

  Note:

  Convictions may be higher than prosections because person may have been proceeded against in earlier years or for other offences
  282
  (9) how many prosecutions were brought for false accounting in each of the last five years; and how many of these related to instances of mortgage fraud; [65612]

  (10) if he will list for each of the last five years (a) the number of individuals fined following conviction on charges of false accounting, (b) the average fine and (c) the highest fine; [65613]

  (11) how many individuals were convicted of false accounting in each of the last five years; and how many of these related to instances of mortgage fraud; [65610]

  (12) how many individuals were convicted of obtaining property by deception in each of the last five years; and how many of these related to instances of mortgage fraud; [65611]

  (13) if he will list, for each of the last five years (a) the number of individuals fined following conviction on charges of false accounting in cases of mortgage fraud, (b) the average fine and (c) the highest fine; [65614]

  (14) if he will list for each of the last five years (a) the number of individuals imprisoned following conviction on charges of obtaining property by deception, (b) the average sentence and (c) the longest sentence; [65607]

  (15) how many prosecutions were brought for obtaining property by deception in each of the last five years; and how many of these related to instances of mortgage fraud; [65609]

  (16) if he will list for each of the last five years (a) the number of individuals fined following conviction on charges of obtaining property by deception, (b) the average fine and (c) the highest fine. [65608]

  Mr. Boateng
  The table shows court proceedings data for offences of false accounting and obtaining property by deception from 1993 to 1997.

  Our records do not distinguish the circumstances (i.e. mortgage fraud) of these types of fraud offences.

  Impeachment
  Mr. John M. Taylor
  To ask the Secretary of State for the Home Department what representations he has received on the future use of impeachment. [65774]

  Mr. Mike O'Brien
  None.

TREASURY

  Funerals
  Ms Lawrence
  To ask the Chancellor of the Exchequer when the consultation document on pre-payments for funerals is to be published. [66317]

  Ms Hewitt
  The consultation document entitled "Regulation of Pre-paid Funeral Plans" is published today. Copies have been placed in the Libraries of both Houses of Parliament.

  In my announcement of 29 July 1998, Official Report, column 300, I said that the Government would be looking at ways of excluding from direct regulation under the Financial Services and Markets Bill pre-paid funeral arrangements that offer sufficient protection to consumers. The consultation document explores how to meet that objective without the need for regulation by the Financial Services Authority. It discusses two possible exemptions: plans backed by a life insurance policy (either whole of life or investment-backed); and where a provider has set up a trust arrangement which has sufficient safeguards.

  The proposals apply to new plans, but the document asks for views on how existing plans could be enhanced to provide the types of safeguard set out in the document.

  Progress by pensions firms in resolving cases of personal pensions mis-selling in the period to the end of December 1998

  A

  B

  C

  D

  E

  F

  G

  H

  50–75 per cent. of cases resolved

  Countrywide

  5,476

  2,987

  717

  249

  468

  353

  6

  66

  Over 75 per cent. of cases resolved

  DBS

  2,475

  953

  1,138

  269

  869

  726

  29

  79

  IFA Network

  368

  134

  166

  99

  67

  62

  17

  80

  Burns Anderson

  1,298

  440

  760

  275

  485

  426

  33

  88

  Financial Options

  573

  407

  121

  35

  86

  75

  13

  90

  Sedgwick

  17,225

  10,037

  6,025

  1,976

  4,049

  3,742

  22

  91

  Windsor Life

  9,711

  4,245

  5,331

  333

  4,998

  4,393

  45

  92

  Sun Life of Canada

  29,146

  11,454

  17,043

  2,935

  14,108

  12,586

  43

  93

  Colonial

  8,734

  3,192

  5,395

  625

  4,770

  4,306

  49

  93

  Lincoln National

  13,604

  2,258

  11,106

  1,419

  9,687

  9,066

  67

  94

  Standard Life

  7,571

  923

  6,396

  1,327

  5,069

  4,887

  65

  94

  Hill Samuel

  6,118

  943

  5,043

  719

  4,324

  4,153

  68

  95

  Abbey Life

  18,132

  6,759

  10,825

  1,398

  9,427

  9,112

  50

  95

  Pearl

  48,500

  4,855

  42,860

  5,838

  37,022

  35,590

  73

  95

  CIS

  44,681

  8,060

  36,606

  13,984

  22,622

  20,622

  46

  95

  Friends Provident

  7,152

  1,362

  5,643

  847

  4,796

  4,632

  65

  96

  London and Manchester

  8,641

  1,619

  6,992

  703

  6,289

  6,069

  70

  97

  Berkeley Independent

  185

  122

  63

  36

  27

  22

  12

  97

  Equitable Life

  7,628

  1,972

  5,591

  1,831

  3,760

  3,620

  47

  97

  Hogg Robinson

  2,338

  871

  1,467

  487

  980

  934

  40

  98

  Legal & General

  37,355

  15,301

  21,869

  2,075

  19,794

  19,256

  52

  98

  A: cases identified as requiring review

  B: of A, cases where investor was informed that information gained during assessment excluded cases from review

  C: number of assessments completed

  D: cases where the investor has been informed that no redress is due

  E: cases where redress has been offered

  F: cases where redress has been accepted

  G: cases where redress has been accepted as a percentage of cases identified for review ((F/A)x100)

  H: cases completed, including exclusions, as a percentage of cases identified for review (((B+D+F)/A)x100)

  284
  Responses should be sent by 30 April to Mrs. Raminder Sandhu, Financial Services Team, HM Treasury, Room 111/G, Parliament Street, London SW1P 3AG.

  Pensions Mis-selling
  Ms Lawrence
  To ask the Chancellor of the Exchequer if he will make a statement on progress in the review of personal pensions mis-selling. [66318]

  Ms Hewitt
  Significant progress has been achieved in the priority review since May 1997. The major firms monitored by the Treasury have advanced from 15 per cent. to 94 per cent. of priority case reviews completed since the Government took office.

  Of the 21 firms whose results are set out only one has resolved less than 75 per cent. of its cases. Seventeen have now resolved over 90 per cent. of their cases.

  The time limit for completion of the priority review, set by the Personal Investment Authority (PIA), has now expired for the last 19 firms. As of 31 December all firms should have completed the priority review. Consistent with the treatment of the twenty firms already removed from the Treasury's monthly list the Government will look to the PIA for its assessment of whether the remainder have in fact met their targets. Those that have will be removed from the list next month.

  Firms must now concentrate their efforts onto phase 2 of the review. It is important that the lessons of the priority review are properly learnt. The Government and the regulators will no longer tolerate delay, and expect all firms to adhere to the regulators' timetable.
  285
  Mr. Love
  To ask the Chancellor of the Exchequer what arrangements are in place to ensure that phase 2 of the personal pensions mis-selling review will complete its outstanding cases within the timescales set out in the review; and if he will make a statement. [65062]

  Ms Hewitt
  The Financial Services Authority's guidance for phase 2 will include appropriate timescales for completion of the review. FSA will monitor the performance of firms to see that this guidance is adhered to. The regulators have made clear that disciplinary action will continue to be taken against firms that do not conduct their reviews with a sufficient degree of despatch.

  Developing Countries (Debt)
  Mr. Reed
  To ask the Chancellor of the Exchequer if he will list for(a) Uganda, (b) Mozambique, (c) Bolivia, (d) Guyana, (e) Cote d'Ivoire and (f) Burkina Faso the (i) actual debt service in the five years prior to completion point in the HIPC Initiative and (ii) IMF/World Bank estimates of actual debt service for the five years after completion point. [61490]

  Ms Hewitt
  The precise information requested is not available. I am, however, writing to my hon. Friend and will place a copy of my letter in the Library.

  Higher Rate Taxpayers
  Mr. Webb
  To ask the Chancellor of the Exchequer how many individuals paid income tax at the higher rate, and, of these, how many filed an income tax return, in the latest year for which figures are available. [64684]

  Dawn Primarolo
  About 2.0 million taxpayers have paid tax at the higher rate for the 1996–97 tax year. The information available on taxpayers who have filed 1996–97 tax returns to date does not allow the number who have paid higher rate tax to be separately identified. However, the vast majority of higher rate payers will have filed a tax return.

  European Code of Conduct Group
  Mr. David Heath
  To ask the Chancellor of the Exchequer what(a) prior and (b) continuing consultation he has had with the Government of Gibraltar in respect of discussions on taxation in the European Union Code of Conduct Group. [64475]

  Dawn Primarolo
  [holding answer 17 December 1998]: Discussions on the EU Code of Conduct were held at ministerial level with Government of Gibraltar representatives before the Code of Conduct was agreed on 1 December 1997. Since then the UK Government have kept the Government of Gibraltar informed of significant developments in the Code of Conduct exercise. Gibraltarian officials attended a seminar in September 1998 to discuss the Code and other initiatives to tackle harmful tax competitions. A meeting took place in October 1998 between the Chief Minister and other Government of Gibraltar representatives and senior Foreign and Commonwealth Office, Treasury and Inland Revenue officials to discuss these issues.

  Mr. David Heath
  To ask the Chancellor of the Exchequer what link the Government have made between consideration of future tax regimes in Gibraltar and voting 286
  rights for citizens of Gibraltar in European parliamentary elections, as part of the discussions in the European Union Code of Conduct Group. [64476]

  Dawn Primarolo
  [holding answer 17 December 1998]: These are two separate and distinct issues. The EU Code of Conduct tackles the specific problem of harmful tax competition. It is only right that Gibraltar should be part of international efforts to ensure fair tax competition and Gibraltar is part of the Community for these purposes. With reference to the issue of voting rights for citizens of Gibraltar in European Parliamentary elections, I refer the hon. Member to the reply given by the then Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Manchester, Central (Mr. Lloyd), on 9 December 1997, Official Report, column 499, to the hon. Member for Tewkesbury (Mr. Robertson).

  VAT
  Mr. Mitchell
  To ask the Chancellor of the Exchequer if he will make a statement on(a) the legislative base for, (b) the extent of and (c) the duration of (i) full, (ii) temporary and (iii) transitional exemptions in respect of VAT. [64824]

  Dawn Primarolo
  The legislative base for VAT exemptions and zero rates, in terms of EC law, is the Sixth VAT Directive.

  Most of the UK's VAT exemptions, such as finance, insurance, most leasing of property and betting and gaming, are part of the normal VAT system, and there is no expiry date set down in the Sixth Directive. The same is true of the zero rate for exports outside the European Community, and associated supplies.

  Under the so-called 'transitional' arrangements of the Sixth VAT Directive, the UK is also able to:
  zero rate social items such as food, public transport, books, newspapers and children's clothing (Article 28(2)(a) of the Directive); and
  exempt certain transactions, the main categories being burials, cremations, and building land (Article 28 (3)(b) of the Sixth VAT Directive).

  In addition, there are a number of technical zero rates on goods dispatched (exported) from the UK to other EC member states.

  It was originally envisaged that the transitional arrangements would last until 31 December 1996, when they would be replaced by a 'definitive' (Common) VAT system. However, the Commission has not yet put forward legislative proposals for key elements of the replacement Common VAT system. Until they do so, and they are unanimously agreed by member states, the transitional arrangements will continue automatically.

  Mr. Mitchell
  To ask the Chancellor of the Exchequer if he will list, for the latest available year, the revenue obtained from VAT charges on(a) building alterations and (b) civil construction; and when VAT was introduced for each. [64809]

  Dawn Primarolo
  Information in the form requested is not available. However the breakdown of VAT receipts relating to buildings and construction can be provided.
  287
  Revenue in 1997–98 from house repairs, improvements and maintenance is estimated to be £1.5 billion and that on all other building work, apart from that which qualifies for zero-rating, to be £1.1 billion.

  VAT was introduced for building alterations in 1984 and for construction of new commercial buildings in 1989.

  Mr. Mitchell
  To ask the Chancellor of the Exchequer when the European Commission(a) gave notice of and (b) commenced, infraction proceedings against Her Majesty's Government concerning the zero rating, or exemption from VAT of (i) building alterations and (ii) construction works; on what legal instrument such actions were based; and what papers relating to such proceedings have been made publicly available. [64810]

  Dawn Primarolo
  The European Commission gave notice of infraction proceedings by the issue of a reasoned opinion to the UK Government on 4 September 1984. On 13 September 1985 the European Commission made an application to the European Court of Justice, pursuant to Article 169 of the EEC Treaty (as the Treaty was then known), alleging that the UK had breached Article 28(2) of the Sixth Directive. (Article 28(2) provides for the continuation of those zero rates which satisfy the conditions contained in the Second Council Directive of 1967.)

  A copy of the report for the hearing of the case (416/85) before the European Court of Justice on 15 September 1987 was placed in the Library of the House of Commons on 23 July 1987. The opinion of the Judge Advocate (2 December 1987) and the judgment of the Court (21 June 1988) were published in European Court Reports, the formal law reports of the European Court of Justice.

  New VAT law was introduced in the Finance Act 1989 to reflect the judgment of the European Court of Justice. The construction of commercial buildings became standard rated but dwellings and residential buildings continued to benefit from zero-rating.

  The infraction proceedings did not apply to alterations to existing buildings which have been standard rated since 1984.

  Lead-free Petrol
  Mr. Laurence Robertson
  To ask the Chancellor of the Exchequer if he will make a statement on the taxation of lead-free petrol following the phasing out of four star petrol. [64840]

  Dawn Primarolo
  The Chancellor has received a number of representations about the taxation of lead-free petrol following the phasing out of four star petrol. All of the representations will be carefully considered in the run up to the next Budget.

  British Drugs Liaison Officer (Pakistan)
  Mr. Singh
  To ask the Chancellor of the Exchequer what happened to the senior British Drugs Liaison Officer who was detained in Peshawar, Pakistan, after being caught with three kilograms of heroin in his possession in his official vehicle in July 1995. [65075]

  Dawn Primarolo
  No such incident took place.

  Single Wage Earner Families
  Mr. Flight
  To ask the Chancellor of the Exchequer what measures Her Majesty's Government are taking through the benefits system to support two-parent families with only one wage earner; and if he will make a statement. [63190]

  Dawn Primarolo
  [holding answer 11 January 1999]: The Secretary of State for Social Security announced a number of measures in his statement on 28 October 1998 including the largest ever increase in Child Benefit. And the under-11 child premium in Family Credit was increased from November last year—a change which will follow through into the Working Families Tax Credit when it replaces Family Credit from October 1999. The WFTC will be part of the tax system, and because it will begin to be paid through the pay packet from April 2000, it will reinforce the message that "work pays". The WFTC will help make work pay for families on low and middle incomes, around 400,000 more than are currently helped by Family Credit. Many of these families will be couples with only one income, where one parent chooses to stay at home with the children.

  Blind Persons's Tax Allowance
  Mr. Burstow
  To ask the Chancellor of the Exchequer what plans his Department has to ensure that the audio and Braille versions of the leaflet IR121 "Income Tax and Pensioners" is amended to include a reference to the blind person's tax allowance. [64758]

  Dawn Primarolo
  I am grateful to the hon. Member for highlighting this omission from the audio and Braille versions of the leaflet IR121, "Income Tax and Pensioners". Both I and the Inland Revenue apologise for any inconvenience this may have caused. The Inland Revenue updates all its leaflets periodically, and will ensure that a reference to the blind person's allowance is included in the audio and Braille versions of leaflet IR121 when they are next revised.

  Diesel Duty
  Mr. Baker
  To ask the Chancellor of the Exchequer what pressure he is applying to bring duty levels on diesel in other EU countries up to the level currently applicable within the United Kingdom. [64985]

  Ms Hewitt
  [holding answer 12 January 1999]: The Government continue to press for increases in the EU minimum rates for road fuels to reduce the price differentials between Member States and fully support the adoption of higher minimum diesel duty rates as part of the proposed Energy Products Directive.

  Mr. Baker
  To ask the Chancellor of the Exchequer what assessment he has made of the impact on the UK road haulage industry of the differences in rates of duty on diesel between EU states. [65027]

  Ms Hewitt
  [holding answer 12 January 1999]: I have made no assessment of the impact on the UK road haulage industry of the difference in rates of duty between EU states. However, when considering the impact of taxation on the industry it is necessary to take account of the overall taxation burden, which is lower in the UK than that of our major EU competitors.

  Mr. Charles Whelan
  Mr. Malcolm Bruce
  To ask the Chancellor of the Exchequer if he will make a statement on the reasons for the planned departure of his Press Secretary, Mr. Charles Whelan; and what is Mr. Whelan's expected date of departure from the Treasury. [65700]

  Mr. Heathcoat-Amory
  To ask the Chancellor of the Exchequer (1) when he expects his Special Adviser, Mr. Charlie Whelan, to resign; [65515]

  (2) if he will set out the severance pay arrangements for his Special Adviser, Mr. Charlie Whelan; [65518]

  (3) what safeguards he is putting in place to ensure that his Special Adviser, Mr. Charlie Whelan, will not be able to make use of his knowledge of confidential policy matters when he takes up new employment; [65513]

  (4) if his Special Adviser, Mr. Charlie Whelan, has access to confidential Budget policy papers. [65514]

  Mr. Gordon Brown
  The normal rules applying to those leaving the Civil Service will apply to Mr. Whelan, who has resigned from his post.

  Channel Tunnel Rail Link
  Mr. Heathcoat-Amory
  To ask the Chancellor of the Exchequer when he will answer the letter dated 5 October 1998 from the right hon. Member for Wells (Mr. Heathcoat-Amory) addressed to the last Paymaster General about the additional cost to the taxpayer of the funding method chosen for the Channel Tunnel Rail Link. [65620]

  Mr. Milburn
  I have done so today.

AGRICULTURE, FISHERIES AND FOOD

  Document Storage
  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food if his Department's premises are being used to store documents removed from the Government Whips Office in July 1998; and if he will make a statement. [64551]

  Mr. Nick Brown
  [holding answer 11 January 1999]: The only documents removed from the Government Whips Office in July 1998 were personal. Some of those documents are stored in the Department.

  Computer Equipment (Government Chief Whip's Office)
  Mr. Page
  To ask the Minister of Agriculture, Fisheries and Food under what authority a payment was made by his Department to the Government Chief Whip's Office; and what the reasons were for the payment. [64321]

  Mr. Nick Brown
  [holding answer 17 December 1998]: My Special Advisers brought two laptop computers with them from the Whips' Office when they moved across to MAFF on 27 July. In accordance with normal practice, the Chief Whip's Office billed MAFF for the transfer of the equipment.

  Mr. Page
  To ask the Minister of Agriculture, Fisheries and Food what payment has been made by his Department to the Government Chief Whip's Office; and what was the sum involved. [64320]
  290
  Mr. Nick Brown
  [holding answer 17 December 1998]: A total payment of £11,207.23, including VAT, has been made by my Department to the Government Chief Whip's Office for the transfer of two laptop computers.

  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food which(a) Ministers, (b) civil servants, (c) advisers and (d) others were responsible for moving the computer equipment to the Ministry of Agriculture, Fisheries and Food, from the Government Whips Office in July 1998; on what day the equipment arrived at the Ministry of Agriculture, Fisheries and Food; and if he will make a statement. [64548]

  Mr. Nick Brown
  [holding answer 11 January 1999]: My Special Advisers brought their laptops with them on the day they joined me at MAFF on 27 July 1998.

  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food which members of his Department have been assigned the computer equipment which was transferred to his Department from the Government Whips Office in July 1998; and if he will make a statement. [64550]

  Mr. Nick Brown
  [holding answer 11 January 1999]: My Special Advisers have retained the use of the two laptop computers they brought with them from the Government Whips Office in July.

  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food if he will list the computer equipment transferred from the Government Whips Office to the Ministry of Agriculture, Fisheries and Food in July 1998; and if he will estimate the(a) purchase cost and (b) current market value of the equipment. [64544]

  Mr. Nick Brown
  [holding answer 11 January 1999]: Two Toshiba Tecra 730X laptop computers, including CD ROM Drives, 48Mb RAM memory cards, PC modem cards, internet/modem and power leads, together with their carry cases transferred across from the Government Whips Office to MAFF with my Special Advisers in July. The original purchase cost of this equipment was £8,431.78. This figure is inclusive of VAT but does not include software installation costs. The estimated current market value of the equipment would be around £6,400.

  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food (1) which(a) Ministers and (b) officials in his Department authorised the transfer of computer equipment from the Government Whips Office to the Ministry of Agriculture, Fisheries and Food, in July 1998; and on which date such authorisation was made; [64545]

  (2) which Ministers and officials in (a) the Government Whips Office and (b) the Ministry of Agriculture, Fisheries and Food negotiated the (i) transfer date and (ii) purchase price of the computer equipment transferred from the Government Whips Office to the Ministry of Agriculture, Fisheries and Food, in July 1998; on what date such details were agreed; and if he will make a statement. [64546]

  Mr. Nick Brown
  [holding answer 11 January 1999]: Arrangements for the transfer of two laptop computers from the Whips office to MAFF, and their replacement with the latest, equivalent machines, were made between my Private Office and the Chief Whips Private Office

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  according to standard procedure. The agreed bill was £9,738.48 for the new equipment and £1,468.75 for software installation costs. Both figures are inclusive of VAT. The relevant invoices were dealt with on receipt on 17 September and 15 October respectively.

  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food what remedial work has been carried out on behalf of his Department on the computer equipment transferred from the Government Whips Office to the Ministry of Agriculture, Fisheries and Food in July 1998; and if he will make a statement. [64547]

  Mr. Nick Brown
  [holding answer 11 January 1999]: None.

  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the adequacy of computer equipment in his Department. [64549]

  Mr. Nick Brown
  [holding answer 11 January 1999]: My Department is equipped with office and IT systems, designed to enable efficient delivery of services in line with Departmental objectives. The capability and performance of our computer equipment is kept under constant review to ensure that it is fit for the departmental purposes on which it is deployed. Significant upgrades are planned in some areas for 1999, particularly in MAFF's Regional Service Centres.

  Slaughterhouses
  Mr. Blizzard
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the costs of enforcing specified risk material controls in licensed slaughterhouses and cutting plants. [66118]

  Mr. Nick Brown
  My colleagues and I have carefully considered the cost of enforcement of these controls. We have reluctantly concluded that we can no longer defer the introduction of charges to the industry to cover these costs and that they must be transferred from taxpayers to the industry from 29 March 1999.

  SRM controls are in the fundamental interest of the industry since, by protecting animal and public health from the risk of BSE and related diseases, they enhance consumer confidence and so bolster demand for meat and meat products.

  Interested parties are being consulted on the details of the necessary legislation and a copy of the consultation package has been placed in the Library of the House. Comments are required by 12 February 1999.

  Farmers
  Mr. Hoyle
  To ask the Minister of Agriculture, Fisheries and Food what assistance is being provided for farmers to diversify and to generate income from new sources. [65707]

  Mr. Morley
  Funding to encourage a wide range of agricultural activities, including farm diversification, is available in the six areas designated to receive assistance under the English Objective 5b Structural Fund Programmes. No grant aid for farm diversification is available outside these areas. However, in order to assist 292
  farmers in developing successful diversified enterprises, the Ministry has produced a series of advisory booklets on farm diversification.

  Mr. Hoyle
  To ask the Minister of Agriculture, Fisheries and Food what incentives and support his Department is providing to farmers to pursue an agri-environmentally friendly farming policy. [65706]

  Mr. Morley
  MAFF operates a wide ranging package of voluntary environmental schemes aimed at encouraging farmers to conserve the countryside and its wildlife. Financial provision for England's agri-environment programme this year is £82 million. Following the Government's Comprehensive Spending Review we have announced that we aim to expand the areas protected and enhanced under the agri-environment schemes. During the next three years an additional £40 million will be available in England for improvements and enhancements to these schemes.

  Through ADAS and the Farming and Wildlife Advisory Group, MAFF also funds free initial advice to farmers in England on all aspects of conservation, farm woodland and set-aside. The financial provision for advice this year is over £1 million.

  Revised Codes of Good Agricultural Practice for the Protection of Water, Air and Soil, together with a new summary leaflet, were launched in October 1998. The Codes are designed to provide clear, practical advice to farmers and represent the industry standard of good practice for the prevention of agricultural pollution.

  US Beef Exports
  Mr. Nigel Jones
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of allegations of the National Association of Federal Veterinarians that some US vets have been pressurised to certify US beef for export as free from symptoms of central nervous system diseases in a manner contrary to EU regulations; and if he will make a statement. [64830]

  Mr. Rooker
  The Chief Veterinary Officer has written to his counterpart in the United States seeking his comments on the allegations in the October edition of the "Federal Veterinarian" publication. I will write to the hon. Member as soon as a response is received.

  Badgers
  Mr. Nigel Jones
  To ask the Minister of Agriculture, Fisheries and Food when he expects to publish the research carried out by his Department's laboratories into levels of trace elements in the livers of badgers. [64980]

  Mr. Rooker
  The relatively small number of badger livers (343) analysed in this limited study do not yield results sufficiently robust to be of interest to a scientific journal. The results will, therefore, not be published. They are being written up and will be made available on request. I shall place a copy in the Library.

  Condensate Spreading
  Ms Walley
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to end the practice of spreading condensate on grazing land. [65295]
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  Mr. Rooker
  The Spongiform Encephalopathy Advisory Committee has considered the practice of spreading rendering condensate on fields. The Committee noted the difficulty of establishing the origin of any ruminant protein found in condensate and concluded that spreading condensate on fields where cattle might graze should be prohibited. The Committee's concerns were related to the risk from BSE to animal rather than human health.

  Renderers will be advised that the presence of ruminant protein in condensate means that the practice of spreading it contravenes the Fertilisers (Mammalian Meat and Bone Meal) Regulations 1998. This legislation contains the specific offence of spreading material containing protein on agricultural land and is enforced by the appropriate local authority.

  Cattle (Trace Element Deficiencies)
  Mr. Nigel Jones
  To ask the Minister of Agriculture, Fisheries and Food when he expects to publish the preliminary findings into trace element deficiencies in cattle piloted in the epidemiological investigation survey during November. [64845]

  Mr. Rooker
  The purpose of this pilot study was to assess how well the new epidemiological questionnaire would perform in the field prior to its being introduced on a national basis. It was never the intention to analyse the data collected; indeed, the sample size of 36 farms is such that any analysis would be unlikely to yield reliable results.

  Quarantine
  Mr. Tyler
  To ask the Minister of Agriculture, Fisheries and Food (1) if he will list the recommendations in Professor Kennedy's report, "Quarantine and Rabies-A Reappraisal", which would require primary legislation; and if he will make a statement; [65502]
  294
  (2) what representations he has received on implementing the proposed changes to the quarantine laws by (a) primary and (b) secondary legislation; and if he will make a statement. [65503]

  Mr. Rooker
  I have received a paper from Passports for Pets expressing the view that all of the Advisory Group's recommendations can be implemented by secondary legislation. My right hon. Friend the Minister of Agriculture, Fisheries and Food will be meeting Passports for Pets on 25 January to hear their views.

  Mr. Tyler
  To ask the Minister of Agriculture, Fisheries and Food when he expects to publish a consultation paper relating to the Animal Health (Amendment) Act 1998; and when he expects the Act to come into force. [65504]

  Mr. Rooker
  The Act came into force on 21 July 1998. No order has been made yet. The Government are currently considering the responses to consultation on the Kennedy Report on Rabies Quarantine. We expect a separate consultation on animal welfare matters and quarantine premises to follow during the Spring. An Order, under Section 10 of the Animal Health Act 1981 would follow this.

