Sitting of 15 June 2000

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

  PRIVATE BUSINESS
  LONDON LOCAL AUTHORITIES BILL [LORDS] (BY ORDER)
  Order for consideration, as amended, read.
  To be considered on Thursday 22 June.
  MERSEY TUNNELS BILL (BY ORDER)
  Order for Second Reading read.
  To be read a Second time on Thursday 22 June.

Oral Answers to Questions
  TRADE AND INDUSTRY
  The Secretary of State was asked—

  Granada
  Ms Hazel Blears: What assessment he has made of the report from Manchester business school on the impact of Granada on the north-west; and if he will make a statement. [124579]
  The Minister for Competition and Consumer Affairs (Dr. Kim Howells): I understand that the report commissioned by Granada provides a positive picture of the company's contribution to the economy of the north-west.
  Ms Blears: I am grateful to the Minister for that reply. The Department is on record—somewhat courageously perhaps—as acknowledging that there is a real difference in the performance of our different regional economies. It is a fact that gross domestic product in the north-west is only two thirds of that in London and the south-east. Granada supports 4,000 jobs in the region, and has invested £1 billion in production facilities. It is a flagship for success in our region. Will the Minister take into account the strong feelings of many hon. Members that if there were to be a merger between United and Carlton it could damage the regional diversity of the ITV network? It is crucial that regional diversity be maintained, and that we do not have southern domination, which could damage the industry as a whole. I ask my hon. Friend to take those feelings seriously into account.
  Dr. Howells: As high-technology companies employ people with valuable skills, ITV companies are likely to have a significant impact on the economies of their
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  regions, no matter where they are in Britain. We shall certainly take into account all the factors that my hon. Friend has outlined for us.
  Mr. Graham Brady: May I further urge the Minister to take into account the importance of maintaining Manchester's position as the second city in the United Kingdom for the media industry? I stress that it is vital, particularly for news and regional programming, that the regional diversity of the ITV network should be maintained.
  Dr. Howells: I can certainly give the hon. Gentleman that assurance.

  Miners' Compensation
  Mr. Ronnie Campbell: If he will make a statement on the legal costs retired miners can expect to face in respect of health-related compensation claims. [124580]
  The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): The Department of Trade and Industry considers that miners and their families should not be paying any legal costs. We have made arrangements to ensure that the costs of solicitors and the cost to each claimant are met by the Department. We have put aside £100 million to cover those fees.
  Mr. Campbell: I thank my right hon. Friend for that reply. It is a disgrace that these solicitors—these parasites—who are already getting paid are now charging those lads again. Someone in the Department should consider the legal position and stop them doing so. I thank the Labour Government for the compensation cases that are now coming to the fore. Miners are now getting paid. That started in 1998, whereas under the Tory Government they got absolutely no compensation. As chairman of the miners' group at that time, my hon. Friend the Member for Bolsover (Mr. Skinner) knows that they would not budge an inch on compensation cases. It was not until 1998, after the Labour Government came to power, that compensation was paid.
  Mrs. Liddell: I thank my hon. Friend for making that point. We have made arrangements whereby solicitors can receive fees of between £500 and £1,750 plus VAT and any small costs that they may have incurred to allow them to help claimants to fill in the forms. I ask hon. Members to ensure that the Department is informed if solicitors charge contingency fees, and we will raise the matter. Solicitors should not be doing that, and if anyone has been charged any fees they should ask for them to be annotated so as to give true evidence of why they have been charged.
  On the more general point, my hon. Friend is absolutely right. The first case, in 1990—the Tanner case—showed that chronic bronchitis and emphysema was an industrial injury, and that British Coal was liable. That case gave Conservative Members, who were then in government, the opportunity to act. In the following year, 1991, the Industrial Injuries Advisory Council said that coal pulmonary diseases were an industrial injury, but the

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  Tories turned their back on it. Seven thousand miners died and their widows have put in claims for that period. That is the record of the Conservative Government.
  Mrs. Angela Browning: As it is more than two years since the court judgment requiring the Government to start the process for those claims, why did the DTI require Healthcall to begin recruitment of respiratory consultants as late as November of last year? Was it not because the original contract, which was not tendered for, failed to carry out appropriate medical tests on former miners? What went wrong with the Government's plan to process 2,500 full medical tests a month?
  Mrs. Liddell: The hon. Lady should do her homework. She has asked a series of questions, but she has not bothered to read the replies. We have not changed companies. We have processed the claims as quickly as we possibly can, and £60 million has already been paid out to miners and to their widows. We are currently paying £3 million a week in compensation, and £1 million a day will soon be matched in compensation. If men were too ill to complete the test, that does not prevent claims from being completed. To suggest otherwise is to spread anxiety in the mining communities which the Conservative Government decimated during their years in power.
  The accusation made by the hon. Lady in a press release issued this morning—that is what this is all about—that widows' claims are being dealt with after those of living victims is utter nonsense. From 1992 to 1997, 7,000 miners died, and their widows are now claiming compensation. My Department has paid £180 million in compensation for vibration white finger and lung disease. The Government whom the hon. Lady represented did nothing. I challenge her to come to the Dispatch Box and apologise.
  Mrs. Browning: The press release that the Minister is waving was issued yesterday. It was issued yesterday because, having tabled five named-day questions on behalf of ex-miners from all over the country who wrote asking me to assist them by speeding up the process—the way in which the Department is handling the matter is exacerbating their problems—I received, as usual, holding answers. The Department could not give answers on a critical issue for which it is responsible.
  I received the answers last night. Three were of such a party political nature that I wrote to the Cabinet Office this morning asking for an investigation of the politicisation of the DTI—[Interruption.] The health of these miners and their widows, and the processing of the claims, do not constitute a subject for party political spin from the Minister or other Labour Members.
  I issued the press release because of the inaction of the Minister and her Secretary of State, who were unable to answer questions about vital matters for which they are departmentally responsible. If the Minister believes that all is well at the DTI, and that her Secretary of State—[Interruption.]
  Madam Speaker: Order. Those on both Front Benches must realise that we are not having a debate. This is Question Time.
  Mrs. Browning rose—
  Madam Speaker: Order. I must either hear brief questions and brief answers, or move on to the next question. May I hear a question to the Minister, please?
  Mrs. Browning: If all is well, why does the Minister think the Nottingham Evening Post quoted a member of the Labour party—one of her MPs—as saying that the position was not acceptable? Other Labour MPs representing Nottinghamshire constituencies—[Interruption.]
  Madam Speaker: Order. Will the Minister answer briefly? Otherwise I shall move on to the next question, because I have heard enough of this.
  Mrs. Liddell: In fact, the press release issued by the hon. Member for Tiverton and Honiton (Mrs. Browning) is dated 15 June rather than yesterday.
  As for the hon. Lady's points about Nottinghamshire, Members throughout the House have been working with miners in their communities to ensure that the necessary documentation is processed as quickly as possible. Labour Members are holding surgeries to help miners, while Conservative Members are issuing press releases. I note that the hon. Lady did not apologise to the House for misleading it, or for the actions of the last Government.
  Mrs. Browning rose—
  Madam Speaker: I hope that we are going to hear another question.
  Mrs. Browning: On a point of order, Madam Speaker.
  Madam Speaker: Order. I can take no points of order during Question Time. I understand that the hon. Lady wished to ask three questions. If she has a question, I will hear it.
  Mrs. Browning: Why has the Nottingham Evening Post had to run a campaign—the word that it used—on behalf of former miners in its area to encourage the Government to speed up the processing of claims? Why should it be incumbent on local newspapers to make the Government do their duty?
  Mrs. Liddell: Like all other coalfield newspapers, the Nottingham Evening Post is working with the mining community to process the claims as quickly as possible. It was my hon. Friend the Member for Sherwood (Mr. Tipping), the Parliamentary Secretary, Privy Council Office, who is present, who spoke to the newspaper.
  What the hon. Lady says would be much more credible if she were prepared to go into mining communities and answer for the inaction of the Government whom she supported, and under whom she was a Minister. Labour Members have acted to ensure that within three years we shall have settled the biggest personal injury action in the country's history. It would have taken 15 years had we not acted. Some £60 million pounds is to go into miners' pockets, but had the last Government accepted liability, the money could have been in miners' pockets now.
  Mr. George Stevenson: I congratulate my right hon. Friend and her Department

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  on implementing the compensation scheme, in stark contrast with the record of the previous Government, but will she revisit the payments that are being offered on legal advice under the so-called fast-track system? I have constituents who are terribly affected by emphysema and lung disease as a result of their mining experience but who are being offered as little as £3,000 under the fast-track procedure. Will my right hon. Friend please revisit that important aspect of the scheme?
  Mrs. Liddell: If a miner or his widow accepts compensation under the fast-track procedure, they can also opt to go into the medical assessment process. It is on the basis of that process that the excess damages are paid. If my hon. Friend has any specific cases that he wishes me to look at, I will be only too happy to do so. I commend him and my hon. Friends from the coalfields who are doing extra work with mining communities to try to move the claims along as quickly as possible. I know that their work is much appreciated in mining communities. It is certainly much appreciated by the Government.

  E-commerce
  Mr. Nick St. Aubyn: If he will make a statement on the regulatory framework for e-commerce. [124581]
  The Secretary of State for Trade and Industry (Mr. Stephen Byers): The Electronic Communications Act 2000, which received Royal Assent on 25 May, gives legal certainty to the use of electronic signatures and gives powers to amend existing legislation. It will ensure that the United Kingdom is the best place in the world for e-commerce.
  Mr. St. Aubyn: The Home Secretary's Bill, the Regulation of Investigatory Powers Bill, which will regulate e-commerce in this country, is described in a Financial Times leader today as giving the Home Secretary
  powers that Joseph Stalin would have used with relish.
  It says that those powers
  could seriously injure the attractions of the UK as a location for e-business.
  Is the Secretary of State not aware that, earlier this week, the British Chambers of Commerce published a report by the London school of economics warning that our level of e-commerce business could suffer by up to 30 per cent. as a result of the Home Office Bill? A major company in my constituency with long experience of encryption development—
  Madam Speaker: Order. Questions are getting out of hand today. We are getting into an Adjournment debate. If the hon. Gentleman has a constituency case, he should raise it on the Adjournment. Put the question to the Secretary of State.
  Mr. St. Aubyn: Thank you, Madam Speaker.
  When will the Secretary of State accept responsibility for the Home Office Bill's highly damaging effects on e-commerce business for my constituents and others?
  Mr. Byers: It is agreed by business that we need to have a safe and secure environment for electronic
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  commerce. The Regulation of Investigatory Powers Bill, which the Home Office is taking through another place, will provide that environment. However, we are aware that there are concerns in the business community about some of the Bill's proposals, which is why the Home Secretary, on behalf of the Home Office, has indicated that he is more than willing to consult business about its concerns. That is what he will do. If necessary, the Bill can be amended to reflect those concerns.
  Mr. Andrew Miller: The Electronic Communications Act paves the way for Britain to take a leading role in that important area; my right hon. Friend should take no notice of the carping from the Opposition Benches. Will he look carefully at encouraging companies to work together to kitemark their products, so that they can sell to the rest of the world with an underlying support mechanism among themselves—which will be self-regulated—to ensure that goods and services are delivered? That would help. Secondly—
  Madam Speaker: Order. The hon. Gentleman has put a question. Will the Secretary of State answer? We are moving on in questions today. Come along.
  Mr. Byers: It is true that business-to-business transactions over the internet are proceeding very quickly and developing rapidly. However, my hon. Friend raises an important issue, which is about transactions with individual consumers over the internet. There is some merit in the idea of an e-mark to brand the validity of transactions. It is one of the issues that my hon. Friend the Minister for Small Business and E-Commerce is considering.
  Dr. Vincent Cable: As the Home Secretary has apparently bet his annual salary that the estimates of the British Chambers of Commerce are grossly exaggerated, could the Department of Trade and Industry, as the Department responsible for e-commerce, give its own estimates of what the Regulation of Investigatory Powers Bill will cost industry? Could the Secretary of State also calm industry's anxiety by giving a categorical assurance that the compliance costs of meeting national interests will be fully reimbursed by the Government?
  Mr. Byers: The Home Office, as the Bill's sponsor, has done its own assessment of the business cost. I repeat the point that I made earlier: if business has genuine concerns—I know that it has expressed some recently—about the measure that the Home Office is taking through the House of Lords, we are prepared to listen to those concerns. That is exactly what we did with the Electronic Communications Act 2000. I believe that we were able to ensure that that measure was very effective by listening to the views being expressed, and I am sure that we shall do exactly the same with the Regulation of Investigatory Powers Bill. That assurance is there. If business wants to discuss the matter with the Home Office, the Home Secretary has invited it to do precisely that.
  Mr. Nick Gibb: It was thanks to Conservative Members that the over-regulatory first draft of the Electronic Communications Bill was shaken up and whittled down to the light-touch

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  approach that we finally saw. Now, however, it seems that all those excessive, interventionist regulations were simply sent down the road through St. James's park to the Home Office, and included in the RIP Bill. There seems to be a complete absence of joined-up government.
  More important, the Secretary of State himself seems to have completely abandoned the DTI's role within government as the protector and promoter of business and enterprise. What liaison has he himself had—it is all very well for him to talk about the Home Secretary doing this or that—with the Home Office in the formation of the RIP Bill? Or is he completely content with a Bill that puts yet more burdens on to business and is likely to cost British business £46 billion in lost business?
  Mr. Byers: I replied to that question a little earlier. The hon. Gentleman has not reflected on the answer that I gave to the hon. Member for Guildford (Mr. St. Aubyn), in which I made it clear that if business is concerned about the Bill's contents, we shall consult with business. That is exactly what we shall do. The Home Office is providing a secure and safe environment for e-commerce.
  We are going to take no lessons on e-commerce from a party that supported key escrow—which got the whole of business up in arms against it. Conservative Members know very well that that was the Conservative party's exact policy. The Conservative party was the party of key escrow, and business opposed it totally. Our proposals are ones that business actually supports.

  Regional Selective Assistance
  Mr. Archy Kirkwood: When he will publish the map agreed by the EU for eligibility for regional selective assistance; and if he will make a statement. [124583]
  The Minister for Trade (Mr. Richard Caborn): As soon as possible, once the map has been agreed with the Commission. I hope that that answer is in compliance with your desires, Madam Speaker.
  Madam Speaker: Absolutely. Perfect.
  Mr. Kirkwood: Will the Minister of State give special consideration to those areas seeking eligibility for inclusion on the map and which were on it in July 1999 but have lost that position in the most recent proposals? Will he consider those cases sympathetically? Will he also acknowledge that, now that the United States Trade Department has proposed trade sanctions against the importation of cashmere jerseys, state aid will be more important than ever in developing the local economy in areas such as my own, in places such as Kelso? Will he undertake to get the map's details resolved as soon as possible, and try to impress on the European Commission the urgent need to sort out the underlying trade dispute with the United States?
  Mr. Caborn: On the first point, yes, we shall try to move the Commission on the matter as quickly as possible. I understand the hon. Gentleman's desire, which is shared by many other hon. Members, to clear up the matter as quickly as possible. We have a number of indicative offers out for regional selective assistance,
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  but they have been held up because of non-clearance of the map. I hope that the Commission will deal with the matter sooner rather than later.
  We are making very strong representations on cashmere and the United States's new approach on the carousel. The European Commission knows our position on those issues, on which we shall be making separate representations.
  Mr. Dale Campbell-Savours: In relation to West Cumbria, the gross domestic product figures that the European Commission uses as the basis on which it calculates regional selective assistance levels are simple, plain rubbish. They do not reflect what is going on in reality, as we lose substantial numbers of jobs in various industries. Can we have an inquiry into the make-up of those statistics and a review of the whole arrangement?
  Mr. Caborn: I cannot comment in detail on the issues that my hon. Friend has raised, but the statistics are consistent across the Community. If specific areas have problems with the statistical analysis, we will consider them. The statisticians, both here in the United Kingdom and in the European Union, are professional people of integrity. If there are fundamental mistakes or flaws, we will consider them.
  Mr. Ian Bruce: What role will the regional development agencies play in deciding how money will be spent in regional assisted areas? Will the Minister consider carefully what is happening in the south-west, where the RDA looks after Cornwall? The RDA has shown an appalling lack of activity, especially in my constituency, in leaving the best site in the south-west empty because of its inaction in getting the Portland naval site freed up. Will he please get a grip on that awful organisation?
  Mr. Caborn: Perhaps the hon. Gentleman should have a meeting with Sir Michael Lickiss, the chairman of the RDA. If he has complaints beyond that meeting, we will discuss them. The strategy presented by the south-west RDA was a bottom-up process and was the subject of wide consultation in the south-west. The business community in the area accepted that strategy, and so did the Government, and that is what we will work towards. We will look into the specific point that the hon. Gentleman raised.
  Ms Joan Walley: I thank the Minister for the work that he is doing to get the objective 2 map agreed, as well as the regional state aid map. It is important that we balance the money available for communities across the country, but I ask him to do all that he can to get a decision by the summer. In the interim and in respect of North Staffordshire, can he confirm that his officials are giving advice that conditional offers can be made, pending agreement by the Commission? In other words, can he confirm that everything that can be done is being done to benefit the North Staffordshire community?
  Mr. Caborn: The answer is yes, and we have been giving out indicative offers since 1 January this year, to ensure some stability for the process, but we cannot make decisions until the European Commission makes decisions on the map. By the way, if the Staffordshire newspaper The Sentinel was as supportive of its area as other regional

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  newspapers, it could promote the area instead of running it down all the time. It is disgraceful that an official of the Commission has actually had to write to the editor about its inaccurate reports, which affect the area's industrial base. The letter stated:
  Moreover, the quotes in question are insulting to a UK Cabinet Minister and his Department.