  Tobacco Farmers
  Mr. Hoyle
  To ask the Minister of Agriculture, Fisheries and Food if he will ensure the removal of the subsidy provided to tobacco farmers in Europe. [65705]

  Mr. Rooker
  The Government strongly disapprove of the Common Agricultural Policy support regime for tobacco and would like to see an end to it. We believe that the Community should progressively disengage from support for tobacco production, on grounds of health and cost. Following the reform of the regime agreed in June last year we continue to press for further amendments. However, such further reform would require the support of a qualified majority in the Agriculture Council.

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Wakefield.

Royal Assent
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Act, passed in accordance with the provisions of the Parliament Acts 1911 and 1949:
European Parliamentary Elections Act.

Equine Dentistry
Lord Soulsby of Swaffham Prior Lord Soulsby of Swaffham Prior asked Her Majesty's Government:
What action they are taking to regulate the qualification of people practising equine dentistry.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue): My Lords, those equine dental procedures that are considered to be acts of veterinary surgery may be undertaken only by a registered veterinary surgeon or by a registered dentist at the request of a veterinary surgeon.
Lord Soulsby of Swaffham Prior: My Lords, I thank the Minister for that reply. However, does he agree that there is some urgent need for a revision of Schedule 3 of the Veterinary Surgeons Act 1966, which would regulate not only veterinary dentists but also all other paraprofessionals who operate on horses in one way or another?
Lord Donoughue: My Lords, I confess that I always tremble a little when the noble Lord rises to speak on these major issues of policy strategy because his great knowledge dwarfs anything that I can ever hope to achieve. However, I am very relieved—I think—to say that I agree with everything he said and is going to say. Yes, I can confirm that we do feel that there is a need for amendments in this respect. We very much appreciate that the 1966 Act is somewhat clumsy in its operation and, in many ways, inadequate in its definitions. That leads to problems for veterinary surgeons—that is, problems of delegation to, for example, the nurses. Indeed, it can lead also to problems for animal owners because where non-qualified people carry out such acts, they risk causing harm to the animal and a loss of insurance compensation. We are fully appreciative of the situation, but I cannot give the noble Lord any timetable because the department also has a number of other priorities, especially as regards legislation. Nevertheless, I can tell the noble Lord that I
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thought the letter from the Royal College of Veterinary Surgeons of 2nd December, which set out the case very clearly, was excellent. I am very sympathetic to it.
Baroness Trumpington: My Lords, despite what the Minister said—in other words, from the horse's mouth—is he aware that many of the horse-owning lay public regard "equine dentists" as qualified individuals and ask them to undertake really complicated bits of work, such as extractions of teeth, which they should never be doing? Indeed, anything above the rasping of teeth or the most basic requirements should be carried out only by fully qualified veterinary surgeons.
Lord Donoughue: My Lords, that issue is set out in the letter and is one of the matters that the department is considering.
Baroness Byford: My Lords, I should like to press the Minister a little further on the matter. I understand that negotiations or discussions have been taking place between the noble Lord's department and the veterinary college. However, can the Minister say when they started, when they will conclude and when we might perhaps see the outcome of such discussions?
Lord Donoughue: My Lords, I can tell the noble Baroness that they started in response to the 1996 report of the Royal College and discussions have continued since that time. However, I cannot say when they will conclude because they will only do so satisfactorily with changes to Schedule 3 to the Act. I really cannot give any guarantee on when the latter might take place.
Baroness Sharples: My Lords, is the Minister aware that insurance companies may refuse to pay when treatments which cause damage to horses are carried out by unregulated vets?
Lord Donoughue: My Lords, we are aware of the situation. Indeed, that is one of the problems associated with using unqualified people in such operations. All owners should be aware of the risks involved, and that could also apply in the area of artificial insemination.
Baroness Gardner of Parkes: My Lords, as regards instances where horses' teeth have to be extracted due to dental decay, would it not be wise to advise owners to consider a change of diet and encourage them to give more carrots to their horses and fewer sugar lumps?
Lord Donoughue: My Lords, as a frequent feeder of sugar lumps to certain horses, I take note of what the noble Baroness has said.
Lord Rowallan: My Lords, this is a serious subject. Are the Government aware that three people in the United Kingdom have practised equine dentistry for over 20 years? They are Bob Livock, Gary Singh, and Steven Holmes. They estimate that they spend more than 25 per cent. of their time rectifying mistakes made by other people, often vets. Should not the Government seriously consider talking to these three gentlemen with

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a view to setting up a training centre because it is now possible for people to go to the United States and after only three weeks obtain a certificate of proficiency in equine dentistry, when they are obviously not proficient in that subject?
Lord Donoughue: My Lords, I am certainly not proficient in that subject. This is a matter of how one regulates the profession and who is qualified to do what. We are in the process of considering that matter but it is quite complex. A whole range of issues have been put to us that require legislation. I assure the noble Lord that I certainly take those issues seriously, but I cannot guarantee rapid action.

Kosovo: UK Monitors
3.14 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What assessment they have made of the effectiveness of the contribution made by United Kingdom monitors in the international endeavour to preserve the ceasefire in Kosovo.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, British members of the Kosovo Verification Mission (KVM) played a crucial role in securing the release yesterday of eight Yugoslav Army officers captured on 8th January by the Kosovo Liberation Army (KLA). The head of KVM has also paid fulsome tribute to two British verifiers involved in mediating with both sides after fighting around Podujevo over the Christmas period. United Kingdom monitors were first deployed in Kosovo as the UK Kosovo Diplomatic Observer Mission. When the KDOM was folded into the OSCE Kosovo Verification Mission, British monitors based in Prizren played an important role in encouraging displaced people to return to their homes and in building confidence among local communities.
Lord Campbell of Croy: My Lords, I thank the noble Baroness for her comprehensive reply which confirms that these unarmed monitors are successfully playing a vital role, with the additional functions of negotiating about hostages and forestalling local attacks. But who will take the difficult decisions, if nonetheless serious hostilities break out, on when the NATO extraction force will be sent in from Macedonia in order to rescue the monitors?
Baroness Symons of Vernham Dean: My Lords, I thank the noble Lord, Lord Campbell of Croy, for his recognition of the important role being played by the British element in the verification mission. They are, of course, not only negotiating on the hostage issue, but they have also played an important part in ensuring that the hostilities which were engaged in over the Christmas period were put on one side in a period when I think it is
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acknowledged there is heightened tension. Ambassador Walker, the head of the OSCE, should the need arise to use the extradition forces currently in Macedonia—I am sure that all of your Lordships hope that the need does not arise—would make a request to NATO for that to be taken forward. That would involve both the OSCE element and the NATO element.
Lord Wallace of Saltaire: My Lords, is the Minister confident that once the snows melt the monitors will be able to contain what is clearly a potentially threatening conflict? Can she confirm reports that heavier weapons have been coming in from northern Albania for the KLA and that Serbian troops have been involved? Would she care to comment on the remark of Carl Bildt, the former mediator, that NATO and/or the Europeans would have done well to put their forces into northern Albania as well as into Macedonia?
Baroness Symons of Vernham Dean: My Lords, this is a period of heightened tension. The verification mission is being strengthened at the moment. Currently 110 Britons are involved. It is hoped that that number will increase to about 150 by the end of this month and that the full force of the mission will rise to about 1,200 at the end of the month. We must take advice from those on the ground. Major General Drewienkiewicz himself—Major General DZ, as he is commonly known—has indicated that he wants a period of consolidation with regard to the verification mission before talking about any additional people who might be brought in. This is a period when we shall have to watch the situation closely. This matter is being discussed today by the EU political directors. It is considered on a weekly basis by NATO ambassadors, and of course the UN Secretary General is reporting regularly to the Security Council on the issue. Therefore it is not just a matter of what is happening on the ground; we also need to keep in touch with what is happening at a political level internationally.
Baroness Ludford: My Lords, can the Minister also tell us whether there has been any progress in the talks on a political settlement, as that clearly needs to be achieved as rapidly as possible? Can she assure us that those discussions, and any options that are considered, will not foreclose the possibility, whether in the medium to long term, of Kosovan independence?
Baroness Symons of Vernham Dean: My Lords, of course I think that everyone who has kept in touch with the situation in Kosovo must recognise the increasingly urgent need to make real progress on the political track. The United Kingdom is working hard with the United States and of course with the Contact Group partners to increase the momentum of the process engaged in by Ambassador Hill on the political track. It is essential that we continue to send clear messages to both sides, including the KLA, that the situation can be satisfactorily resolved only through negotiation. Her

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Majesty's Government believe that both sides have a clear choice: to fight to a standstill and then negotiate, or to negotiate now. They should negotiate now.
Baroness Rawlings: My Lords, can the Minister explain how it is possible that the statement by the Foreign Secretary in the Financial Times on 28th October last year, that he was determined to keep in place that credible threat of NATO action, is consistent with delaying the dispatch of observers? Does the Minister agree that the simmering crisis in which the unarmed observers—only 745 of the promised 2,000—are increasingly cast as vulnerable peacekeepers proves that the western response is inadequate and disproportionate to its verbal threats?
Baroness Symons of Vernham Dean: My Lords, the noble Baroness and your Lordships can rest assured that we are in touch with the verification mission and listening very carefully to what the head of that mission and his deputy are saying to us about the need to strengthen the verification front. I hope that I have made it clear that there are more verifiers going into Kosovo this month, to the extent of there being 1,200 in the build-up at the end of this month. The noble Baroness spoke of 745; I think she will find that very shortly that number will be very significantly increased.
As to the extraction force, it will become operational tomorrow, 15th January, and we are confident that it will be able to do its job. I stress that that in no way relieves the Government on the ground of the responsibility they have for the safety of the verifiers and their mission.
Lord Campbell of Croy: My Lords, can the noble Baroness confirm that many of the monitors are former British Army officers whose experience and reliability are greatly valued by the international security organisation which she has mentioned?
Baroness Symons of Vernham Dean: My Lords, I am very happy to confirm that. I pay tribute to the courage of those who are prepared to go in to do very difficult work. There are serving and ex-military personnel. There are also human rights experts, non-governmental organisation experts, police officers, lawyers, weapons verifiers, election planners and customs experts. We have been able to draw on a wide range of expertise in putting together this verification force.
Lord Avebury: My Lords, what is the attitude of the Government to this problem of mission creep—the expansion of the role of the monitors into areas such as the rescue of hostages and the stopping of hostilities? Does the Minister think that the terms of reference of the mission should be amended so that the monitors have a formal remit to undertake these duties?
Baroness Symons of Vernham Dean: My Lords, the noble Lord, Lord Avebury, may have misunderstood me. I did not suggest that the verification mission had rescued any hostages. It did not engage in any rescue mission but was able to negotiate with both sides. We
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are on track with this at the moment. Some hostages were released yesterday; we hope and believe that some hostages from the other side will be released in a few days' time. I would not wish the noble Lord to think that the verifiers have somehow become involved in some sort of military action—they certainly have not. What they have done is entirely consistent with their terms of reference, both in regard to what they have done about the hostages and in trying to separate factions, through negotiation, in the sort of incidents that took place over Christmas. They have also been enormously important in ensuring that the humanitarian effort, which is so vital to the ordinary people in Kosovo—if I can use that term—is able to reach those who need it.

Poetry
3.24 p.m.
The Lord Bishop of Oxford The Lord Bishop of Oxford asked Her Majesty's Government:
What action they are taking to encourage the contribution of poetry to national culture.
Lord McIntosh of Haringey: My Lords, the Government are encouraging poetry to flourish in many ways. The Arts Council, which is funded by my department, will this year spend more than £1 million on support for poetry. As part of the national year of reading, a project will enable poets to work with schoolchildren throughout the country. The National Lottery awarded the Poetry Society £450,000 for its poetry placement schemes project. The society employs poets throughout England to encourage the reading and writing of poetry. Last year the Government marked the UK presidency of the European Union through the promotion of poetry.
The Lord Bishop of Oxford: My Lords, I thank the Minister for his reply. In view of the importance of poetry to any national culture—and it is important and not just an adornment; for example, in the Soviet Union this century it has been literally a matter of life and death—I think the Minister will understand that there is very widespread disquiet about the decision by the Oxford University Press to cease publishing its Oxford poets list, the second most significant list in the country. Would it be possible for Her Majesty's Government to make any representations about that?
Lord McIntosh of Haringey: My Lords, I am sure that the right reverend Prelate will appreciate the difficulty that the Government would have in intervening in the decisions of what is, after all, a private company. I was not much encouraged by the response of the company in print last week to the right reverend Prelate's protests about the abandonment of the poetry list. The response was:
"It is a strategic decision. We have to target our core identity".

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I should have thought a literary publisher could avoid that sort of management-speak.
Lord Baker of Dorking: My Lords, I associate myself with the comments of the right reverend Prelate. Since the 16th century, the Oxford University Press has been the custodian of the English language. It is disgraceful that, at this particular time when we are enjoying a renaissance in the writing of English poetry and when it is generally agreed that the one universal genius our country has produced in the last thousand years was a poet, the Oxford University Press should cease publishing contemporary poetry. I appreciate that the Minister can do very little about the Oxford University Press, but the amount of money he has mentioned which is going into the arts is quite small as regards poetry. I can tell him that very little of that will find its way into the pockets of poets. I suggest that he should be rather more imaginative and perhaps bear in mind Shelley's famous phrase that poets are the unacknowledged legislators of the world.
Lord McIntosh of Haringey: My Lords, Shelley said that poets are,
"the trumpets which sing to battle…Poets are the unacknowledged legislators of the world".
I am sure that the Oxford University Press will pay due attention to the words of perhaps the most distinguished anthologist in this House.
The noble Lord is wrong about government expenditure not going to poets. All the money to which I referred in my first Answer is going to poets. The Arts Council of England is supporting the Poetry Society, the Poetry Book Society and a number of the smaller poetry publishers who do not have opportunities to cross-subsidise their publishing of poetry. I am not at all ashamed of what the noble Lord describes as a rather modest contribution from the Government.
Lord Cledwyn of Penrhos: My Lords, is my noble friend aware that there is not a village in Wales without a very good poet in it, probably more than one? Can he say what assistance they are being given? Is he aware that, if ever he wants to see one, they are on Welsh television at least once a week, arguing against each other about a variety of poetry. Does the Minister think that that is an excellent thing in Wales?
Lord McIntosh of Haringey: My Lords, I think that we in England could all learn a great deal from the Welsh example. Perhaps if Welsh poetry could be translated we could have our own Eisteddfod and we would benefit significantly from that. I am pleased to hear what my noble friend has told me.
The Viscount of Falkland: My Lords, does the Minister agree that most people would be behind the general drift of the right reverend Prelate's question? But one has to say that what stands at the core of the British poetic tradition must be the King James Bible and the Book of Common Prayer, also originating from the 17th century. Without wishing to cross swords with
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the right reverend Prelate—he and I shared the same school chapel for a number of our formative years—does not the Anglican Church bear some responsibility for its successive "modernising"—I borrow that word from the Labour Party—of these works, thereby losing a good deal of the poetry?
Lord McIntosh of Haringey: My Lords, I am aware that the noble Viscount is referring to the Established Church. I do not think that gives Ministers who are not members of that Church the right to interfere in its affairs.
Lord Bragg: My Lords, I should like to mention the late Poet Laureate, Ted Hughes, in this context, not only because of the extraordinary quality of his poetry and because his book Birthday Letters outsold every other hardback in the UK in 1998, thus confirming the British public's willingness to engage with fine and complex poetry, but particularly because of his lifelong dedication to the idea that the imagination of all children is nourished and enlarged by learning and writing poetry. Therefore, I should like to ask what measures are being taken, particularly in primary schools, to ensure that our unique poetic inheritance is being passed on consistently to the next generation.
Lord McIntosh of Haringey: My Lords, I am grateful to my noble friend for his tribute to the late Poet Laureate. In fact I have been enjoying Tales from Ovid rather more than Birthday Letters, but that is clearly a matter of taste. A great deal of the effort which I have been describing is going to the encouragement of poetry in schools. That is what part of the poetry placement scheme is for. Much of the money of the Arts Council in England is going for that purpose. My noble friend is right to emphasise this point.
Baroness Strange: My Lords, does the noble Lord agree that,
"Rain enough will fall and sun will shine
And peace will reign in 1999"?
Lord McIntosh of Haringey: My Lords, the noble Baroness makes it clear why I was right to resist the temptation to attempt to give answers to any of these questions in verse. They would have been in doggerel.

Royal Ordnance Factory, Bishopton
3.31 p.m.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish asked Her Majesty's Government:
What help they intend to give to the Renfrewshire economy in the light of the job losses caused by the closure of the ordnance factory at Bishopton.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, job losses of this scale are always unwelcome. Her Majesty's Government are committed to providing help to those individuals affected by the decision. We will also be

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looking at how this closure can be turned into an opportunity for the Renfrewshire economy. The factory occupies a strategic site close to all forms of transport and, at 2,500 acres, offers real scope for development. My department proposes to work closely with Royal Ordnance, the local authority and Renfrewshire Enterprise to ensure that these opportunities are realised.
Lord Mackay of Ardbrecknish: My Lords, I am glad to hear those words from the Minister although I must say that, much as I enjoy his appearances at the Dispatch Box, I would have been more impressed if the Scottish Industry Minister, his noble friend Lord Macdonald, had come to the Dispatch Box to answer this Question. I wonder whether, rather than attempt to find alternative employment, the Scottish Office should be concentrating on seeing how it can persuade its colleagues at the MoD to keep the Royal Ordnance Factory at Bishopton. Has the noble Lord seen the report in today's Glasgow Herald which carries in some detail another report carried out in strict confidence by Martin Mays Associates recommending delaying the planned shut-down of the nitrocellulose production facility which makes the basic gun-cotton ingredient to fire every type of bullet, missile and shell used by the UK's Armed Forces? Should we not be using this confidential report, which seems to have come into the hands of the Glasgow Herald, as a means of persuading the Government that it is foolish to rely on foreign sources for such an important material for our Armed Forces as the propellants of shells and bullets? Should we not be concentrating on attempting to keep these facilities in the United Kingdom and at Bishopton?
Lord Sewel: My Lords, I do not know whether or not to thank the noble Lord for his comments about my appearance at the Dispatch Box, but I should point out that the Scottish Industry Minister is doing his job. He is in Scotland working for the benefit of Scottish industry. I have seen the article in today's Glasgow Herald to which the noble Lord referred. The report was prepared for British Aerospace as its own internal document. It is a matter for it to decide how to proceed with any possible run-down and the timing of any possible run-down or eventual closure at Bishopton. I have to point out that the Royal Ordnance's proposals were beaten both on cost and on technical grounds. Indeed the technical specification was not met so that Royal Ordnance was not even in a position to complete the evaluation trials. So it is perhaps not a matter of getting the desired outcome as easily as the noble Lord envisages.
Lord Rowallan: My Lords, now that the Armed Forces' small munitions are supplied by Holland and the heavy and tank munitions are to be supplied by South Africa, is the Minister confident that we have a reliably independent system of keeping our Armed Forces fully armed? Was not John Reid, now the transport Minister, correct 10 years ago when he said that Bishopton was a bonus necessary for good defence?
Lord Sewel: My Lords, the important point is that the armaments used by the British Army are of a
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technically high quality. That is the main requirement. The second requirement is that they are resourced and obtained in a way which represents value for money. The third requirement is that we must have proper regard for security of supply. I am absolutely convinced that my colleagues in the Ministry of Defence have made this decision on the basis of all three criteria.
Earl Russell: My Lords, while the whole House might agree in regretting the loss of jobs to the Scottish economy, would the Minister agree that one might question the concept of a "Renfrewshire economy" for just the same reasons as one questions the concept of a Hertfordshire economy?
Lord Sewel: My Lords, it is perfectly reasonable in economic terms to talk about local economies. That does not mean that they are somehow hermetically sealed, but it is a recognition that there are local travel-to-work areas which function as small-scale economies.
Lord Sempill: My Lords, is the noble Lord aware that Bishopton is the sole supplier of a little-known life-saving side of warfare; namely, a special propellant for ejector seats in all of our military aircraft? Is this not the type of specialised industry that Scotland should be maintaining and developing in an increasingly competitive global market?
Lord Sewel: My Lords, if that specialised activity can continue effectively and economically, I see no reason why it should not continue.
Lord Trefgarne: My Lords, does the noble Lord recall that when Royal Ordnance was moved into the private sector some 10 years or so ago noble Lords opposite and their right honourable friends then in opposition attacked vehemently what was being done on the grounds that we were preparing Bishopton for closure? Is it not ironic that closure, when it eventually came 10 years later, was the result of the defence policy of this Government?
Lord Sewel: My Lords, the defence policy of this Government is to ensure that our troops and our Armed Forces' personnel generally have ammunition which is technically of a high quality and has been resourced in terms of effective and proper value for money. That is a sound way to proceed.
Lord Mackay of Ardbrecknish: My Lords, if the noble Lord's noble friend Lord Macdonald has a moment to spare from his work perhaps he might consult his right honourable friend Henry McLeish, the Minister of State at the Scottish Office, and ask him about the comments he made a decade ago which were referred to by my noble friend Lord Trefgarne a moment ago. When it was just a theoretical and rumoured closure, Mr. McLeish said that closure at Bishopton was against the interests of the nation, the public purse and employment in Britain. What, my Lords, has changed?
Lord Sewel: My Lords, the obvious comment is that the Government have changed. The second obvious

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comment is that the whole nature of resourcing the armed services is continually in a process of evolution. One rightly has to consider what the advantages and disadvantages are of continuing production at Bishopton. At one moment in time, given the nature of any contract, it would be right and proper to continue production there. If Bishopton and its proposals become technically deficient and do not represent value for money, there is no case for continuing production at that site.

Social Security Contributions (Transfer of Functions, etc.) Bill [H.L.]
3.39 p.m.
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 CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Transfer to Board of certain functions relating to contributions, etc.]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Higgins: It is unlikely that our debates on the Bill in Committee will turn out to be remarkably exciting or passionate. At Second Reading we on this side made it clear that in a number of respects we had doubts about the Bill. It is nonetheless right that today we should examine it in considerable detail, although I hope that that does not necessarily mean the debate will be prolonged. Perhaps I may make one or two preliminary remarks.
First, I declare an interest as the chairman of an occupational pensions scheme. Secondly, I wish to pay tribute to the way in which the noble Baroness, Lady Hollis of Heigham, prepared previous discussions on the Bill and our discussion today. For the first time a set of explanatory notes has been provided with the Bill. They have been very helpful on what is a complex and technical measure. In addition, following Second Reading, the noble Baroness wrote to me and a number of my colleagues dealing with some of the technical points raised in the debate. She was also kind enough earlier to arrange a briefing meeting, which was very helpful. I must apologise for the fact that I was prevented from attending the second such meeting. The invitation was nonetheless appreciated. In relation to legislation of this type, that kind of preparation is of considerable advantage.
To some extent the Bill institutionalises the move of the social security contributions system into the area controlled by the Chancellor of the Exchequer, in particular the Inland Revenue; and the distinction between contributions paid into the national insurance
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scheme, which in turn give the right to obtain certain benefits, is eroded if it becomes more and more the case that this is simply a tax. We debated this point at some length at Second Reading and I do not wish to burden the House with greater detail now. We remain of the view that the contributory principle is of great importance and should be preserved. We had some doubts as to whether, in terms of costs and savings, the arguments in favour of the Bill were justified. I pointed out that the Minister responsible for these matters in the previous government reached the conclusion that that was not so.
The drafting of the Bill is of great complexity and gives some cause for concern. To an enormous extent it deals with reference to other legislation, and on occasions even two or three tiers of legislation. That makes the statute book very confused.
I am not clear to what extent some of the clauses in the Bill mean that the rights of this House to debate the legislation or secondary legislation will be changed at all because it comes under the Chancellor and the Treasury rather than the umbrella of the Department of Social Security. I therefore hope that the Minister can give a clear assurance on that point.
I wish to raise a further point in relation to this clause. The matter is done by reference to Schedule 1 from Clause 1 and there are separate points for debate on that. The explanatory notes, the overall summary, points out that the transfer will take place from the Department of Social Security of its operational functions and goes on to state that,
"policy responsibility for NICs would transfer to the Inland Revenue once decisions had been reached on a new benefit entitlement test".
We did not go into the matter in great detail at Second Reading. It is of considerable importance, as will emerge in subsequent debates. Is the Minister in a position to say whether any progress has been made?
We have tabled a number of amendments, some seeking to leave out clauses while some are more specific. That may help to give greater focus to the discussion, and is why the Marshalled List looks rather more elaborate than it might otherwise do. I hope that the Minister will reply on those two points. After we have dealt with the government amendments that have been tabled, perhaps we may then deal with Schedule 1 and the question of the schedule itself. That is probably a better point at which to raise the substantive issues.
3.45 p.m.
Lord Skelmersdale: My noble friend Lord Higgins has, with his customary zeal, laid out suggested rules of engagement for the debate. I found them extremely helpful. So far as concerns the grouping of my amendments, perhaps I may suggest gently to the noble Baroness that, since my Amendment No. 3 and her Amendment No. 4 cover the same matter, it would be sensible to group them together. Then I shall be happy to move my group of amendments en bloc. Since they

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cover exactly the same order and the same line in the Bill, perhaps the Minister will take a few seconds to consider that suggestion.
Lord Goodhart: I, like the noble Lord, Lord Higgins, apologise for my absence from the meeting arranged by the noble Baroness last week. Unfortunately, it clashed with another meeting arranged by the noble and learned Lord the Lord Chancellor to discuss the Access to Justice Bill. I hope that the noble Baroness will forgive me for having chosen to attend that meeting rather than the one which she arranged.
In order to save time later in the debate, I wish to make it clear at this point, as we did at Second Reading, that we strongly support the principle behind the Bill. We believe that, whether or not the contributory principle is in itself important, transfer of the functions of collecting and managing contributions should be to the Inland Revenue. The contributions have been for many years past, and arguably always have been, a tax rather than part of a genuinely contributory system, given that the amount of benefits to which anyone is entitled is—with the sole exception now of SERFS—independent of the amount that they have contributed, although in a number of cases the number of contributions made may be relevant. On that basis therefore we feel that the Bill makes the right move. As the noble Lord, Lord Higgins, said, the Bill is complex. However, it is not my intention on behalf of my party to intervene in the debate to any greater extent than is necessary.
As can be seen, we have tabled only one amendment. It is therefore unlikely that I shall wish to contribute to any great extent on more than a few of the others. In remaining silent I broadly indicate consent to the principle of the Bill.
Baroness Hollis of Heigham: I thank the noble Lords, Lord Higgins and Lord Goodhart, for their welcome, with varying degrees of enthusiasm, in general and their welcome in particular for the degree of briefing. I wish to pay tribute to the officials for the work they put in through offering facilities and access. I appreciate that the meeting was inevitably called at short notice because of the intervention of the Christmas vacation. It had to be held at the beginning of the week in which the Bill arrived. I am sorry that neither of the two Front-Benchers was able to attend, which we fully understand. However, it will not prevent us trying to respond to any points, if not from the Dispatch Box then through letters or subsequent meetings.
Both noble Lords and the noble Lord, Lord Skelmersdale, said that it is a technical Bill. Therefore, I may well suggest to the Committee, on various occasions, that I wish to follow up in correspondence points which are made. I know that certain points may be important for tax lawyers and others to follow and I shall do that rather than trying to rely on the more formal words in Hansard. I hope that the Committee will forgive me if I go down that route more than is usual. I too do not wish to engage in repeating our Second Reading debate.
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First, I wish to address the points raised by the noble Lord, Lord Higgins, who asked whether the Bill would affect the powers of scrutiny of the House of Lords by virtue of transferring it to another body and potentially an Order in Council. No, I am assured from the Box that there is nothing in the Bill that will affect the proper House of Lords' scrutiny of changes to NICs structures.
Secondly, I emphasise that the Bill in no way erodes the contributory principle. It was part of a major arena of our debate at Second Reading and I do not wish to repeat that ground. As was said at the time, the welfare benefits system is based on three different structures of benefit: means-tested or income-related benefits, contributory benefits based on the national insurance principle and also what I call universal category or contingency benefits which are by virtue of the group of people to whom you belong—for example, an entitlement to disability living allowance or an entitlement to child benefit.
It is true that means-tested benefits have grown at the expense of contributory benefits, not in the past 18 months but in the past 15 or 20 years. That is primarily because the previous administration reduced unemployment benefit as a contributory benefit paid for two years to a six months only contributory JSA. More positively, the previous administration, with the support of Members of the House, developed the growth of in-work benefits which have been classically income-related and therefore means-tested.
It is precisely because of the problems of means-testing that the Chancellor announced, and will bring to the House reasonably shortly, a Bill to replace the main in-work benefit, family credit, with a working family tax credit system. That is to overcome the problems that have been identified by noble Lords about means-tested benefits.
Nothing in the Bill will affect the contributory principle. There is much else in what the Government are doing, including, for example, changes to incapacity benefit and widows' benefit and the like which will extend the role of the contributory principle. We wish to ensure that people see a proper return for being in the labour market. We recognise that there is no single structure of benefit which will fit all forms of need. I am sure we shall continue to have a mixed economy, with that effect.
Finally, I remind the Committee that Clause 1 is one of the keystones of the Bill. It introduces Schedules 1 and 2. Schedule 1 transfers to the Inland Revenue the day-to-day operational functions currently discharged by the Contributions Agency on behalf of the Secretary of State. Those functions, in relation to NICs, statutory sick pay, statutory maternity pay and contracting out matters will be exercised by the Inland Revenue from the day appointed for the operational transfer.
Schedule 1 amends the provisions of Acts which confer such functions on the Secretary of State and also other provisions which make consequential references to his exercise of those functions. Functions conferred on the Secretary of State by the subordinate legislation listed in Schedule 2 are also transferred to the Inland Revenue.