  Aerospace Industry
  Mr. John Wilkinson: How much launch aid from his Department for aerospace companies over the last 10 years has been devoted to projects which have dual civil and military applications. [124586]
  The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): Launch aid, which is now referred to as launch investment, is available to assist only in the design and development of civil aerospace projects.
  Mr. Wilkinson: Notwithstanding the Minister's reply, is it not the case that the EH101 helicopter received substantial investment aid from the Department, before this Government came to power, as did the RTM322 power plant and helicopter engine? Is it not therefore important that the Department recognise the industrial implications of the procurement in future by the Royal Air Force and the Royal Navy of amphibious and support helicopters to replace the Puma and the Sea King HC4? That is necessary to ensure that the British helicopter industry remains, as it is now, at the forefront of European technology.
  Mrs. Liddell: The hon. Gentleman knows that we will do what we can to support the British industrial base as much as possible. The EH101 began as a military aircraft and, in the mid-80s, my Department put resources into it to see whether it could be developed for civil purposes. We work with the Ministry of Defence, especially through the Civil Aircraft Research and Technology Demonstration—or CARAD—to ensure that any synergies that can be developed out of military research capability are also available for civil capability. However, the launch aid recently given to British Aerospace for the A3XX represents a considerable opportunity to help the British aerospace industry and will benefit both the civil and military aspects of that industry.
  Mr. Barry Jones: May I thank my right hon. Friend, her Department and the Government for the £530 million launch aid for the A3XX, and for the £133 million launch aid for the A340, the stretch version? That aid is massively important for my constituency, but how can my right hon. Friend help me prise out of the Welsh Assembly a £25 million regional grant for the Airbus 3XX? That grant would guarantee 1,400 jobs for a generation. If we do not have those jobs in my constituency, they will be exported—perhaps to Hamburg, or even to the English regions.
  Mrs. Liddell: Matters relating to regional development assistance in Wales are for the Welsh Assembly, but my right hon. Friend is right to point out the job-creating potential of that assistance. The assistance that we have been able to give to British Aerospace for the A3XX will
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  create 22,000 jobs, and preserve 60,000 others. That very considerable investment will have very considerable benefits for the British economy.
  Mr. Nigel Evans: I welcome the launch aid for the A3XX, and the two big contracts for Meteor and the A400M. However, BAE Systems today announced a total of 3,800 job losses. I have BAE Systems Samlesbury in my constituency, and the plant at Warton, where 750 jobs have been lost, is nearby, A number of smaller companies supply and contract to BAE Systems and may suffer job losses that have not yet been identified.
  Will the Minister have talks with the Secretary of State for Defence to see whether the two big projects could be brought forward to alleviate some of the job losses that have been announced? What will her Department do to give direct assistance to workers who will lose their jobs over the coming months in an area that has been hit already by a number of manufacturing job losses?
  Mrs. Liddell: I very much regret the decision and the job losses that have been announced today. I understand that the job losses arise largely from the merger of British Aerospace with Marconi and from the consequent rationalisation and restructuring process that is aimed at improving BAE's global competitiveness. I know that BAE has acknowledged the support that it has received from the Government.
  The Government, especially my Department and the Department for Education and Employment, will certainly react in the most positive possible way to give necessary assistance to people losing their jobs. We will do what we can to allow the process of change to go ahead as painlessly as possible.

  Regional Selective Assistance
  Mr. Bob Blizzard: What preparations his Department is making for implementation of the new assisted areas map. [124587]
  The Minister for Trade (Mr. Richard Caborn): As I said earlier, my right hon. Friend the Secretary of State announced on 21 December last year that we would be giving indicative offers of regional selective assistance. We have done that, and we hope to make that assistance available as soon as the European Union clears the map.
  Mr. Blizzard: My constituents are delighted that the Government have designated Lowestoft for assisted area status—unlike the previous Government, who did not seem to know where Lowestoft was.
  However, in the expectation that the European Union will soon clear the map, and given the length of time that has passed since the original announcement, will my right hon. Friend authorise a relaunch in the region? He will know that a number of the assisted areas on the east coast contain fabrication yards that are having to adjust to the smaller scale of the North sea oil and gas industry. Does he agree that it is essential that those businesses get help

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  from assisted area funds, to enable them to restructure and diversify? Will he ensure that the Government regional offices and the RDAs recognise that as a priority?
  Mr. Caborn: First, I congratulate my hon. Friend and those colleagues who represent that part of the eastern region on the exhibition in the Upper Waiting Hall about oil and gas industry exploration, which I had the privilege to open on Monday. I suggest to my hon. Friend that it would be far better if the companies that want to get involved in applications for RSA put their plans forward so that we can evaluate them. I hope that they will be part of the reconstruction of a sector of the economy that has been neglected for many years. I think it is now coming round, and restructuring will allow it to have a very bright future.
  Mr. Owen Paterson: How much has the presentation of an ineligible map to the EU cost the British taxpayer?
  Mr. Caborn: I cannot reply to the hon. Gentleman now, but I shall find out the answer and write to him. I can assure him, however, that seven years ago, when the previous Administration carried out this exercise, they did so in a far more party political way. That is one thing that the present Government cannot be accused of, as we have conducted wide consultation through the regional development agencies and the Government offices for the regions. Indeed, we had to withdraw the July map because it was said that we had tried to get more than our fair share. We then went back to consultation, in which many people participated. The process has not been part of a political fix, as it was under the previous Administration seven years ago.
  Mr. John Cryer: My right hon. Friend will know that Rainham, in my constituency, has been removed from assisted area status. Rainham is bang next to the Ford Dagenham factory, and since that decision was taken, the management of Ford have decided to end car production at Dagenham, with the potential loss of thousands of jobs. Will my hon. Friend reconsider that decision and reverse it?
  Mr. Caborn: As my hon. Friend knows, we have set up a working party to look at Dagenham. However, once the map has been cleared—we are asking the Commission to clear it as speedily as possible—it will apply for the next seven years. The point that my hon. Friend has raised will be taken on board by the working party that has been set up to look at the fallout from Dagenham.

  Diesel Manufacturers
  Mr. Bob Russell: What assistance he is giving to United Kingdom diesel manufacturers to increase sales in the UK and overseas. [124589]
  The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): The Department works in partnership with the UK diesel engine industry to help improve its competitiveness and thereby increase sales in the UK and internationally. Our activities include support
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  for the development of diesel engine technology and the extensive export promotion services offered by British Trade International.
  Mr. Russell: I am grateful to the Minister for her reply, as far as it went, but does she not agree that diesel engine manufacturers feel that they are not getting the support that they need? In particular, may I draw her attention to Paxman in my constituency, now owned by MAN? Does she agree that her Department, and the Government in general, should encourage the Ministry of Defence and the privatised rail industry to purchase British-made diesel engines?
  Mrs. Liddell: I know of the hon. Gentleman's interest in this matter. Indeed, he has raised it before on the Floor of the House. As for promoting diesel engine development, I have just come from a meeting with the Department of the Environment, Transport and the Regions that brought together the refining industry, the downstream oil industry and motor manufacturers. One of the first issues that we discussed was the emergence of new forms of diesel engine technology.
  Indeed, through the Engineering and Physical Sciences Research Council, we support projects that are focused on the diesel engine sector. Eight grants have been awarded, amounting to some £1.3 million, specifically to support the development of diesel engines. Whenever the Government carry out procurement exercises for defence vehicles, they are aware that that is a matter of considerable importance to the industry, and do everything that they can to assist British industry.
  I am conscious of the fact that the company in the hon. Gentleman's constituency has recently been taken over. I believe that that is viewed positively as an excellent opportunity to enlarge its potential, not just in the United Kingdom but internationally.
  Mr. David Chaytor: Is not the difficulty for diesel engines the fact that as the years go by, they are likely to become less important for private cars? That is because of the inevitable exhaustion of the world's oil reserves, which will reach their peak of production in a few years time, the inevitable rising price of oil, and the need to reduce carbon emissions by about 60 per cent. by the middle of this century. Would not the best support for diesel engine manufacturers be to encourage them to diversify into alternative sources of fuel, such as hybrid engines, gas-powered vehicles and fuel cells?
  Mrs. Liddell: My hon. Friend makes an interesting point. It has to be said that this is not an either/or situation, or a question of solely developing new diesel technology at the expense of other technologies. Automotive manufacturers, and, indeed, diesel manufacturers, are looking at other aspects of powering vehicles, but some big issues have to be addressed.
  Many of us associate diesel engines with the diesel engines of the past, and think of the London buses that belched out black fumes. New diesel technology is improving considerably, but we must still strike a balance—we must understand the extent to which these engines have an impact on the environment. My hon. Friend is right to say that it is essential to look at every

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  new technology that comes along. As demand for cars increases, we must be sure that we have the fuels to drive them.
  Mr. Geoffrey Clifton-Brown: If the Minister is so concerned about the competitiveness of the vehicle manufacturing industry, will she make representations to her colleagues in the Treasury to drop the £1 billion energy tax to which the Labour party is committed, and to stop increasing the duty on diesel way in excess of inflation through the fuel duty escalator, which hits motorists so hard, particularly in rural areas?
  Mrs. Liddell: I think that it was the Deputy Prime Minister who accused Conservative Members of wanting the country to have collective amnesia. I seem to recall that it was the previous Government who introduced the fuel duty escalator.
  As for the climate change levy, Governments across the world are having to consider means of reducing emissions into the atmosphere. That is why the Government are taking action in a coherent focused way, by contrast with the behaviour of the Conservative party. which introduced the fuel duty escalator when it was in power.

  Textile and Clothing Industry
  Judy Mallaber: If he will make a statement on his Department's response to the textile and clothing strategy group's report published on 6 June. [124591]
  The Secretary of State for Trade and Industry (Mr. Stephen Byers)rose—
  Hon. Members: Show us the jacket.
  Mr. Byers: The Government welcome—
  Hon. Members: He's got style.
  Mr. Byers: Thank you very much.
  The Government welcome the report of the strategy group on the textile and clothing industry. At its launch last week, the Government announced as a first step measures to help firms strengthen their position in world markets, raise added value, improve skills levels and diversify into new markets. The Government's response has been widely welcomed by the industry.
  Judy Mallaber: I thank my right hon. Friend, and welcome his comment that his statement last week was just a first response to that report. which is so essential to making sure that the industry has a future and can compete in world markets.
  In view of the current job losses and closures in the industry, will my right hon. Friend ensure that the special unit now set up in his Department acts very speedily on all the recommendations in the report, in conjunction with the industry, and that the necessary additional resources are allocated to back up that work? Will he instruct the Government offices for the regions to give assistance to clothing and textiles firms, including helping them access
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  the grants that are available? Will he also urge regional development agencies to give priority to the industry and see what they can do to make sure that it has a future?
  Mr. Byers: My hon. Friend is right to point out that last week we announced a plan that is really just the first step in our approach to the strategy group's report. A key aspect will be to address matters at a regional level. The regions of England—and, indeed, Scotland and Wales—are being affected in different ways, reflecting the diversity of the industry. The Government offices, the Scottish Parliament and the Welsh Assembly are looking carefully at how they can assist an industry through a period of quite radical change, which is what we are seeing in the textiles and clothing industry.
  I happen to believe that, given the strengths that we have in the United Kingdom, textiles can be a real growth industry in the future. For that to be achieved, we have to arrest the present decline, and I think that the measures that we have put in place will begin to do precisely that.
  Mr. David Tredinnick: Does the right hon. Gentleman accept that for many thousands of workers in the east midlands, including my constituency in Leicestershire, the report has come too late, and that there is very little in it for those who have lost their jobs? Does he further accept that some recommendations, such as those for improvements in training, mean little in a town like Hinckley, where the courses have just closed down?
  What will the right hon. Gentleman do about reducing tariff barriers in markets overseas, now that the multi-fibre arrangement is being phased out? What is there in the report about his attempts to improve the trading situation for our hard-pressed companies abroad—companies that are in a worse situation under this Government?
  Mr. Byers: As for the multi-fibre arrangement, we are ensuring that as we move into that situation, we can open up trade and markets that will benefit UK industry. That is what we intend to do, while recognising, as we do, that open trade is in the interests of the industry because there will be more markets to which it can export. That is one of the Government's key objectives.
  I understand that the training courses that were held at Hinckley have not closed, but have been transferred to a neighbouring college, so the opportunities are still there. However, the hon. Gentleman is right to point out the importance of training for people who were involved in the industry. There has been a history of underinvestment in training and skills development. One of the key priorities raised in the strategy group's report was the importance of investing in skills and training—and that is exactly what we intend to do.
  Dr. Brian Iddon: A few days ago, Coats Viyella announced the closure of the Cawdor Street mill in my constituency in Farnworth, with the loss of 90 jobs. Will the recommendations in the report that are aimed at helping such workers be in place soon enough to assist those who will lose their jobs in Farnworth?
  Mr. Byers: Through the initiatives taken by the Department for Education and Employment, tailor-made proposals will help individuals who have been affected by the announcement to which my hon. Friend referred.

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  In addition to the help that we can give individuals, it is important to look at the industry as a whole to consider what support the Government can give. As a result of the strategy group's report, that is what we are doing. The report includes a series of recommendations from the industry and its employees; that is why it is so strong and so practical in setting out an agenda for the future of the industry, and why we take it so seriously. Last week we responded to several of the recommendations, and during the period ahead, we shall give further consideration to how we can implement the review group's proposals positively.
  Mr. Richard Page: I assure the House that I am wearing a jacket that was made in England.
  Why did the strategy group set up by the DTI take more than a year and a half to report? Every month during that year and a half, hundreds—thousands—of jobs were lost, culminating today, I understand, in 4,000 jobs at C&A. Is the Secretary of State not aware that he should have taken action to have the report produced sooner? Is he aware that the textiles analyst at Deutsche bank said that the initiative could not reverse the industry's fortunes? She said:
  This sounds like a lot of hot air. The government is just trying to avoid adverse publicity. It is willing to pour money into Rover, but the textiles sector is in far worse condition than the car industry—that's politics for you.
  Is he not aware that in his own Department, a challenge initiative is under way with the apparel and textiles industry to carry out the main aspects of the report? That is in place, and it is funded by his Department. May we have an answer from the Secretary of State about the strategy? Why is the Department prepared to put money into Rover and not into the textiles industry? May we have a constructive answer, not a lot of spin?
  Mr. Byers: The hon. Gentleman does no service to the Phoenix group, which has taken over Rover, by implying that it receives state support; it does not. The group has made it clear to its City backers that it is not asking for money from the Government. I hope that the hon. Gentleman realises that he has made a mistake. He is talking down the Phoenix group, and that will be bad news for Rover and for Longbridge. That is the reality: not a penny is going from the Government to the Phoenix group to support it in Longbridge. That is what Phoenix wanted, and that is how we are responding. He should not talk the group down; the City listens carefully to such comments.
  The textiles and clothing strategy group was not run by the Department. We asked the industry to make recommendations, and the industry took 18 months. That was the decision that it took. However, it has made clear recommendations to the Government, and we are acting on them.
  The Conservatives have no strategy for textiles and clothing. They were prepared to see the industry become the innocent victim of market forces. We are prepared to help it through a process of change and to diversify, raise skills and invest in the future—and that is exactly what we shall do.
  In case the hon. Gentleman wants to ask about my labels, he will be pleased to know that, from top to toe, I am wearing Great British-built clothing.