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We intend that the day appointed for the transfer of operational functions under Clause 27 should be 1st April, the start of the new financial year. Clause 27 also allows regulations concerned with operational functions transferred under Clause 1 to be made from Royal Assent so that they too can be in force by 1st April.
With my efforts to answer the main points raised by the noble Lord, Lord Higgins, and appreciating the welcome given by the noble Lord, Lord Goodhart, I hope that the noble Lord, Lord Higgins, will feel able to withdraw his objections to Clause 1.
Lord Higgins: In the light of what the Minister said and since we shall be able to pursue matters further on Schedule 1, I withdraw my objection to Clause 1.
Clause 1 agreed to.
Schedule 1 [Transfer of Contributions Agency functions and associated functions]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 1:
Page 16, line 29, at end insert—
("2A. In section 638 of the Income and Corporation Taxes Act 1988 (other restrictions on approval of personal pension schemes), in subsection (6)(c) for "Secretary of State" there is substituted "Board".").
The noble Baroness said: We start with a very sexy and exciting amendment or, as my brief says, a technical, consequential amendment. Section 638(6)(c) of the Income and Corporation Taxes Act 1988 refers to minimum contributions paid by the Secretary of State under Section 43 of the Pension Schemes Act 1993. Once Clause 1 of the Bill is in force, those minimum contributions will be paid by the Inland Revenue. I beg to move.
On Question, amendment agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 2:
Page 17, line 22, after ("substituted") insert (""Commissioners of").
The noble Baroness said: This too is a technical drafting amendment. The term "Inland Revenue" is amplified to "Commissioners of the Inland Revenue", to be consistent with existing references in Part XI of the Contributions and Benefits Act. I beg to move.
On Question, amendment agreed to.
On Question, Whether Schedule 1, as amended, shall stand part of the Bill?
Lord Higgins: As I have indicated, a number of points arise on the schedule which is introduced by Clause 1 which we have already agreed. Therefore, this will be a reasonably orderly debate, if we continue the debate on Clause 1.
Earlier in her remarks on Clause 1, the noble Baroness pointed out that there may be a number of technical points on which she would wish to write to people rather than to respond on the Floor of the House. We can well understand, given the nature of the Bill, why that might be so.
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However, having said that, there is a point which should be made. The noble Baroness referred to the way in which tax lawyers tend to "crawl over"—if that is the right expression—the nitty-gritty of this kind of legislation. If I understand the position correctly, it is not the case that the interpretation of the Act would necessarily turn on the travaux preparatoires. If there has not been a debate on the Floor of the House on the point, the correspondence may never come into public light. Those are matters about which the noble Lord, Lord Goodhart will know infinitely more than I. If that is the case, if some technical point has to be made in correspondence, perhaps we should consider whether it could be read straight into the record, quickly, at some later stage of the Bill.
The reality is that the Bill must be introduced because of the curious fact that it could not be done by regulation because of the status of the Inland Revenue department in our existing law. Therefore, it deals a great deal by reference to existing legislation. I am becoming worried at the extent to which the drafting carries over from one Act to another and then on to yet a third. That point will emerge on later amendments. The noble and learned Lord, Lord Howe of Aberavon, is sitting on a committee which hopes to improve tax legislation generally from the present complex situation. It may be that the area with which we are dealing in the Bill is one at which he could appropriately look.
I now turn to more substantive points, although again they are related to lawyers. In Section 20(3) of Schedule 1, it is suggested that there should be inserted in the Social Security Administration Act 1992 the words:
"any person authorised by the Inland Revenue may conduct any proceedings under section 114 of this Act before a magistrates' court although not a barrister or solicitor."
I am not clear whether that is simply an effort to reduce restrictive practice in this field or whether it is an innovation.
The next point which arises in this context is in relation to the timing of the operational arrangements of the Department of Social Security being transferred to the Inland Revenue. My noble friend Lady Anelay of St. Johns raised at Second Reading the issue of computerisation of the Department and referred to some of the problems that have arisen in that field. We also discussed at that stage whether the Millennium bug would be a problem. We are not experts in this field but in the last few days a particular case has come to my attention, which I have not had time to raise with the Minister's office until this morning.
It raises the question of whether as the Chancellor of the Exchequer suggested in his Budget speech, it is an appropriate moment to transfer the responsibility for these matters from the Department of Social Security to the Chancellor's department. This particular case raises broader issues. It concerns an individual who had deferred drawing his national insurance pension last September and decided to draw it from October. He would have received a larger amount than he would otherwise have received because of the deferment of the pension. By January he had heard nothing at all from the department and, therefore, being concerned about

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the delay, he rang the department and was told that the department's computer had been "down" since last June. It was indicated that the computer was not likely to be working fully until April. No doubt the noble Baroness can say whether or not that was indeed the case.
A number of different issues arise, leaving aside the fact that the individual had been unable to draw his pension on the date requested. He also asked what would happen about the increment, and it was indicated that even by April it might not be possible to decide whether or not it would be paid. That left the individual in a position of not knowing how much to declare on his income tax form under the new system of self assessment. This may be some justification for the Bill.
I thought that it would be helpful at this stage to ask whether or not this is an appropriate moment to transfer the operation from the Department of Social Security to the Inland Revenue. At Second Reading the Minister indicated that this was not a great problem and that it would be switched from one department to the other. However, would that be a sensible move when the computer, which I gather is a massive computer, is not operating effectively? It may well be that the department which has been operating it so far is in a better position to sort out the problem and then to transfer at a later date.
I presume that there is no substantive reason, other than the fact that the Chancellor mentioned it in his Budget speech, why the matter cannot be delayed so that the transfer can take place more efficiently.
I turn now to one matter which puzzles me. The whole thrust of the Bill and in particular this schedule, is to transfer the operation from the Secretary of State to the Inland Revenue. The noble Baroness agrees with me that that is clearly the case. However, I am not clear why it should be transferred from the Secretary of State to the officials of the Commissioners of the Inland Revenue. One would have thought that it was more appropriate to transfer it to the Chancellor of the Exchequer since the Inland Revenue is one of the Chancellor of the Exchequer's departments.
There may be some technical implications which arise in relation to later clauses, but it raises a question about the accountability of Parliament. We are moving the Next Steps Agency operation to the Inland Revenue, which has a very different history and is more independent and has different powers. Can the Minister clarify why it is being done in that way rather than transferring it from one Minister to another?
Baroness Hollis of Heigham: I take the noble Lord's point that technical, but nonetheless significant, issues arise. I recognise that people need access to the Government's view. I am trying to steer a course between providing something solid on which people can rely and providing wider access. If noble Lords wish to raise the matter in the form of a probing amendment on Report, or if they would like to notify me privately that they would like to do so, I will ensure that this matter comes back on Report. To some extent, the "constituency" from which some of those questions may come will depend on access to information and the degree to which it needs to be on the public record.
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The noble Lord raised a question about the general drafting of the Bill. It is complicated because there are many issues associated with contributions into the National Insurance Fund as well as payments out, which are handled by the DSS. The Bill fillets those responsibilities not two ways, but three ways. Some responsibilities will remain with the DSS. particularly those for statutory sick pay and maternity pay; some responsibilities will go to the Inland Revenue and some will go to the Treasury. Therefore there is a three-way split into other departments which use different terminologies and have different understandings. We are trying in this Bill not only to fillet the responsibilities but to standardise terminology throughout the system. That is the reason for what may appear to many Members of the Committee to be an endless array of technical drafting amendments.
The noble Lord referred to paragraph 20(3) on page 19 and asked whether this was a possible "dig" at restrictive practices. Currently, DSS officials have this power and we are transferring the same powers to the Inland Revenue; in other words, it mirrors the existing provisions of Section 116 of the Social Security Administration Act which gives authorised people that right. There is nothing new in this; it simply transfers existing powers.
Lord Higgins: Does it cut both ways? Does it mean that Inland Revenue officials who are not qualified will now be able to appear on Inland Revenue matters?
Baroness Hollis of Heigham: At the moment we are talking solely about the powers of the Contributions Agency and staff being transferred to the Inland Revenue for decision-making. We are referring to DSS officials who will now be employees of the Inland Revenue so to speak. We expect that after proper training in due course there will be an integration of functions, but that is not where we are at the moment.
Lord Higgins: I have not made my point very clear. As I understand it, new provisions are to be sought under which people who are not qualified as either solicitors or barristers will be able to appear in a magistrates' court and fulfil the functions that are normally carried out by solicitors and barristers. If I understood it correctly, the noble Baroness said that there would be no change. I was unclear whether that would give Inland Revenue officials dealing with Inland Revenue matters the same powers.
Baroness Hollis of Heigham: This particular provision of the Bill refers to the Social Security Administration Act 1992. Therefore, it transfers powers that social security staff currently have to be carried with them when they go over to the Inland Revenue. We are not talking here about mirror activities. But as in all these matters, if I receive any further information to the contrary, I shall write to the noble Lord. I believe that the heading to paragraph 20 which refers to the Social Security Administration Act 1992 makes that point clear.
As to timing, the noble Lord asked whether this was the appropriate moment because of concerns about the computer. Not having had advance warning of the

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particular case to which the noble Lord referred, he will understand that I cannot comment upon it. But in so far as it is illustrative of a general problem, I take his point. The problems that we have experienced with the late running of the NIRS 2 contract are undeniable. Although stabilisation plans are under way, I understand that as at 1st January, while a total of £1.4 billion of age-related rebates had been paid, it equates to about 60 per cent. of the figure paid this time last year. I do not seek in any way to diminish the problem associated with NIRS 2, but it does not affect this Bill. The responsibility for its administration—ring-fenced so to speak—simply transfers from one section of the Civil Service to another and has no necessary implications (whatever one wishes) for the better or more efficient, or worse or less efficient, running of the computer. The project and its operation and co-ordination with Andersens simply transfers across. Although we hope that those problems will be addressed quickly, they will be addressed neither more nor less rapidly by virtue of this switch than they would have been if it had remained within the responsibility of DSS.
Lord Higgins: I am grateful to the Minister for that explanation. I do not wish to pursue the individual case. Fortunately, following my move from another place to this House, my preoccupation with individual cases has disappeared. However, it is apparent that the department has not written to the individual concerned to say what is happening. I do not know to what extent that is generally the case. Having said that, is it really appropriate to hand over the matter when it is not working very efficiently? Can the Minister clarify whether the same individuals will deal with the whole operation as at present? Presumably while the noble Baroness will no longer be dealing with any points on this particular issue and it will be for Treasury Ministers to answer any questions with regard to the computer, if we can be assured that at least the same people will deal with it rather than that others will inherit what is clearly a very difficult situation, that would be helpful.
Baroness Hollis of Heigham: My understanding is that the same body of people who run it currently will move across. In that sense, the formal reallocation of day-to-day functions should not make a difference to the NIRS 2 problems, which I do not underestimate in any way. If the noble Lord gives me the name of the individual concerned, I shall try to follow up the case, but not having had advance warning of the example he gives, I am unable to help him any further this afternoon.
Schedule 1, as amended, agreed to.
4.15 p.m.
Schedule 2 [Transfer of functions under subordinate legislation]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 3:
Page 26, line 30, column 3, leave out ("regulations 37 to 39, 41 to 42 and") and insert ("regulation").
The noble Lord said: I said at Second Reading that I found Schedule 2 to be a very strange being. Drawing a bow at a venture, I then asked the noble Baroness to
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explain the transfer of Regulations 23 and 61 of the Occupational Pension Schemes (Contracting-out) Regulations 1996. In her round-robin letter addressed to my noble friend Lord Higgins, she explained that both these regulations related to policy, as indeed they do. But I was confused by the fact that in a separate part of the letter the noble Baroness explained that the policy was to remain with DSS Ministers. I am the first to agree that that is right.
However, the third column in Schedule 2 is headed, "Provisions conferring functions transferred". I find it very difficult to work out how something can be both policy and yet be transferred. I am sure that I am not alone in my confusion. The only conclusion at which I could arrive was that those matters which were not excepted according to this particular amendment were to be transferred.
In brief, the Secretary of State is to hang on to those regulations which are to do with items of policy for the moment, as the Explanatory Notes rather ominously say, and transfer the operational nuts and bolts of the Contributions Agency to the Board of the Inland Revenue. Knowing from previous experience how complicated these matters are, I went through those orders that I could acquire to see whether the nuts and bolts matters were in (that is, in the hands of the Secretary of State) or out (that is, in the realm of the Inland Revenue, or would be following the enactment of this Bill). We would all agree that operational matters should certainly be transferred with the Contributions Agency to the Inland Revenue. Incidentally, the noble Baroness did not respond to my intervention when my noble friend drew up the rules of engagement, but I assumed from her nod that it would be all right to deal with Amendments Nos. 3 and 4 together at this point.
That brings me to the first of my string of amendments which concerns the Social Security (Contributions) Regulations 1979. The entry in the schedule states that the Secretary of State is to hang on to the power in Regulation 37. That regulation is headed,
"Reallocation of contributions for benefit purposes".
If one looks at the regulation it is clear that that is an operational matter. I shall not weary the Committee by quoting it.
I suspect that it was the direction of the Secretary of State that originally caused the draftsman to exclude this regulation from the handover. However, the Secretary of State does not himself give the direction; it is delegated to someone in his department, which these days means the Contributions Agency. It would be logical if that was an official in the Contributions Agency. If that is the case why can it not be transferred? It is clear that the Government agree with me because in Amendment No. 4 tabled by the noble Baroness, Regulation 37 is replaced by Regulation 36. I welcome that.
Regulations 38 and 39—also excepted—are much clearer examples of nuts and bolts operations. They tell the agency how to treat late paid contributions under the Act. Why then is Regulation 40, which covers the

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treatment of voluntary Class 2 contributions not paid within the permitted period, to be transferred and not excepted? I simply cannot see the logic.
Regulation 41 covers late payments through ignorance or error and the Secretary of State is to hang on to that. Regulation 42 covers a different form of treatment, that of contributions paid under an arrangement, and again that is to remain with the Secretary of State.
For the avoidance of doubt, I agree with the Minister about Regulation 40, concerning the application for allocation of a National Insurance number. It is quite logical that it remains with the Secretary of State. However, I believe that all the preceding excepted matters are indeed nuts and bolts and I would be grateful to hear the Minister's response to that. I beg to move.
The Deputy Chairman of Committees (Lord Elton): If Amendment No. 3 is agreed to, I shall be unable to call Amendment No. 4.
Baroness Hollis of Heigham: The noble Lord, Lord Skelmersdale, is something of an expert on delegated legislation as a result of his role on the Joint Committee on Statutory Instruments. Due to his commitments with that committee, he was unable to attend a briefing meeting when we might have been able to clarify some of these matters for him, which was why we offered such a meeting. Alas, to no avail. I understand his interest in the detail of Schedule 2, to which all these amendments relate.
I believe that the noble Lord is, quite rightly, seeking to check that we have done our job properly. Let me make clear at the outset that I do not think that there is any difference between the Government and the noble Lord on what we intend to do. However, the noble Lord does not have confidence that we are doing what we think we ought to be doing and, therefore, he believes that we should go along his route. I would like to suggest some problems in going down his route and suggest why I prefer our route.
Our strategic intention behind the Bill is to transfer the operational functions of the Contributions Agency to the Inland Revenue, together with policy responsibility for national insurance contributions. The way we have done this is to go through the relevant primary and secondary legislation to identify those provisions which confer specific functions on the Secretary of State for Social Security and to decide whether those specific functions should be transferred to the Inland Revenue or the Treasury as necessary. The functions conferred in primary legislation are amended as necessary in Schedules 1 and 3. Clause 1(2) transfers to the Inland Revenue functions conferred on the Secretary of State by provisions of subordinate legislation specified in Schedule 2.
The noble Lord's amendments fall into two categories. The first seeks to specify in Schedule 2 whole sets of regulations rather than individual provisions. The explanation as to why these amendments are unnecessary is somewhat technical and I hope he will bear with me as I set out how I am advised Schedule 2 works.
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The first point is that we need to specify only provisions which actually confer a function on the Secretary of State. The noble Lord will have noticed that the heading for column three of Schedule 2 is "provisions conferring functions transferred". Where a provision of regulations simply deals with how a function conferred elsewhere is to be exercised, there is no need to specify it in Schedule 2. So, in order to ensure the regulations work when they have been transferred, there is no need to transfer regulations which deal with how a function is to be exercised if the regulations do not themselves identify the function holder. Any stray references to the Secretary of State which do not themselves confer functions are converted into references to the Inland Revenue or Treasury, as necessary—as a sweep-up, if you like—by paragraph 1(4) of Schedule 7.
That deals with the first category of the noble Lord's amendments. The remainder would actually change the boundary of operational functions between the Secretary of State and the Inland Revenue. Perhaps I may give two examples of how these would work, and if the noble Lord would like a fuller explanation I shall be happy to write to him with more details of why we have drawn the Bill as we have.
First, take his Amendment No. 4, to the reference to the Social Security (Contributions) Regulations 1979. This would have the effect of transferring responsibility to the Inland Revenue for deciding how to treat certain contributions—for example, those paid late—for the purposes of contributory benefits. This is a function relating to the administration of contributory benefits and therefore we think it should remain with the Secretary of State.
Secondly, Amendment No. 7, to delete the reference to the Statutory Sick Pay (General) Regulations 1982, would retain with the Secretary of State certain administrative functions relating to the operation of statutory sick pay. We have already discussed in the context of Schedule 1 that the administration of, but not policy on, statutory sick pay will transfer to the Inland Revenue. The noble Lord's amendment would leave with the Secretary of State the functions of: arrangements for making payment of statutory sick pay where an employer is insolvent or refuses to make payments when an officer of the board has determined that it is payable; appointing someone to act on behalf of a person who is, or claims to be, entitled to statutory sick pay but who is unable to act for himself or herself (for example, where that person is in a coma); and requiring information from an employer or employee where the board determines whether there is entitlement to statutory sick pay but needs further information in order to resolve a particular question.
That would mean that employers and employees would need to deal with two government departments in respect of statutory sick pay—the Inland Revenue when a question arises whether a person is entitled to the benefit, and the Benefits Agency when a person is not being paid the benefit because the employer is insolvent, or refuses to pay, or where someone needs to act on behalf of someone who is unable to do so. Furthermore, the amendment would mean that, where an officer of

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the board requires further information to determine whether a person is entitled to statutory sick pay, he would need to ask the Secretary of State to require the information from the employer or employee involved. That would be rather bureaucratic and hardly the sort of service we would want to provide.
The reason we have transferred these provisions to the board is because decisions on entitlement to statutory sick pay normally involve questions of employment status—for example, whether a person is an employee or not, and what are his or her average earnings. They are obviously not medical questions. It makes sense, therefore, for other functions, such as those connected with the payment of statutory sick pay where an employer is insolvent or refuses to pay, also to be undertaken by the board.
I hope that reassures the noble Lord. Perhaps if he has any further concerns we can deal with them in correspondence. I do not believe that the thrust of the noble Lords' amendments would deliver what he wishes. I hope he will withdraw his amendment.
Lord Skelmersdale: I asked for it, did I not? However, it obviously not only confused me, but, by virtue of Amendment No. 4, tabled by the noble Baroness, it has also confused the draftsman, which is why she is amending her own Bill.
That said, I shall read extremely carefully what the noble Baroness has said and I may want to follow it up in correspondence. In her exhaustive explanation, she said that in a case of a bankrupt employer owing statutory sick pay, under my amendment two departments would have to be consulted on how to deal with the matter. That is the position now. I do not see why there is a change. I will happily follow up that matter in correspondence or perhaps consultation at a later stage. I do not think that it is right, or indeed proper, to go into it now.
It also occurs to me that in some places in Schedule 2, the Bill transfers all the regulations. "All the regulations" does not necessarily mean the functions of the Secretary of State. In some cases, as I read it, it means functions which are already carried out by the Contributions Agency. I regard these as nuts and bolts and the matters that I have listed in my critique on Amendment No. 3 are also what I regard as nuts and bolts. I suspect that the argument—the noble Baroness is quite correct—is not about what should be done but whether it is being done properly. I still do not know the answer. However, when I have read the explanation in Hansard, I hope I shall. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.30 p.m.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 4:
Page 26, line 30, column 3, leave out ("37") and insert ("36").
The noble Baroness said: I accept the noble Lord's correction about timing and my manuscript note not having been adopted accordingly.
In moving Amendment No. 4, I speak to Amendments Nos. 11, 13 and 64. These are technical amendments to Schedule 2 which specifies provisions of secondary legislation conferring functions on the Secretary of State which are transferred to the Inland Revenue. Column 3 of the schedule expressly excludes provisions conferring functions on the Secretary of State which are not being transferred.
Amendment No. 4 excepts regulation 36 of the Contributions Regulations, as the noble Lord, Lord Skelmersdale, noted, as this relates to functions concerning credits which are not being transferred to the Inland Revenue.
Amendments Nos. 11 and 64 relate to the Employer's Contributions Reimbursement Regulations 1996 (S.I. 1996/145). These are made principally under Section 27 of the Jobseekers Act 1995, to which amendments are made by the Bill (paragraph 64 of Schedule 1: page 25, lines 34–35) to transfer functions from the Secretary of State to the Inland Revenue. Regulations 7, 8 and 9 each confer functions on the Secretary of State, all of which need to be conferred instead on the Inland Revenue. Hence their inclusion in Schedule 2.
Regulation 1(4) contains a definition which becomes redundant as a result of this transfer, and it is therefore revoked.
Section 150 of the Pensions Act 1995 (which extensively amended the Pensions Schemes Act 1993) dissolved the Occupational Pensions Board and conferred power to provide, in the relevant commencement order, for the exercise by other persons or bodies of any outstanding functions of the Board.
Articles 4 and 13 of the Pensions Act 1995 (Commencement No. 10) Order 1997 (S.I. 1997/664 (C.23)) conferred on the Secretary of State the functions of the Board under several provisions of the 1993 Act or regulations which were temporarily preserved.
To the extent that such functions still need to be discharged, they are exercised by officers of the Contributions Agency, and therefore need to be transferred to the Inland Revenue. Amendment No. 13 effects this transfer. I beg to move.
Lord Skelmersdale: As the noble Baroness said, regulation 36 of the Social Security (Contributions) Regulations 1979, deals with crediting class 3 contributions. However, it is an item which the Contributions Agency has to take into account in the operation of its duties. In other words, it has to know whether the money is owing, or whatever. I find it difficult to understand why this matter is excepted—in other words, why the Secretary of State is hanging on to the power.
Baroness Hollis of Heigham: The noble Lord refers to regulation 36, which relates to functions concerning credits. We included it in the schedule to make clear that credit functions are to stay with the Secretary of State.
Lord Skelmersdale: I ask: why?
Baroness Hollis of Heigham: Credit functions, which can involve home responsibility payments

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through to proposals in the new pensions legislation for carers and the like, remain essentially a function of social security legislation, and therefore remain with the Secretary of State.
Lord Skelmersdale: But why? They affect total contributions when eventually they are assessed for the purposes of pension or whatever other contributory benefit one is about to receive.
Baroness Hollis of Heigham: Those are policy issues. As the noble Lord will understand, some of those credits do not go through the traditional route, with the employer responsible for noting them. By definition they are home based. It is not therefore an obvious function for an employer and therefore the Inland Revenue (vis-à-vis the employer) to collect that information. It is appropriately a matter for the Department of Social Security because it is analogous with information that the DSS would collect about income support or other income-related benefits.
I do not know whether that helps the noble Lord. It seems to me that the matter is in a different category from the employer-based NICs or contributory-based conditions when one needs to see what has been paid in order to determine eligibility for retirement pension. This is not an employment focused credit. In that sense it seems properly to remain with the Secretary of State. In other words, I am puzzled that the noble Lord is puzzled.
Lord Skelmersdale: For the moment we shall have to agree to disagree.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 5:
Page 26, leave out lines 32 to 34.
The noble Lord said: Since the noble Baroness gave a comprehensive answer to Amendment No. 3, and because of the curious rules which we try to obey in this House, I have to move the amendment in order to withdraw it without the noble Baroness saying anything. I therefore beg to move.
Baroness Hollis of Heigham: It was a consequence of the grouping. Had the noble Lord wished the amendments to be discussed separately, he would have taken them out of the grouping. That is why they were spoken to collectively.
Lord Skelmersdale: I readily understand that. I give notice that I do not intend at this stage of the Bill to move any of my other amendments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 6 to 10 not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 11:
Page 27, line 24, at end insert—

("S.I. 1996/195.