  Export Licences
  Mr. Eric Illsley: What plans he has to amend the procedures for application for export licences. [124592]
  The Minister for Competition and Consumer Affairs (Dr. Kim Howells): Since March 1999, exporters have been able to apply for standard individual export licences on disc. About 90 per cent. of such applications are now made in this way. The aim is to build on that and to introduce a system that will enable exporters to submit their applications over the internet, subject, of course, to satisfactory assessment of security and other relevant issues. Every effort is made to give applicants a decision as quickly as possible, consistent with careful consideration.
  Mr. Illsley: My hon. Friend will be aware of a company in my constituency that, even as we speak, is in danger of losing a $600,000 contract to supply a standard piece of equipment—a mine hoist—to a mine in Iran. It might lose the contract because of delays in obtaining an export licence, which it applied for as long ago as March. Will he consider the procedures involved in applying for such licences, and in particular, the inflexibility caused by the fact that the committee that considers the applications meets only once a month? After the approval of an application, delays are then caused by the requirement for approval by other Government Departments. Does my hon. Friend not agree that it might be better to have a single agency to deal with such licences, so as to speed up the process?
  Dr. Howells: I take on board my hon. Friend's suggestion, but he must remember that United Nations sanctions are in place to govern the export of military or dual-use goods to Iran. I understand that the sanctions enforcement team was concerned that the hoist in question might have applications other than those specified in the application. That is why a careful examination of the application by the Ministry of Defence and the Foreign and Commonwealth Office is under way. However, I assure my hon. Friend that as soon as the matter returns to the Department of Trade and Industry, it will receive swift and careful attention.
  Miss Anne McIntosh: Although I welcome the Minister's announcement, will he join me in regretting today's announcement by British Aerospace of the closure of its avionics plant at Sutton-on-the-Forest in the Vale of York? One reason for the closure is the merger with Marconi, but another is that the company is finding it increasingly difficult to compete in a major internationally competitive market. Undoubtedly the strength of the pound has harmed the company, so what do the Government propose to do to aid exports in that market?
  Dr. Howells: I, too, regret the announced job losses, but I am absolutely sure that British Aerospace, like many other companies in this country, has made the necessary adjustments to compete worldwide. It is a successful company in world wide competition, and I as a Minister will not stand here and talk it down. I know that we have measures in place to help the workers who are being

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  displaced to retrain and find other work. I hope very much that that will happen quickly, but I have every confidence in British Aerospace as a world competitor.
  Ms Julia Drown: A number of export licence issues were raised in the Scott report, and they cannot be addressed without further legislation. Is my hon. Friend's Department ready to get that legislation on to the statute book, and is it pushing to find parliamentary time to do that as soon as possible?
  Dr. Howells: I assure my hon. Friend that we are busy at work on drafting appropriate legislation, and that we shall fight our corner to make sure that it appears on the statute book.

  Car Manufacturing Industry
  Mr. Michael Fabricant: If he will make a statement on car manufacturing in England. [124594]
  The Secretary of State for Trade and Industry (Mr. Stephen Byers): In 1999, we saw the highest total number of cars produced in the United Kingdom since 1972. Although we recognise that in a dynamic economy there will be changes in the sector, we are confident that it will remain a major employer.
  Mr. Fabricant: We all welcome the initiative to introduce cheaper cars, but does the Secretary of State realise that by announcing the initiative without saying when or how the aim will be achieved, he has caused a real problem for manufacturers and distributors, as John Towers of the Phoenix group said only yesterday?
  Will the right hon. Gentleman admit, in a moment of honesty, that perhaps he made the announcement a little too soon? There is a hiatus in the sale of cars, which is causing problems both for distributors and suppliers. When will the Government learn the lesson that they should think first of the consequences before announcing new initiatives merely for the sake of political spin?
  Mr. Byers: It was the hon. Member for Tiverton and Honiton (Mrs. Browning), who speaks for the Opposition, who urged me to respond quickly to the Competition Commission's report. She is now complaining that that was six months ago, and that I delayed too long. That is the reality; Opposition Members need to get some consistency in their arguments.
  I responded to the commission's report. On Monday I put out an order for consultation, and the industry has 30 days to comment on it. We shall then reflect on the matter and make a decision accordingly. How long the process will be, and when implementation will take place. will be decided in the light of the consultation process. That is exactly how it should be done.
  We are not prepared to tolerate a situation in which the consumer in the United Kingdom, as the report showed, is paying on average £1,100 too much for each car purchased. The Conservative party in government did nothing about that, but we will.

  Electricity Trading Arrangements
  Mr. Michael Clapham: What progress has been made with the new electricity trading arrangements. [124596]
  The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): The new electricity trading arrangements are on target for implementation in the autumn.
  Mr. Clapham: I am grateful to my right hon. Friend for that answer. Does she agree that the pool system, as introduced when electricity was privatised by the Tories, worked artificially to increase the price of electricity because of the marginal pricing system that was part of the pool? That was bad for industry, bad for the consumer generally and bad for British competitiveness. Does she further agree that the new electricity trading arrangements should bring beneficial reductions in electricity prices that should help in exporting electricity to continental Europe, which should help the British deep coal mining industry?
  Mrs. Liddell: My hon. Friend is absolutely right. There is no question but that the electricity pool has distorted the market, especially to the disadvantage of flexible plant such as coal. The move towards the introduction of new electricity trading arrangements has shown that from a 1998 baseline there is a 25 to 30 per cent. real-terms cost reduction in electricity forward agreements. That is to the advantage of the consumer. Privatisation was bungled by the Conservative Government, and the consumer has paid the price. This Government will set things right.
  Mr. Simon Thomas: Does the Minister agree that the introduction of net metering would give a tremendous boost to renewables, especially in the domestic sector? When will the Government think again about such metering within the electricity arrangements?
  Mrs. Liddell: The hon. Gentleman is aware of the action that the Government are taking to support the renewables industry. We have put in place a 10 per cent. obligation for electricity suppliers to take their energy from renewable sources, so as to move renewables from the margin into the mainstream. That is how the future will be.
  The Utilities Bill, which is now in another place, is neutral on net metering. It may be that in future there will be an opportunity for such metering, both domestically and otherwise. The Department has brought together the embedded generation working group, which is considering the various aspects of embedded generation and renewables, including the difficulties of storing energy for access to the grid. Those matters are live for the Government. We are anxious to support the renewables industry because there is an opportunity for considerable competitive advantage for the United Kingdom.
  Mr. Chris Pond: The Minister will be aware that trading in electricity is not the primary purpose of the Kimberley Clarke proposal for a combined heat and power plant in Northfleet in my constituency, but that it will considerably increase the productivity and efficiency

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  of that plant. It will underline the considerable investment there, and perhaps help to secure its future. Will the Minister say when we shall hear the result of the company's request for approval of that investment?
  Mrs. Liddell: My hon. Friend has been active in pursuing that application. He will be aware that, because
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  of the quasi-judicial position of my right hon. Friend the Secretary of State and myself, I cannot give him an answer, other than to say that the Government have done much to support combined heat and power, not only through the restricted gas consents policy, but through the climate change levy.

Business of the House
12.30 pm
Sir George Young: Will the Leader of the House give 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 19 JUNE—Debate on the royal commission report on the reform of the House of Lords on a motion for the Adjournment of the House.
TUESDAY 20 JUNE—Opposition day [14th Allotted Day]. Until about 7 o'clock there will be a debate on "US/UK Air Negotiations" followed by a debate entitled "The Government's Policy on Planning, House Building, Development of Greenfields and the Decline of the Cities". Both debates will arise on Opposition motions.
Second Reading of the Census (Amendment) Bill
[Lords].
WEDNESDAY 21 JUNE—Second Reading of the Children (Leaving Care) Bill [Lords].
THURSDAY 22 JUNE—Debate on the Security and Intelligence Agencies on a motion for the Adjournment of the House.
FRIDAY 23 JUNE—Debate on policing of London on a motion for the Adjournment of the House.
The provisional business for the following week will be:
MONDAY 26 JUNE—Remaining stages of the Race Relations (Amendment) Bill [Lords].
TUESDAY 27 JUNE—Remaining stages of the Learning and Skills Bill [Lords].
WEDNESDAY 28 JUNE—Remaining stages of the Limited Liability Partnership Bill [Lords]
Remaining stages of the Fur Farming (Prohibition) Bill.
THURSDAY 29 JUNE—Opposition Day [15th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
FRIDAY 30 JUNE—The House will not be sitting.
Sir George Young: The House is grateful for next week's business and an indication of the business for the following week.
When does the right hon. Lady expect the Prime Minister to make a statement to the House on the outcome of the European Council in Portugal?
I see that, on Tuesday, in Government time, the House is to debate a private Member's Bill—the Census (Amendment) Bill. If the Government are now finding time for private Members' Bills that are objected to on Fridays, when might we debate the Warm Homes and Energy Conservation Bill?
Will the Leader of the House find time to debate the Neill committee report "Reinforcing Standards", given the growing concern about the politicisation of the civil service, and the Government's failure to respond to the report's recommendations?
Following the appearance by the Secretary of State for Health on the "Today" programme, will time be found next week for a statement by the light hon. Gentleman on
1106
the Government's welcome change of policy towards the independent sector of medicine? The need for such a statement is reinforced by a parliamentary answer that revealed that expenditure by the national health service on that sector has risen by almost 50 per cent. since the general election.
There is mounting interest in the comprehensive spending review. When does the Chancellor hope to make a statement on the outcome? In addition, can we resolve soon the issue of the pattern of economic debates throughout the year?
Finally, last week I asked about the date of the summer recess, so that our staff and the staff of the House can plan their lives. I incurred the usual heckle from the hon. Member for Bolsover (Mr. Skinner), but did not receive the consolation of a reply from the right hon. Lady. Can she shed any light on the subject today?
Mrs. Beckett: First, as the right hon. Gentleman knows, it is the Prime Minister's custom to make a statement to the House after formal EU Councils, so I anticipate that one will be made. I cannot give a date, but I anticipate that it will be within the usual time scale.
Secondly, the right hon. Gentleman asks about the Census (Amendment) Bill. He will understand that the position is unusual: Governments do not usually find time for private Members' Bills. However, the Bill is believed to be uncontroversial, and it went through the House of Lords without any difficulty. The issue it addresses was raised after the main census legislation had gone through, and it is promoted by our former Speaker, who is now a Cross-Bencher in the Lords. Until the objection the other day, there was no reason to anticipate that there would be a difficulty in the House of Commons. The matter is one in which there is considerable public interest, and there is a degree of pressure arising from the fact that the next census will not be held for another 10 years. As the alternative was not to deal with the matter at all, it seemed sensible to the Government to deal with it now, in the context of the current census.
The right hon. Gentleman asked me about a debate on the Neill report. There has been no undue delay in dealing with the report, which made 41 recommendations, some of them with substantial constitutional implications. The Government are giving the matter full consideration. It was put forward as a package of proposals, and the Government will respond to it as a package. I do not see much point in having the debate before the Government's response, but I take on board the right hon. Gentleman's request for such a debate. Indeed, I welcome it, as it will give us an opportunity to remind everybody that we have given the Conservative party substantial extra sums of public money—a fact to which Conservative Members seem puzzlingly unwilling to refer.
The right hon. Gentleman asked about a statement from the Health Secretary. Since, as my right hon. Friend made plain, there has been no change of policy on the issue, there is little for him to say to the House.
I have already indicated that I have taken on board the right hon. Gentleman's request for a statement on the spending review and his request for a little more clarity about the pattern of economic debates.
With regard to the recess, I apologise for having overlooked what was, I think, question 8 last week. I fear that I have, as yet, no news for the right hon. Gentleman.

1107
Given the huge demand from the Opposition for further debates, I anticipate that they will want the House to sit until well into August.
Mr. Andrew Miller: May I draw my right hon. Friend's attention to early-day motion 773?
[That this House notes with pleasure the 10th anniversary of the elections on 27th May 1990 in Burma, in which the National League for Democracy, headed by Daw Aung San Suu Kyi, won 392 out of the 495 parliamentary seats; but regrets the action of the military regime in failing to respond to the democratic wishes of the country; condemns the regime for retaining in prison 55 MPs elected in 1990 and for detaining 1,000 political activists last year; further condemns the regime for its brutal and inhumane treatment of ethnic minorities, such as the Karens, who have suffered from a brutal campaign of murder, forced relocation and slave labour during this period; and calls upon the British Government to exert the maximum pressure on the regime, including pressing for international court action against those responsible for crimes against humanity.]
Unusually, the early-day motion has already been signed by 190 right hon. and hon. Members from eight parties. May we have an early statement from the Government on the important subject of democracy in Burma?
Mrs. Beckett: I am grateful to my hon. Friend, and I know that he, with others, has long campaigned on the issue and takes a great interest in the subject. I am pleased to know that there is such support across the House for the position that he has been advocating. I cannot undertake to find time for an early debate, and I am not sure how easy it will be for a statement to be made on recent developments, but I assure my hon. Friend that the Government will continue to work steadily at the issue, as I know he would wish.
Mr. Paul Tyler: Will the Leader of the House urgently consider publishing the criteria by which Ministers decide whether to make a full and proper statement to the House on a change of policy, and when they simply use a planted question and a written answer? The right hon. Lady will recall that in the past Ministers seemed to avoid making a full statement only when an issue was causing embarrassment on the Government's Back Benches, as in the case of the contamination of crops with genetically modified seed.
There are two cases in the news today on which, I think, the Leader of the House would accept that a proper statement should have been made to the House. Reference has been made to the fact that the Secretary of State for Health made copious references to a change of policy on the "Today" programme this morning. To add insult to injury, he implied that there would be a written answer this afternoon, when no such question appears on the Order Paper. How are we to hear whether a U-turn has taken place with regard to the investment of national health service money in the private sector?
The Leader of the House will have heard in exchanges a few minutes ago that there are serious concerns in the textile and clothing industry, relating not just to C&A but,
1108
as I understand from rumours circulating in the past few minutes, to Bhs. When will we get a proper statement from the Secretary of State on the Government's policy on that very important industry?
Mrs. Beckett: First, the hon. Gentleman asked about the criteria determining when a statement is made and when a written answer is given. I entirely reject the notion that a written answer is given when the matter causes the Government some difficulty. Indeed, I well remember, as I am sure he can, many occasions on which that has clearly been disproved by the Government making a statement in just such circumstances. The practice varies from occasion to occasion.
One of the important criteria is that we do not allow statements to be made on an Opposition day, which I hope the hon. Gentleman would welcome. [Interruption.] There is no need for the hon. Member for Epping Forest (Mrs. Laing) to make a fuss. We screwed that concession out of the previous Government with considerable difficulty when she was engaged as a special adviser.
The examples given by the hon. Member for North Cornwall (Mr. Tyler) do not stand up. From memory—and it is from memory, I accept—my right hon. Friend the Minister of Agriculture, Fisheries and Food did come to the House to make a statement about contamination, but the issue arose, if I recall correctly, over a weekend, and there was some difficulty with timing. With regard to the textile industry, it is an important industry and there is concern about it, but we have just had Trade and Industry questions.
Mrs. Gwyneth Dunwoody: My right hon. Friend will be aware that many of us came into politics to defend and improve the national health service. May I point out to her that private commercial health care, which is an industry, is not required to maintain the same ratio of doctors resident to patients, or of trained nurses to patients? If there is any suggestion of a reverse takeover of the NHS by private industry health care units, I hope that she will reconsider her decision not to hold a debate next week, because some of us may have rather a lot to say about the matter.
Mrs. Beckett: Of course I understand my hon. Friend's sensitivity, and her family has many links with the health service. However, I understand that my right hon. Friend the Secretary of State for Health made it plain that there has been joint working between the health service and the independent health care sector and that there is every determination to ensure that not only value for money but proper clinical standards will be maintained where there is reciprocal use of facilities.
Mrs. Dunwoody: No, no.
Mrs. Beckett: Well, that is my right hon. Friend's policy. Proper clinical standards will be maintained and those are the contracts that will be undertaken, but not at the expense of developing NHS services. Of course I share my hon. Friend's view. The whole House—well, most hon. Members—will share her view that it is extremely important that we modernise and expand the health service so that it can deal with all those who wish to use it. That is what the Government are doing.
Mr. John Wilkinson: Will the Leader of the House allow time next week to hold a

1109
debate on the White Paper "Smoking Kills", especially in the light of the damning report just published by the Select Committee on Health, entitled "The Tobacco Industry and the Health Risks of Smoking"? Will she ensure that the hon. Member for Leicester, East (Mr. Vaz) is present at that debate to explain why the Government still allow the European Union to subsidise the growing of tobacco in southern Europe at the British taxpayer's expense? Does she realise that subsidising tobacco growers in the EU is roundly criticised by the Select Committee in paragraph (zz) of its report?
Mrs. Beckett: Of course I understand the hon. Gentleman's concern. I congratulate him on his ingenuity in making even a health issue a matter of EU policy. I would simply say that it is a little harsh for him to blame my hon. Friend, who is today a Minister at the Department of Trade and Industry, given that the policy was pursued through all the years of the Government whom he supported.
Gillian Merron: Will my right hon. Friend find time to hold a debate on the future shape of the NHS so that the House can openly compare the recent, welcome announcement on an early-warning system to detect all adverse events that might take place in health care with the Conservative party's apparent policy, which seems to revolve around paying for operations, such as hip replacements, which can cost up to £5,000? That policy, if it ever came about, would be a tremendous worry and burden to people in my constituency.
Mrs. Beckett: I recognise, as does everyone, the importance of the moves that ale being considered to produce an early-warning system so that people can learn from the mistakes of others in the health service, as happens elsewhere. It is unfortunate that such a system has not been in place previously, but it is to our credit as a Government that it is now being developed. My hon. Friend is right to contrast that with the policy of the Conservative party, which apparently wants no one to be able to have operations such as hip replacements on the NHS, thus persecuting pensioners yet again.
Mr. Michael Jack: The Leader of the House may be aware that today BAE Systems has announced 3,800 job losses throughout the company. Some 750 of those job losses will affect the constituents of Fylde and those of my hon. Friend the Member for Ribble Valley (Mr. Evans) and other right hon. and hon. Members. As the Government are a major customer of the company, can she arrange for an oral statement, or some other communication from the Government, giving their views about the future prospects for supporting the company? There is great uncertainty and worry in the work force about the future, especially of projects such as the Eurofighter Typhoon, the joint strike fighter and the future offensive air system. The Government's attitude to those projects is vital to the company's future.
Mrs. Beckett: Of course I understand the concern that the right hon. Gentleman expresses on behalf of his constituents and those of other Members. There is always anxiety in the House when job losses are announced, but I believe that he recognised that the Government support the industry and will continue to do so. We will continue
1110
to do our utmost to work with it to make sure that it stays competitive and that it sustains the highest possible employment levels.
Dr. George Turner: I know that most of my constituents will have been delighted by this morning's news that the Government are to allow for the effects of sparsity in the policing of rural areas. However, is my right hon. Friend aware that there is an impatience in rural constituencies such as mine for the delivery of the Government's major programme, which I understand is to be heralded in the rural White Paper? When does she expect the White Paper to be published and is there a realistic hope that the House might debate it before the recess?
Mrs. Beckett: At this moment, I cannot be absolutely certain when the recess will be or when the rural affairs White Paper will be published, so I fear that I cannot give my hon. Friend much more information. However, I can tell him that the Government will introduce a rural affairs White Paper and will continue, in line with what he and many other Labour Members who represent rural areas are urging, to do our utmost to improve the circumstances in which we found those areas.
Mr. Eric Forth: May we please have an urgent debate on the role of focus groups in government? The Prime Minister's very unfortunate remarks yesterday appalled the entire country with their flippancy and superficiality. [HON. MEMBERS: "Hear, hear."] Therefore, is it not time for us here in the House of Commons to get to the bottom of exactly how far focus groups decide Government policy and whether the Prime Minister has any views of his own at all? If so, please may we have some open government in this case and the regular publication of the focus group results so that we can relate them directly to his statements?
Mrs. Beckett: I certainly cannot find time for an urgent debate on the matter. I am very sorry if Conservative Members are a little sensitive about what the right hon. Gentleman called the Prime Minister's unfortunate remarks, but it is unfair to suggest that my right hon. Friend was being trivial and superficial yesterday. After all, it is clear from Hansard that he declined to talk about such matters and wanted to talk instead about the extra 1 million jobs, the fall in unemployment and the real issues; but the Leader of the Opposition said:
We would be delighted if the Prime Minister read out the comments of his focus groups …—[Official Report, 14 June 2000; Vol. 351, c. 934.]
The Prime Minister then did so. Well!
Mr. Paul Flynn: When can we debate the extremely alarming increase in hospital-acquired infections? A documentary on HTV Wales this week claimed that the number of deaths from methicillin resistant staphylococcus aureus in Wales alone is running at 500 a year compared with only 30 a year in the Netherlands, which has five times the population of Wales. A reason for the improvement in the Netherlands is the enhancement of standards of hospital cleanliness and hygiene, which, sadly, have deteriorated in British hospitals over the past 20 years. Cannot we debate the need to elevate the role of nurses in our hospitals and to

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restore the matron to her role as the most important element in our hospital services, which is what she was in the past?
Mrs. Beckett: My hon. Friend makes an important point. We must always be concerned when people come out of hospital with more diseases than they went in with. He is right to link that issue particularly to standards of cleanliness and hygiene and I share his view that the deterioration in those matters, which we have all seen in the health service over the past 20 years, is of considerable concern. However, he will know that my right hon. Friend has made it very plain that he shares that concern and that, as Secretary of State, he is discussing how we can restore standards, whether by the formal reintroduction of matrons or by some other means. Although I sympathise with my hon. Friend's question, there is no need for a special debate at this time because the matter is being addressed.
Mr. David Davis: May I press the right hon. Lady further on the question asked by my right hon. Friend the Member for Fylde (Mr. Jack)? There have been 850 job losses in my constituency today, arising partly from the merger of BAE Systems, but also from the inability of the defence industry to compete in the modern world as a result of the level of the pound and other considerations. Will the Leader of the House provide time for a debate in the House on the British defence industry's competitive ability and what the Government should be doing to promote it?
Mrs. Beckett: We have made it clear that we certainly recognise that there are industries in which the level of the pound has caused difficulties. I understand that lately the shadow Chancellor has recognised that there is an upside as well as a downside to the strong pound.
I hope that the right hon. Gentleman is aware that the Government take seriously their responsibilities to manufacturing, whether in the aerospace industry or elsewhere. I fear that I cannot undertake to find time for a special debate on the matter on the Floor of the House in the near future, but, although the right hon. Gentleman might not welcome these words, some 200 extra opportunities are available in Westminster Hall to scrutinise the Government.
Mr. David Winnick: I have asked my right hon. Friend before about the possibility of a statement before the summer recess on compensation to former prisoners of war of the Japanese. Is she aware that it would be totally inappropriate for the House to go into the long summer recess without such a statement and that there is overwhelming support in the House and certainly in the country for those former prisoners, who have suffered so much, receiving some compensation, bearing in mind the fact that the Japanese refused to pay when they should have done so?
Mrs. Beckett: I know that my hon. Friend has long taken a great and deep interest in this important subject. He will know that the Prime Minister discussed the matter with senior representatives of the Royal British Legion in April and undertook to consider it further with ministerial
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colleagues. That consideration is being undertaken. I cannot undertake today to find time for a further debate or statement on the matter in the near future, but I certainly undertake to draw my hon. Friend's remarks to the attention of my right hon. Friend the Secretary of State for Defence.
Mr. Edward Leigh: Is there any chance of a comment being made in the early part of next week about the case of Mr. Gary Graham, who has served 19 years on death row and is due to be executed in Huntsville, Texas next Thursday for a crime that he is alleged to have committed when a minor of 17? He was convicted on the evidence of one witness who saw him for one second.
This is a matter of some international concern. Along with the chairman of the Bar human rights committee, I have requested an appointment with the Foreign Secretary who, unfortunately, is unable to see us, although he suggested that we could meet Baroness Scotland. Any kind of statement would be valuable. We have not executed minors alleged to have committed a crime for more than 150 years, but Gary Graham's case is now on the desk of Governor Bush.
If the Leader of the House cannot promise any comment next week, will she comment now? I do not wish to be referred to Foreign Office questions next Tuesday as there is no question dealing with US relations on the Order Paper. The first question that might be appropriate is Question 18 on ethical foreign policy, but that might not be reached. Any comment that the Leader of the House could make now would therefore be valuable in the campaign to save this young man's life.
Hon. Members: Hear, hear.
Mrs. Beckett: I understand and sympathise with the hon. Gentleman's concern, as it is clear that the whole House does. However, I am afraid that I cannot undertake to offer him a statement on the matter in the near future. Of course, I share the concern that he expressed; indeed, I believe that the whole House does, and it is a matter of record that we do.
I remind the hon. Gentleman, as I frequently have to point out in a more contentious context, that a written parliamentary answer is a form of statement to the House. I am sure that he has raised the matter by such means previously, but he may wish to consider the merits of doing so now or of seeking a letter from the Foreign Office. I regret that the Foreign Secretary, who has a full diary, is not available to see the hon. Gentleman and his colleagues, but the hon. Gentleman may wish to take up the offer of a meeting with Baroness Scotland.
Dr. Ian Gibson: My right hon. Friend will be aware that today's Order Paper contains an item entitled "Environmental Liability White Paper" next to which, in parenthesis, are the words "No debate". That document, which was issued by the European Commission, goes way beyond the implications of the Countryside and Rights of Way Bill, which we debated this week. It includes matters such as the polluter pays principle, which could

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affect some of our industries, as well as the precautionary principle and how that is to be interpreted. The Order Paper states that it is the Government's
intention to scrutinise the proposals.
Is it possible to change "scrutinise" to "debate in the Chamber"?
Mrs. Beckett: Of course, this matter has been examined on two occasions in the European Standing Committee. I accept that it has long-term implications, and I suspect that it will, in various forms, come before the House again. As my hon. Friend knows, it has long been the practice that most of these matters are considered in Committee and then a motion, such as that on today's Order Paper, is put to the House. I cannot undertake to find time for a special debate on the Floor of the House in the near future, but I see no reason why my hon. Friend should not seek to raise the matter in Westminster Hall.
Mr. Stephen Day: May I refer the right hon. Lady to the questions asked earlier by my right hon. and hon. Friends about British Aerospace? She will be aware that I have in my constituency, I am proud to say, the Woodford plant, known as Avro International, which builds civil airliners. I discovered this morning that, as a knock-on effect of the BAE situation, there will be a relatively small but no less serious number of job losses at Woodford. I am sure that the right hon. Lady will agree that however few the job losses at Woodford may be, this is a serious matter for the people who will lose their job. I therefore ask her to reconsider her programme. I understand that it is tight and that the Government have much business that they need to get through, but this is a serious matter and many hon. Members on both sides of the House would welcome the opportunity to debate it on behalf of their constituents and the industry in general, and to do so in this Chamber, where it really matters, not in the sideshow.
Mrs. Beckett: Of course I share the lion. Gentleman's concern on behalf of his constituents. He will know that the Government have done a great deal to work with BAE to secure its future. Some 4,000 jobs have been created and 9,000 have been sustained as a result of our support for the A3XX; 3,000 jobs have been created and 3,400 sustained as a result of the decision on military transport aircraft; and 1,200 jobs have been sustained by the decisions on the missile for the Eurofighter.
I completely accept the hon. Gentleman's point that that is not necessarily a consolation to the individuals who are affected, but BAE is continuing, over the next 18 months, to recruit some 2,000 engineers and, over the next two years, some 1,000 young people. The picture is mixed, although it creates difficulty for those affected.
I fear that I cannot undertake to find time for a debate on the Floor of the House. I am sorry that some Conservative Members seem to retain an almost ideological hostility to the notion of Westminster Hall. After all, as I pointed out earlier, that facility is covered by the reports of our proceedings, just as this Chamber is. It can be covered on television and it provides 200 extra opportunities to scrutinise the Government—something that hon. Members are always demanding but apparently do not always wish to take up.
There is also an Opposition day in the provisional business. If the hon. Gentleman and his colleagues are unwilling to look for the opportunity of a debate in
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Westminster Hall and want to seek a debate on the Floor of the House, I suggest that they take it up with their Front Benchers.
Mr. John Cryer: Could my right hon. Friend find time for a debate on the Stewart report on telecommunications masts for mobile phones and the Government's response to the report? In my constituency, Orange is planning to put a mobile phone mast about 10 or 12 yd from Towers primary school. There are other such examples in my constituency and probably in every constituency in the United Kingdom. We should have the opportunity to draw attention to the way in which multinational cowboys are treating communities with absolute contempt by marching in, putting up mobile phone masts near hospitals, schools and houses and not even, in Orange's case, bothering to go to a public meeting to explain why it plans to do so.
Mrs. Beckett: I know of the considerable concern that my hon. Friend has expressed about this matter on behalf of his constituents. He will know that the Government recognised that concern by setting up the review last year, and we have welcomed the report. Further discussion and consultation on the specific elements of the report are under way. My hon. Friend might like to take the matter up with my right hon. Friend the Secretary of State for Education and Employment.
As I say, I understand and share my hon. Friend's concern, but at present, the Government's role and powers are limited. That is exactly the kind of area that is being discussed and explored. However, I suspect that the pressure that my hon. Friend is bringing to bear on behalf of his constituents will, in itself, have some effect. I fear that I cannot find time for a special debate on the Floor of the House, but he too may wish to seek a debate in Westminster Hall.
Miss Anne McIntosh: Will the right hon. Lady find time for a debate in Government time on the registration of doctors? I am sure that all hon. Members will join me in sending their sympathies to those lady patients who were operated on by Richard Neale, a number of whom live in the Vale of York. The Friarage hospital, in the constituency of my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), has an excellent reputation, but how could a doctor who had been struck off the Canadian register be allowed to continue to practise in north Yorkshire, causing grief and severe clinical and personal distress to those ladies? There remains the outstanding question, which the House could address in such a debate, of the claims to be made by the ladies once the General Medical Council has reported. Will the right hon. Lady agree to such a debate?
Mrs. Beckett: I cannot at this moment give the hon. Lady the assurance that she seeks, but she will know that the concern that she has expressed is widely shared throughout the House and within the Government. She is right to identify the fact that those concerns have been aired for many years now, including under the previous Government. There is an on-going and urgent discussion with the profession on how such matters can better be handled in future. My right hon. Friend the Secretary of State for Health is extremely concerned to see the matter tackled as early as possible, so I feel confident that he

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will share the hon. Lady's wish for the matter to be discussed here. However, I cannot tell her when that might be.
Dr. Brian Iddon: Last week, the all-party parliamentary drugs misuse group published the result of its investigations into dual diagnosis, the linkage between mental illness and the misuse of drugs, which reminds me to ask my right hon. Friend when the UK anti-drugs co-ordinator's annual report is likely to be published, and whether it is intended to have an annual debate on his consideration of the misuse of drugs, which began last July.
Mrs. Beckett: I cannot tell my hon. Friend offhand when the co-ordinator's report is likely to be published, but I shall ask for inquiries to be made and the answer to be given to him. I understand and sympathise with his request for an annual debate on the report, but he will know that hon. Members wish to discuss so many issues annually that the occupier of my post is always reluctant to give such an undertaking. However, I recognise my hon. Friend's concern and will draw it to the attention of my right hon. Friend the Home Secretary.
Mr. Simon Burns: Will the right hon. Lady consider the early-day motion, tabled earlier this week and signed by hon. Members from all the main parties in the House, expressing regret at the Prime Minister's decision not to grant a public holiday on 4 August to celebrate the 100th birthday of Her Majesty Queen Elizabeth the Queen Mother? That is perceived by many to be a somewhat petty decision, and it would give great pleasure if the Government were strong enough to reverse it.
Mrs. Beckett: I shall certainly draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Home Secretary. The hon. Gentleman will know that a great many celebrations of the Queen Mother's 100th birthday are being undertaken, not least the presentation of an address from the House, which will be led by Madam Speaker. I understand the hon. Gentleman's argument, but, although it is an important anniversary, which will be very much marked in the country, the provision of a public holiday at a time when most people are on holiday anyway, while welcome, might be felt by many to be not as great a mark of affection as it might usually be taken to be.
Mr. David Chaytor: Ninety-three per cent. of young people are educated in state schools, and 66 per cent. of the top A-level grades are attained by young people in state schools, yet only 50 per cent. of Oxbridge places are filled by them. In view of that, and of the recently published research by the Sutton Trust, will my right hon. Friend find time to hold a debate on the wider issue of equality of opportunity and access to Britain's leading universities?
Mrs. Beckett: My hon. Friend makes an important point. I understand from remarks that I heard recently by the Minister for Education and Employment that the disturbing statistics that my hon. Friend cites are
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replicated in applications. As my hon. Friend knows, it has been suggested that the figures result from fewer applications. However, applications show the same pattern. I therefore share my hon. Friend's view that the position does not reflect a correct balance in judging between people who have the right qualifications. However, although the issue is topical. I cannot undertake to find time for a special debate on it in the near future.
Mr. Peter Brooke: Does the Leader of the House believe that the comparative attendance at business questions reflects good Opposition morale, poor Government morale, or both?
Mrs. Beckett: I do not think that it has anything to do directly with morale. My distinguished predecessor, Lord Biffen, described business questions as the occasion on which an hon. Member can deliver the speech that he has been nurturing in his bosom all week and been unable to get out. I welcome great attendance at business questions, which is an opportunity for Opposition Members to raise any issue that they wish, with a time limit that is at the discretion of Madam Speaker.
On morale, I do not know how often the right hon. Gentleman has attended Opposition day debates recently, but the turnout on the Opposition Benches has not been high. That says more about morale than today's attendance at business questions.
Mr. Desmond Swayne: In a written answer to me in column 586W of Tuesday's Hansard, the Under-Secretary of State for Health, the hon. Member for Birmingham, Edgbaston (Ms Stuart), reveals information that clearly shows that the change in Government policy on the private sector, which was announced this morning, was not a genuine change. For the past three years, the Government have been doing what they state that they have not been doing. The answer states that information was placed in the Library on Tuesday afternoon. Despite my agitation, and all the Government's spinning on the "Today" programme this morning, the information did not reach the Library until 10.45 this morning. That is disgraceful. Will the Government make a statement about their new policy on the private sector, and apologise about the misleading information in the written answer?
Mrs. Beckett: Of course I deplore it if the hon. Gentleman was told incorrectly that information had been placed in the Library. I shall ensure that that is taken up with the relevant Department. [Interruption.] I accept that the hon. Gentleman says that the information is in the Library now, but that it was not there when it should have been.
The hon. Gentleman claims that the written answer shows that the policy has not been changed, but that perhaps it is being developed in respect of standards. That is exactly what I said a little while ago.
Mr. James Gray: The public are increasingly worried about the explosion of spin doctoring over substance and the politicisation of the civil service. Both are a product of the many special advisers that the Government now employ. Is that because Ministers are of poorer quality and therefore need more advice, or because