The Employer's Contributions Reimbursement Regulations 1996.

Regulations 7, 8 and 9.")

On Question, amendment agreed to.
[Amendment No. 12 not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 13:
Page 27, line 51, at end insert—

("S.I. 1997/664 (C.23)

The Pensions Act 1995 (Commencement No. 10) Order 1997.

Articles 4 and 13.")

On Question, amendment agreed to.
[Amendment No. 14 not moved.]
Schedule 2, as amended, agreed to.
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Higgins: I thought that discretion was the better part of valour during the previous debates. I am lost in admiration for my noble friend Lord Skelmersdale and the noble Baroness for her replies. They certainly seemed to be caviare for the general—although I have never understood what that meant.
I make a simple point on Clause 2. It reverts to an issue I raised earlier but may appropriately be responded to on this Question. I am still not clear why the matter is transferred from a Minister to an official. The issue may have some implications for parliamentary accountability. The institutional position of what were called the Next Step agencies, such as the DSS Contributions Agency, is not the same as that of the Inland Revenue. I simply do not understand why it has not been transferred to the Chancellor rather than to the Inland Revenue and its commissioners, who are not accountable in the same way.
Baroness Hollis of Heigham: Instead of the long answer perhaps I can offer the noble Lord a short one. Parliamentary accountability will not be diluted. The person responsible to Parliament for this activity is the Paymaster General. That will continue. However, the operational day-to-day functions will be exercised by the Board of Commissioners of the Inland Revenue. Of course, all high-level policy issues will be determined by the Chancellor, as the noble Lord, Lord Higgins, will know.
I am finding it a little difficult to put my finger on what is precisely worrying the noble Lord. It may be better for him to table a more open amendment at Report stage when we can then tease out some of his concerns. Nothing else is happening here that does not already exist; for example the Child Support Agency, the Next Steps Agency and so forth. I do not understand the noble Lord's concern about the dilution of parliamentary responsibility.
Lord Skelmersdale: Perhaps I can put a slightly explanatory complexion on this matter. My noble

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friend's question is perfectly valid. In the event of a catastrophe in the Contributions Agency, given these transfer powers and functions which move from the authority of the Secretary of State to civil servants who will eventually be part of the Inland Revenue though for the moment within the Contributions Agency inside the Inland Revenue, who will be answerable to Parliament? Will it be the Secretary of State for Social Security, the Chancellor of the Exchequer, the Financial Secretary or the Paymaster General? Who will Parliament be able to question on that matter?
Baroness Hollis of Heigham: My understanding is that, should there be such a disaster—heaven forbid!—and questions are raised in the House on the day-to-day running of the Contributions Agency as an operation, it would ultimately be the responsibility of the Paymaster General and, if it raised high level issues, the Chancellor. As and when policy for NICs is handed over, it would be the responsibility of the Paymaster General through to the Chancellor. That is on the collections side. The disbursement of those revenues in terms of social security spend will remain the responsibility of the Secretary of State for Social Security.
Lord Skelmersdale: Does that mean that if the millennium bug interferes with the computer—this Bill will be an Act of Parliament; it will be law—Parliament will question the Chancellor of the Exchequer or will Parliament question someone else?
Baroness Hollis of Heigham: If it was a case of the millennium bug affecting the accurate and reliable collection of information from employers—analogous to the similar problems we are having with NIRS—it will ultimately be the parliamentary responsibility of the Paymaster General as and when the day-to-day running has been transferred. If I receive any different information in relation to the millennium bug problem I shall write to the noble Lord. I add that qualification because I suspect that there is also a parallel responsibility with the Cabinet Office—the overall responsibility for the millennium bug and computers. The direct line will be through the Paymaster General.
Clause 2 agreed to.
Schedule 3 [Transfer of other functions to Treasury or Board]:
Lord Higgins Lord Higgins moved Amendment No. 15:
Page 28, leave out line 20.
The noble Lord said: On reflection it may not be necessary to pursue Amendments Nos. 15 and 16. They are linked with Amendment No. 17.
This section refers to the earnings limit for Class 1 contributions. The Minister will not be surprised therefore to hear that my concern is in relation to the situation with regard to contributions which we debated on a number of occasions on the Social Security Bill; namely, the fact that the level has been raised for employers but not yet for employees. The noble Baroness will recall that we debated this last year at some length.
I am not clear whether or not it will be possible for that limit to be changed under this part of the Bill simply by regulation rather than in a way in which it could be amended. Perhaps I can spell out my worry. The noble Baroness will recall that, last year on the Social Security Bill, the Chancellor of the Exchequer announced that he was raising the contributions level for employers and said that subsequently he would raise it for employees. That was debated quite controversially at considerable length. Is it possible under this part of the Bill to do that by regulation rather than primary legislation? I beg to move.
4.45 p.m.
Lord Renton: Before the noble Baroness replies, I wish to add a slightly different point to that made by my noble friend Lord Higgins. In these three amendments there is an intention to make the Government think again about whether the Treasury rather than the Secretary of State or any other individual Minister should be made responsible for this secondary legislation. When we look at lines 26 and 27 on page 28 of Schedule 3, we find that the Government wish to insert the words,
"Regulations under subsection (2)(a) above shall be made by the Treasury with the concurrence of the Secretary of State".
That expression occurs again in lines 34 and 35. What is the difference between regulations made by the Treasury without the concurrence of the Secretary of State and regulations made by the Treasury with the concurrence of the Secretary of State? In any event, is not the Chancellor of the Exchequer the Minister responsible when the Treasury makes regulations even on a Social Security Contributions (Transfer of Functions, etc.) Bill?
This is a matter of constitutional importance which we need to consider now that the Bill is before us. I believe that there are precedents. I have not turned them up but at the back of my mind I seem to remember that, though they are not frequent, precedents do exist for these expressions. Surely our main object in our parliamentary democracy must be to have a Minister rather than officials responsible to Parliament for every piece of legislation delegated to a Minister. Therefore, in the course of the proceedings on this Bill through your Lordships' Chamber, we should try to get the matter right.
Baroness Hollis of Heigham: Though the noble Lord, Lord Higgins, was particularly interested in Amendment No. 17, he moved Amendment No. 15 and therefore it is important that I seek to reply to that.
The noble Lord, Lord Higgins, was among those who welcomed the Explanatory Notes published with this Bill, and I surmise that those notes helped him to devise amendments targeted at the principle of the policy transfer.
Paragraph 66 of the Explanatory Notes states:
"Paragraph 1 transfers to the Treasury powers in section 1 to make regulations relating to the basic structure of the NICs regime, the rates of different categories of contributions and who is liable to pay them".

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Taken together, the first two amendments of this group would gut this first paragraph of Schedule 3. The first seeks to maintain the annual re-rating of contributions levels as a DSS rather than a Treasury function. The second would retain with DSS the power to regulate residence requirements for NICs, and the power to allow people to pay NICs even though they are not liable to pay them; and the third would leave with DSS the annual adjustment of the lower and upper earnings limits for primary Class 1 NICs and the earnings threshold for secondary Class 1 NICs. In those circumstances, I suspect that the noble Lord will regard these as probing amendments.
As I am sure the noble Lord is aware, these amendments would not of themselves produce coherent results even as far as these functions are concerned. Amendments later in this schedule—paragraphs 44 to 50—transfer to the Treasury the current DSS responsibilities for laying orders on contribution rate changes to keep the NIF in balance. The responsibility for keeping the NIF in balance would, under the Bill, still pass to the Treasury—even the amendments seek to keep with DSS the tools controlling NIF income and expenditure.
One of the Government's main drivers is our welfare-to-work agenda. We think this means that responsibility for contributions rates as well as tax rates should pass to the Chancellor of the Exchequer, to put both those determinants of work incentives into the same hands. The amendments would block that high-level strategy.
Some employers and tax practitioners are keen that we should address differences between the tax and NICs rates for residence, as well as how these rates are operated within the Inland Revenue and the Contributions Agency. We would be happy to discuss that with them. But, whichever officials and Ministers lead on any discussions, they would need to be alive to the benefit entitlement implications as well as the convenience of employers. Accordingly, I do not see the case for separating the residence tests from other issues affecting contributions liability.
I turn to the point about the lower earnings limit. In his last Budget, the Chancellor of the Exchequer made clear his aim of aligning the lower earnings limit with the single person's tax allowance - although of course he had no proposals about alignment with income tax of the upper earnings limit. Noble Lords will recall the amendments to the Social Security Bill to achieve this as far as employers are concerned. As far as employees are concerned, this, rightly, needs to wait for the Chancellor's proposals on increasing the lower earnings limit without depriving people of benefit entitlements—that is, those who currently receive benefit while the LEL is at £64 but who might otherwise be vulnerable if it moved up to align with the single person's tax allowance.
Nevertheless, Parliament has already agreed the principle of alignment. As noble Lords will know, decisions on the single person's tax allowance are of considerable budgetary significance. Accordingly, this
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hardly seems the time to separate decisions on the lower earnings limit and the earnings threshold from other matters to transfer to the Treasury.
Given the Government's strategy of alignment, it is inevitable that the Treasury will have an even closer involvement in determining the LEL and earnings threshold than hitherto. Separate decision-making will not give employers the reassurance they reasonably seek that alignment will be maintained.
The noble Lord, Lord Higgins, also asked a specific question about the relative responsibilities and regulations and what needs to have parliamentary approval. We can make full alignment only by primary legislation. Once that is passed, as is customary in all such financial matters, regulations will give the power to increase or decrease the figures. That is a fairly standard procedure.
The noble Lord, Lord Renton, was concerned about some of the constitutional issues involved. Existing social security legislation already requires some powers of the Secretary of State to make regulations to be exercised with Treasury consent; for example, Section 189(8) of the Social Security Administration Act 1992. I do not think that this is a constitutional novelty. It seems to us to be a sensible way to proceed. In the light of those remarks, I hope that the noble Lord, Lord Higgins, will feel able to withdraw his amendment.
Lord Higgins: I shall want to read carefully in Hansard what the Minister has just said and to consider whether we should return to this point. I was not entirely clear about the point that she made; namely, that the alignment would have to be achieved by primary legislation, but that the level could then be altered once the two had been aligned. I was not clear whether without primary legislation the rate of one could be altered to achieve the alignment. Perhaps I may consider that point. Subject to that, I beg leave to withdraw the amendment—
Lord Renton: Before my noble friend does so, I wonder whether the Minister will be so good as to answer my point about the desirability of Ministers being responsible for secondary legislation. That is important. If the Inland Revenue or the Treasury performs that function—that is provided for later in the schedule—that means that officials are doing it. It could be said, I suppose, that Ministers are responsible for officials, but if the Ministers are ultimately responsible, surely it is better for it to be written into Acts of Parliament that they have the responsibility for making the regulations.
Lord Skelmersdale: Before the Minister answers that point, I wonder whether she can help us further. She said—I paraphrase—that the statute book has many examples of a Secretary of State being allowed to do something, with the consent of the Treasury. Here, surely, my noble friend Lord Renton is quite right: the

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boot is on the other foot. We are looking for a precedent where the Treasury is allowed to do something, with the consent of a Secretary of State.
Lord Higgins: Perhaps I may intervene. My noble friend Lord Renton echoes the point I made earlier, to which, in the light of the Minister's remarks, I thought that we might return on Report; namely, the curiosity throughout this Bill that matters which have previously been the responsibility of a Minister are transferred to officials. I am not clear about why the provisions do not simply state that the responsibility is transferred from the Secretary of State for Social Security to the Chancellor of the Exchequer.
Baroness Hollis of Heigham: We are simply mirroring existing provisions. It was not my understanding—and certainly not in my briefing—that this provision raises any constitutional issues whatsoever. I do not believe that there is any such dilution of parliamentary accountability. However, it is clear that the noble Lord, Lord Renton, supported by other Members of the Committee, fears that without this being more explicit, there could be some misunderstanding. I shall take back this point to the department to consider whether we need to clarify the drafting to allay the fears expressed by the noble Lord.
Lord Higgins: On that basis, I am happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 16 and 17 not moved.]
On Question, Whether Schedule 3 shall be agreed to?
Lord Higgins: I thought it probably more convenient to raise this matter on Schedule 3 rather than earlier, on Clause 2, which is linked with it. I believe that the proposal that the determination of the level and scope of NICs should shift across from the Department of Social Security to the Treasury gives cause for concern. That is another example of the move away from contributions, which give an entitlement to benefits, to a tax pure and simple.
I understand all the points made earlier by the noble Lord, Lord Goodhart. National insurance contributions are already commonly understood to be a tax. Nevertheless, now that the Chancellor rather than the Secretary of State is to determine the level—yet another example of the "salami-slicing" movement—this is becoming less and less a contributory matter and moving more and more towards being a straight tax. We are therefore concerned that responsibility for this matter is introduced in this clause and that the Chancellor of the Exchequer or perhaps, very oddly, the Inland Revenue will be dealing with it.
There are other aspects which concern us. In the course of extensive correspondence, the comprehensive nature of which has astonished me, the noble Baroness spelt out over some three pages the workings of the National Insurance Fund. On an earlier occasion the noble Lord, Lord Goodhart, described the National
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Insurance Fund as a pipeline. I think it is not so much a pipeline as a tank, with the level going up and down depending on how it is adjusted. There are some strange arbitrary rules, such as that at the end of the financial year it should cover at least a sixth of the expenditure of the fund, and so on. We are not clear why that rule should apply. More particularly, we are concerned that responsibility for the matter is being transferred more towards the Treasury and that there is less concern with the policy aspects of, for example, pensions. In that context, is it envisaged that the proposals which the Government have put forward for reform of pensions into three tiers will be operated in the case of the first two tiers through the National Insurance Fund?
5 p.m.
Lord Goodhart: I do not agree with the noble Lord, Lord Higgins, on this issue. It seems to me inevitable that there will be consultation between the Chancellor of the Exchequer and the Secretary of State in deciding at what level national insurance contributions should be fixed. As is well known, national insurance contributions have an important fiscal role and it would be impossible to fix the annual budget without an agreement between the Chancellor of the Exchequer and the Secretary of State as to the level of national insurance contributions.
On occasions in the past we have seen specific increases in national insurance contributions for fiscal purposes. At certain times we have also seen regular subsidies to the National Insurance Fund from the Treasury. It seems to me that national insurance contributions and the direct taxes are so closely related that it makes obvious common sense that the level should be fixed by the Chancellor of the Exchequer.
Lord Renton: I wish to make some general comments about the third schedule. It consists of nine pages of amendments, which is very unusual. On each of those pages there are never fewer than six and sometimes as many as 10 amendments. We can therefore be sure that in this schedule there are 60 or 70 amendments proposed to fairly recent legislation of the previous government.
I do not object to the involvement of the Treasury; it has always had to be involved. I hesitate to repeat myself, but, if amendments of this kind have to be made, it must be made clear that it is individual Ministers who are being made responsible as a result. That is the point I made before, on which the noble Baroness raised my hopes in her previous reply. With that in mind, I hope that at Report stage we shall find that the Government have reconsidered the way in which in the schedule they are making amendments to the previous legislation.
Baroness Hollis of Heigham: The comments of the noble Lord on Schedule 3 invite us to reopen the Second Reading debate, which would not be sensible. We could have achieved the results of Schedule 3 through a negative resolution Order in Council under the Ministers of the Crown Act 1975, but that procedure is not available for transfers to the Inland Revenue, which is why it is being done this way.

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I am grateful for the support of the noble Lord. Lord Goodhart, on this matter. Achieving the policy transfer by order would have left this primary legislation concerned only with operational functions and with changes such as the new appeals system. Secondary legislation, considered separately, would be needed to complete the picture. We thought it better and more transparent to put both parts of the proposals simultaneously before Parliament. Secondly, including in the Bill material on the policy transfer allows the opportunity for debate on specific functions we propose to transfer, and the noble Lord has quite properly taken advantage of both Second Reading and the debate today.
The particular point which the noble Lord raised beyond the mutual responsibilities of the Chancellor of the Exchequer and the Secretary of State for these broader policy issues was the responsibility for the National Insurance Fund. The Bill transfers functions, for the reasons I explained in my speech on Amendment No. 17. It makes no changes in the level and scope of NICs, nor to the existence of the National Insurance Fund. The Chancellor, as always, is responsible for determining the adequacy of the level of the National Insurance Fund. He usually seeks the involvement of other government officials. But the DSS will continue to handle legislation on broader policy.
In response to the noble Lord, Lord Renton, the Inland Revenue already has powers in relation to tax. This provision makes the position consistent.
I emphasise that the powers that will go to officials are, for the most part, low-level, mechanical powers that are currently exercised by officials within the DSS. There is no dilution of the responsibility of the Treasury or specific Ministers within the Treasury. I repeat my assurance that, if we need to make this clear, we shall he happy to look at the drafting of the Bill.
Schedule 3 agreed to.
Clause 3 [General functions of Board]:
Lord Higgins moved Amendment No. 18:
Page 2, line 8, leave out subsection (2).
The noble Lord said: I shall not detain the Committee long on this amendment to delete subsection (2), which provides that, with some exceptions which are listed in the latter part of the clause, in future "inland revenue" will be taken to include contributions. That merely underlines the point I have been making throughout. I do not ask the Minister to respond since we clearly disagree on the matter. I beg to move.
Baroness Hollis of Heigham: I do not think we should treat the noble Lord's amendment in quite such a perfunctory way. If it were passed, it would fundamentally undermine the Bill's purpose of transferring the Contributions Agency's functions to the Inland Revenue. Let me explain why.
Other provisions of the Bill, particularly Clause 1 and Schedules 1 and 2, allow the integration of the Contributions Agency into the Inland Revenue by transferring its functions from the Department of Social Security to the Inland Revenue. This amendment, as I am sure the noble Lord is aware, would mean that the
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Inland Revenue's responsibilities—that is, what it is entitled to do as a statutory board—were not explicitly extended to cover national insurance contributions.
If NICs were a tax, subsection (1) on its own would be sufficient to complete the transfer of functions to the Inland Revenue that is effected by the Bill. But NICs are not a tax, which is precisely why subsection (2) is needed. It adds NICs to the statutory provisions covering the exercise by the Inland Revenue of its tax functions. Without it, some other means would be needed to fulfil a key purpose of the Bill, to enable the Inland Revenue further to integrate the arrangements for the collection of NICs into those for the collection of tax.
I can assure the Committee that subsection (2) does not merge tax and NICs but merely brings their administration together in one body. In deleting subsection (2), this amendment would omit a key step in the transfer of functions to the Inland Revenue that is to be effected by this Bill, and, incidentally, could put at risk the collection of some £2 billion of NICs money, which I am sure the noble Lord would not wish to be a party to. In those circumstances, I hope that the noble Lord will withdraw his amendment.
Lord Higgins: Indeed, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins Lord Higgins moved Amendment No. 19.
Page 2, line 29, leave out (", whether made before or") and insert ("made").
The noble Lord said: This amendment refers to a substantive point. I find the wording of this part of the clause rather doubtful. For example, in subsection (5) it says:
"In any declaration for the purposes of section 6 of the Taxes Management Act 1970 (declarations on taking office), whether made before or after the commencement of this section, the reference to an offence relating to inland revenue shall be taken to include a reference to",
various offences, and so on. Can the Minister say whether I am wrong in thinking that this provision will in fact make it retrospective? In other words, does the fact that the subsection refers to a declaration being made before or after the commencement of the section mean that it will be possible for someone to be found guilty of an offence, which would not otherwise be the case? Of course, the Government's policy generally does, to some extent, change some offences which are criminal into those which are civil. However, on the face of it, I am not quite sure to which of those categories this particular section of the Bill refers. Can the Minister say whether it would indeed create a situation where someone might be found retrospectively, in the absence of this particular section, to have committed an offence and thereby be guilty of either a criminal or a civil offence? I beg to move.
Lord Renton: My noble friend has raised a fundamental question of principle. I say that because in criminal cases we never convict anyone under a law which has not yet come into force. We expect the law to be clear before the alleged offence is committed and,

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indeed, we expect it to be brought into force before the commission of that offence. It is rather strange that this provision could lead to a different result.
Baroness Hollis of Heigham: I very much hope that I can allay the noble Lord's fears. It seems to me that his amendment would have much more dire consequences than he has foreseen. This part of Clause 3 is intended to ensure that the undertaking given by civil servants and tax appeal commissioners to keep taxpayers' affairs confidential is adapted to include the Inland Revenue's new responsibilities for NICs, statutory sick pay, statutory maternity pay and contracting-out matters. Staff and tax appeal commissioners need to be able to disclose otherwise confidential information for the purposes of prosecutions. The wording of Clause 3(5) enables contributions offences to be handled in the same way as tax ones are now.
The amendment proposed would mean that this extension would apply only to Inland Revenue civil servants and tax appeal commissioners appointed after Clause 3 comes into force, which I believe was the concern of the noble Lord, Lord Renton. Staff and commissioners appointed before the passage of the Bill—obviously the very great majority—would not be able to disclose information for the purposes of prosecution about NICs, and so on. The effect would be to place varying confidentiality requirements on staff and appeal commissioners depending on when they were appointed. As all Inland Revenue staff and tax appeal commissioners will potentially deal with both tax and contributions, this would produce an odd and undesirable result. Indeed, it would hardly be helpful to this Government's drive against fraud of all kinds.
I hope that the noble Lord, Lord Renton, will be reassured to know that the provision in Clause 3(5) follows the precedent used in the past, especially by the previous government, when it has been necessary to extend the scope of the declaration of secrecy to cover new matters. For example, when corporation tax was introduced, the existing declaration was extended to cover the new tax. It is a sensible measure, which I do not believe raises serious constitutional issues. It is a well established precedent for the smooth and effective transfer of contribution matters to the Inland Revenue. Therefore, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Higgins: I should like to consider, as no doubt my noble friend and others will, exactly what the Minister said in her response. I was reasonably happy with her reply until she referred to the question of the Government's drive against fraud. Of course, we are all in favour of that drive. However, in the light of what the Minister said, we are not clear as to whether it would be possible for someone to be convicted of fraud in the circumstances outlined by my noble friend Lord Renton. As Members of the Committee know, I am not a lawyer. Therefore, I should like to consider, with others, exactly what the Minister said. Subject to that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
On Question, Whether Clause 3 shall stand part of the Bill?
Lord Skelmersdale: I am not sure whether my noble friend intends to speak in this respect, but if he does I am afraid that I am pre-emoting him because my question relates to subsection (3) and relates specifically to paragraph (e). Subsection (2) says:
"Subject to subsection (3) below, for the purposes of the Inland Revenue Regulation Act 1890 ("the 1890 Act") the definition of "inland revenue" in section 39 of that Act shall be taken to include contributions".
That is fair enough, but miscellaneous exceptions are then set out in subsection (3) one of which, surprisingly, is the "expenses of prosecutions". I rather wonder why that is. Can the Minister enlighten me?
Baroness Hollis of Heigham: Given the fact that the noble Lord is opposing the Question that Clause 3 should stand part of the Bill, it is perhaps worth emphasising—
Lord Skelmersdale: With the greatest respect to the Minister, I am not doing so. I am using the debate to raise a question on the clause, which is a rather different matter.
Baroness Hollis of Heigham: I am advised that several sections of the Inland Revenue Regulation Act 1890, as set out in Clause 3(3), do not need to apply to contributions. In some cases comparable legislation already exists in relation to contributions, while in other cases the section no longer applies to income tax and would not be suitable in relation to contributions. Hence the inclusion of the list of exceptions.
Lord Skelmersdale: I thank the Minister for that explanation.
Clause 3 agreed to.
Clause 4 [Powers relating to enforcement]:
On Question, Whether Clause 4 shall stand part of the Bill?
Lord Higgins: This clause relates to the issue of enforcement. Again, it was raised on Second Reading and is a matter upon which the noble Baroness has written at some length, as far as concerns the actual hours involved. Schedule 4 is in fact related to the clause and I believe that we have tabled some specific amendments in that respect. Therefore, it may be more appropriate to raise these matters while dealing with the schedule rather than the clause. As Members of the Committee will see, Clause 4 merely consists of three lines so it would be easier to discuss such matters when dealing with the related schedule. In the circumstances, I do not wish to oppose the clause at this point.
Clause 4 agreed to.
Schedule 4 [Enforcement]:
Lord Higgins Lord Higgins moved Amendment No. 20.
Page 37, line 18, leave out ("or any other enactment").
The noble Lord said: In some ways, this amendment is not dissimilar to the matter that we debated a few moments ago. Under paragraph 2 of the schedule it seems that premises may be inspected,
"by an officer of the Inland Revenue under section 110ZA below or any other enactment".
It seems possible that that provision might confer powers which are not at the moment enjoyed by the Department of Social Security. The purpose of the amendment is to establish whether that is likely to be the case. Perhaps the Minister can reassure us on that point. I beg to move.
Baroness Hollis of Heigham: Section 110 of the Social Security Administration Act permits the Secretary of State to enter into arrangements with any other government department. Under those arrangements the officers of the latter may act on behalf of the DSS, using DSS powers to enter premises, inspect them and obtain information there for DSS purposes. The only condition is that the premises in question must either be subject to inspection by officers of the other department under their own powers, or be under the control of that other department.
Currently officers in the Contributions Agency may be asked by their colleagues in the Benefits Agency to visit employers to check on the earnings of employees who have made income-related benefits claims. No special power is needed to permit co-operation of this nature as both agencies are part of the same department.
After the staff of the Contributions Agency move to the Revenue, co-operation of this kind remains as desirable as ever to counter potential fraud. But once the staff involved belong to different departments, special provisions are needed to enable those of one department to gather information for the purposes of the other. The purpose of this measure (paragraph 2 of Schedule 4) is to enable that co-operation to continue.
However, I can see why some Members of the Committee, particularly the noble Lord, Lord Higgins, might be concerned that paragraph 2 goes beyond what is needed for the purposes I have just described. For example, officers of the Inland Revenue expert in the valuation of property have for many years had the power to inspect premises for the limited purpose of making valuations needed in connection with those taxes for which the Revenue is responsible, for business rates or for council tax. I accept that an argument could be constructed whereby all such premises could be regarded as liable to inspection by any Revenue official on behalf of the DSS. This is not our intention. I am therefore happy to accept Amendment No. 20, as Inland Revenue officers will still be able to inspect premises on behalf of the DSS where the Inland Revenue controls those premises, or where its officers have reason to inspect them for the purposes of NICs or other transferred functions, which fulfils our intentions. As I said, we are therefore happy to accept Amendment No. 20.
I now turn to Amendment No. 21 which is grouped with Amendment No. 20. The proposed new subsection (5)(a)(ii) in Section 110 simply
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reformulates powers which have been on the statute book for some 50 years. These allow the Secretary of State for the DSS to enter into arrangements with another government department. Under those arrangements the officers of the other department may enter premises, inspect them and obtain information for DSS purposes, so long as the premises in question are subject to inspection by those officers under their own department's powers.
The Committee may be concerned that the new subsection (5) would mean that Inland Revenue officers could be authorised to inspect premises on behalf of the DSS to which Revenue staff had no rights of access, but others, such as safety inspectors did. If so, I can assure the Committee that this is not our intention; nor do we think it is the proper construction of this provision.
The proposed wording of Section 110(5) would provide for two types of arrangement: first, with Inland Revenue staff authorised to inspect premises for contributions purposes; and, secondly, with non-Revenue staff authorised under non-tax and non-contributions legislation. The amendment would remove that second link. Even if that were right as a policy, it is not obviously something to be done in a Bill merely transferring contributions functions. Furthermore, I suggest seriously to the noble Lord that tying the hands of the DSS like this goes against the concept of joined-up government and could damage the fight against benefit fraud. I am sure that that is not his intention. As I say, we have taken his amendments seriously and we are happy to accept Amendment No. 20. However, we do not think it is appropriate to accept Amendment No. 21. I hope therefore that the noble Lord will withdraw that amendment.
Lord Higgins: Christmas presents, however late, are always welcome! As I understand it, the effect of what the noble Baroness has just said also encompasses Amendment No. 22 which stands in the name of my noble friend Lady Anelay of St. Johns and myself. Therefore the amendment will not be moved at the appropriate moment.
On Question, amendment agreed to.
[Amendment No. 21 not moved.]
The Deputy Chairman of Committees (Lord Elton): Before I call Amendment No. 22, I must inform the Committee that, if it is agreed to, I shall not be able to call Amendments Nos. 23 to 27. However, I gather that that is superfluous information.
[Amendment No. 22 not moved.]
Lord Higgins Lord Higgins moved Amendment No. 23:
Page 37, line 47, leave out from ("examine,") to ("in") in line 48.
The noble Lord said: There is a rather curious provision in the Bill as regards the powers exercisable by officers of the Inland Revenue. The Bill states that an officer can conduct an examination,
"alone or in the presence of any other person, as he thinks fit".