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the spin doctors are of poorer quality and we must have more of them? Whatever the answer, will the Leader of the House arrange for the Minister for the Cabinet Office to accept Lord Neill's invitation to come here soon to answer questions about the report and recommendations that he made as long ago as February?
Mrs. Beckett: Both the former and the current Cabinet Secretary have rejected with contumely the notion that some 70 or so political advisers can politicise a civil service of thousands.
Secondly, the hon. Gentleman alleges that everything is spin over substance. It is my observation and direct experience that journalists and the Conservative party want to talk about spin while Ministers want to talk about delivering. I shall give three simple examples. This week, 30,000 more applications for teacher training have been announced, but hardly reported. Tomorrow, my right hon. Friend the Prime Minister will open the Carlisle hospital—the first of the new hospitals to be built. People had been waiting for that hospital to be built under the previous Government since about 1987. Yesterday, unemployment returned to the level that it last reached in February 1980. It was above that level for all the years of the Government whom he supported—during which I understand he was a special adviser—whereas it has taken us three years to get it back to that level. We want those issues to be discussed, and it is a pity that they are not reported instead of the comments of the Conservative party, which are frankly not very exciting.
Mr. Graham Brady: The Leader of the House will be aware that, owing to lengthening NHS waiting lists over the past three years, some 150,000 people have been forced to pay for private operations out of their own savings without having the benefit of health insurance to cover the cost.
In the light of that, is not it particularly welcome that the Government are now looking into ways of funding the cost of those operations for people who think that they deserve treatment at the expense of the national health service? That would be welcome to my constituent Mr. James Hickson, a pensioner who had to pay out of his life savings for a private operation because the NHS waiting list was so long.
I welcome moves that will mean shorter waits for people who are in pain and suffering. It is time the Government were prepared to allow that to be debated on the Floor of the House, so that those of us who want to urge them on in their intelligent moves to encourage private sector health care have an opportunity to do so.
Mrs. Beckett: Of course I sympathise with the hon. Gentleman's constituent in those circumstances. The Government are determined to ensure that, if the private sector is used to ease any pressures on the health service, it is done applying the right standards. As I understand the policy enunciated by the shadow Secretary of State for Health, under a Conservative Government anyone who needed an operation such as a hip replacement would be forced to do precisely the same as the hon. Gentleman's constituent.
Mr. Dennis Skinner: Is my right hon. Friend aware that during questions to the Department of
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Trade and Industry, five Tories sought to intervene, and during business questions another six Tories have already intervened? Could I accordingly give it the spin: "Horror, shock, Tories abandon market forces"?
Mrs. Beckett: My hon. Friend is entirely right to draw attention to the sharp contrast between the Conservative Members' ideological approach and their ceaseless demand for more spending and more intervention at the same time as they claim that they want tax cuts. I fear that, as they proved spectacularly during the late 1990s, arithmetic is not their strong suit.
Mr. Geoffrey Clifton-Brown: Will the Leader of the House give time for an important debate on the work of the Select Committee on Standards and Privileges, and in particular on Lord Neill's annual report, which said that the committee's work crucially depends on its independence of the Government of the day? There are strong concerns that that may not always be the case. Could she find time so that we can debate this matter?
Mrs. Beckett: I have not had chance to study Lord Neill's remarks in depth, but I remind the hon. Gentleman that the Government widened the remit of the Neill committee and gave it the capacity to scrutinise, among other things, party political funding. That was always resisted by the Conservative party. I share the view that it is important to have proper standards and independent scrutiny of how these matters are developing. However, I utterly reject the contention that any complaint can be made about the Government.
Mr. Owen Paterson: Following a ruling by a coroner in the south-west, it will no longer be possible for police forces to use emergency powers to close streets for parades or fetes. In order to stay within the law, they will have to request a road closure order from the local authority, which requires the futile exercise of charging the fete or organisation £210 in the case of Shropshire for an advert in the back of a local newspaper that no one reads. I have written to the Minister in the other place, Lord Whitty, asking that this be changed immediately, because the cost in Shropshire alone for events with a turnover of under £5,000 is £31,500. The consequences for girl guides, scouts, remembrance day services, fetes, carnivals and parades across the country will be devastating unless this ridiculous, bureaucratic nonsense is changed quickly. Will a Minister from the Department of the Environment, Transport and the Regions make a statement to the House?
Mrs. Beckett: I understand the hon. Gentleman's concern, although I gather that that is common practice in some parts of the country. He has raised an important issue. I fear that I cannot undertake to find time for a debate or a statement in the near future, but I will draw the hon. Gentleman's remarks, and the fact that he raised the matter on the Floor of the House, to the attention of my right hon. Friend the Secretary of State for the Environment, Transport and the Regions.
Mr. Bob Russell: Will the right hon. Lady make time for a debate—or, failing that, a statement from the Secretary of State for Culture, Media and Sport—about the loss to the BBC of coverage of important

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football matches? Following the advice of the hon. Member for Bolsover (Mr. Skinner), does she agree that Government intervention is required? The football authorities have shown themselves to be incapable of looking at the long-term interests of football. Surely the people's sport should be on the people's television. Football on television should be for the many, not the few.
Mrs. Beckett: I agree that football on television should be for the many, not the few. As the hon. Gentleman will know, the Government have taken steps to ensure that important sporting events can be seen by many members of the public. However, as my right hon. Friend the Secretary of State for Culture, Media and Sport said this morning, such issues are a matter for commercial negotiation and discussion involving the BBC and others.
I understand the hon. Gentleman's regret that the football "industry" has taken such a stand, in the context of the revenue that it seeks to raise, and I have no doubt that my right hon. Friend the Secretary of State will continue to look at the effects of such a policy. I fear that I cannot undertake to find time for a special statement in the near future, but I am sure that the hon. Gentleman and, indeed, the whole House will want me to wish England well in the forthcoming match with Germany.
Mr. Michael Fabricant: May we have an urgent debate on the future of recruitment in the national health service? In Lichfield and across the land, hospitals are under threat. They stand under the sword of Damocles. People are not prepared to go into hospitals when area health authorities are reviewing whether those hospitals will continue to exist.
Is the right hon. Lady aware that, although a review instigated in south Staffordshire was supposed to take only three months, Victoria hospital is still under threat 12 months later? Does she realise that it is that situation—which, as I have said, applies throughout the United Kingdom—that produced the slow handclap that the Prime Minister received when he said, "We have not abandoned the NHS"? He got a very slow handclap indeed from those in the know.
Mrs. Beckett: No one in the know would have reacted in that way. Those in the know would be aware of the resources being made available. Of course, the situation described by the hon. Gentleman did not come about overnight; it came about under the Government of whom he was such a strong and fulsome supporter. Moreover, those in the know would be aware that the Government have approved some 38 major hospital building projects, and have substantially improved the staffing of the health service.
Of course it is taking time, and will continue to take time, to turn around the problems that we inherited, but given Conservative Members' propensity to complain about spin over substance, let me apprise them of some facts of which they are almost certainly unaware. There are some 30,000 extra jobs in education, some 8,000 extra jobs in health, and fewer jobs in central Government. When the party that the hon. Gentleman supports said that
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it would fund its programme by cutting jobs in the public sector, it was talking about sacking exactly the people more of whom he wants to be employed.
Mr. Nigel Evans: In the light of the British Aerospace job losses, will the Leader of the House consider bringing forward the defence procurement debate that we normally have? The matter is urgent. Will she also consider a debate on the importance of manufacturing generally to the regions? As well as the 750 job losses that have taken place at British Aerospace in the past few weeks, Lancashire has experienced more than 400 manufacturing job losses in Burnley, and 550 in Accrington.
This is an issue that interests all hon. Members, on both sides of the House. I know that the hon. Member for Hyndburn (Mr. Pope) has worked closely with the Department of Trade and Industry, and, indeed, with the Conservative leader of Hyndburn council, in an attempt to alleviate the worst effects of the job losses. The loss of 750 jobs to date will have an enormous impact on communities. Whole families work in some of the industries involved, and whole families have lost their jobs.
Mrs. Beckett: Of course I understand the hon. Gentleman's concern. It gives me a pang to hear Conservative Members expressing the concern for manufacturing that all of us tried to instigate in them during the years when they were in government, but never mind. We are the Government now, as he rightly says. We share his concern, which is why—as he knows and will, I think, acknowledge—the Government have given considerable support to British Aerospace, not least in the field of defence procurement. I understand his suggestion that a vehicle for that concern to be aired might be the defence procurement debate. I cannot at the moment give him the assurance that he seeks, but I will bear his remarks in mind.
Mr. John Bercow: May we please have a statement on the criteria used by Government Departments in deciding when regulations that flow from legislation will be subject to the negative procedure, which does not allow debate, and when they will be subject to the affirmative procedure, which does? The right hon. Lady will no doubt wish to be aware that, on no fewer than three recent occasions, in proposing and seeking to push legislation through the House, Ministers have been unable to tell the House which procedure is to be used or why.
On a wholly separate matter, what assessment has the right hon. Lady made of the progress, or lack of it, in the other place of the Sexual Offences (Amendment) Bill?
Mrs. Beckett: I believe that the Sexual Offences (Amendment) Bill has had one debate in the other place. Further than that, I cannot call its present circumstances to mind.
On the criteria to decide when regulation should be subject to negative or affirmative procedure, I understand that the hon. Gentleman seeks greater clarity as to how those decisions are made. I am not sure that it is always as scientific as he might suggest. I am not aware of an occasion on which a Minister could not suggest what the pattern for a set of regulations would be, but it sometimes

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depends on the outcome; it depends on the balance of the material which it is anticipated will be put in regulations, and the weight that is associated with the decisions that those regulations will enshrine. That is probably the nearest it gets to being scientific. As to why someone might have been unable to answer the hon. Gentleman's question, perhaps at that time the decisions had not been made.
Sir Patrick Cormack: Will the right hon. Lady give serious consideration to bringing the defence procurement debate forward? She has heard from many Conservative Members who have British Aerospace factories in their constituencies. They are asking not for intervention, but for a debate. I happen also to have such a factory in my constituency. Can we please have that debate at an early opportunity?
Will the right hon. Lady think further about the question of a public holiday to celebrate the 100th birthday of Her Majesty the Queen Mother? Such a holiday would have the support of the official Opposition and of the Liberal Democrats. I have consulted the hon. Member for North Cornwall (Mr. Tyler) and he, too, would welcome a positive response.
Mrs. Beckett: Of course I have taken on board the hon. Gentleman's remarks about the defence procurement debate and undertake to consider the matter. With regard to his remarks about a further special holiday to celebrate the Queen Mother's birthday, all I can do is repeat what I said earlier: I will undertake to draw the remarks to the attention of my right hon. Friend the Home Secretary.

EUROPEAN COMMUNITY DOCUMENTS
Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

ENVIRONMENTAL LIABILITY WHITE PAPER
That this House takes note of European Union Document No. 6230/00, a Commission White Paper on Environmental Liability; and supports the Government's welcome for the publication of the White Paper, its endorsement of the general principle of environmental liability, and its intention to scrutinise the proposals in order to establish implications for existing domestic arrangements and assessment of the full Regulatory Impact Assessment on UK businesses.—[Mr. Sutcliffe]
Question agreed to.
Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

BROAD ECONOMIC POLICY GUIDELINES
That this House takes note of European Union Document No. 7828/00, the Commission's Recommendation for the Broad Economic Policy Guidelines for 2000; and supports the Government's welcome for this draft as giving operational content to the conclusions of the Lisbon summit, reflecting the importance of structural reform in tackling successfully the challenges of globalisation and competitiveness, and in promoting employment and social inclusion.—[Mr. Sutcliffe.]
Question agreed to.

European Affairs
[Relevant documents: Seventeenth Report from the European Scrutiny Committee, on The 2000 Inter-Governmental Conference, HC23-xvii;
No. COM (00) 34, European Commission's Opinion on adapting the institutions to make a success of enlargement;
No. COM (00) 109, Additional Commission contribution to the Inter-Governmental Conference on institutional reform: reform of the Community Courts;
No. COM (00) 114, Supplementary contribution of the Commission to the Inter-Governmental Conference on institutional reform: qualified majority voting for single market aspects in the taxation and social security fields;
Developments in the European Union, July-December 1999 (Cm. 4762);
Minutes of Evidence taken before the Foreign Affairs Committee on 7th June, HC 68-ii; and
Eighth Report from the Defence Committee, on European Security and Defence, HC 264.]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sutcliffe.]
Madam Speaker: I have had to limit Back-Bench speeches to 15 minutes.
1.24 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): Thank you, Madam Speaker.
When the Government took office, we gave a commitment that we would make Britain a leading player in Europe. In the three years since then, we have taken Britain off the sidelines of Europe and made it one of the leading players in the team.
The British Government no longer go to European Councils in the undignified position to which the previous Government were reduced—being the back-seat driver complaining about the direction in which those in charge were going, but never determining it. Britain is now in the driver's seat on the big issues before the European Council. [Interruption.] Hon. Members simply do not want to confront the reality of Europe. At Helsinki, we were in the driving seat on enlargement. We were in the driving seat, at Lisbon, on economic reform. We will again be in the driving seat, at Feira, on European security.
European security is a British initiative. The British Prime Minister launched it at the Pörtschach summit, and we took it forward in alliance with France and with Germany. Two years later, we can look back with satisfaction on how well that initiative has prospered and at the consensus within Europe that we have built around what was a British idea.
The European Union has helped to make possible half a century of unprecedented peace between its members—(Interruption.] The right hon. Member for Bromley and Chislehurst (Mr. Forth) sighs. Most of the rest of Europe is grateful for half a century of unprecedented peace.
Integration between our economies has made unthinkable war between our countries.
Mr. Desmond Swayne: Will the right hon. Gentleman give way?
Mr. Cook: I shall in a second.

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A common commitment to democracy and to the rule of law has promoted stability and placed a barrier in the way of extremism.
Mr. Swayne: Is it not the reality that the Government have conjured up the security agenda because of their lack of progress on leadership on economic matters in Europe, and is not that agenda itself very damaging to NATO—which is precisely the guarantor of the peace in Europe that he has described?
Mr. Cook: There is no conflict between Europe and NATO. Indeed, at Feira, we shall be approving the agreement with NATO.
Mr. Michael Fabricant: Feira?
Mr. Cook: If the hon. Gentleman does not even know where he can find Feira in Europe, I am not sure how he hopes to shape the debate at the European Council at Feira.
Mr. Fabricant: I thought that pharaohs were in Egypt.
Mr. Cook: We know that Conservative Members seem to think that Norway is a member of the European Union, but it is a new one that they think that Egypt is a member.
At Feira, we shall be agreeing to detailed arrangements for co-operation between Europe and NATO. Particularly, we shall approve the basis for participation in European crisis management of the six members of NATO who are European countries but not European Union members. They will have the right to be consulted before the European Union initiates any crisis operation. They will have the right to participate in it, and they will have the same rights in its management as any other participants. [Interruption.]
The right hon. Member for Horsham (Mr. Maude) seems to be unconvinced about whether that is satisfactory. I met all those six countries, at Florence, at the NATO meeting, and they recognise that it is an excellent outcome for them. They also recognise that they would not have achieved that outcome if it had not been for the leading role that Britain played in the security mission.
I know that Conservative Members fret that European security and defence policy might result in conflict with NATO, and the hon. Member for New Forest, West (Mr. Swayne) has just helpfully pointed us to that anxiety. Conservative Members have done their very best to create that conflict with NATO. Their defence spokesman, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), toured Washington trying to stir up conflict with NATO. That has, however, always been a misplaced concern. Territorial defence will remain a job only for NATO, and the European Union will launch an intervention only when NATO as a whole is not engaged.
Now that the European Union and NATO have reached a partnership on that, Opposition Members can relax. They can perhaps even—although I recognise that this may be a hope too far—welcome the results of our efforts to achieve stronger European security.
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Last Thursday, I saw that the right hon. Member for Horsham claimed that European security and defence policy was inspired—I think that I have his words right—by "a chilling anti-Americanism." [HON. MEMBERS: "Hear, hear."] I see that he carries some of his hon. Friends with him.
Unfortunately for the right hon. Gentleman, in the same week, in the same country, President Clinton said:
it is a very good thing. There is no contradiction between a strong Europe and a strong transatlantic partnership.
I put it to Conservative Members that there is really no need for them to be more pro-American than the President of America.
Mr. William Cash: Will the right hon. Gentleman give way?
Mr. Cook: Yes—the hon. Gentleman may well wish to try to be so.
Mr. Cash: Will the right hon. Gentleman acknowledge that, only yesterday, in conjunction with the European Scrutiny Committee, the Defence Committee presented a report in which it dealt with the matter of the relationship between the North American and European wings of the North Atlantic alliance, saying:
This is not a new problem, but the new arrangements will create their own new set of tensions. There must be absolute transparency between the EU military element and NATO at all times and in all circumstances. There must be no secrets between them, but each must be able absolutely to rely on the other …?
Will the right hon. Gentleman give us that assurance?
Mr. Cook: I am happy to assure the hon. Gentleman and the House that I absolutely share the call for full transparency between the European security policy and NATO. I am sure that the hon. Gentleman will be relieved to hear that that is why we will agree at Feira to four separate working groups with NATO structures to ensure that full transparency and co-operation.
Mr. Donald Anderson: Is not it a little patronising of the Opposition, who are trying to be more papist than the Pope, to purport to know the interests of Turkey and Norway better than the Governments of those countries? The Opposition also purport to know the interests of the United States better than the US Government. That is part of a pattern of flitting from frightener to frightener in the European debate generally.
Mr. Cook: My hon. Friend makes his point, and I suspect that we will find during the debate that the fears have moved on, now that those particular fears are not shared by any of the other members of NATO.
Mr. John Wilkinson: Will the Foreign Secretary give way on that point?
Mr. Cook: I have been generous in giving way so far. I am sure that the hon. Gentleman will try to intervene later and I shall give him priority if he allows me to continue now.
Our higher standing in Europe has not only enabled us to take forward proposals that are in Britain's interests, but it has enabled us to see off proposals that could be

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damaging to Britain's interests. Last year, we were under pressure to agree to a withholding tax across Europe—one of the other fears that the Opposition have brought up. This year, we have won the argument. There is not going to be a European withholding tax. Britain has secured majority support for our view that the better way forward is through increased transparency and exchange of information. Now it is the few member states who still resist greater transparency who are under pressure to agree to our proposals. My right hon. Friend the Chancellor deserves credit for having turned round the argument and ensured continuing success for Britain's financial industries.
Mr. John Redwood: Is the Foreign Secretary arguing that he has decided to veto draft clause 93 in the treaty of Nice, which would allow the withholding tax—and many other tax proposals—through under a qualified majority vote which we had lost? If he is saying that, how can he say that the Government are at the heart of Europe and in full agreement with our partners? If he will not veto it, will not we end up with the withholding tax even though we do not like it?
Mr. Cook: I have repeatedly told the House—and since the right hon. Gentleman asks, I shall repeat again—that unanimity on taxation is one of our bottom lines for the IGC. We share that bottom line with several other countries. At present, there is unanimity about the introduction of qualified majority voting at the IGC on only three or four issues. Opposition Members should try to lose the fear they have that the IGC will produce a raft of agreement to QMV. I can tell the right hon. Gentleman—and he can take it as whatever relief and assurance he wishes—that we cannot hope to match his record in Government, when they approved 42 different articles for QMV.
The European Council will also confirm Greece as a member of the eurozone.
Mr. Cash: He must be joking.
Mr. Cook: I assure the hon. Gentleman that Greece has met the conditions for membership of the eurozone and will be confirmed as a member. That will reduce to three the member states outside the euro. Denmark will hold a referendum in September on whether it should join and Sweden may take the same decision in 2002. The enlarging membership of the eurozone is the background against which we should judge the designation of last Saturday by the Opposition as save the pound day. If the Opposition really want people to have a choice on the euro, they would join Labour in offering the public a real referendum, not a postcard on which to give their names and addresses to the Tory Party.
In truth, the Opposition are not committing themselves to saving the pound for all time. It would have been much more honest if they had declared last Saturday "Save the Pound for One Parliament" day.
Even the Opposition's leader-in-waiting, the shadow Chancellor, no longer describes himself as a never man when it comes to replacing the pound. The Opposition owe it to the public to come clean about where they stand on the issue of principle. At the moment, they are
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pretending that they are against the euro in principle, while reserving the right to change that principle after four years.
Mrs. Gwyneth Dunwoody: Will my right hon. Friend make it totally clear that any decision to enter the euro would be carefully spelled out to the British people in a referendum? Will he then make clear the connection between common currency, common taxation and the right of decision making in a parliamentary democracy?
Mr. Cook: I can assure my hon. Friend that there will be a clear commitment, as there has been for the past three years, that the British public will decide the matter in a referendum. Indeed, Labour is the only one of the two major parties that is giving that commitment. In that referendum my hon. Friend will be free to express all the views and arguments in which she believes. With respect, those of us who take a contrary view will be free to express those views as well.
Mr. Christopher Gill: Will the right hon. Gentleman give way?
Mr. Cook: No, I must make progress.
Plainly, Britain can join the euro only if the economic conditions are right, but we will be ready for that event only if we prepare now and if, when the time comes, we decide on the basis of the economic tests. As my right hon. Friend the Chancellor said in his statement to the House:
The potential benefits for Britain of a successful single currency are obvious in terms of trade, transparency of costs and currency stability.—[Official Report, 27 October 1997; Vol. 299. c. 583.]
The benefits are obvious because the eurozone is the market for the greater part of our exports, and our access to Europe is by far the largest incentive for inward investment to Britain. If the hon. Member for Ludlow (Mr. Gill) wishes to challenge the laws of arithmetic, I am happy to let him intervene.
Mr. Gill: Is the Foreign Secretary aware that our trade with Europe in fact represents less that 12 per cent. of gross domestic product? The single currency might arguably benefit that 12 per cent., but there would be absolutely no benefit to the other 88 per cent. of our GDP, which will have to suffer the inordinate cost of conversion.
Mr. Cook: I am astonished that the hon. Gentleman can found his argument on the basis that only 12 per cent. of GDP would benefit. That 12 per cent. represents the jobs of more than 3 million people in Britain, and it accounts for 58 per cent. of our total exports.
Mr. Gill: Rubbish.
Mr. Cook: It is not rubbish: it is the true analysis of our exports of goods and services. If the Opposition can

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wave aside as an inadequate consideration 58 per cent. of our exports of goods and services, the public will not listen to them when they come to make their choice.
Sir Richard Body: Will the right hon. Gentleman give way?
Mr. Cook: I will give way to the hon. Gentleman, but the figure that I gave is perfectly correct.
Sir Richard Body: Does the right hon. Gentleman realise that the percentage export figure that he gave includes exports going to Rotterdam that are immediately re-exported to other parts of the world?
Mr. Cook: The hon. Gentleman is correct that Rotterdam is in Europe, and that our exports to Rotterdam count as exports to Europe. However, many of those re-exports go to countries of far less significance than the rest of the European Union. It is a matter of record that we export more to Denmark than we do to the whole of China.
Opposition Members want to talk about the United States, and I am aware that many of them would be happier if Britain were to join the North American Free Trade Agreement and leave the European Union, but they should reflect on the fact that we export to the United States only one third of the volume that we export to the other members of the European Union.
Our bottom line will be whether membership of the euro will assist in meeting our goal of full employment—a goal that we are on target to achieve in a way that the previous Government never did, through the creation of a million new jobs since this Government took office.
I have just returned from Damascus. I have come back to discover that the shadow Chancellor must also have been on the road to Damascus. He has experienced a dramatic conversion. He now tells us that he is committed to full employment. It is a pity that he did not discover that commitment when he was Secretary of State for Employment and that he did not do something about it then instead of busily plotting the demise of the Department for Employment.
Mrs. Cheryl Gillan: What has that got to do with it?
Mr. Cook: I shall tell the hon. Lady. If the Conservative party is serious about putting jobs first, it will need to drop its hostility to the European Union, membership of which is vital to the security of millions of British jobs.
Mr. Fabricant: Will the Secretary of State give way?
Mr. Cook: No, I will continue my speech. I am sure that the hon. Gentleman will have the opportunity to entertain us with his own speech.
My hon. Friend the Member for Swansea, East (Mr. Anderson) pointed to the frighteners that are held out to us. Of course, in the past three weeks the Opposition have discovered a new frightener—the declaration of fundamental rights, about which we shall hear a report at
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the European Council. The report will be given by Roman Herzog, the chair of the convention preparing the charter. His comments last week in Die Welt provide a refreshing dose of realism to the excitable comments of some Opposition Members. He said that the charter would create no new powers for the EU over its member states, that it would apply only to EU institutions without imposing new rights on member states and that the charter was not the kernel of a future European constitution.
Nevertheless, last week the right hon. Member for Horsham denounced the charter of fundamental rights as "steel handcuffs". It is a curious mindset that equates human rights with handcuffs.
There is absolutely no reason why Britain, of all nations, should run scared of discussion on fundamental rights. Britain is, after all, one of the cradles of European values of freedom and liberty.
Mr. Francis Maude: Will the Secretary of State tell the House what human rights are being conferred by the declaration—which everyone else refers to as the charter—which have not already been conferred on British people by this Parliament?
Mr. Cook: The position of the Government is exactly in line with the rights conferred by this Parliament because what we argued for in the convention and in the Council and what we will argue for in Portugal next week is that the declaration should consolidate and bring together in one place those existing human rights. I do not think that Britain should in any way be afraid of that. After all, Britain took the lead in drafting the European convention on human rights and the universal declaration of human rights. We should not be afraid of seeing those represented in a European Union declaration.
Mr. Maude: Will the Secretary of State now answer the question? What rights are being conferred by the charter which have not already been conferred on the British people by the British Parliament?
Mr. Cook: I have already answered the right hon. Gentleman. We do not intend there to be any additional rights as a result of this process. We have said from the start that it is a consolidation of existing human rights.
Mr. Maude: If this charter confers no additional rights beyond what has already been conferred by this Parliament, what is the point of it?
Mr. Cook: At present, the existing European institutions are not signatories to the European convention on human rights. The Commission is not bound by any code of human rights. Technically, although the Council brings together member states, it is not a signatory or a party to the European convention on human rights. I see nothing to be afraid of in, and something to be gained by, a clear declaration that the European institutions are bound by those declarations. In other circumstances, I

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would expect the Conservatives to complain that the European Commission has no limitations in respect of an obligation to respect human rights.
Mr. John Bercow: Will the Foreign Secretary give way on this point?
Mr. Cook: It cannot be the same as the three points that the hon. Gentleman has tried to intervene on already, but I will give way.
Mr. Bercow: I am grateful to the right hon. Gentleman for his uncharacteristic generosity. How does he square his complacency on the charter with the verdict of the House of Lords European Union Committee report in May this year, at paragraph 123, that the charter could indeed be enshrined in the treaties and made legally binding on member states; and how does he square it with the fact that the Minister of State for Europe has not ruled out such a prospect?
Mr. Cook: My hon. Friend the Minister of State has ruled it out, my right hon. Friend the Prime Minister has ruled it out and if the hon. Gentleman is in any doubt, I am happy to rule it out. Europe already has in the European convention on human rights a legally binding code for member states. We want to make sure that it remains the sole legal guarantee. A separate legal text could provide an undermining, not a strengthening, of that system of human rights. That view is shared by a number of other member states—Britain is not alone on this issue. That is why, at the European Council, we will together be making it clear that there is no consensus for the charter becoming a legally binding text. I hope that the hon. Gentleman is sufficiently relieved to be able to carry himself in silence throughout the rest of this speech.
At Feira, we will also take stock of progress on enlargement. The Portuguese presidency has maintained steady progress on enlargement. Negotiations have been launched with six more candidates, and the original six candidates are advanced in the negotiation on almost all chapters of the European legislation.
For central and eastern Europe, enlargement will provide assurance of political security and economic opportunity. For the European Union, it will provide a membership of 500 million people—a market twice the size of the United States and four times the size of Japan. It will give Europe, and Britain, extra leverage in international trade negotiations.
Mr. Fabricant: Will the Secretary of State give way?
Mr. Cook: No, I will not.
It is a rich prize, but if we are to grasp it, we must reform the European Union to make it ready for enlargement. That is why it is important that at the forthcoming European Council we maintain the momentum of the intergovernmental conference on enlargement and keep it on schedule for completion by the end of the year.
I see that the Conservative party is now committed to a referendum on the treaty that will result from the enlargement IGC. That certainly appears to unite the forces opposite. However, it is real cheek for Conservative Members to pose now as the champions of
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referendums. In their long years in office, they never once had a referendum on anything. They took Britain into Europe without even a by-your-leave of the public.
The right hon. Member for Huntingdon (Mr. Major) signed the Maastricht treaty on behalf of Britain. That was a dramatic treaty—his signature launched sweeping changes on Europe. He built two whole new pillars of the European Union. He laid the foundation for the single currency. He signed away 30 further articles to be decided by majority voting. Curiously, while the right hon. Gentleman was agreeing to those bold changes, it never occurred to him to put them to the British people in a referendum. Indeed, the current Leader of the Opposition actually voted in the House to prevent a referendum on the Maastricht treaty.
With a record like that, it seems curious that the right hon. Member for Horsham (Mr. Maude) should now have done a cartwheel. Of course, we know why—it was to get the millions of Mr. Paul Sykes out of the Referendum party and into the Conservative party. [Interruption.] The hon. Member for Chesham and Amersham (Mrs. Gillan) says, "Cheap". I rather suspect that it is anything but cheap when it comes to Mr. Sykes and his millions.
Paul Sykes makes no bones about where he stands on Europe. He does not just want a referendum on the next treaty—he wants a referendum to get Britain out of Europe. It is a measure of how far the Conservative party has lurched to the right that an extremist like Mr. Sykes can feel at home in it. He even claimed to the "Today" programme that the vast majority of Conservative Members agree with him and judging by the noise that they have been making during this speech, he is absolutely right.
As I understand it, that is not the position of the right hon. Gentleman. If he does reject the view that we should be edging out of Europe, I hope that he will take the opportunity this afternoon to put it right. I am sure that he would not want to receive Mr. Sykes's millions under false pretences. We will listen with attention for a clear passage in his speech that tells us that Mr. Sykes has misunderstood the position of the Conservative party, and tells Mr. Sykes to keep his millions out of the Tory party bank account. I do hope that he will not disappoint us when he comes to speak.
Mr. Ian Taylor: Will the right hon. Gentleman give way?
Mr. Cook: The hon. Gentleman has already expressed a view, and I am happy to let him do it again.
Mr. Taylor: I am grateful to the Foreign Secretary for giving way. He is quite right—we want nothing to do with Paul Sykes and all the nonsense about a referendum and our position in Europe because that is not the position of the Conservative party.
On an earlier point, is the right hon. Gentleman saying that at Feira a timetable will be laid down as to when enlargement will be achieved? There have been worrying signs that the European Commission and the member states have been backing off from providing such a timetable.
Mr. Cook: I can assure the hon. Gentleman that at Feira we will be approving a timetable for the IGC.

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Yesterday we received a report that the Portuguese presidency intends to put to the European Council on the progress in the IGC. That report will call on us to agree a timetable to complete the IGC by the end of this year.
Mr. John Maples: What about enlargement?
Mr. Cook: The matter is of course about enlargement; it is the part that the EU can play in preparing for enlargement.
We shall also take forward negotiations with the applicant countries. The speed with which that can be done must depend on the speed of those countries in reforming themselves.
Mr. Ben Bradshaw: Will my right hon. Friend confirm that the policy of vetoing any treaty change would stop enlargement? Does he know of any mainstream political party in the whole EU—including the neo-fascists in Austria—that has such an extreme policy on Europe as does the British Conservative party?
Mr. Cook: I agree with my hon. Friend that it is important to take forward the IGC so as to secure enlargement; it is also important because the reforms that we want in the IGC are in Britain's interest. Our key objective is to achieve a re-weighting of votes in the Council of Ministers so as to give Britain a bigger vote. We want—
Mr. Michael Trend: Will the right hon. Gentleman give way?
Mr. Cook: No, I shall come back to enlargement, if the hon. Gentleman wants to intervene.
We want to keep a fixed ceiling on the European Parliament so that it does not balloon with enlargement. We want to control the size of the Commission so that it does not become a mass meeting rather than a functioning college. We shall agree to majority voting only where it would remove obstacles to reforms that Britain wants.
So there will not be anything in the treaty of Nice that represents a threat to Britain or to the British way of life. It is not even a threat to the Tory party, unless its members feel that their prejudices are challenged by the prospect of a reformed and more effective European Union.
Much in the treaty of Nice will be of immense value to the candidate countries. They know that enlargement will be agreed only if those reforms are agreed first. If the right hon. Member for Horsham does not agree with that, he should listen to the views of the candidate countries, if he will not listen to mine. They all want the treaty completed on time.
Mr. Cash: The right hon. Gentleman is getting very close—I use the word with respect—to misunderstanding the position, or misleading the House. In recent months, I have visited some of the candidate countries; they are deeply concerned about the blackmail to which they are being subjected by having to accept the acquis communautaire without reservations in order to acquire
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the benefits—as they see them—of getting into the European Union. They are deeply concerned about the defence implications.
Mr. Cook: I have met the Governments of those—
Mr. Cash: So have I.
Mr. Cook: I shall inquire gently of my Foreign Minister colleagues what they made of the hon. Gentleman. I assure the House that every Foreign Minister of the applicant countries—especially those in NATO—is keen to play a part in the European security policy. All six were at Florence and they all agreed to our proposals there.
Candidate countries understand that, if we do not reach agreement at Nice on the IGC, enlargement will be deferred. It will not give them an opportunity to pick and choose, as the hon. Gentleman wants; it will mean that they will not have the opportunity of membership.
The right hon. Member for Horsham has promised "to campaign strongly" against the treaty of Nice. Nothing could do more to lose Britain friends from the Baltic to the Balkans. The right hon. Gentleman is in danger of making his party as unpopular among the dozen applicant members as it already is among the existing members.
Mr. Fabricant: The Foreign Secretary wrote that speech before the latest opinion polls.
Mr. Cook: It is true that I have made that observation before. It is even more true on this occasion, after the speech made recently by the right hon. Member for Horsham. All those applicant countries want to be full members of the EU; they want to be accepted as equal members—not second-class members of the type suggested by the hon. Member for Stone (Mr. Cash). That is why there was unease among them at the recent speech made by Joschka Fischer with its implication of a vanguard of member states providing an inner core of the EU.
I realise that some Opposition Members pounced on Mr. Fischer's speech as evidence that their fantasies are realities, and that a federal superstate is just around the corner. What I thought was revealing about the aftermath to Mr. Fischer's speech was the degree of resistance to it across Europe. I would not go as far as the Foreign Minister of Finland who described it as Leninist, but I share the fears expressed by the Swedish Foreign Minister about any federal structure that has the effect of
dividing the EU into a core of nations and other countries with lesser status.
Even in France, the reaction has been, to put it politely, reserved. Hubert Vedrine set out last Friday a series of searching and intelligent questions about the problems of attempting to define an inner and an outer core and the difficulties of a federation co-existing with strong nation states.
The reality now is that the broader consensus does not seek a federal superstate but a union of free and democratic member states. As Chancellor Schröder has said:
the nation state will be the centre of people's hopes and needs.