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It appears that the Revenue may make what I believe the noble Baroness, Lady Hollis, at Second Reading insisted was a visit rather than anything else. On that occasion I referred to a raid, which may have been a little over the top. In the correspondence—which has been referred to on a number of occasions—I believe she specified how many such controversial visits (if I may put it that way) had been made by the Department of Social Security in any given year. It was certainly a small number. However, on the other hand, I imagine that the number of visits made by the Inland Revenue would be considerably greater. One is concerned that the tendency of the Inland Revenue to make such visits—as compared with the small number of visits by the DSS—might encourage more visits of a controversial nature to be made in the future. Be that as it may. However, to return to the amendment, I am still not clear why the Inland Revenue may wish to be accompanied by "any other person" and whether that is appropriate if the individual in the premises concerned does not wish to see the "other person". I beg to move.
Earl Russell: I hope the Committee will pay some attention to this point because it requires a little thought. We should never legislate on the assumption that "it cannot happen here". Some 999 times out of a thousand it cannot. However, in this of all years one should not think of that as an absolute bar on it ever happening. One must construe vires strictly. As I understand the position, in this case it would be possible for an inspector to inspect a business in the presence of the leading competitor of that business. Would it perhaps be better to state instead of,
"any other person, as he thinks fit"
something like,
"any other appropriate person"?
That would give the court the power to review whether the person was appropriate. It may be that this power—like the power of this House to throw out Acts to prolong the life of a parliament—may not be necessary in many hundred years. One could perhaps argue that it is not necessary because it is there. This is a small change and I hope that the Minister may consider it.
Lord Higgins: Perhaps I might add just one postscript to the point the noble Earl has just made. There have been occasions in the past—I shall not go into them now as they were extremely controversial—when sometimes visits by the Inland Revenue have been accompanied by the media. I presume it is certainly not the intention of the Government to include that kind of provision at this stage.
Baroness Hollis of Heigham: I am slightly baffled by this concern because it is not the same concern as I believe the noble Lord expressed at Second Reading. However, I shall try to develop this point because we are trying to protect the situation of employees, not to add extra people to accompany the inspector. I wonder whether there is some fundamental misunderstanding between us as regards what the clause and its addendums seek to achieve. I shall spell out what it
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seeks to achieve and we can pursue the matter to see whether the misunderstanding still exists. As to the concern that has been expressed, that is certainly not my understanding of the intention of the clause.
I remind the Committee that the powers in new Section 110ZA are merely copying inspection powers which have existed unchallenged for 50 years. They attack the careful attempt made in the Bill to preserve the current balance between inspectors' powers and citizens' rights. The exercise of those powers—I take account of everything the noble Earl has said on that point—has been almost wholly uncontentious. We have no reason to expect that to change as a result of the transfer. In other words, experience would suggest that this is not a problem.
Turning to Amendment No. 23, inspectors have the power to question persons that they find on an employer's premises, or others reasonably believed to be liable to pay contributions. When doing so, inspectors can choose whether to question a person alone or with others. Amendment No. 23 would remove that power.
This power is extremely useful in finding the facts where an employer is suspected of defrauding the National Insurance Fund—for example, by paying employees in cash, which does not go through the books of the business. Such employers, particularly if they were present when the employee was being interviewed, would be in a position to put pressure on employees not to reveal the facts to the inspectors visiting the employer's premises—for example, by threatening to dismiss the employee if he tells the truth or asks the inspector for a private word. Giving the inspector the power to require the interview to be carried on in private overcomes that inhibition. I can assure the Committee that it is not the intention that the power should ever be used to deny a suspect employer the right to have his lawyer or other professional adviser present at an interview. On the one hand we obviously want the employer to have any additional support he may need; on the other hand, we do not wish to have the employee feeling that, because he may have the employer present he must do so, and therefore there is the possibility that intimidation may result.
Amendment No. 24 attacks the right of inspectors to visit any employer's premises to check that NIC rules are being applied properly. Such checks are much more effectively carried out on the spot where records are kept rather than remotely. They can also be concluded much more quickly, and that is to the advantage of the employer. Paradoxically, the power to visit the premises of employment agencies and the offices where pension schemes are administered has been left intact by this amendment. I am not sure of the logic behind the distinction. I cannot believe that it has anything to do with the noble Lord's declared financial interest.
Amendment No. 25 seeks to reposition the borderline between those premises which can be visited to check on the operation of the NIC rules by an employer or self-employed person and those which cannot. At present premises, a house or flat, used wholly as a private residence are not subject to inspection visits; premises used partly for that purpose and partly for trade

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or business can be visited. That is a sensible place to draw the line. The existence of a business and the employment of staff or self-employment go hand in hand. An inspection is best and most conveniently done where the business is run and where its records are kept.
As a result of the amendment, there will be no explicit right to make an inspection visit to the office accommodation of a person carrying on a perhaps substantial business if the office is a room at his home. But if that person takes office accommodation elsewhere, an inspection becomes possible. There is no sense in that distinction.
I surmise that the thinking behind this amendment is that the present rule could lead to an unreasonable encroachment into a person's privacy as, once domestic accommodation is used for a trade or business, theoretically the whole premises become subject to an inspection visit even though only a small part is used commercially. But inspectors have no interest in the parts of a house which are used for purely private purposes.
I turn now to Amendments Nos. 26 and 27. At present, Contributions Agency inspectors make 60,000 visits to employers a year, in almost all cases with co-operation, without the need to threaten use of legal powers. The need to obtain a magistrate's warrant for each visit would be quite inappropriate and a major burden on the courts. I am not aware of any evidence that NIC inspectors have ever abused their powers by visiting premises where there were no reasonable grounds for supposing that people were employed. If the noble Lord has any evidence, of course I shall take it seriously.
Perhaps I may sketch in some background about these visits. The fact that an employer has been chosen for an inspection visit carries no implication that irregularities are suspected. The great number of visits—60,000 of them a year—illustrates that they are largely of a routine nature. Furthermore, inspectors have no right to force entry if their way is barred. In practice, of course, the timing of visits is agreed with an employer beforehand in order that they are as convenient as possible. As the noble Lord said when ironically quoting himself, we are not talking about dawn raids.
If these amendments were accepted, what would a magistrate have to consider when deciding whether or not to grant warrants for up to 60,000 visits? He would have to consider only whether there were reasonable grounds for supposing that somebody was employed, or that there was an employment agency or pension scheme run from the premises. That is not a sensible use of magistrate's time.
It may be that the amendment is intended to require a magistrate to impose a tougher test before granting a warrant; for example, that there must be reasonable grounds for suspecting irregularities. Such a test would be consistent only with a much reduced inspection programme and, inevitably, a far less effective one. Incidentally, such an inspection programme would alter the whole basis of the current inspection programme, rather than the dipstick-like regime that we have at the moment.
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The Committee will be aware that it is not generally true that Customs officials need a magistrate's warrant for entering a premises. For example, a routine visit to check on a trader's compliance with VAT rules requires no search warrant. Such visits are analogous to the routine visits that NIC inspectors make. A magistrate's warrant is required in cases where the power to enter by force is sought. In that case—perfectly reasonably—the magistrate must be satisfied that there are reasonable grounds for suspecting serious fraud.
If it were to be suggested that the Inland Revenue should be entitled to enter premises by force, I would fully agree that at least a warrant from a magistrate, if not a county court, should be required. While I see some attractions in such a suggestion, I do not think that such an extension of powers would be appropriate to this Bill. I do not think that the noble Lord is proposing that any more than a reduction in the existing powers. On all these grounds, I would ask your Lordships to withdraw these amendments.
5.30 p.m.
Earl Russell: Before we leave this matter, perhaps I may ask for some further clarification about Amendment No. 23. The Minister and I appear to have been at complete cross purposes about the meaning of line 48, especially the words "as he thinks fit". The Minister is arguing that those words refer to the inspector's choice of whether he thinks fit to bring another person or to do it alone. I would have no objection at all to that understanding. My understanding had been that he had the option of bringing in any other person he thought fit. Would it not be a good idea to clarify this matter before a court gets hung up on the same misunderstanding that we have had?
Lord Higgins: I entirely agree with the noble Earl. In reality, it is arguable that the clause is ambiguous in that crucial respect. Perhaps the Minister will undertake to look at it again. The noble Baroness has given a very comprehensive reply to the other points and I am inclined to accept the view she expresses with regard to warrants and magistrates' courts and so forth.
One other point arises—certainly not, I hope, in relation to my own interests. As regards premises, would it perhaps tighten the definition a little by saying "a dwelling house not used for a related trade or purpose" rather than carrying out any trade in the home. In the light of the earlier discussion in the House, it may be a poet or whatever. That perhaps would be a little tighter than saying that if any trade is carried out in the house, then they can go into what used to be called an Englishman's castle.
Baroness Hollis of Heigham: Obviously I shall take away both of those points for consideration. This is why I was baffled. When I started, it seemed to me that the criticisms or concerns of the two noble Lords were coming from an almost diametrically opposite position from my understanding of what the clause and the schedule are designed to do, which is to protect the position of employees in the eyes of inspectors so that they are not vulnerable to intimidation. Now that it has

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been pointed out, I shall obviously check that, so that there can be no misunderstanding on the part of the lawyers as regards the meaning of those words. If there is any ambiguity and the words can bear the construction which the noble Earl, Lord Russell, placed on them, then we are obviously very grateful to him for pointing it out. We shall obviously seek to clarify it.
The noble Lord asked about the dwelling house and the poet. I am happy to check whether the wording is as explicit as it ought to be or is too loosely drawn. If we believe that there are any concerns on this point we shall come back with a government amendment. I have no reason to believe that that is the case but it is the job of the House of Lords to scrutinise Bills for ambiguities or misunderstandings. I am happy that we should do so.
Lord Higgins: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 24 to 27 not moved.]
Clause 5 [Disclosure of information]:
Lord Higgins: I had intended to oppose the Question that Clause 5 stand part of the Bill but it may be more appropriate to raise my concerns on the Question that Schedule 5 be the fifth schedule to the Bill.
Clause 5 agreed to.
Schedule 5 [Information]:
Lord Higgins Lord Higgins had given notice of his intention to move Amendment No. 28:
Page 41, line 40, after ("information") insert (", other than information on the identification of persons,").
The noble Lord said: I shall not move the amendment at this stage because I suspect there has been a misdrafting.
[Amendment No. 28 not moved.]
[Amendments Nos. 29 to 31 not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 32:
Page 43, line 20, after ("1993") insert ("or Part III of the Pension Schemes (Northern Ireland) Act 1993").
The noble Baroness said: We are back to another of the Government's technical amendments. Paragraph 9(3) of Schedule 5 to the Bill inserts a new subsection (2A) into Section 182 of the Finance Act 1989 to define the expression "social security functions" for the purposes of that section, which prohibits the unauthorised disclosure of information held in the exercise of official functions.
Section 182 has effect throughout the United Kingdom, as will the amendments made by paragraph 9 of Schedule 5. References to "contributions" in the new subsection (2A) are already specifically defined to apply in Northern Ireland and references to statutory sick pay and statutory maternity pay have a currency throughout the UK. However, as it stands, new subsection (2A)(b) will work only for contracting-out legislation in Great Britain. This amendment inserts a reference to corresponding Northern Ireland legislation. I beg to move.
On Question, amendment agreed to.
On Question, Whether Schedule 5, as amended, shall be agreed to?
Lord Higgins: I wish to pursue one or two points. Schedule 5 is concerned with what one might call Chinese walls and the extent to which information may pass from one government department to another. Over the years that has in some respects been tightened by statute and in other respects has been weakened. One point worries me. Paragraph 9(2) of the schedule states:
"No obligation as to secrecy imposed by statute or otherwise on persons employed in relation to the Inland Revenue shall prevent information … from being disclosed … to the Secretary of State".
My understanding is that on matters of the kind that are being dealt with in the schedule such information would not normally be conveyed to the Secretary of State as such.
Perhaps I may give another example regarding the Treasury. It has always been the case that an individual's tax affairs shall not be disclosed to Treasury Ministers. There is always a Chinese wall between the Inland Revenue and Treasury Ministers. That is an important safeguard. I am not clear whether, quite accidentally I am sure, the paragraph to which I have referred would not enable private information about individuals' contributions being transferred without their permission to the Secretary of State.
My other point is one of drafting. Paragraph 8 of the schedule refers to Section 158A of the Pension Schemes Act 1993. When I came to look at the relevant section of the Pension Schemes Act 1993 I was unable to find Section 158A. I am not sure where it is. The Library has provided me with the Pension Schemes Act 1993, which I shall treasure. It may be that the Act has been amended subsequently but, if so, the Library appears to be unaware of it. Perhaps we can return to this point at a later stage. I simply ask whether there is any substance in my first point and no doubt we can consider whether the drafting is correct with regard to my second point.
Baroness Hollis of Heigham: I may receive a note from the Box on that point, but I do not know whether Section 158A of the Pension Schemes Act 1993 has gone astray or whether there has been some misunderstanding between the noble Lord and his source of information. We shall try to let him have an answer.
The noble Lord asked about the interface of information. This schedule introduces provisions on the exchange of information between government departments which are needed to allow the Inland Revenue, the Department of Social Security and other bodies to carry out their functions following the merger of the Contributions Agency with the Inland Revenue as a consequence of our Bill. In many cases the provisions do no more than revise existing legislation on such exchanges of information to reflect the fact that the Inland Revenue rather than the Secretary of State is now responsible for contributions, statutory maternity pay, sick pay and contracted out pensions.

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In other cases the provisions reflect the fact that the way in which the Inland Revenue's duty of confidentiality has developed over the years means that it can disclose confidential information only where there is a specific legislative provision allowing it to do so. So a specific provision is needed in this schedule to enable the Inland Revenue rather than the Secretary of State to provide contributions-related information to the Office of National Statistics.
Section 158 allows Inland Revenue officials to speak directly to either DSS policy officials or Benefits Agency staff about the pension position of individuals or schemes. Without that facility, the Inland Revenue might not be able successfully to resolve an individual's query. As I understand it, there is nothing within the Bill that involves the passing of information to the Secretary of State.
It may be worth stressing at this stage that the changes which I describe do no more than allow the Inland Revenue, the Department of Social Security and other public bodies such as the Office for National Statistics continued access to the information that is essential for the carrying out of their functions. In effect, the boundaries across which information can be supplied need to be redrawn to reflect the fact that the Contributions Agency will become part of the Inland Revenue but will be formally separated from the remaining operations of the Secretary of State in relation to social security.
What these provisions do not do—I hope I am able to allay the noble Lord's concerns—is allow any new general pooling of tax and social security information. Such provisions have no place in a Bill which is designed to do no more than transfer specific responsibilities from the Secretary of State to the Inland Revenue.
If the noble Lord thinks it helpful, I am happy to enlarge on what information about the citizen may be passed between government departments. I shall develop that point if the noble Lord wishes. It appears from his nod that he wishes me to do so; therefore I shall say a little more about the detail of the schedule.
Paragraph 1 introduces new Sections 121E and 121F into the Social Security Administration Act 1992. Section 121E provides for information held by the Inland Revenue relating to contributions, statutory sick pay and statutory maternity pay to be supplied to the Secretary of State for Social Security or the Department of Health and Social Services in Northern Ireland for functions relating to social security, child support or pensions. The information in question is, for example, the National Insurance contributions record of an employed person which may be essential for the Secretary of State to determine whether the claimant is entitled to a social security benefit.
Section 121F is the companion provision covering in similar terms the reverse flow from the Secretary of State to the Inland Revenue of social security information which may be required for the purposes of the Inland Revenue's functions relating to contributions, statutory sick pay or statutory maternity pay.
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In practice the great bulk of the information that the departments require from one another will automatically be available to them through their joint access to the National Insurance record system computer. I say that to reassure noble Lords that the merger will not lead to a paper chase with the Inland Revenue and the DSS passing information backwards and forwards to one another.
Paragraph 3 of Schedule 5 introduces a new section, Section 122AA, into the Social Security Administration Act 1992. This provides the explicit statutory gateway for the IR to disclose the information it now holds in relation to contributions, statutory sick pay or statutory maternity pay to certain public bodies. Those bodies are the Health and Safety Executive, the Government Actuary's Department, the Office for National Statistics and the Occupational Pensions Regulatory Authority.
In each case the Secretary of State already provides the relevant information in relation to contributions, etc., to enable those bodies to carry out their functions. This new section allows the IR to continue to provide such information, for the same purposes, after the merger.
Paragraph 4 of Schedule 5 removes the existing Section 122A of the Social Security Administration Act 1992. As Section 122A relates only to the supply of information by the Inland Revenue to the Secretary of State for purposes relating to contributions, it will become redundant once the Secretary of State ceases to have responsibility for contributions.
Paragraph 5 of Schedule 5 is another tidying up provision, again reflecting the fact that the Secretary of State no longer needs information (in this case from government departments other than the IR) relating to contributions.
Paragraph 10 again recognises that the Secretary of State will no longer need, or be in a position, to pass information about contributions to the Inland Revenue, which has assumed responsibility for them. It also makes clear that these existing provisions for passing information to the Inland Revenue are unchanged by the separate specific provision introduced concerning exchange of information on contributions, etc. That draws a clear line between the new disclosures of information concerning contributions, etc., and the existing ones concerning disclosure of tax information. The latter continue unchanged.
Noble Lords will note that this schedule does not extend to the Inland Revenue the extensive powers of information exchange, for example with local authorities, that the previous administration gave the DSS in 1997. On balance, we were not convinced that such an extension was an essential part of a Bill we intend as a transfer of present information flows.
In the light of those explanations, I hope that the noble Lord is able to withdraw his objection to the schedule and that the Committee will accept it.
Lord Higgins: The Committee will be grateful for that reassuring statement by the Minister on a matter on which we are rightly concerned.

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Perhaps I may express gratitude to my noble friend Lord Skelmersdale, who has been more assiduous than I in reading the helpful Explanatory Notes. They point out that,
"Section 158A was inserted by Schedule 6, paragraph 9, Pensions Act 1995",
and that that is its origin. My noble friend is both assiduous and more up to date than I am and the Minister need not bother to pursue the matter. On the important broad issue, we are grateful for her reply.
Schedule 5 agreed to.
Clause 6 [Use of information by Board]:
Lord Higgins Lord Higgins moved Amendment No. 33:
Page 3, leave out lines 10 and 11.
The noble Lord said: The effect of this amendment is to raise the question of how much confidential information may go to outsiders. The clause states that the information,
"may be supplied to any person providing services to the Board for [the purposes specified]".
One was worried about the extent to which information held by the board or by a person providing services to the board could effectively be passed to third parties even though they were undertaking work for the Government. There was some concern that the provision might lead to some leakage of otherwise confidential information to people who might misuse it. It is not clear to me from the words of the subsection whether that might apply to Inland Revenue information as well as to information obtained by the DSS at present. Perhaps the Minister would clarify that point.
Baroness Hollis of Heigham: I understand the noble Lord's concern. It is one that I shared in relation to previous social security Bills driven through by his government. I pursued almost identical amendments. Whether I shall persuade him more satisfactorily than his predecessor the noble Lord, Lord Mackay, managed to persuade me, we shall have to wait and see. However, he had a larger number of troops. Who needs arguments when you have bullets?
The overall intention of Clause 6 is to enable the board to make appropriate use of the information which is available to it for carrying out its various functions. The noble Lord identified that. It includes being able to pass information freely to the contractors who provide the board with services, with the proviso always, of course, that the information can be used by those contractors only for the purpose of providing services to the board. Those service providers are contractually bound to keep data confidential. I absolutely understand the noble Lord's concern; he was worried about leakage and therefore whether there would be a risk of or temptation to impropriety.
The provision mirrors and in fact is based on that in Section 3 of the Social Security Act 1998. That section allows the pooling of information held by the Secretary of State for Social Security in respect of social security, child support and war pensions. It also specifically allows the Secretary of State to supply any such
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information to a person providing services for use in connection with the exercise of functions for social security, child support or war pensions.
The provision in Clause 6 does no more than repeat a provision which noble Lords have already recently endorsed in relation to social security, and under the previous administration, in other fields of social policy. It is as essential for the proper operation of the board of Inland Revenue as it is for the proper operation of the Department of Social Security that such a provision be in place. The Committee will note that the contracting out of computer services which requires this provision was the policy of an earlier administration. That is where the concerns were first raised.
I should stress that, as with the existing Section 3 of the Social Security Act 1998, there is no question or should be no question of confidential information being passed to contractors for indiscriminate use. The sole use which can be made of such information is in relation to the services provided to the Inland Revenue by the contractor. The contractor in those circumstances is doing no more than acting on behalf of the Inland Revenue.
I therefore urge your Lordships to reject the amendment which would significantly interfere with the computer services currently provided to the Contributions Agency, essentially by private operators. If the noble Lord has any further worries about what controls we have in place then I should be happy for him to see any appropriate standard conditions of contract, in so far as they are not commercially sensitive, in order to reassure him. I have regularly expressed those concerns and they have also come from the Lib Dem Benches in the past. I hope that with those assurances and any extra information that the noble Lord might desire, he will feel able to withdraw his amendment.
6 p.m.
Lord Skelmersdale: Before my noble friend does that, I am not sure what the clause is getting at. What kind of contractors are we talking about? Can the noble Baroness give an example? I am sure it would make it much easer for me to understand.
Baroness Hollis of Heigham: The obvious example and the one which I have been discussing with my officials is providers of computer services.
Lord Higgins: We need to consider this, given the fact that the Minister previously shared our qualms about the issue and that she will examine it again. In those circumstances I would not wish to pursue the matter further at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 [Decisions by officers of Board]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 34:
Page 4, line 4, leave out from beginning to first ("to") in line 5.
The noble Baroness said: In moving this amendment, I wish to speak to Amendment No. 36 with which it is grouped.
These two linked amendments deal with a drafting matter only. They move words which constrain the ambit of an appeal, rather than a decision about directors' liabilities, from Clause 7 which relates to decisions by officers of the board to Clause 10 which relates to appeals against such decisions. I beg to move.
Lord Goodhart: I wish to raise a drafting point. On page 4, if all the words in line 4 to the first "to" in line 5 are removed, the reference at the end of line 6 to "that Act" must become a reference to the Social Security Contributions and Benefits Act 1992. That was the last Act previously mentioned. I believe that that cannot be right. A further amendment is needed so that at the end of line 6 the reference to "that Act" must become a reference to the Social Security Administration Act 1992.
Baroness Hollis of Heigham: I am not sure whether that is so. It would be better if I take the issue away and consider whether the noble Lord's comment is correct. If it is and he is right, we shall have to bring forward a further amending amendment.
On Question, amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 [Regulations with respect to decisions]:
Baroness Anelay of St. Johns Baroness Anelay of St. Johns moved Amendment No. 35:
Page 5, line 11, leave out ("may") and insert ("shall").
The noble Baroness said: In moving this amendment, with the permission of the Committee I shall also speak to Amendment No. 51 which is in my name.
First, I wish to add my thanks to those expressed by my noble friend to the Minister for the full explanation she gave before the debate today with regard to questions raised at Second Reading. I also thank her for the offer of the meeting on Tuesday. I regret that because of the late change in timing of that meeting this week, I could not attend. However, I was grateful to have the opportunity to speak to her office yesterday and give details of the objectives behind my amendments.
Before I turn to the substance of the amendment, perhaps I may explain that the purpose of all three amendments to which I shall speak this evening is to attempt to get a picture of what the new appeals procedures will be like for those taking part, whether they be the appellants or those sitting on the tribunals. I am trying to look at it in a pragmatic manner so that there is an explanation on the record of the Committee as to the Government's expectations with regard to the new appeals procedures.
Therefore, as the Committee will realise, this is a probing amendment, phrased with the assistance of the Public Bill Office. I appreciate that the questions I ask may go wider than the amendment, but I was trying to save the Government's time and to hang quite a few questions on this one amendment.
The Minister has already answered some of my points from Second Reading in her letter of 17th December. In particular, I am grateful to her for explaining the role of the Lord Advocate about which I had serious concerns. The letter is in the Library of the House for public reference.
On this issue I am concerned about the uncertain role of medical experts. At present the Bill states, referring to the board, not to the UAT, that:
"Where it appears to an officer of the Board that a matter before him [or her] involves a question of fact requiring special expertise, he may direct that in dealing with that matter he shall have the assistance of one or more experts".
My amendment states that the officer "shall" direct that he should have such expert help. My questions revolve around the issue of what the regulations will state on the occasions when the officer of the board should seek advice. What are the Government's expectations about when an officer of the board shall seek advice? If officers seek advice and the expert—perhaps a medical expert—comes along, the board listens and may decide not to accept the advice. Having been given advice, the appellant hears that the officer of the board decided to disregard it. Two questions follow from that. What is the position with regard to the appellants? Are they able to take further measures to appeal against the fact that the officer ignored the advice? Are they able to adduce their own evidence which may be taken by the board on that or another occasion, in contradiction of the advice that was ignored or in support of it? Either scenario might transpire.
I ask the question because I am familiar with the procedure within the unified appeals tribunals system as to what further redress may be available to the appellant. However, I am not aware of what further redress will be available to the appellant in the new system of appeals. It is new, of course, only because of the transfer of functions. I am aware that there is an appeals procedure in existence but it is a question of how it will impact on these new client groups. That is an appalling definition, but one that is customarily used.
One of the problems is that so much of this is to be subject to regulation. I do not blame the Government for not printing the regulations at this stage. I am aware that that is customary practice but it would be most helpful if the Minister could give an indication of the expectations of the Government.
Amendment No. 51 proposes leaving out paragraphs 24 and 25 which remove the current ability of the DSS or an appeal tribunal to require statutory sick pay and statutory maternity pay claimants to take a medical. It is a probing amendment, to give the Government the opportunity to put on record why that change is required. I beg to move.
Lord Skelmersdale: I support my noble friend in her remarks in relation to Amendment No. 35 which predicates that the officer of the Board does not have that special expertise himself and therefore needs to obtain it elsewhere. I hope that the Minister can tell us

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that this is one occasion when "may" means "shall". If not, I have no doubt that my noble friend and I will have further questions to ask.
Baroness Hollis of Heigham: I am so relieved that the noble Lord will only have further questions to ask without commitment to further amendments before hearing the reply.
These two amendments deal with expert advice, particularly medical advice, available to officers of the Board. Before I deal with the amendments, and the points raised by the noble Baroness, I should first explain the background and why the clause is needed. Clause 8 is based, and indeed largely lifted straight from, Section 11 of the Social Security Act 1998. It provides the framework for Inland Revenue decisions on the issues that are set out in Clause 7. It provides for regulations to be made by the Board of Inland Revenue covering these decisions.
Turning now to Amendment No. 35, this would mean that if it appeared to an officer that any decision they were making involved a question of fact that required special expertise, then they would have to obtain the assistance of an expert in making that decision. This would mean that every such decision would require expert assistance. Public money would have to be spent even if the sums at stake on the decision were trivial.
In practice the Board will write guidance for their officers to follow in making decisions. We do not think it likely that there will be many cases in which officers will need expert guidance of the kind not currently available from current CA or Inland Revenue experts. If a particular matter looks likely to arise more than occasionally, then the Board's guidance to its officers will include appropriate guidance, Where appropriate that guidance would be written with expert assistance. Where such a question arose sufficiently frequently then the Board would consider whether it was appropriate to employ experts. Certainly, the Board would not expect staff untrained in such matters to make judgments on, for example, medical matters. We intend that the Inland Revenue will have access to medical advice from SEMA doctors, who currently provide such advice to the Benefits Agency.
By making the assistance of experts mandatory, the amendment does not take account of whether such additional assistance is necessary in the light of what is available in terms of internal guidance, or in relation to the significance of the decision. By requiring the Inland Revenue to seek expert help, even when written guidance was available, this amendment could impose an unjustified administrative and financial burden on the Board without any objective improvement in the decision-making process.
Similarly, Amendment No. 51 seeks to retain the Social Security Act 1998 provisions which allow the Secretary of State, when making decisions on entitlement to statutory sick pay, statutory maternity pay or an appeal tribunal, when determining an appeal against such decisions to those benefits, to refer the person concerned to a medical practitioner for examination and report.
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If accepted, the amendment would leave in place a provision which could never be used. That is because the Bill provides that decisions about entitlement to statutory sick pay or statutory maternity pay will in future be determined by officers of the Board, and appeals will be heard by tax appeal commissioners. Neither the Secretary of State nor tribunals constituted under the Social Security Act will determine entitlement to these benefits.
6.15 p.m.
The noble Baroness asked what would happen if medical advice were not taken, or taken into account; and what redress would be available. It may be helpful if I explain how decision-making on statutory sick pay works. The first point is that questions relating to entitlement to these benefits are normally made by the employer concerned. They are referred for a formal decision only where agreement cannot be reached between the employer and the employee. Such referrals mostly concern questions of whether the person making the claim is an employee or what are their average earnings. Very few cases referred for a decision, and even fewer appeals, raise the issue of the employee's medical condition, even with SMP and SSP. The noble Baroness's question concerns only a very small minority of cases. I asked for the statistics this morning, and of 500 cases a year concerning SSP or SMP, perhaps only 50 involve a medical issue. The rest are likely to be related to linking rules or employment rules and therefore do not require expert medical advice at all.
If medical evidence is required, it will almost invariably be because an employer is disputing that an employee is or was incapable of work at a certain time. In the first place, it will be for the employee to produce medical evidence in support of his claim. This will normally be a medical certificate. Where this does not satisfy the employer, he may well seek a more developed written report from the employee's GP or consultant, which will be available both to the officer of the Board of the Revenue and the employee.
The officer of the Board will consider the medical evidence provided. Clause 8 enables him or her to seek the assistance of an expert where it appears that a matter involves a question of fact requiring special expertise. In the light of the fact that very few medical disputes are anticipated it is likely that the officer will call upon such assistance in most cases—the likely exceptions being where the sums at stake do not justify the cost of expert advice.
Indeed, if the officer did not seek advice, or failed to take proper account of it, he or she would have a thin case to put before the appeal commissioners. The appellant can put his or her evidence directly to the commissioners. The likely result would be that the commissioners, looking as they do at the balance of evidence before them, would find for the appellant.
Accordingly, the first route of redress in these few cases would be to seek a hearing before the appeal commissioners. Then, in the process of seeking to settle an appeal by agreement rather than by formal hearing,

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the official could reconsider the need for specialist advice in the circumstances, as happens already for tax issues.
Ultimately, and I hope such cases never materialise, revised codes of practice on official error, the adjudicator and the ombudsman, offer other routes of redress.
I believe this to be a practical and fair approach to the small number of disputes that will arise on SSP/SMP entitlement issues. I hope the noble Baroness is content with my explanations of how the arrangements for statutory sick pay would work and is content to withdraw the amendment.
Baroness Anelay of St. Johns: I am grateful to the Minister for that information, particularly with regard to the further redress available to appellants within the new system of appearing before this Board rather than before the UAT. The noble Baroness stated that it is anticipated that there will be approximately 500 cases a year of SSP and SMP, of which only 50 would require medical advice.
Baroness Hollis of Heigham: That is the current situation. I have no reason to think that it will change, but I would not like there to be any misunderstanding.
Baroness Anelay of St. Johns: I am grateful to the noble Baroness for that clarification. Even on the basis of only 50 individuals, whether medical advice is not only sought but taken seriously and accepted can be a very important matter for them. I raise these issues in the context of concerns at UATs where medical experts are in a somewhat invidious situation. Do they offer advice independently or must they wait to be asked? However, on the basis of the explanation given by the noble Baroness about regulations relating to the use of medical experts, their role may be clearer at the board than it is currently at the UAT. In those circumstances, I beg leave to withdraw the amendment
Lord Skelmersdale: Before my noble friend seeks to withdraw her amendment, I threatened the Minister with a further question if I was unhappy with her answer. I am afraid that I am unhappy with her answer in relation to Amendment No. 35. In the introduction to her response to my noble friend she made two points. First, she said that guidance would be given to officers of the board. Secondly, she said that were my noble friend's amendment accepted on every occasion, special expertise or the advice of experts would be required. Surely, that is not true because the ball is very firmly in the court of the officer of the board. Subsection (2) provides:
"Where it appears to an officer of the Board that a matter before him involves a question of fact requiring special expertise …"
If the special expertise is already there in guidance notes it will not appear to him, will it? Therefore, we are considering the absence of expertise available to the officer. In those circumstances, surely it is only right that he should obtain it. It does not particularly matter whether the wording is "he may direct that in dealing
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with that matter he shall have the assistance of one or more experts". It will be his decision whether or not he needs it.
Baroness Hollis of Heigham: I wonder whether we are chopping words here. Clearly, if the advice that the officer needs to draw upon is available by written guidance, the question is whether that is "expert" or "expertise". That appears to be the difference between the two. I am not sure what point the noble Lord seeks to make. Where there is a frequently occurring problem, we expect it to be covered in the normal guidance and that will provide the expertise required. I suspect that that will relate largely to employment law. There may be many more individualised cases that are medically or disability-based where that expertise is not available to the officer of the board because he has not had medical training. He will be expected to seek such advice as is appropriate.
But we do not seek to lay down expert advice, in the sense that a person must always be required to come in, where it can be covered either by written material or the costs are disproportionate to the money in dispute. I am not sure that there is any difference. The noble Lord may want to read the answer carefully. If he is still concerned perhaps he will write to me. If he still feels he has not had a response to his question, he has at least two further opportunities to move amendments in order to deal with this issue.
Baroness Anelay of St.Johns: Obviously, my noble friend is a little more combative than I but I defer to his experience. He has served as a Minister in the Department of Social Security and I have not. The Minister is worried that I may encourage my noble friend. I must inform the Minister that I shall be delighted to defer further to my noble friend but on this occasion, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clause 9 agreed to.
Clause 10 [Appeals against decision of Board]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 36:
Page 5, line 37, at end insert—
("( ) This section has effect subject to section 121D of the Social Security Administration Act 1992 (appeals in relation to personal liability notices).").
On Question, amendment agreed to.
Clause 10, as amended, agreed to.
Clauses 11 to 14 agreed to.
Clause 15 [Decisions under Pension Schemes Act 1993]:
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): If Amendment No. 37 is agreed I shall be unable to call Amendment No.38 because of pre-emption.
Lord Goodhart Lord Goodhart moved Amendment No. 37:
Page 7, line 43, leave out from beginning to end of line 24 on page 8 and insert—
("(4) Provision may be made by the Inland Revenue by regulations as to the making by their officers of any decision under or in connection with this Act which falls to be made by such an officer.
(5) Subsections (2) and (3) of section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 and sections 9 to 12 of that Act shall apply to relevant decisions as they apply to decisions under section 7 of that Act."").
The noble Lord said: My great moment has arrived and I now have an amendment to move. Having looked through the Marshalled List I find that the noble Lord, Lord Higgins, and the noble Baroness, Lady Anelay, have together tabled some 25 amendments plus 10 objections to stand apart. That makes me feel like an ordinary worker in a soviet factory faced by a couple of Stakhanovite champions who have greatly exceeded their norm.
The effect of Amendment No. 37 is to transfer from social security tribunals (if I may be forgiven for using that expression because I am aware that technically that is no longer their name) to the Commissioners of Income Tax appeals from certain decisions which under this Bill are to be taken by officers of the Inland Revenue. The background to this particular amendment has involved me in a lengthy paper chase. It is an example of the extreme complexity of legislation in this field. I agree with the earlier comments of the noble Lord, Lord Higgins, about the remarkable and excessive complexity of this matter.
One begins with Section 17 of the Social Security Administration Act 1992 which provides that contribution questions are to be decided by the Secretary of State. Those questions include matters such as whether a person is an earner and, if so, the category to which he belongs. It also includes a large number of other contribution questions. Section 170 of the Pension Schemes Act 1993 adds certain other questions to those which fall to be decided under Section 17 of the 1992 Act by the Secretary of State for Social Security. Those questions relate to contracting-out; for example, the amount of guaranteed minimum pension to which the member of a pension scheme is entitled. But the question whether employment is contracted-out employment, which is a particularly important matter here, and some other questions are to be decided not by the Secretary of State but the Occupational Pensions Board. Section 170 was amended by the Pensions Act 1995. That abolished the Occupational Pensions Board whose functions in determining these questions were transferred to the Secretary of State for Social Security. That became effective on 1st April 1997. Therefore, questions relating to contracting-out have been decided by the Secretary of State for less than two years.
The next step was that Section 170 of the 1993 Act was replaced entirely by paragraph 131 of Schedule 7 of the Social Security Act 1998, which this House debated late in the previous Session. That provided for the review of decisions on contribution questions to be dealt with under that Act and for appeals to social
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security appeal tribunals under Section 12 in terms that are more or less identical to Clause 15(6) of the present Bill.
I turn to the present Bill. Clause 15(1) transfers to the Inland Revenue decisions on questions arising under Section 170 of the 1993 Act in its original form—as it relates to contracting-out—and Clause 15(2) transfers to Inland Revenue officers decisions on all questions, with an insignificant exception, under Part III of the Pension Schemes Act 1993. Part III concerns decisions on certification of schemes as contracted-out, the consequences of contracting-out on contributions and rights to benefit and the consequences of termination of contracted-out status.
Under Clause 15(4),reviews of those decisions are to be made by officers of the Inland Revenue. Under Clause 15(6) an appeal lies to the social security appeal tribunal. The purpose of our amendment is to treat decisions under Clause 15 in exactly the same way as all other powers of decision transferred by the Bill to the Inland Revenue, both for the purposes of variation and for the purposes of appeal. It seems logical and obvious that if the primary decision is to be taken by an officer of the Inland Revenue, an appeal should lie with the commissioners of income tax through the appeal procedure of the same department. So, why is it that appeal to the social security appeal tribunal is being preserved?
On Second Reading the noble Baroness, Lady Hollis of Heigham, said that it was not appropriate to refer those appeals to the general commissioners of income tax, with which I agree. She also said that it was not appropriate to refer the appeals to the special commissioners because they do not necessarily have pension expertise. However, in a letter to the noble Lord, Lord Higgins, which has been copied to me, the noble Baroness has given a different reason. Perhaps I may just explain what that is. The noble Baroness said:
"Such disputes as there are in contracting-out matters generally arise in connection with an individual's SERPS entitlement. SERPS is administered by the Benefits Agency and appeals on SERPS matters will go to UATs"
—what I call the social security appeal tribunal—
"The issue at stake in such appeals is very much to be whether someone was in contracted-out employment and, if so, what amount of Guaranteed Minimum Pension should be deducted from the amount of that individual's SERPS entitlement. It is extremely rare for a dispute to center on, for example, the refusal to issue a contracting-out certificate or to be about the terms of such a certificate. So on balance we felt that any such appeals about certificates should also go to a tribunal with SERPS experience, rather than the tax appeal Commissioners".
I do not find that argument any more convincing than the first argument. I suspect that there will be very few appeals on rights to SERPS. The amount of SERPS is conditional only on the number and amount of payments. Those are ascertainable facts and matters of record. They are quite different, for example, from the question of whether a claimant is entitled to a disability benefit. It is extremely unlikely that there will be more than a handful of SERPS appeals and it seems to me doubtful that any social security appeal tribunal will be able to build up any degree of expertise in that subject.
In my view, it is awkward and illogical to have most decisions of Inland Revenue officers on contribution issues subject to appeal to the commissioners of income tax, but a small category subject to the social security appeal tribunal. I believe that can be justified only if the appeal tribunal is plainly a more appropriate body. I suggest that the special commissioners of income tax are at least as capable of deciding questions under Part III of the Pension Schemes Act as the social security appeal tribunal, and probably more capable. They have wide experience of deciding the course of the appeals that they hear with exceedingly technical questions on a wide variety of subjects. I would regard the issues under this clause as wholly within their capacity and, therefore, I believe that that is a much more appropriate body than the social security appeal tribunal.
6.30 p.m.
Baroness Anelay of St. Johns: It may be convenient if I speak to Amendment No.38 which is grouped with Amendment No. 37. As the Chairman of Committees has pointed out, if the amendment of the noble Lord, Lord Goodhart, were accepted, mine would not be called. I begin the New Year in the extraordinary position of having to agree with virtually every word that the noble Lord, Lord Goodhart, has uttered so far and I support what he has argued with regard to his amendment.
Amendment No.38 was tabled as a probing amendment on the advice of the Public Bills Office and as a peg on which to hang some questions about the composition of the tribunal which will hear the appeals, regardless of the argument of the noble Lord, Lord Goodhart, that it may not be the appropriate tribunal in this case.
On Second Reading, I referred to the fact that appeals on contracted-out issues had been left with the UATs and I sought clarification about the implications of that for the appellants. I was interested particularly in the Government's view about the number who would sit on the UATs to hear appeals. I thank the Minister for her letter of 17th December, to which the noble Lord has already referred. Further on in that letter, the noble Baroness gives an explanation, to some extent, about the way in which the UAT will function in regard to appeals.
I asked questions on Second Reading with regard to waiting times that appellants may anticipate. However, I was concerned also about the number of people who will sit on the tribunal. In the letter, the Minister refers to the fact that:
"The current statutory requirement for three person tribunals makes hearings difficult to arrange and contributes to delays. So appeals to the current social security tribunals take, on average, seven months to be heard".
I appreciate that that is nothing new; it is a matter of fact. It is difficult to empanel three member tribunals. On the other hand, three member tribunals have a valuable part to play. During discussions on the Social Security Act last year, several noble Lords, of whom I was one, were concerned that we might be drifting or
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being pushed by the Government to end up with UATs—as they are now—routinely sitting with fewer than three people.
The reason for speaking to Amendment No.38 today is to elicit from the Government an explanation of whether they expect the appeals which are left with the UAT under this Bill to be heard routinely by three person tribunals or by tribunals of fewer than three people. The Minister's answer to that would give me some guidance as to whether I raise further matters at a later stage.
Lord Skelmersdale: Having made the decision to transfer the Contributions Agency and most of its attendant pieces to the Inland Revenue,it seems that, yet again, the Government are drawing back from that conclusion. We have had several examples during the course of the day, either in amendments or in responses to amendments, showing that the Government clearly do not believe 100 per cent. in what they are doing. They are keeping matters back when, in my judgment, they should not be kept back and they should go lock, stock and barrel to the Inland Revenue.
Baroness Hollis of Heigham: I shall deal with that last point first. It is not that we do not believe in what we are doing and, therefore, we are keeping things back. Clearly, there is a whole series of issues on which we are trying to make a pragmatic decision, given the number of appeals and existing arrangements in organisations elsewhere. Rather than set up special machinery, it may be preferable to use existing machinery, integrated in that way. That is our response.
I shall stand back a moment and try to set the context for the issues that the noble Lord, Lord Goodhart, has raised today and which he also raised on Second Reading. As I am sure your Lordships are aware, Clause 15 amends Section 170 of the Pension Schemes Act 1993 which is concerned with the decision-making and appeals process for the contracting-out of SERPS.
Contracting-out of SERPS is administered by the Contracted-out Employments Group of the Contributions Agency, known as COEG. COEG will transfer to the Inland Revenue with the rest of the Contributions Agency. Responsibility for policy and legislation on contracting-out will remain with Social Security Ministers.
The Inland Revenue will be responsible for making decisions and managing disputes on those decisions. Clause 15 makes the necessary amendments to Section 170 of the Pensions Schemes Act 1993 to enable Inland Revenue officers to make decisions on these matters.
However, as the Committee identified, any appeal on contracting out will be to a DSS unified appeal tribunal, and thereafter to social security commissioners in accordance with the provisions of the Social Security Act 1998 and supporting regulations rather than to tax appeal commissioners. That deals with the point about whether or not we believe in what we are doing.
I am aware that there are some concerns about the decision we have taken. At Second Reading, the noble Lord, Lord Goodhart, questioned our reasoning for

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retaining the social security appeal route, noting that at least the special commissioners are experienced in dealing with pension matters in the context of approval of tax relief. As she did today, the noble Baroness, Lady Anelay, spoke on this issue.
Amendment No. 37, tabled by the noble Lord, Lord Goodhart, places contracting-out decisions and appeals under the remit of the tax commissioners, demonstrating that the noble Lord considers that the new DSS unified appeal tribunal to be the wrong body to deal with contracting-out matters. I can see the ground for that argument: that contracting-out matters should follow the tax appeal route. However, those arguments fail to recognise the practical interaction between the state scheme and contracting out. The reality is that when disputes arise—and I stress that that is rarely—they arise not in the context of employers and whether or not they satisfy the conditions to be awarded to a contracting-out certificate but rather in the context of the amount of contracted-out pension due. Therefore, we need a decision and appeal-making system which ensures that when appeals arise they are dealt with by the body which can best respond to the needs of the appellant.
UATs will handle SERPS appeals; and experience has shown that questions about the contracted out pension—for example, the guaranteed minimum pension—often arise as subsidiary points to the main SERPS appeal. Therefore, if an appeal is raised specifically on the contracted-out pension the right body to hear it is a DSS unified appeal tribunal given that it will be dealing with SERPS appeals more generally. We do not think that it would be right to send those appeals to tax commissioners who have no expertise in that area and do not deal with benefits.
The only appeals which could readily be referred to tax commissioners would be those relating to contracting-out certificate, as it could be argued that there are some parallels with appeals concerning tax approval for pension schemes. But again the reality is that appeals are extremely rare in this area. The unit, COEG, has a good working relationship with employers and scheme administrators and a history of resolving disputes quickly, effectively and to the satisfaction of all concerned.
I understand that since contracting out was introduced in 1978 there has been only one dispute related to certification which needed to be escalated for resolution to the then occupational pensions board. At that time the occupational pensions board was the equivalent of a tribunal for contracted-out pension matters. We have no reason to think that matters will be different in the future. Rather than making alternative provision for such exceedingly rare cases, we suggest that it makes sense for any such appeals to go to the same body as SERPS appeals.
Where an appeal contains a technical point relating to private pensions, we have provided for the tribunal to seek the assistance of an expert witness such as an actuary or pensions lawyer. Appellants can also take expert advice and present it to the tribunal in support of their appeal. Although I accept that the system is not perfect—it is one of those areas where there is a genuine
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overlapping of mutual responsibility—it provides a pragmatic solution, given the number and type of disputes that occur on contracting out; and for the extremely rare case which might arise every now and then it seems a price worth paying if it means a unified, coherent and transparent appeal system for contracting out.
Amendment No.38, tabled by the noble Baroness, Lady Anelay, concerns contracting-out matters. The amendment puzzled us. However, our reading of it was not the same as the noble Baroness's explanation of what the amendment intended to convey. Our reading of it suggested that the amendment removed the appeal route for contracting-out decisions and offered no alternative. I know that the noble Baroness did not intend to take away such a fundamental right, but that was the effect technically of the amendment. However, the noble Baroness made it clear that she was using the amendment in order to probe what we had in mind as regards the constitution of the tribunal and membership.
Some of those issues were raised when we discussed the social security decision-making appeals legislation. We expect that 75 per cent. or thereabouts of all appeals will continue to be heard by tribunals consisting of two or three members. I do not expect that these matters will be heard by a tribunal of three members, although the president of tribunals could so certify if he thought that that was in the best interests of decision-making. We would expect, for example, that there might be one legally qualified person, plus one expert. That would give more expertise at a UAT than at a special commissioner's tribunal if one of the members were legally qualified. Alternatively, it could be two tribunals together and one expert. Although there may not be three members, we think that the members will have the relevant expertise—expertise possibly greater than that which the special tax commissioners may enjoy. Given the rare number of cases, it is more pragmatically sensible to integrate those into the appeal structure of the UAT.
We think that the system should work well. However—hence the wrap-around clauses—our judgment could be wrong. Future pensions legislation may open up areas of concern which we have not yet envisaged. We shall soon discuss Clause 22. The current debate on the appropriate appeal route is an excellent example of why Clause 22 is desirable. Clause 22(1)(d) provides for switches by Order in Council of appeals between the tax appeal commissioners and the unified appeal tribunals. I can assure the Committee that if the system is not working, and if the worries of the noble Lord, Lord Goodhart, are confirmed, when the show is on the road we have the necessary mechanism to reverse the situation. We all want it to be a satisfactory, expeditious, appropriate and fair appeal system. If the route that we propose, which we believe to be best given the rarity of the cases, turns out not to be so, we have a fairly straightforward way of ensuring that we can alter the position to ensure that we achieve our objectives.
6.45 p.m.
Lord Goodhart: I shall read with great care what the noble Baroness said. I am not sure that I shall be

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persuaded that my view is wrong. However, I take some comfort from Clause 22(1)(d) which enables the jurisdiction to be transferred if it turns out that I am right. However, for today I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No.38 not moved.]
Clause 15 agreed to.
Clauses 16 and 17 agreed to.
Schedule 6 [Decisions and appeals]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 39:
Page 45, line 6, at end insert—
("10A. In paragraph 8 of Schedule 2 to the Social Security Contributions and Benefits Act 1992 (application of Part V of Taxes Management Act 1970 in relation to Class 4 contributions), for the words from "but nothing" to "arising—" there is substituted "but nothing in this Schedule affects the extent to which the Income Tax Acts apply with respect to any decision falling to be made—".").
The noble Baroness said: In moving Amendment No.39, I shall speak also to Amendments Nos.40 and 65 with which it is grouped.
The purpose of these three technical amendments is to bring provisions of existing legislation—as to the application of tax legislation to Class 4 contributions—into line with changes made elsewhere by this Bill.
Paragraph 8 of Schedule 2 to the Social Security Contributions and Benefits Act 1992 at present excludes from the application of the taxes Acts the categories of Class 4 contributions which it is not currently the function of the Inland Revenue to collect. As a result of the Bill, those categories of Class 4 contributions will fall to be collected by the Inland Revenue, with decisions about liability being taken by their officers. Appeals from such decisions will be determined by the tax appeal commissioners and will need to be governed by provisions of the Taxes Management Act 1970. Paragraph 8 of Schedule 2 therefore needs amendment to recognise that tax legislation is to apply to these Class 4 contributions to that extent. The first of these amendments includes that change in Schedule 6 to the Bill.
Schedule 2 to the Social Security Contributions and Benefits Act also applies in Northern Ireland and is set out word for word as Schedule 2 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992. So the second of these amendments makes an equivalent change in that schedule to that Act.
Finally, the amendments to paragraph 8 of Schedule 2 in both the Great Britain Act and the Northern Ireland Act need to be reflected in Clause 27 which lists those provisions of the Bill which are to extend to Northern Ireland. This change is made by the last of these three amendments. I beg to move.
On Question, amendment agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 40:
Page 46, line 28, at end insert—
("15A. In paragraph 8 of Schedule 2 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (application of Part V of Taxes Management Act 1970 in relation to Class 4
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contributions), for the words from "but nothing" to "arising—" there is substituted "but nothing in this Schedule affects the extent to which the Income Tax Acts apply with respect to any decision falling to be made—".").
On Question, amendment agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 41:
Page 46, leave out lines 34 to 37 and insert—
("(3) Subsection (3) is omitted.").
The noble Baroness said: In moving Amendment No. 41, I shall speak also to Amendment No. 59. These are technical amendments. Once the provisions of the Bill come into force, decisions about entitlement to statutory sick pay or maternity pay will be made by officers of the Board of the Inland Revenue. Appeals against such decisions will be heard by tax appeal commissioners. The amendments therefore ensure that any references to those benefits in those parts of the Social Security Act 1998 which deal with decisions by the Secretary of State and appeals to tribunals are removed as they are no longer required. I beg to move.
On Question, amendment agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 42 and 43:
Page 47, line 22, leave out ("In").
Page 47, line 23, after ("State)") insert ("is amended as follows.
(2) In subsection (1)—

(a) at the end of paragraph (b) there is inserted "and", And

(b) paragraph (c) and the word "and" immediately preceding it are omitted.