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Or as President Chirac has put it:
Europe's future is not a United States of Europe but a United Europe of States.
Last week, the right hon. Member for Horsham went to Germany to respond to Joschka Fischer's vision of a federal Europe with the distinctive Conservative vision for a disunited Europe—one that resembles a pick-and-mix counter. It is a curiously lop-sided vision that assumes that we can take the benefits of membership without accepting the obligations of membership.
Mr. Donald Anderson: The Conservatives do not care about anyone else.
Mr. Cook: The problem, I say to my hon. Friend, is that that approach might be shared by others. Conservatives assume that other member states will continue to observe their obligations to us while we stop observing our obligations to them.
Mr. Fabricant: I tried to intervene earlier and the Foreign Secretary has talked about enlargement, which most of us would welcome. He also said that there must be a restructuring of the European Union, and many of us would welcome that, too. However, a report from the Institute of Directors says that, taking into account all the benefits of the European Union, our membership costs the United Kingdom between $75 million and $100 each year.
The Foreign Secretary clearly has not read the report, but I advise him to do so. However, will his restructuring of the European Union and renegotiation result in a reduction in the amount of money that we pay net into the EU, taking into account all the benefits that we receive? That money could otherwise go into pensions, hospitals and schools.
Mr. Cook: I am alarmed at the degree of agreement that the hon. Gentleman has found in my speech. I shall try to ensure that that does not happen again before I conclude. I welcome the fact that he supports enlargement. However, if that is the case, he cannot campaign strongly against the intergovernmental conference that will make enlargement possible.
On the net payment, the outcome of the Berlin settlement should reduce the cost to the common agricultural policy, will reduce the cost to the structural funds and will reduce the extent to which Britain's contribution is in any way different from the contribution of many of the other larger states. We continue, as a result of Berlin, to preserve the rebate to make sure that we get back 70 per cent. of the funds that we pay in net.
In his speech last week, the right hon. Member for Horsham said that the Conservative party would reclaim the supremacy of national Parliaments over the European Court of Justice. That is flatly contrary to Britain's interests as a trading nation. As a trading nation, it is in our interests that the single market has rules that are enforced by an authoritative European Court of Justice. There are far more cases outstanding against most other member states than against Britain. France has more than two and a half times as many cases outstanding; Italy has twice as many; and Germany, Belgium, and Greece each has half as many again as Britain. It is in our interests to make the European Court of Justice stronger, not weaker.
Mr. Maude: The Foreign Secretary must know that he is deliberately misrepresenting my proposal. I propose
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that we should give Parliament supremacy over EU law where EU law is imposed by virtue of an extensive interpretation of the treaty by the European Court of Justice. That would give us precisely the same protection that the German and French have under their written constitutions. Is he opposed to that?
Mr. Cook: The right hon. Gentleman advances a proposition that is attractive so long as he can interpret the basis on which national supremacy is asserted. Other countries will take their own view of when the national parliament should be supreme. For example, we do not want France to decide that its national parliament will be supreme on food safety when we win in the European Court of Justice against its ban on British beef. We want to have a European Court of Justice that cannot be challenged by the unilateral decision of a national parliament, thereby undermining gains for our exporters and our economy.
In the spirit of trying to find as much common ground as possible, I accept that the right hon. Gentleman made a thoughtful speech in that he wrestled with the central problem. He wanted to sound positive about Europe, but he could not name one thing that Europe has done over the past dozen years of which the Conservative party approves.
Mr. Cash: Quite right.
Mr. Cook: I have that echoed. It underlines the right hon. Gentleman's dilemma that a Conservative Back Bencher says that I am "quite right" on that point.
Far from sounding positive about Europe, most Conservative Back Benchers perfectly fit the description of the previous Prime Minister, who said last week that people think that the European Union is a group of
wicked foreigners out to do us down.
They cannot give a lead in Europe because the only place to which most Conservative Members want to be led is the exit door.
By contrast, we have been able to get reform in Europe. That is because our partners believe that we want reforms that will make Europe work better. That is why we made the running on economic reform at Lisbon. That is why we secured a programme to put Europe in front in the communications revolution. We are setting targets for the reform of the Commission. We have been so successful in setting the benchmarks for reform of the Commission that in Brussels there are complaints that it is being compelled to accept an Anglo-Saxon model.
We can go to Portugal, knowing that issues such as European security are top of the agenda because Britain put them there. We can be confident that we can get a good deal out of the intergovernmental conference because we have allies and partners. That is good for Britain, for the 3 million households whose income depends on our exports to Europe and for Britain's wider standing throughout the world. It is a good demonstration that the British people are best served by Britain being not semi-detached from Europe but a full and wholehearted member of a successful European Union.
2.2 pm
Mr. Francis Maude: The debate is both timely and somewhat overdue. It is timely because of the upcoming summit and overdue because it is a pity that

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there has not been a debate specifically on the intergovernmental conference White Paper, which was published as long ago as February. That is regrettable, especially during the critical time when the IGC agenda is firming up. There is a huge opportunity and a necessity for Britain to lead the debate on that conference, and to fill what The Economist recently described as the "void in Europe".
The Government are sadly failing that test of leadership. Apparently, they are trailing timidly and sadly behind the Franco-German agenda for further and deeper political union. Where is the British vision for the sort of European Union that genuinely embraces the entire family of European nations? That is a European Union that can genuinely become flexible in how it develops. It is good that we are debating these issues because the public have a hunger for exploring them.
On the great divide in the Cabinet about whether to make the case publicly and wholeheartedly for scrapping the pound, we side with the Foreign Secretary and the Secretaries of State for Northern Ireland and for Trade and Industry in their desire to make the case publicly so that there can be a proper debate. We profoundly disagree with them on the substance, but it is an entirely honourable position for politicians to want to scrap the pound and join the euro at the earliest opportunity. There is certainly a case to be made for doing that. It is not a case that I accept, but the argument should take place openly and honestly. It is dishonourable and dishonest to pretend that there is no debate.
Our advice to the Foreign Secretary is that he should stoutly resist the Chancellor of the Exchequer's bullying in trying to suppress the issue and turning Britain into a do-not-mention-the-euro zone. We think that he should be encouraging an increasingly weak and vacillating Prime Minister to make the case in which Labour so passionately believes. The public expect and deserve to be treated as intelligent adults who can make up their minds on the issues and arguments.
I commend the Foreign Secretary for addressing some of those matters today. He spoke about the issues surrounding the euro and scrapping the pound, and I congratulate him on doing so. We disagree, but that is fine—airing disagreements is what Parliament is for. I only wish that we could see the Chancellor of the Exchequer at the Dispatch Box, ready to debate the issues in the forthright and open way demonstrated by the Foreign Secretary today. People expect to be treated seriously. As the right hon. Member for Birkenhead (Mr. Field) said recently:
We should never underestimate the intelligence of the electorate. They don't need pagers to know what to think.
The public deserve a debate—they should not be pandered to with an insulting pap of spin, evasion, half-truths and simple lies.
The Foreign Secretary spoke about the Feira summit, to be held early next week. I am sure he recognises the degree of public cynicism about such events. In March, Heads of Government, the Foreign Secretary, and several plane-loads of their spin doctors and flunkies proceeded to Lisbon, to tell the world how Europe had changed. Lisbon was to be Europe's break point—the moment the old-fashioned and overweight continental model was
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unceremoniously traded in, swapped for a go-getting, can-do approach that would prize enterprise, attract investment and signal a welcome change of heart. The spin was that there would be a sea change. The Prime Minister asserted that Europe had shifted to
a new direction—away from heavy-handed intervention and regulation, towards a new approach based on enterprise, innovation and competition.—[Official Report, 27 March 2000; Vol. 347, c. 21.]
That turned out to be nothing more than a tidal wave of waffle.
The Government talk about the big picture—the need to make both Britain and Europe competitive and to meet the challenge of electronic commerce; but everything they agree to runs counter to such aims. Now, even the Prime Minister admits that the working time directive, which the Government so enthusiastically implemented, was over the top, and he may now regret having taken advantage of the parental leave directive. Part-time workers are the most flexible section of our work force, but the directives to regulate such workers might make them less flexible in future.
We are conscious that all the directives, in theory, sound like universal motherhood; but in practice, they bring headaches to thousands of small firms throughout Britain. We are told that next week's summit will result in a charter for small firms. Unless that charter is essentially about rolling back some of the legislation that has been heaped on to small businesses, those who run the businesses will treat it with derision and contempt, as empty words and no action.
Mr. Fabricant: My right hon. Friend will recall that the Foreign Secretary said that the Government were in the driving seat in Europe. Is he aware that one of the Labour Government's first actions was to give way in respect of directions on building regulations, which resulted in not a small firm, but a large one—Armitage Shanks—having to be sold. [Interruption.] The Minister for Europe laughs—it is amazing that a Minister can laugh at the loss of 700 jobs. Those jobs were lost as a direct consequence of the Government's first caving in to European directives, yet they have continued to do so ever since.
Mr. Maude: My hon. Friend provides a vivid example of how giving in on such matters damages Britain's economy.
I challenge the Foreign Secretary to answer the following question: where are the changes—the actual changes, as opposed to changes in language and words—that emerged from the Lisbon summit? Where is the can-do, enterprise Europe that we were promised? Can he list three measures that have made the running of a small business simpler and eased the burdens on real entrepreneurs? That is what the language of Lisbon was all about, but where is the delivery? What has been done?
Does the Foreign Secretary believe that the directives on sex discrimination and racial discrimination, which reverse the burden of proof and make the employer entirely responsible, contribute toward the can-do Europe that he and the Prime Minister talked about? We ask that because the Minister of State for Europe made it clear before those directives were agreed that the Government would not accept them. Presumably, he was concerned

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that the reversal of the burden of proof would mean an open season for all sorts of pressure groups to take action against law-abiding businesses. However, less than a fortnight later, the Government had signed up to the directive.
A web of reassuring verbiage is spun in Britain, but there is abject surrender when Ministers go to Brussels to negotiate directives. The Government have a veto—for the time being, at any rate. If they did not approve of the directive, as the Minister for Europe was forthright enough to say, why did they not use the veto? Is it because, behind the spinning and the tough words, there is no appetite among Ministers for standing up for British interests in Brussels?
So much could be done at the forthcoming summit, if only the Government had the will and the vision to attempt it. There are so many things that could make the European Union better for businesses and better for the people who live and work in it—reform of the budget, cleaning up fraud and mismanagement, and sorting out the way in which development aid, for example, is spent.
On development aid, one critic said recently:
Anyone who knows anything about development knows that the EU is the worst agency in the world, the most inefficient, the least poverty-focused, the slowest, flinging money around for political gestures rather than promoting real development.
We agree with that. I am not sure whether the Foreign Secretary does—it was the Secretary of State for International Development who said that. Strong words, but she is right.
Where is the new broom that is coming in to sweep away the culture of back-handers and sweeteners that has corroded so much of what the Commission has done? Where is the evidence that Commissioner Kinnock's proposals for reform have done any good? The proposals contain many impressive-sounding words—"activity based management", the introduction of "a top level progress chaser", a "strategic planning and programming cycle" and, best of all, there is to be an "integrated resource management system". That will really make a difference.
What good has any of that done, other than boosting the sales of lexicons of third-rate management drivel?
Mr. Owen Paterson: Commissioner Kinnock attended the Select Committee on European Scrutiny not long ago. I asked him whether he had fired one person, and he said that he had not.
Mr. Maude: There was one person who lost his job. That was Mr. van Buitenen, the brave Commission official who blew the whistle on what was going on. He lost his job, all right. He was moved out, but no one else—no one who was found guilty of bad practices, fraud and mismanagement. It was the whistleblower who lost his job.
That is carrying on. The National Audit Office recently investigated the state of the European Union's financial controls, in a report that received much less coverage than it deserved. The NAO concluded that
it is a matter of serious concern that the high level of "substantive" errors found by the Court meant that it was unable to provide positive assurance on the transactions underlying payments for the fifth year in succession.
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It went on to recommend that
the Commission needs to design and simplify schemes to minimise the risk of fraud and irregularity.
The Foreign Secretary should listen to that. It is advice that the NAO is giving to the Government about what they can do to improve matters. It went on to urge
the United Kingdom Government to press the Commission to make rapid progress in this regard.
Perhaps the Foreign Secretary will tell us what steps the Government have taken to press the Commission, as the National Audit Office recommended.
I fully accept that the Government cannot be blamed for all the problems, some of which are of long standing, although many have only recently come to light. However, I blame the Government for failing to take seriously a catalogue of error and abuse, responding with words when action is needed.
Mr. Geoffrey Clifton-Brown: I am grateful to my right hon. Friend for giving way. I was part of the Committee that went over to interview Mr. van Buitenen. We found a culture in which one Commissioner stood up for all the Commissioners and one civil servant stood up for another, whether or not they were guilty of mismanagement. It was not possible to get rid of individual Commissioners or members of staff because they had a contract for life. Is not such a culture of protectionism a disgrace, and should not Commissioner Kinnock have done something about it by now?
Mr. Maude: Commissioner Kinnock would have the wholehearted support of all Opposition Members and, I hope, the entire House if he set about making the changes that we know are needed and about which he spoke, albeit in language with which most of us would not be comfortable. We regret that the Government seem to be failing to respond even to the National Audit Office's recommendations to help the Commission to get matters right and to apply pressure. That is not happening.
Mr. Robin Cook: May I assure the right hon. Gentleman and his hon. Friend that the ability to dismiss an individual Commissioner rather than the entire Commission is one of the key changes to the treaty that is likely to come out of the treaty of Nice at the end of the IGC? Is the right hon. Gentleman still proposing to campaign strongly against that as well?
Mr. Maude: The right hon. Gentleman has clearly read my speech of last week extremely carefully, as he has quoted from it. I am delighted that he has done so; he will have found much food for thought there. Having read my speech, he will know that I said that we would campaign strongly against an integrationist treaty of Nice that transfers further powers from Westminster to Brussels. I make no apology for that. We will do that.
Mr. Cook: The right hon. Gentleman makes an interesting elision with what he said in Germany. So that Mr. Paul Sykes does not put his money in under false pretences, is the right hon. Gentleman saying that he now reserves the position to see the outcome of the treaty of Nice before the Conservatives commit themselves to holding a referendum? That is not what he is understood to have said.
Mr. Maude: It is clear that the Foreign Secretary's officials put my speech into his Red Box, but he did not