(3)").
The noble Baroness said: With the leave of the Committee, I shall move Amendments Nos. 42 and 43 en bloc. These amendments have already been spoken to. I beg to move.
On Question, amendments agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 44:
Page 47, line 33, leave out ("question") and insert ("other matter").
The noble Baroness said: In moving Amendment No. 44 I shall speak also to Amendments Nos. 45, 46 and 53. These are technical amendments to remove from new Sections 10A and 24A of the Social Security Act 1998 references to "questions" to be consistent with the new focus introduced by that Act on "outcome decisions".
At present a claim for benefit involves a bundle of subsidiary questions, some of which may give rise to separate decisions and rights of appeal to different appellate bodies. Under the 1998 Act the only decision which is generally to be given is an outcome decision. That is the one which is the bottom line from the customer's point of view and will be appealable to the new unified appeal tribunal. Therefore concepts of subsidiary questions are not to be found in the 1998 Act and we need to make sure that new Sections 10A and 24A reflect that. I beg to move.
On Question, amendment agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 45 and 46:
Page 47, line 48, leave out ("question") and insert ("other matter").
Page 48, line 2, leave out ("question") and insert ("other matter").
On Question, amendments agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 47 to 50:
Page 48, line 6, leave out ("In").
Page 48, line 6, after ("tribunal)") insert ("is amended as follows.
(2) In subsection (1)—

(a) at the end of paragraph (a) there is inserted "or", and

(b) paragraph (c) and the word "or" immediately preceding it are omitted.

(3)").
Page 48, line 12, at end insert—
("22A. In section 13 of the Social Security Act 1998 (redetermination etc. of appeals by tribunal), for subsection (4) there is substituted—
"(4) In this section and section 14 below "the principal parties" means—

(a) the persons mentioned in subsection (3)(a) and (b) of that section, and

(b) where applicable, the person mentioned in subsection (3)(d) and such a person as is first mentioned in subsection (4) of that section."

22B. In section 14 of the Social Security Act 1998 (appeal from tribunal to Commissioner), the following provisions are omitted—

(a) subsection (2),and

(b) in subsection (3), the words "In any other case".").

Page 48, line 14, at end insert—
("23A. In section 18 of the Social Security Act 1998 (matters arising as respects decisions), in subsection (1)(a)—

(a) at the end of each of sub-paragraphs (i) and (ii) there is inserted "or", and

(b) sub-paragraphs (iii) and (iv) are omitted.").

The noble Baroness said: These amendments have already been spoken to. I beg to move.
On Question, amendments agreed to.
[Amendment No. 51 not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 52 and 53:
Page 48, line 20, at end insert—
("25A. In section 21 of the Social Security Act 1998 (suspension in prescribed circumstances), subsection (4) shall cease to have effect.").
Page 48, line 36, leave out ("consideration of any claim or question") and insert ("the appeal").
The noble Baroness said: With the leave of the Committee, I shall move these amendments en bloc. The amendments have already been spoken to. I beg to move.
On Question, amendments agreed to.
Schedule 6, as amended, agreed to.
Clauses 18 and 19 agreed to.
Clause 20 [Property, rights and liabilities]:
Lord Higgins Lord Higgins moved Amendment No.54:
Page 10, line 15, leave out subsection (3).
The noble Lord said: Amendment No. 54 concerns a minor point. I was puzzled by the fact that, if assets are to be transferred, it appears to be the recipient rather than the donor who is going to certify that the transaction has been completed. It seems more appropriate, if a certificate is to be issued, that it should be issued by the Department of Social Security rather than by the Inland Revenue or the Treasury which are coming into the assets.
The other point is a hierarchical one. If a certificate is to be issued, it should be issued by a Minister rather than by an official. I beg to move.
Baroness Hollis of Heigham: I hope I can deal with this amendment fairly swiftly.
I have mentioned from time to time during our debates on this Bill that machinery of government transfers of functions are usually achieved by orders under the Ministers of the Crown Act 1975. However, I have explained that, because the Inland Revenue is not a ministerial department for the purposes of that Act, we need a separate Bill to transfer functions. But this Bill has needed to cover much the same ground as an order and in a number of places we have imported much the same wording as one would find in either that Act or an order made under it. Clause 20 is one such example.
Like any organisation, the Contributions Agency owns property, receives goods and services under contracts and has liabilities. As an agency of my department it does so on behalf of the Secretary of State for Social Security. Our underlying objective is to ensure that the Contributions Agency can transfer property rights and liabilities over to the Inland Revenue so that it has all the necessary goods and services to enable it to continue its work. So Clause 20 provides that the property, rights and liabilities of the Secretary of State are transferred to the Inland Revenue or Treasury when their related functions are transferred. Subsection (3), which would be deleted by this amendment, simply provides that, should it be necessary to establish the ownership of any property to which Clause 20 applies, a certificate issued by the Inland Revenue or the Treasury shall be conclusive evidence that the property has been transferred to them.
Let me explain how this provision might be used by way of an example. Let us say that in five years' time a company wishes to buy a piece of land from the Inland Revenue which was formerly Contributions Agency property. The company would wish to satisfy itself that the Inland Revenue was the legal owner of that land. In order to do so, its solicitors would need to check through the provisions of the Bill to link the land with functions transferred to the Inland Revenue. That would be a complex and expensive task. The certification procedure cuts through that and provides a simpler mechanism for verifying the ownership of the land; the Inland Revenue would simply supply the company with such a certificate and that would make clear that the new owner had good title to the land.

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This is based on a standard wording used in provisions transferring functions. Members of the Committee may be familiar with the National Health Service and Community Care Act 1990. This permitted transfers of functions to set up new health authorities and Section 8(8) of that Act included a similar certification procedure.
In the light of that explanation I hope that the noble Lord will feel able to withdraw the amendment.
Lord Higgins: I understand the case for a certificate. I am not clear why it should be issued by the person whose ownership might be in dispute rather than the person whose ownership of the asset is not in dispute and who is transferring it to someone else. It seems to be the wrong way round. If the asset is owned by the Department of Social Security and the certificate is saying that it has been transferred to someone else, surely the certificate should come from the Department of Social Security.
Baroness Hollis of Heigham: Again, it may be that I am missing some point. I understand what the noble Lord is saying. However, it seems to me that as some of those transfers could have been done a considerable time previously—not just five years, but perhaps 15 or 20 years earlier—it does not make sense to go back to a body or agency which no longer exists as opposed to the current body which now holds the land. I understand what the noble Lord is saying but I do not believe it to be a substantive point.
7 p.m.
Lord Higgins: I do not want further to delay the Committee, but I am interested in the fact that apparently the Department of Social Security is less likely than the Treasury to exist in 50 years' time.
Baroness Hollis of Heigham: Given the experience of the past 400 years, I fear that the noble Lord may well be right!
Lord Higgins: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 agreed to.
Clause 21 [Special provision for certain contracts]:
On Question, Whether Clause 21 shall stand part of the Bill?
Baroness Hollis of Heigham: With the indulgence of the Committee, it may be helpful if I speak to Clause 21.
Clause 21 is the second clause dealing with the transfer of property, rights and liabilities. It recognises and provides for some of the complex contractual relationships involved.
As we have already discussed, Clause 20 transfers to the Inland Revenue any contracts under which the Contributions Agency receives goods or services. However, the Contributions Agency also receives goods and services under contracts which provide for the
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supply of goods or services to other parts of the Department of Social Security. So these contracts relate partly to functions transferred to the Inland Revenue and partly to functions retained by the DSS. For example, the Benefits Agency and Contributions Agency often share accommodation, and office services are supplied under the same contract to both agencies. Also, like the other DSS agencies, the Contributions Agency orders computer hardware and software through contracts managed by the Information Technology Services Agency on behalf of the department.
Clause 21 deals with these contracts. As with Clause 20, our underlying intention is to ensure that patterns of supply are maintained to enable the Contributions Agency—and the Benefits Agency and other DSS agencies—to continue to receive the goods and services they do now to enable them to carry out their work.
Clause 21 does this by providing two options for treating these contracts. Subsection (3) provides that in these cases the contract will continue to be with the Department of Social Security but that the Contributions Agency can continue to receive goods and services under that contract once it is part of the Inland Revenue. It does not allow the Inland Revenue to gain wholesale access to DSS contracts.
However, we accept that in some cases the contract may relate sufficiently largely to transferred functions, as opposed to retained functions, that it would be appropriate for the Inland Revenue to take over management of that contract. So subsections (4) and (5) provide an alternative option. Certain contracts, specified by order, can be treated as exceptions to the rule and transferred to the Inland Revenue, while allowing the Department of Social Security to continue to receive benefits under that contract.
There are two main contracts we intend to specify in such an order. The first is the contract for the new National Insurance Recording System—NIRS2. Noble Lords will be aware of the difficulties that there have been. The Contributions Agency has been managing the contract with Andersen Consulting to develop and run the NIRS2 system on behalf of the department. We have concluded that NIRS2 is so integral to the work of the Contributions Agency that, while it provides information to the other DSS agencies, it would be most appropriate to transfer the contract for its development and maintenance to the Inland Revenue with the Contributions Agency.
The other main contract is that with the Newcastle Estates Partnership for the redevelopment of the Longbenton estate in Newcastle. Although the other DSS agencies occupy parts of the Longbenton estate, the Contributions Agency is the principal occupier and has been managing the contract on behalf of the other agencies. So we intend that this contract will also transfer to the Inland Revenue.
I have gone into this is some detail, which I would not normally do, because I think that noble Lords are entitled to an explanation. The Contributions Agency is, of course, as part of good contract management, discussing with its suppliers the implications of the

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transfer. Given that both matters are sensitive, I thought that it was useful, at least in Committee, to put our thinking on the record of Hansard. I support Clause 21 standing part of the Bill.
Clause 21 agreed to.
Clause 22 [Power to transfer functions by Order in Council]:
Lord Higgins Lord Higgins moved Amendment No. 55:
Page 10, leave out lines 43 to 45.
The noble Lord said: There are three amendments in this group. In the light of some of the earlier exchanges with the noble Lord, Lord Goodhart, it may be that they have more significance than I had realised. The power to transfer functions in both directions seems an extraordinarily wide power. That is why I tabled Amendment No. 55.
With regard to Amendment No. 56, Clause 22(1)(b) provides that functions can be transferred in one direction only, with the concurrence of the board, but that transfers in the other direction do not require the concurrence of the department.
Amendment No. 57 seeks to leave out subparagraph (ii).
My first amendment relates to three lines which seem to cover every possible contingency. As I said, as this point was referred to earlier, it may be more significant than I had realised. I beg to move.
Baroness Hollis of Heigham: The three amendments before us now seek an explanation of how we intend to use Clause 22. This clause is not an essential part of the Bill but I think it is a valuable provision. I therefore want to spend a few moments explaining what it does and why we have included it in the Bill. Indeed, given the noble Lord's amendments, I think that I am required to give that explanation.
As I hoped that I had explained at Second Reading, the normal process for machinery of government transfers is an Order in Council under the Ministers of the Crown Act 1975. The Inland Revenue is not, however, a ministerial department for the purposes of that Act, so transferring functions to or from it requires a Bill. Hence, we need a Bill to transfer the Contributions Agency to the Inland Revenue.
As I hope I made clear in our earlier discussions, identifying and stripping out the NICs functions of the Secretary of State for Social Security is no easy task. Although in some cases the function is clearly related to NICs and therefore should be transferred, in other cases, particularly around the periphery of NICs, the distinction is much more difficult to draw. Further, whether a particular job is done in the Contributions Agency rather than the Benefits Agency is sometimes as much a matter of history as of current preferences. We have had to make a judgment about whether the function should stay with DSS or be transferred to the Inland Revenue.
I hope that we have made the right judgment on these issues. But there is no right and wrong answer and, weighing the probabilities, it is possible that, in the light
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of operational experience, we may conclude that we have drawn the boundary in a slightly awkward place and that further adjustments are desirable to ensure the better operation of the legislation and delivery of services by the Government.
As the noble Lord, Lord Higgins, rightly identified, one example, which the noble Lord, Lord Goodhart, has already raised, is the appropriate tribunal for hearing appeals on contracted-out matters. We have made a judgment on that. If the fears of the noble Lord, Lord Goodhart, are realised, this provision allows us to rectify the position.
Clause 22 provides a mechanism for making these adjustments. It does so by providing a power similar to that in the Ministers of the Crown Act 1975, but tightly limited to the subject of this Bill. As with the Ministers of the Crown Act 1975, this power is to be exercised by way of an Order in Council. That will mean that the adjustments can be made without needing to return to Parliament with a whole Bill.
An order under this clause can transfer functions between the Secretary of State and the Inland Revenue and vice versa. It can set up new requirements for concurrence in the exercise of those functions; it can transfer responsibility for making decisions on various matters between the Secretary of State and the board and vice versa, and switch the route for appealing against such decisions between the unified appeal tribunals under the Social Security Act 1998 and the tax appeal commissioners. The three amendments remove in turn the first three of these powers.
I should point out that Clause 22 does not allow orders to transfer functions between the Secretary of State and the Treasury—only the Secretary of State, or the DHSS(NI), and the Inland Revenue. As I explained earlier, functions can already be transferred between the Secretary of State for Social Security and the Treasury by order under the Ministers of the Crown Act 1975. Only the Inland Revenue does not have such a power. So we need no separate provision here to permit that.
I can well understand that noble Lords would seek constraints on what can be achieved by an order under this clause. These are set out in subsection (2) as functions relating to contributions and the National Insurance Fund, other than core activities such as the receipt of contributions and the control and management of the National Insurance Fund, together with functions relating to statutory sick pay, statutory maternity pay and contracting-out. So I hope noble Lords will recognise that Clause 22 does not provide a general power to transfer functions between the Secretary of State and the Inland Revenue. Indeed, we would anticipate that any exercise of this power would be very much at the edges of those functions. I am therefore pleased that the Select Committee on Delegated Powers and Deregulation was content that the negative resolution procedure provided by the Bill is appropriate.

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We cannot be sure that we have the detail right at the boundaries and there may need to be some fine-tuning. I can well understand that Members of the Committee are anxious to ensure that powers in Clause 22 have appropriate safeguards. The amendments as drafted go too far, but, if the noble Lord continues to have concerns and wishes to write to me, we shall consider the matter to see whether there is any further issue which we should address. I hope that the noble Lord will be content with the answer that I have given him tonight.
Lord Higgins: In the light of that invitation, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments No.56 and 57 not moved.]
Clause 22 agreed to.
Clause 23 agreed to.
Clause 24 [Orders and regulations]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No.58:
Page 13, line 43, at end insert—
("( ) A power conferred by this Act to make regulations includes power to provide for a person to exercise a discretion in dealing with any matter.").
The noble Baroness said: This is a technical amendment to copy into Clause 24 a standard provision found in Section 189(6) of the Social Security Administration Act 1992 and elsewhere in social security legislation. It enables regulations to provide for a person to exercise a discretion in dealing with any matter—for instance, where provision needs to be made for the extension of time limits. I beg to move.
Lord Higgins: That was a remarkably brief and cogent explanation and I am sure that the Committee would wish to express its thanks to the Minister for the extremely lucid way in which she has dealt with the proceedings and to congratulate her on her stamina.
On Question, amendment agreed to.
Clause 24, as amended, agreed to.
Clause 25 agreed to.
Schedules 7 and 8 agreed to.
Schedule 9 [Repeals and revocations]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 59:
Page 53, line 14, at end insert—

("1993 c. 48.

The Pension Schemes Act 1993.

Section 167(3)."

On Question, amendment agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 60 to 63:
Page 53, line 28, column 3, at beginning insert—

("In section 8(1), paragraph (d) and the word "and" immediately preceding it.")

Page 53, line 28, column 3, at end insert—

("In section 12(1), paragraph (c) and the word "or" immediately preceding it. In section 14, subsection (2) and in subsection (3) the words "In any other case".")

Page 53, line 29, column 3, at end insert—

("Section 18(1)(a)(iii) and (iv).")

Page 53, line 33, column 3, at end insert—

("Section 21(4).")

On Question, amendments agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 64:
Page 54, line 8, at end insert—

("S.I 1996/195.

The Employer's Contributions Reimbursement Regulations 1996.

Regulation 1(4).")

On Question, amendment agreed to.
Schedule 9, as amended, agreed to.
Clause 26 agreed to.
Clause 27 [Short title, commencement and extent]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 65:
Page 14, leave out lines 40 and 41 and insert—
("(c) section 4 and Schedule 4, so far as they amend the Taxes Management Act 1970,
(cc) section 17 and Schedule 6, so far as they amend the Taxes Management Act 1970, Schedule 2 to the Social Security Contributions and Benefits Act 1992, or Schedule 2 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992").
On Question, amendment agreed to.
Clause 27, as amended, agreed to.
House resumed: Bill reported with amendments.

Financing of Maintained Schools Regulations 1998
7.14 p.m.
Lord Hunt of Kings Heath Lord Hunt of Kings Heath rose to move, That the draft regulations laid before the House on 3rd December be approved [2nd Report from the Joint Committee].
The noble Lord said: My Lords, these draft regulations were considered by the Joint Committee on Statutory Instruments on 8th December and by Standing Committee in the other place on 15th December. They cover England and Wales, with variations which have seemed appropriate in the light of differing national circumstances.
The enabling powers are contained largely in Sections 46 to 48 of the School Standards and Framework Act 1998. As enacted, these sections relate to the new school categories—community, foundation and voluntary—which do not take effect until 1st September. However, the sections have been modified so as to apply, between 1st April and 31st August, to the existing categories of school—county, voluntary and grant-maintained. This modification was achieved by the School Standards and Framework Act (Modification) Regulations, made on 30th October under Section 144 of the Act.
The regulations give effect to our aim of establishing a single, equitable funding regime for all state schools in place of the divisive dual system which has existed since introduction of grant-maintained status. Our proposals were originally set out in the consultation paper Fair Funding. This was published in England at the end of last May, shortly before the relevant clauses of the SSAF Bill were considered in Committee by this House, and it was often referred to during the debates in Committee and at later stages. A similar consultation paper was issued in Wales in June.
The House looked in some detail at the clauses, and the ground will therefore be fairly familiar. But it may be helpful to recall our key objectives before turning in slightly more detail to the content of the regulations. There are three main points.
First, we want to put in place a framework which aligns funding with the respective responsibilities of schools and LEAs and promotes greater transparency in funding arrangements. Secondly, we want to give all schools the fullest scope for self-management by requiring significantly higher levels of financial delegation than have been normal up till now in LEA schools; but we want to do this without forcing schools to take on responsibilities before they think they are ready. Thirdly, we want to ensure equitable treatment as between community, voluntary and foundation schools; and at the same time we want to give grant-maintained schools a smooth transition to the new funding framework.
The regulations are the outcome of an extensive, two-stage consultation. There were about 3,000 responses to the consultation paper in England and over 500 in Wales. In the light of these responses, decisions on the main issues were announced by the Government on 23rd September, both in England and in Wales. In England those decisions will mean that around £1 billion more can fall within the total of funds going directly into the classroom; but this shift will be achieved in a way that allows schools to feel comfortable with their extra responsibilities.
Since then, detailed consultation with LEAs and national organisations has led us to modify the regulations in ways which provide valuable local flexibility without losing the essential features. The consultation has been most constructive and I know that my right honourable and honourable friends are grateful to those who contributed to it.
I shall now review briefly the main features of the regulations. They deal with three important matters. The first is the balance between funding retained centrally by LEAs and funding distributed by them to schools. These matters are dealt with in Part II and in Schedules 1 and 2 which relate respectively to England and Wales. The second is the methods to be used by LEAs to allocate the funding which they are required to distribute to schools. These are regulated by Part III and by Schedules 3 and 4.
Finally, the regulations deal in Part IV and Schedule 5 with the content of the "schemes" which will regulate the financial relationship between LEAs and the schools they maintain and ensure that governing bodies and heads can run their schools without unnecessary LEA intervention.
Part II, made under Section 46 of the Act, has attracted most attention during the consultative process. This is not surprising. It is through this part of the regulations that we have to get the balance right between pushing forward the frontiers of self-management and ensuring that schools have access to essential services. In the event, the two-stage consultation process has led us to make certain changes in the proposals originally published in the summer. Thus we have revised the delegation timetable to give LEAs more time to work out suitable arrangements in consultation with schools.
We have also reconsidered the range of items which may be centrally funded. For example, LEAs will not now have to delegate funding for meals and milk to all primary and special schools, although they will be able to do so if they wish and our intention is that LEAs in England will be required, from April 2000, to delegate funding to individual primary or special schools where they request it. LEAs will be able to continue funding outdoor education centrally if they wish, and we have also made some other marginal adjustments to our proposals on such matters as support for the arts and the funding of supply cover. But this still means much higher delegation for schools currently maintained by LEAs. For example, funding for a wide range of financial, personnel and other administrative support must be delegated by April 2000. Schools will take responsibility for all non-capital building repairs and maintenance from April 1999 in England and April 2000 in Wales. Funding for secondary school meals must be delegated by April 2000, or April 1999 in England if there are no contractual problems.
The process for the approval of education development plans will require LEAs to refocus their expenditure for school improvement. In doing so, they will need to consider very carefully the role, and the cost, of inspection and advisory services. Funding for such services will, in general, have to be delegated from April 1999 in England and April 2000 in Wales if it cannot be justified by reference to LEAs' approved educational development plans.
I need only add that we shall be keeping a close eye not only on school improvement expenditure but also on central expenditure more generally. Addressing the North of England Education Conference last week, my right honourable friend the Secretary of State for Education and Employment made it clear that he will be publishing tables early in the summer to enable the

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performance of individual LEAs to be compared. He also made it clear that he will not hesitate to use the power, conferred by Section 46, to set limits to the amounts which LEAs may retain for particular purposes, if this appears necessary. I ought to add at once that, if he uses these powers, my right honourable friend's target will be wasteful bureaucracy, and he will not be seeking to restrict essential central expenditure on special educational needs and other vital support services.
Part II contains special provisions for GM schools. Our aim all along has been as far as possible to level LEA schools up, in terms of delegation, rather than levelling GM schools down. So we have made it our general principle that, where funding for a particular service must be delegated eventually, LEAs must delegate it to GM schools from April 1999. This is reflected at various points in Schedule 1 for England and Regulation 5 for Wales. I shall have more to say about GM schools in a moment.
Finally, there is one specific outcome of our consultation which might have been noticed by noble Lords opposite. The English consultation paper suggested that schools might be invited to determine the future funding arrangements for some services by majority vote. However, in the light of consultation, we have decided not to proceed with the majority voting proposal.
Part III and Schedule 3 deal with the way in which the individual schools budget is distributed to schools through LEAs' funding formulae. Here, we attach a good deal of importance to continuity. LEAs have a good deal of flexibility to reflect local circumstances and priorities in their formulae, and we do not want to force them to make major changes if they themselves see no good reason to do so. So Schedule 3 to the regulations offers LEAs an extensive à la carte menu of factors from which they can select to meet local requirements. However, 80 per cent. of primary and secondary school funding must be allocated on a pupil-led basis, essentially as at present. The rule has been the subject of some debate, but at the end of the day we believe that 80 per cent. is right.
It is important that formulae are fair to all categories of schools and take full account of the schools' views. The regulations accordingly prevent LEAs from discriminating between different school categories, unless there is an acknowledged difference in the functions of their governing bodies. They also require LEAs to consult all schools, including those which are currently grant-maintained, about their formulae; and to do so in time for responses to be taken properly into account when the LEA takes its final decisions. That requirement includes consultation on certain matters—for example, the age-weightings used in the formula—on which LEAs have not been statutorily required to consult in the past.
We do not wish GM schools to experience unmanageable changes in their budgets on entry to the new framework. The "levelling-up" principle which I mentioned earlier should go a long way towards achieving this. But we intend also to protect the amount
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of funding per pupil received by GM schools in England at its 1998–99 level, in cash terms, for 1999–2000. In Wales, the number of GM schools is much smaller and the funding system has differed in certain respects from the English GM funding regime. The upshot is that the difference between GM and LEA school budgets has been less marked in Wales than in England. Having considered the position, my honourable friend the Minister for Education in Wales has decided not to introduce transitional arrangements for GM schools in Wales.
I think it fair to note that these arrangements for managing the transition of GM schools' budget arrangements continue a process of aligning their budgets with other schools which was begun by the previous government, who had set in hand a phased removal of the unfair cash protection which had applied, in England, to the so-called "central" element of the annual maintenance grant.
It may be convenient to take this opportunity to comment on certain concerns expressed in a note which I received yesterday from the Grant Maintained Joint Monitoring Group. It is fair to say that that note registers general satisfaction with the regulations as they have turned out. The concerns which have been put to me both relate to certain responsibilities which will rest by law with the governing bodies of foundation schools but with the LEA in the case of community and voluntary controlled schools, just as they rest with the LEA in the case of county and controlled schools now.
On the one hand, there are certain responsibilities which derive from the fact that staff in foundation schools will be employed by the governors and not the LEA. This has implications for the governors' responsibilities in certain fields such as health and safety. As I understand it, the concern of the Grant Maintained Joint Monitoring Group is that LEAs will retain expenditure centrally in respect of these responsibilities, even in relation to schools for which the relevant responsibilities lie with the governing body. It does not seem to me that paragraph 25 of Schedule 1 permits this. It deals with expenditure in relation to the LEA's functions, not anyone else's. Moreover, in the particular case of health and safety, the regulations are designed to ensure that funding is delegated as far as is practicable even in the case of schools where the LEA is the employer.
As regards compliance, particulars of an LEA's central expenditure will be included in the statements which LEAs will be required to produce under Section 52 of the School Standards and Framework Act 1998 which we audited under Section 53. More generally, the performance tables that I mentioned will show which LEAs are retaining excessive amounts for administration. But if schools see continuing grounds for concern once the new system is in place, I am sure that they will make these known to us and we will consider what further action may be required.
The other matter arises from the position of foundation schools as admission authorities. The suggestion is that these schools should receive additional delegated funding in respect of this

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responsibility, which rests with the LEA in the case of community and controlled schools. We have considered this with care, but it has to be borne in mind that the position of foundation schools as admissions authorities is no different from the long-standing position of voluntary-aided schools. As far as we know, the latter have not received additional, delegated funding from their LEAs for their admissions functions, although we understand that many LEAs have provided various forms of admin support for the admissions process in voluntary-aided schools. Of course, that can be done without infringing the prerogative of voluntary-aided governing bodies on matters of policy.
It is clear that we have to treat foundation and voluntary-aided schools on the same basis under the new framework. To insist that all foundation and voluntary aided schools should carry out all their own admission arrangements with delegated funding would have the effect of disturbing existing local arrangements which have worked well. Accordingly, our aim in the regulations is to allow for appropriate arrangements to be negotiated locally.
Paragraph 17(c) of Schedule 1 contains a flexible definition of the admissions-related expenditure which LEAs may choose to retain. If, in the event, LEAs decide to retain funding centrally in respect of admissions administration at some kinds of school but not others, Regulation 13 will require them to reflect this in their formulae. Paragraph 5 of Schedule 3 specifically allows LEAs to include factors in their formulae which reflect the extent to which admissions costs are being centrally funded.
This, as I say, provides a framework within which suitable arrangements can be worked out locally by LEAs, taking account of the views of both foundation and voluntary aided schools. The implication is that foundation schools seeking to persuade LEAs to change established arrangements will need to work closely with voluntary aided schools to get them on their side. However, as I have said, any other approach could mean upsetting existing local arrangements even where they are regarded as satisfactory by most of the schools affected.
Part IV and Schedule 5 deal with the contents of the schemes for the financing of schools which LEAs will have to draw up in accordance with Section 48 of the Act and Schedule 14. Each scheme will define the financial relationship between an LEA and the schools which it maintains, and will require approval by the Secretary of State.
The purpose of the regulations is simply to identify the topics which must be covered. Statutory guidance to be issued by the Secretary of State under Schedule 14 will indicate in more detail how we expect LEAs to cover them. A draft of that guidance has already been issued in the form of an "outline scheme", to help LEAs undertake consultation in good time.
I think I need make only two more general points. First, the outline scheme—and the schemes which LEAs themselves will submit—cover ground already covered in greater or lesser detail in existing schemes for the
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local management of schools. The arrival of the new school funding regime provided a timely opportunity to review LEAs' financial provisions after nine years of LMS.
Secondly, an LEA's scheme is as binding on the LEA as it is on the schools. It is the means of securing crucial rights for schools—for example, in the right to a bank account, and, even more fundamentally, the right to determine spending priorities. We will also expect schemes to define carefully the circumstances in which LEAs may charge particular costs against a school's budget. Part IV sets out publication requirements to ensure that schemes will be available for reference by parents and others interested.
In conclusion, these regulations are the outcome of a consultation process which has been thorough, even though it has undoubtedly been rapid. There is still work to be done to set the new system in place for 1st April, but the efforts made by all concerned in the past few months have shown that we were not asking for the impossible. The regulations strike a fair balance between the legitimate requirements of LEAs and schools, and I commend them to the House.
Moved, That the draft regulations laid before the House on 3rd December be approved [2nd Report from the Joint Committee].—(Lord Hunt of Kings Heath.)
Baroness Blotch: My Lords, I thank the Minister for setting out the details of the regulations. Delegation to schools and scope for autonomy at school level has proved successful over the past decade or so. I must tell the Minister that LMS is considerably older than nine years. In Cambridgeshire it goes back some 19 years. Indeed my own local authority in Cambridgeshire, together with Conservative controlled Solihull, were the first LEAs to delegate financial control to their schools in the face of vociferous opposition from Labour Party members. Therefore it is to be welcomed that such a change of heart and policy has taken place.
When the fair funding paper was produced last year much was made of 100 per cent. delegation. We asked then—I ask this again now—100 per cent. of what? My reading of the regulations is that it is 100 per cent. of what is left after LEAs have subtracted significant items of expenditure. Schedule 1 contains no fewer than 89 areas where the LEA can hold back expenditure, including such areas as the preparation of the endless plans for approval by the Secretary of State and the incredible level of bureaucracy that will be required to fulfil the additional obligations set out in the School Standards and Framework Act. Organisational committees and adjudicator provisions will have to be funded by LEAs, as will many other matters.
I have worked in local authorities and I know of the constant pressure to hold back resources at the centre, and just how determined one has to be to contain central expenditure. What penalty will be incurred by a local authority that holds back more than the Secretary of State considers necessary? Given that LEAs will have legitimate reasons for increasing central expenditure because of the additional burdens set out in the School

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Standards and Framework Act, it will be difficult for the Secretary of State to take issue with local education authorities on this front.
I have read carefully all that the Minister, Estelle Morris, said about these regulations in another place. I was particularly struck by the number of times the Minister sympathised with points of concern that were made by both my colleagues in another place and indeed by the Liberals, and yet she responded by saying that the Government would have to monitor such areas carefully. There appeared to be a great deal of uncertainty about much of the detail and how it would work. For example, paragraph 23 of Schedule 1 states,
"Expenditure which enables pupils to enhance their experience of the visual and performing arts other than music".
That appears to me to be a licence to local education authorities to retain yet more resources from schools. In addition, the bureaucracy involved in negotiating the financial implications of every school production and every cultural lecture etc., will be considerable. Can the Minister explain how local education authorities must interpret paragraph 23 of Schedule 1?
I also wish to pose the same question in relation to library and museum expenditure, especially as such expenditure in many LEAs comes under another budget head altogether. Also in Schedule 1 at paragraph 32 local education authorities can hold back,
"Expenditure on establishing and maintaining electronic computer systems … in so far as they link, or facilitate the linkage of, the authority to schools which they maintain, such schools to each other or such schools to other persons or institutions".
This is yet another area of reduced autonomy for schools. I also wish to ask the Minister what the impact of the parental leave directive will be. For example, will paragraphs 34 and 35 of Schedule 1 need to be adjusted to take account of the directive?
Regulation 14 sets out that local education authorities may not discriminate between schools by reference to category. Why then should we have different categories? That was a point made by the Liberals in another place. Mr. Don Foster argued for no differentiation between categories of schools. I heartily disagree with that but, if there are to be different categories, those will comprise different schools with different needs. The needs and levels of responsibilities as between schools will be different. For example, ex-GM schools will enjoy in the early years of the new proposals greater levels of responsibility. Therefore funding will need to reflect that. What will happen with regard to education action zones with perhaps one or more governing bodies? Education action zone schools are in a very different category from the other mainstream schools. How do these regulations relate to action zones? The Minister has said little about that.
The Minister in another place, when replying to a question on the use of cheque books by schools, gave a highly unsatisfactory answer. On what basis will interest forgone be charged to any school wishing to have its own cheque book? For example, will the assumption be made on the basis of interest gained on the whole LEA account which will clearly be much greater than the relatively smaller amount relating to a single school account? Why charge interest anyway?
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Regulation 22 needs clarification. The 80 per cent. of funds to be allocated—the figure is not now 100 per cent., but 80 per cent.—is said to be allocated,
"in one or more of the following manners".
It does not appear to be allocated solely on pupil numbers. For example, reference is made to the reservation of places for reception, nursery and special school pupils. If this is to be included in the 80 per cent. delegation, it would certainly mean that some schools would receive sums greater than the 80 per cent. figure and others less. Is that the case?
The Minister has made much during recent debates about the dual funding system. However, funding for grant maintained schools reflected their additional responsibilities. Can I ask the Minister where a school takes on additional responsibilities ahead of other schools, will that be recognised in the funding? If so, what is the difference between that and the present system? If not, then what will be the incentive for any school to accept additional responsibilities?
A moment ago the Minister referred to grant maintained schools which will receive funding on a cash basis as of this year for 1999–2000. If grant maintained schools are to be sustained in cash terms, then funding will be different from non-grant maintained schools. Is that so? That is another example of differential funding. If this level is to be sustained for 1999–2000, what plans do the Government have for the years beyond 2000, especially where some schools accept different levels of autonomy? I understand from what the Minister has said that it is conceivable that different schools will have different levels of responsibility. If they do, will funding reflect that?
Will the Minister explain Regulation 23, which states that the Secretary of State, where it appears to him to be expedient, can authorise a local authority to determine or redetermine budget shares to such an extent as he may specify. What can the Minister give as an example of a situation where the Secretary of State would wish to use this power?
I suspect that delegation will be no more, and may be even less, than at present when this scheme is up and running. It is clear that it is a far cry from the 100 per cent. delegation promised in the publicity blurb. Certainly the bureaucracy will be difficult to control given the considerable extra burdens laid upon local education authorities.
As I have said, even the Minister has had many doubts about how this system will work in all its detail. What matters to schools is that they receive the maximum amount possible from the local education authorities, that bureaucracy is held to a minimum and that the promised transparency claimed by the Minister will be evident. We shall watch the introduction of these new arrangements with interest.
7.42 p.m.
Lord Tope: My Lords, I too should like to thank the Minister for his very full explanation of the regulations. I also thank the noble Baroness, Lady Blatch, for her several references to the many concerns and comments made by my honourable friends in another place. Your

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Lordships will be relieved to know that I do not intend to repeat tonight all that was said in another place, but merely to note that those concerns and comments were expressed.
I start by giving a broad welcome to these regulations. I have a few points to make, but we certainly welcome the thrust of the regulations. On these Benches we have always supported the concept of delegating both financial and operational control from LEAs to schools. I will say very carefully in the presence of the noble Baroness, Lady Blatch, that the Liberal Democrats were among the earliest pioneers of local management of schools.
Baroness Blatch: No, you were not.
Lord Tope: My Lords, one day I shall make a comment on this with which the noble Baroness, Lady Blatch, can agree.
We believe we were among the first pioneers of local management of schools and have certainly always supported it.
It is good to note that arrangements under Part III will enable LEAs to target funding at schools with particular needs or problems. We are pleased to note that at a time of crisis in teacher recruitment and retention, a wider range of supply cover may be funded centrally where such flexibility might be helpful. It is also good to see flexibility in the funding arrangements for "low-incidence" SEN units in mainstream schools and in the delegated funding for meals and milk. Your Lordships are aware that we greatly favour local determination and professional independence. Any small changes in that direction are certainly to be welcomed.
I turn now to the first of my concerns. I remain uneasy about the Government's attitude to the role of the LEAs in monitoring the quality of education provided in their areas. I have long believed that the use of high quality advisers for subject areas, advisers who can evaluate, support, assist and train teachers in their schools, is more likely to raise standards than the Ofsted "name and shame" strategy. On these Benches we prefer "praise and raise".
I looked hard and unsuccessfully to find in the regulations where it is prescribed that LEAs can include the salaries of such advisers in the budget that they retain at the centre. I understand from the Minister's speech this evening that they cannot retain it at the centre and that it must be delegated. Perhaps the Minister will clarify that when he responds. If that is the case, it causes me some concern. I know that already in some areas advisory service and in-service training are bought back. But experience has already shown that this pseudo-market actually puts advisory services at risk. Schools often dare not spend funds on what is really optional when they can barely afford what is compulsory. I hope that the Minister in his response will indicate whether the Government still support the concept of LEA quality control for their schools.
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I have one or two other more detailed queries. It is splendid to find a requirement in Regulation 10(2) of Part III that LEAs should determine a funding formula which is,
"simple, objective, measurable and predictable in effect, and clearly expressed".
I hope very much that that is the practice. I shall be interested to know from the Minister how the DfEE will monitor this. I urge him that when he finds a funding formula that is simple, objective and clearly expressed, he gives it great publicity and wide circulation as a model of good practice. It is certainly a desirable aim, even though, with a little experience, I have some doubt about its achievement.
Quite a lot of space is very properly taken up with funding arrangements for pupils who are either permanently excluded or being reintroduced into other schools. Can the Minister say if the Government are considering, or will consider, making schools financially responsible for the on-going education of pupils who they permanently exclude, at least until they are formally admitted to the roll of another school? We feel that that might be a powerful factor in controlling the rise in expulsions.
Your Lordships will know the importance which we on these Benches attach to proper provision for children with special educational needs. May I say how pleased we are to see acknowledged in Regulation 22(d) the needs of those pupils who have problems with their learning but do not have statements. Many schools have felt that the only way to get money for these people was to statement them. It will be good if we can avoid that bureaucratic nightmare wherever possible.
I should be grateful for an explanation of the effects of paragraph 18(2) of Schedule 1 on the school meals service provided by schools which were formerly grant maintained.
I have expressed our pleasure at the Government's recognition that music, drama and visual arts provision needs to be made at LEA level, or indeed by a consortia of LEAs, and that this is guaranteed by the provisions in paragraphs 22 and 23 of Schedule 1.
Can the Minister explain why there are significant discrepancies between the arrangements for England and Wales? I note that in paragraph 42 of Schedule 2, Welsh authorities can retain money at the centre for the repair, maintenance and cleaning of schools. Similarly, in paragraph 43, Welsh LEAs can retain the money to organise library and museum services throughout their areas. For some reason this desirable situation is not possible in England. Perhaps England should be pressing for its own national assembly? I should be grateful for some explanation of that.
Finally, a word about the arbitrary division between the maintenance of school buildings and plant—mostly revenue expenditure, I know—and capital replacement. It seems to me to be a recipe for schools to say "If we do not spend our money on maintaining our outdated central heating boiler it will blow up and then the LEA will have to pay for a new one". I have to say that this does not seem an altogether sensible way of doing things.

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I end where I began by saying that we give a broad welcome to the measures which are set out in these regulations.
Lord Hunt of Kings Heath: My Lords, I thank the noble Baroness, Lady Blatch, and the noble Lord, Lord Tope, for their comments and for their broad welcome for these proposals. Perhaps I may also take this opportunity to commend the noble Baroness, Lady Blatch, on what I can only describe as the extraordinary athletic prowess she showed in running down the principal corridor during the recent television programme about your Lordships' House. It was a very good example to us all.
The noble Baroness raised the question of 100 per cent. delegation and expressed a little scepticism about the ability of local education authorities to push as much money downwards towards the schools. The 100 per cent. delegation was put forward as an attempt to achieve a major increase in delegation on the basis of a sharper distinction between those functions and services for which central funding is essential and those for which it is not. It is on that basis that the 100 per cent. delegation model was described. Taken as a whole, with the transparency that is being brought into the system, with the ability of individual schools to be closely involved in consultation with the LEA about how the individual school budget is to be allocated and with the reserve of the potential intervention by the Secretary of State, this will be enough to ensure that local education authorities act in accordance with the broad principles that we wish to see introduced. We wish to see as much resource as possible delegated to school level. I am convinced that this will enable all schools to give the kind of leadership and take the kind of responsibility which is so essential to improving what they do. I am also convinced that, by giving a much sharper focus to the strategic responsibility of the LEA, we will he able to enhance the LEA's performance. It must be in the best interests of individual LEAs to adopt not just the rules but the actual broad principles which we wish to see take place.
The noble Baroness referred to the response of the Minister in another place. Concerns were expressed in the debate in another place and what one might describe as worst case scenarios were presented. The reality is that many LEAs have shown the ability to operate the LMS scheme well. They are on their mettle to show that they can handle the new delegated powers. However, we will keep these matters under review and they can be addressed in the future if concerns arise. The LEAs' funding formula will be subject to year-on-year review by the schools within their districts.
The noble Baroness referred to the parental leave directive. I cannot say much at this stage, but we will keep under review what needs to happen when the time comes. The noble Baroness asked about the transitional funding for grant-maintained schools and asked in particular whether this transitional funding would continue after next year. At this stage we have taken no such decision. We wish to see how the arrangements for next year bed down before any such decisions are made.
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The noble Baroness asked whether some schools would receive more than the 80 per cent. on pupil numbers and some would receive less. The answer is yes. The requirement is that 80 per cent. of the total primary and secondary funding is allocated on pupil numbers, including the categories listed in regulation 22. That means 80 per cent. across the LEA, but it could mean different levels in individual schools. For instance, large secondary schools could attract higher levels of pupil-led funding and small primary schools less than that.
The noble Baroness asked about library and museum services. The regulations allow hold-back by LEAs in 1999–2000 for centrally funded services. From 2000, the regulations will change to make them devolve funding on an earmarked basis. Such funding must include expenditure on services applicable to school pupils—
Baroness Blatch: My Lords, I am grateful to the Minister for giving way. I wish to ask a question about 80 per cent. funding. As I read the regulations, it is conceivable that of two schools with exactly the same number of pupils one could receive greater than 80 per cent. delegation and the other less than its share of 80 per cent. simply because the LEA deemed a number of places for nursery, special and another category of schools. It is possible that schools with exactly the same number—not just a large secondary school versus a small primary school—could be treated differently.
Lord Hunt of Kings Heath: My Lords, because of the way in which pupil numbers are weighted, there could be differences between schools with the same number of pupils. However, if it is argued that this is a point of concern, we shall need to review these matters when we see what comes out of the first allocation to schools.
The noble Baroness asked about the role of LEAs regarding computers. It covers the network infrastructure but not the computers in individual schools which are plugged into it. There are good reasons for the central infrastructure to be funded centrally, but we shall be alive to any suggestions that LEAs are using central funding to fund items which ought to be left at school level.
The noble Lord, Lord Tope, asked about supply cover. As he will know, supply cover for circumstances such as trade union duties, jury service, staff undertaking public duties as councillors and magistrates, and Territorial Army service, is at present funded centrally by most LEAs. In many cases a statutory right to time off is involved. Total expenditure is modest but its distribution as between schools is often uneven and unpredictable. There may be ways of delegating funding while protecting individual schools from excessively large bills, but we consider that those arrangements could be very artificial. In the light of the consultation, we thought it best to let LEAs retain the funding if they wished.

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The noble Lord, Lord Tope, asked about advisory and inspection services, particularly in relation to school improvement, the whole area of educational development plans and the role of the LEA. The position is that LEAs will undoubtedly need to retain money for some advisory and inspection services in order to promote school improvement. However, I am clear that education development plans are not a licence for expanding centrally funded services. We shall be scrutinising those plans carefully to ensure that LEAs hold back only sufficient funds to support activities which are clearly needed to raise standards in their area. Any advisory services which are not covered by the educational development plan and are not required to enable LEAs to carry out essential functions, such as in relation to special educational needs, should be funded from school budgets on a buy-back basis and not by top slicing.
The noble Baroness, Lady Blatch, raised the issue of Regulation 23, dealing with additional arrangements approved by the Secretary of State. That power is intended to allow a local education authority to meet an emergency situation where the authority may not have sufficient time to produce an allocation formula in accordance with the regulations; for example, if a group of schools in one area needed special treatment due to, let us say, abrupt population loss.
The noble Lord, Lord Tope, referred to the words, "simple, measurable and clear". I thought that they must have caused amusement to parliamentary draftsmen at the time. However, we should remember that these regulations are replacing very detailed matters. I have seen a number of documents produced by LEAs in an attempt to explain the implications of the regulations to individual schools in their areas which are then used in the consultation process. I have been impressed by the way in which they have been able to do that. I hope that, despite the occasional difficulties of understanding parliamentary language, we shall, at LEA and school level, produce a document that is clear to those who must operate the provisions. My experience in the health service in terms of funding formulae is that, while we all started with the aim of simple, easily understandable formulae, we then completely destroyed them by producing arguments for slight changes in sensitivities. It is very difficult to arrive at an exact balance.
The noble Lord, Lord Tope, raised an interesting point about the funding of permanent exclusions. He suggested that a school that undertakes the permanent exclusion of a pupil should have to pay the costs. I am not in a position to respond directly to that point now. It is a matter to which we should wish to give some thought.
Having thanked noble Lords for their general support for the proposals, I commend the regulations to the House.
On Question, Motion agreed to.

Industrial Training Levy (Engineering Construction Board) Order 1999
8.2 p.m.
Lord Hunt of Kings Heath Lord Hunt of Kings Heath rose to move, That the draft order laid before the House on 1st December be approved [3rd Report from the Joint Committee].
The noble Lord said: My Lords, it may be for the convenience of the House if I speak to this order and the following order together.
The proposals before your Lordships this evening seek authority for the Construction Industry Training Board and the Engineering Construction Industry Training Board to impose a levy on the employers in their industries to finance their training activities, including grants schemes, and to fund the operating costs of the boards. Provision for this is contained in the Industrial Training Act 1982 and the orders before your Lordships would give effect to proposals submitted by the two boards.
The proposals from each board include provision to raise a levy in excess of 1 per cent. of an employer's payroll. The Industrial Training Act 1982 requires that in such cases the proposals must be approved by affirmative resolution of both Houses. In each case the proposals are based on employers' payrolls and their use of sub-contract labour.
As required by the Industrial Training Act, both boards have provided for the exemption of small firms from the levy. The level at which this exemption takes effect is unchanged from last year and aims to strike the right balance between helping small firms to grow and giving them unfair commercial advantage. However, the boards are committed to supporting the training efforts of small firms, whether or not they pay levy. All companies need a skilled, competent workforce if they are to be competitive and small firms in these sectors are encouraged to take advantage of the services offered by the boards and to provide opportunities for trainees and apprentices.
In the case of the Engineering Construction Industry Training Board, the proposals are different from those approved by your Lordships last year in that the higher rate on net payments made by employers for labour-only services has been removed. That is because the rationale for the different rates was questioned in the last independent review of the board and the board was recommended to move to a single rate. Additionally, the rate for off-site establishments is reduced.
The Engineering Construction Industry Training Board treats off-site establishments and construction sites separately and proposes to raise a two-part levy. For off-site employers the rate is reduced from 0.4 per cent. to 0.18 per cent. of the total of payroll and net expenditure on labour-only sub-contracting. Those off-site employers employing 40 or fewer employees are exempt from paying the levy. The rate for site employers is 1.5 per cent. of the total of payroll and net expenditure on labour-only sub-contracting. There is exemption for site employers with combined payroll and net labour-only payments of £75,000 or less.
The CITB proposes to raise a two-part levy: 0.38 per cent. of payroll and 2.28 per cent. of net expenditure by employers on labour-only sub-contracting; employers with combined payroll and labour-only payments of less than £61,000 are exempt from paying the levy.
These rates represent an increase for directly employed labour—the previous rate was 0.29 per cent. The board states that the increase is necessary for two reasons. First, there are continuing changes in employment practices in the industry which significantly affect levy arrangements. Employers are still moving from labour-only sub-contracting towards direct employment and, because the levy on labour-only sub-contracting is at a higher rate, this has led to a reduction in the board's income.
At the same time, the greater numbers of direct employees is expected to lead to an increase in the amount of training being carried out and a corresponding increase in grant and other support provided by the board.
The last independent review of the board also questioned the rationale for the different rates and the board was recommended to move towards a single rate. Subject to further consultation with the industry it is planned that this will be phased in over the next four years.
For both boards the proposals involve levy rates in excess of 0.2 per cent. with no provision for exempting employers who make their own training arrangements. In such cases the Industrial Training Act 1982 requires boards to demonstrate that the proposals have the support of the employers in the industry. I am satisfied that each board has obtained that support.
These proposals are expected to raise nearly £61 million for the CITB and around £10 million for the ECITB. Both boards will use the money to fund a range of training activities including grant and initiative schemes, new entrant training and operating costs.
Your Lordships will know from previous debates that the CITB and the ECITB are the only two statutory industry training boards. The last review of the boards looked at the need for their continuance and included a survey of the views of employers in each sector. The reviews concluded that both boards were widely supported by employers and sectoral interest groups and that, without them, there would be a deterioration in training in their sectors.
Each board has now developed detailed action plans which address the specific objectives and recommendations of the review. These are already starting to increase their effectiveness and further develop their capabilities, especially at the strategic level.
I am also pleased to tell your Lordships that each of the boards has successfully completed its first year as a government recognised national training organisation for its sector. It is an important development for them because it places them very firmly within the national
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network of sector-level training organisations, which is now largely complete, and puts a new emphasis on strategic activities and partnerships.
This is helping the boards to contribute even further to the National Skills Strategy. For example, both boards have developed nationally recognised labour market assessment systems, which will contribute to the important work of the Regional Development Agencies and the National Skills Task Force. Each has also set up New Deal initiatives.
The draft orders before the House will enable the two boards to carry out their training responsibilities in 1999, and I believe it is right that the House should agree to approve them. I commend them to the House. I beg to move.
Moved, That the draft order laid before the House on 1st December be approved [3rd Report from the Joint Committee].—(Lord Hunt of Kings Heath.)
8.8 p.m.
Baroness Seccombe: My Lords, I apologise for my voice, which is disappearing fast, but I hope to be audible. I am grateful to the Minister for the clear explanation of the orders. The two training boards referred to in the orders operate with the general support of firms in the construction and engineering construction industries. With that in mind, we see no reason to object to the raising of the levy in principle.
We on this side of the House, however, have a number of legitimate concerns which arise out of the arrangements. There are three areas which I wish to question. First, there is the question of the effects of the rebalancing of the rates. I recognise that there are valid arguments for the board's decision to increase the payroll rate on labour-only sub-contracting from 0.29 per cent. to 0.38 per cent. It seems a small increase, but in practice it could seriously affect some of the larger firms in the industry. To give but one example, an employer with 1,000 employees and a payroll of £20 million a year currently pays a levy to the CITB of around £58,000. Under the new arrangements, this contribution would increase to nearly £77,000. With the construction industry facing a recession, it seems a most inopportune moment to introduce the changes which effectively will put yet more burdens on industry. What estimate has the noble Lord made of the effects on employment in the industry of these rate changes?
We on these Benches recognise the contribution made to the economy by small firms. We are anxious to ensure that any arrangements will not hamper their development. But, while I recognise that there is a need for fairness and clarity, the question arises of how the Government intend to handle the problem of the status of smaller firms. The call for the lowering of the threshold for entry to the scheme is a result of the reduced income of the board, which in turn is the result of developments in the industry which are beyond the Government's control. There are a number of smaller firms which would rather not pay any levy but would still hope to gain the benefits of a better-trained workforce. Are the Government considering mandatory

357
registration of firms? If the Government decide to introduce mandatory registration, will it be done next year under the order or will it be done under the interim period?
There are also questions about the way in which the Government's New Deal programmes interact with the existing grants systems. How will the orders relate to training for 18 to 24 year-olds under the New Deal? Will there be separate funding arrangements? If that is the case, will employers be able to draw on both sources of funding to finance training for 18 to 24 year-olds?
With those questions, which I hope the noble Lord will address this evening, I return to where I began. We accept that many firms in the industry welcome the scheme. We do not, therefore, object in principle to their continuation.
8.14 p.m.
Lord Hunt of Kings Heath: My Lords, first I thank the noble Baroness, Lady Seccombe, for her warm support for the proposals. She raised a number of points to which I shall endeavour to respond. The issue of the effect of the additional levy on large construction companies depends on the individual circumstances of an individual employer, particularly the mix of directly-employed and sub-contract labour that it has. The Construction Federation, the largest grouping of employers' organisations in the industry, has said that the movement towards a single unified rate of 0.87 per cent. in 2003 would have a fairly marginal effect for its members, who currently pay an average rate of 0.79 per cent. It is an average; some companies will be affected more than others. But it is important that we recognise that this is a phased introduction of change. Looking at the first year or two, we believe the relative change is modest, to allow companies to adapt to new circumstances.
In answer to the noble Baroness's point about the impact of this on the economy generally, it might be worth me saying that overall construction activities continue to grow in the sector, although there are signs of a slow-down. Contract prices appear to be rising faster than inflation, although the export of building
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materials continues to slow down. Experience of the economy over many years suggests that, even in a situation where the economy may be tight, the need for training is ever more essential. For that reason alone, we wish to support the activities of the two boards.
The noble Baroness asked why small firms are excluded when most employers' federations believe that all firms within the industry should pay. There is no doubt that in the last review there are views within the industry both for and against. But the Industrial Training Act 1982 states that a levy order should not be approved unless it provides for the exclusion of small firms. It is important to note that, if small firms were brought into the levy system, the possibility is that a great bureaucracy would come into operation without bringing any substantial increase in income.
The noble Baroness raised the issue of mandatory registration. It is not the intention of the primary legislation that the onus would be on the employer to register with the boards, but the training board raised the issue. It has been told that a change to primary legislation would be considered if a convincing case could be made, taking full account of the costs and the resulting benefits of such a change, as well as giving full consideration to the administrative and bureaucratic implications.
The work of these boards is important and deserves our support. I commend the orders.
On Question, Motion agreed to.

Industrial Training Levy (Construction Board) Order 1999
8.15 p.m.
Lord Hunt of Kings Heath: My Lords, I beg to move formally.
Moved, That the draft order laid before the House on 1st December be approved [2nd Report from the Joint Committee].—(Lord Hunt of Kings Heath.)
On Question, Motion agreed to.
House adjourned at sixteen minutes past eight o'clock.

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