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read it to the end. There is no change in my position. If the right hon. Gentleman had done his homework, as he claimed that he had, he would know that I said last week that we would campaign against a treaty of Nice and would demand a referendum on an integrationist treaty, which gave away powers—[Interruption.] That is precisely what I said. Let him check it. It may require a greater degree of diligence than that to which he is accustomed, but I commend it to him.
Mr. Cook: Let me get this entirely clear on the record: the right hon. Gentleman's party is not committed to a referendum on the treaty of Nice.
Mr. Maude: We are committed to a referendum—I say exactly what I said in my speech last week. We will campaign vigorously against a treaty of Nice that is integrationist, which gives powers from Westminster to Brussels. I set out exactly what we fear will be in that treaty. That was the position set out in my speech, which I commend to the right hon. Gentleman. There is a great deal more in it which he will find instructive if he reads it carefully.
The IGC is an opportunity to start to create a European Union that works and embraces the whole family of European nations. We should not just say the words, as though that is enough. It is a scandal that, more than 10 years after the fall of the Berlin wall, the countries of eastern and central Europe are still being told that they must wait in line.
The way in which the Foreign Secretary spoke about that was interesting. He spoke as though enlargement was a benefit for the present members of the European Union. It is more than that. It is our moral duty to embrace the countries of eastern and central Europe into the European family of nations. It is even more of a scandal that they are being told that they must accept every last sub-clause of every piece of over-regulation that the EU has produced in the past 40 years.
Worse still, the candidate countries are being told privately—this bears out the point that my hon. Friend the Member for Stone (Mr. Cash) made earlier—that if they make any fuss about such onerous requirements, they will be unceremoniously booted to the back of the queue. The IGC is meant to be all about enlargement.
Mr. Giles Radice: I am glad to hear that the right hon. Gentleman considers it important to have the new countries of central and eastern Europe in the European Union. If that is so important, why is he advocating a veto on the treaty of Nice?
Mr. Maude: They are not new countries; they are ancient countries of Europe. They belong to the family of European nations, and we should generously and unstintingly embrace them into the European Union. The right hon. Gentleman asks why we shall veto the treaty. The treaty is only minimally about enlargement. In previous enlargements, matters such as the re-weighting of member states' votes and the number of commissioners and seats in the Parliament were decided after the completion of accession negotiations. It is not necessary to deal with them beforehand. If the IGC is all about
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enlargement, why are proposals on the European security and defence identity, the charter of fundamental rights and qualified majority voting all part of it?
There is an overwhelming roadblock on the path to enlargement, but it is not those narrow institutional issues to which the Foreign Secretary devoted so much attention; it is agriculture. It is clear that the common agricultural policy, in anything like its current form, cannot work in an enlarged European Union. It barely works with 15 members. How could it possibly do so with 20, 25 or 30 members? A centralised policy designed in the 1960s for a Common Market of six countries is simply inappropriate for a union of nearly 30 countries.
When the Prime Minister became leader of the Labour party, he promised that he would solve what he described as this "scandal of a food policy". Today's CAP is economic madness; it is an ecological folly, socially and environmentally disastrous, and morally indefensible. On top of that, it now prevents the enlargement of the EU, which is its moral duty and should be its historic destiny. Is not it clear that the right route is towards member states having greater power to decide the precise nature of agricultural support that is appropriate for each of them? Is not that the direction in which the Commission was beginning to go in Agenda 2000? Does not the IGC provide the ideal opportunity to introduce real reform? Why are not the Government demanding that?
If the Government are serious about enlargement, why are not they demanding reform of precisely the policy that is the roadblock to enlargement? Instead, they are busily engaged in an extensive spinning exercise that is designed to lull the public into a false sense of security. The Foreign Secretary was at it again today, in his most reassuring manner. We hear that the IGC will tidy up some loose ends—a bit of wrangling over how many commissioners each country has, the size of the European Parliament and the re-weighting of votes. However, the Government say nothing about the major developments on which decisions could be taken or the treaty changes that would end the veto by extending qualified majority voting in many areas. He has ruled out some of those—[Interruption.] Well, it is precisely because so much of the veto was given away in the past—
The Minister of State, Foreign and Commonwealth Office (Mr. Keith Vaz): The right hon. Gentleman did that—he signed Maastricht.
Mr. Maude: That is precisely why I am personally acutely conscious of the need to go no further. [Interruption.] The Minister for Europe is getting wildly excited about that notion. He has been touring the country in a coach—rather oddly described as Eunice—trying to make the case for membership of the European Union to the British public. Will he tell the House how many people he found who support giving up the legislative veto on further matters? Did he find any? I shall happily give way to him if he can tell us that a single person on his tour supported giving up the veto on any further matter. He is unusually reticent; he normally springs to the Dispatch Box with restless ease. If he will not respond, perhaps the hon. Member for Swansea, East (Mr. Anderson) will.
Mr. Donald Anderson: During what the right hon. Gentleman, in his wilder moments, might think of as the

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near-treasonable years under Mrs. Thatcher when so much power was taken away from our country and given to those wicked Europeans, what was he doing to oppose it? Did he suggest that there should be a referendum then?
Mr. Maude: The hon. Gentleman refers to whether there should have been a referendum, but there were few precedents for holding referendums in this country at the time. In the past three years, referendums have been held on everything. For heaven's sake, we had a referendum on whether to elect a mayor of London. Given that we had a referendum on that, is it not reasonable to hold one on whether we should become a province of a single European superstate?
Mr. Cash: I hope that my intervention is thought moderately helpful. Does my right hon. Friend accept that the Single European Act referred particularly to competition, commercial matters and trade? The question of democratic consent at the highest level became paramount only when we moved into the area of government. Therefore, there should have been referendums on the Maastricht and Amsterdam treaties, and there should be one on the Nice treaty. Perhaps I live in hope that we will have a referendum on the treaty on European union.
Mr. Maude: My hon. Friend does indeed make a moderately helpful point, and I am grateful to him.
Mr. Bercow: My right hon. Friend will have heard, as I did, the Foreign Secretary assure the House that the charter of fundamental rights would not be incorporated in the treaties. Does my right hon. Friend agree that that assurance sits uneasily with the position of the Minister for Europe, who said, as recently as 5 April, that it would be premature to decide whether the charter should be so incorporated? Is not it time that the Foreign Secretary and the Minister for Europe talked to each other?
Mr. Maude: I was about to deal with precisely that point. The Foreign Secretary talked at length about the European security and defence identity, which is likely to feature in the IGC later this year. It is designed to sideline NATO. Again, for all the reassuring words that he speaks and the verbiage that he produces, the reality is that the driving motivation behind many such proposals is a desire to sideline NATO and reduce American influence. It runs the risk of reducing, not improving, the effectiveness and security of our defences.
I make no bones about the fact that we support greater European co-operation on defence. That is not the issue. We support a stronger European commitment to NATO. That has nothing to do with the defence identity, which is about politics and duplicating structures that already exist. It is designed by people whose primary consideration is ticking off yet another of the trappings of statehood, who say, "Flag? We have got that. Anthem? Yes, we have that. Currency? Got one of those. Government? Working on it day by day. Army? Well, we are getting there." Mr. Prodi says that the Commission is turning into more of a European Government. Mr. Prodi's ramblings about a European army were not needed to give the game away.
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In a speech last month, Mr. Jospin, the French Prime Minister, spoke of a "single European defence structure" and of the "pooling" of Europe's armies. He said that, if that were done, the EU would have
crossed a milestone towards the creation of a united political Europe.
That is the truth about the defence identity.
It is time to think again about the project in simple terms of efficiency and effectiveness. The EU is the wrong body to be entrusted with European defence. There is already a structure devoted to European defence, which is composed of active members and committed by treaty to mutual co-operation. It is called NATO, and we believe in it. It should be built upon, not undermined.
The charter of fundamental rights, which in the Foreign Secretary's mouth has turned into a declaration of fundamental rights, runs the risk of turning British law upside down. It would be a licence to meddle for the European court and, if included, its social provisions would be a serious blow to precisely the economic and social reforms that the Prime Minister appeared to support not only in what he said in Lisbon, but in the Financial Times on Tuesday. In few areas is the gulf between what the Government here in Britain say and the statements of other European leaders so wide.
We should be clear about the fact that another piece in the integrationist jigsaw is being developed. The Government blithely assure the public that they do not need to worry as there will be, as the Foreign Secretary said again today, only a harmless restatement of existing principles and rights—nothing at all to be concerned about, and anyone who says otherwise is merely scaremongering or, as the Minister for Europe has said, paranoid. Well, a lot of people—not in Britain—are apparently paranoid. Let me refer to one or two of those who believe that the charter is another engine of political integration and union, and part of the motor of the single European superstate.
Commissioner Vitorino, who is in charge of the justice and home affairs portfolio, said:
The drawing-up of the Charter is an extremely important issue for the European Union, because, if it is brought off successfully, it will mark a definitive change in the Community, which will move away from the essentially economic raison d'etre of its origins to become a full political Union …
The German Foreign Minister, Joschka Fischer, said that the charter is a stimulus, not only for human rights, but
above all for the identity and legitimacy of the EU
as
the essential basis for the process of further integration …
Gunter Verheugen, as a German Minister, said that its function was as
the foundation stone of a European constitution …
According to the Minister for Europe, all those people are paranoid and scaremongering. It is odd that they have said what they have—there is a higher degree of honesty in the Governments of other European member states than in our own Government.
We are not the only ones to highlight the way in which the charter could eventually be used as a Christmas tree on which to hang all manner of so-called social and

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economic rights that would destroy jobs. To quote someone else who is clearly paranoid, the French Minister for European affairs said that
the aim is to engrave in stone not only the political, but also the social rights which form the matrix of our political project.
Little wonder that the Confederation of British Industry is "deeply concerned" by calls to extend the list of existing fundamental rights and to make it binding, describing it as a "Trojan Horse". An interesting, straightforward comment in the French newspaper Libération gave the game away on the agenda of many in that country:
Any charter of this sort would be welcome in France because most European regulation is anyway less stringent than the French law, and anything that pushes up the regulation in other European countries is seen as a good thing here. Not even Eurosceptics in France would oppose this because they know that it would diminish the competitive edge of France's European partners.
We look for two guarantees on the charter from the Government. First, they must ensure that a new set of wide-ranging rights will not be created at European level. Secondly, they must guarantee that any charter of rights will not be incorporated in the European treaties, even as an annex—[Interruption.] Even as an annex, which is the plan. Nor must it be made in any way legally enforceable.
Four months ago, the Minister for Europe, who is burbling away on the Front Bench, seemed to agree with us on that point in a written answer. Someone else did the drafting and all he had to do was write his name on it—[Interruption.]
Mr. Deputy Speaker (Mr. Michael Lord): Order. Those on the Treasury Bench must not speak from a sedentary position.
Mr. Maude: I am happy to give way to the Minister for Europe if he wants to engage in the debate. I quote back to him what he said in a written answer carefully drafted by Foreign Office officials. All he had to do was sign his name to it. Here it is:
We do not therefore favour the Charter's incorporation into the Treaties.—[Official Report, 1 February 2000: Vol. 343, c. 541W.]
On the point made by my hon. Friend the Member for Buckingham (Mr. Bercow), when questioned on the same issue by the House of Lords European Union Committee on 5 April, he said:
I think it would be premature to decide now whether or not it should go into the Treaties …
What happened in those two months? Why did he have that change of mind, having been adamant in February that the charter was not to be incorporated in the treaties? To use the Foreign Secretary's phrase, why the sudden conversion on the road to Damascus? Why does he now think that it is appropriate to contemplate the charter being incorporated in the treaties?
Mr. Vaz: We have always made it clear that the charter will not be legally binding. The Prime Minister, the Foreign Secretary and I have repeated that in everything that we have said. Everything that the right hon.
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Gentleman has said about the charter of rights being a declaration of existing rights is what we have said from the start.
Mr. Maude: Perhaps the Minister for Europe can be tempted to his feet again to explain to the House what he meant when, in early April, he said to the House of Lords Committee:
I think it would be premature to decide now whether or not it—
in case there is any misunderstanding, that means the charter of fundamental rights—
should go into the Treaties …
What did he mean by that? Will he get to his feet?
Mr. Vaz rose—
Mr. Maude: Ah! Excellent.
Mr. Vaz: I have given the right hon. Gentleman the answer to his question. He knows a lot about signing pieces of paper, as he was one of the Ministers who signed the Maastricht treaty. I am sure that that was drafted for him as well and he just signed it. We have made it clear: the charter is a non-legally binding declaration or proclamation of existing rights. That is what we have always said.
Mr. Maude: The Minister claims that he answered my question. He did not. I specifically asked him what the words meant. He voluntarily said to the House of Lords Committee:
I think it would he premature to decide now whether or not it—
the charter—
should go into the Treaties …
I am happy to give way again because I am genuinely curious to know what was going through his mind. If he is so adamant that, at every stage, all Ministers have been clear that it should not be incorporated in the treaties, what was going through his mind two months ago when he uttered the words that suggest that the Government are still deciding whether the charter
should go into the Treaties …?
I am afraid that that will have to remain one of the great unsolved mysteries on which the House will ponder.
Mr. Bercow: Will my right hon. Friend give way?
Mr. Maude: I will not, if my hon. Friend will forgive me. I am keen to make progress.
Even if the charter does not start as a legally binding text, experience shows that that is how it may end up. Social laws started off as a social charter—a statement of general principles—and developed into a social chapter, complete with costly, binding regulations. Before the Minister for Europe gets excited about my having signed the Maastricht treaty—[Interruption.] I am aware of that; I remember it. That is not a staggering revelation, though the Minister will recollect that, as a result of our negotiations, the social chapter did not apply to Britain. That was the beginning of a model for a more flexible Europe, which he would do well to study.

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Precisely because I know what tends to happen—the integration process goes ahead inch by inch, step by step—we are particularly concerned about the charter. There is a real danger that it will turn into a charter for interference in national law and for job-destroying regulation that could turn centuries of common law in this country on its head. This country's legal system is different from those of other countries and we must not allow that to be overset.
If the IGC contains elements that would transfer powers from Westminster to Brussels, which the loss of the legislative veto, the institution of the ESDI in anything like its current form and the charter of fundamental rights would clearly all do, the public should have the right to vote on them in a referendum before they are enacted. I would expect the Foreign Secretary to be a strong supporter of that because, like us, he wants the public to be brought into the argument. He favours talking to them like grown ups on these matters, as he wants to do on the single currency, though he is frustrated by the Chancellor.
Last Monday, it was decided that reinforced co-operation will be on the IGC agenda. Does the Foreign Secretary agree with the view of some formidable pro-Europeans on the continent that that should be taken seriously? He may remember that Giscard d'Estaing and Helmut Schmidt said:
It is obvious that full integration is not a realistic goal for thirty countries that are very different in their political traditions, culture and economic development. To attempt integration with that many countries can only lead to complete failure.
Does he agree with the compelling analysis in an editorial in The Economist a few weeks ago entitled "The Void in Europe", which said:
the EU's main modus operandi—that all should move together or not at all—looks unworkable. Different countries have different aims, and for perfectly good reasons, not the least of which is that their electorates feel differently about the whole process of European integration … A multi-system Europe, in which groups of countries proceeded to integrate and co-operate in different ways according to their different choices, would offer a more stable and viable way to run a large, liberal community of 30 or more countries … ?
The right hon. Gentleman said nothing about that issue which, we now know, will be on the table at the IGC later this year, and he did not say what the Government's view was. Does he agree that, while Britain should certainly seek to retain the veto, we should not, in principle, exclude others from proceeding with schemes of closer integration which we would not wish to join ourselves. Is that not the right way to draw the poison from the relationship, which, in reality, is the enemy of public support for Britain's continuing membership of the union?
The IGC comes at a crucial time. As I said, there is a fork in the road for the European Union and a choice has to be made. Only if there is the right vision will the right choice be made. One route at the fork leads to an open, flexible Europe that celebrates diversity and does not seek to suppress it. That could be a network Europe, made up of nation states co-operating closely—perhaps more closely than now. The British public so clearly want that that I wonder that Ministers should even try to contest it.
At the fork is another route, of uniformity and uniform integration, in which national vetoes are all but abolished. That is being proposed by the European Commission and is supported by some Governments. The European Union, with eyes bigger than its stomach, would start tasks but not complete them and a tangle of subsidies and protective
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practices would still be in place. There would be an unreformed budget and agricultural and fisheries policies from a bygone era. It would be an EU with its own Government, taxes, foreign policy, criminal justice system, constitution, citizenship and currency. We are being dragged further into that bloc Europe or single European superstate because of a pathetic failure of vision and will on the part of the Foreign Secretary and Prime Minister. It is time that they stood up for Britain.
Mr. Deputy Speaker: Before I call the next speaker, I remind the House that Madam Speaker has limited all Back-Bench speeches to 15 minutes, which will apply from now on.
2.42 pm
Mr. Terry Davis: As leader of the delegation to the Council of Europe Assembly and the Western European Union Assembly, I should like to raise three issues, all of which affect the European Union and either the Council of Europe or the WEU. I believe that I probably have the support of members of all parties in the delegation for doing that and for the views that I shall express.
One issue is the charter of rights or, as we are now being encouraged to call it, the charter of fundamental rights. I give the Government my complete support for their insistence that the charter must not be legally enforceable. If it were, it is inevitable that there would be conflict between it and the European convention on human rights. I remind hon. Members that the long-established European Court of Human Rights enforces the ECHR which, as my right hon. Friend the Foreign Secretary said, was the result of a major initiative by the British Government many years ago. It should not be replaced or superseded by some document produced by the European Union.
I have no objection to a declaration or charter, but, like other members of the Council of Europe Assembly delegation, I object to anything which is legally enforceable and leads to wasteful competition and duplication between the Council of Europe and the EU. However, it is not only a question of duplication resulting from the charter being legally enforceable. I remind hon. Members that all such activities involve expenditure and we cannot afford to spend European taxpayers' money on providing something that already exists.
Mr. Robert Maclennan: Does the right hon. Gentleman agree that there is a lacuna in the jurisdiction of the European Court of Human Rights and the ECHR, and that there is a need for EU institutions to be subject to those rules?
Mr. Davis: The answer is that we should make it possible for the EU to subscribe to the ECHR. I would support that as would all members of the delegation, I believe. However, that does not mean that we should have a separate convention and charter, each of which is separately legally enforceable. I regret that some Members of the European Parliament are pressing for that precise provision.
Mr. Bercow: Will the right hon. Gentleman give way?
Mr. Davis: No, I shall not, as there is a limit on Back-Bench speeches and I have two more issues to raise.

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I generally support the Government's insistence that the new European security initiative should not involve the creation of a European army. It is accepted throughout Europe that, although some people in other European countries have the ambition of having a European army, all that is being discussed as a result of the initiative taken by my right hon. Friend the Prime Minister is a transfer of some important Western European Union responsibilities to the European Union, which leaves the whole subject of collective defence outside the European Union. I and my colleagues in the delegation support the Government in their insistence that collective defence is a proper subject for NATO.
The transfer of some responsibilities from the WEU to the EU is not to be opposed. The Petersberg tasks can be undertaken by the European Union, but there are some important, detailed points on which I hope that the Government will take a robust line.
What will happen to people who are currently employed by the WEU to deal with those responsibilities? I believe that hon. Members all thought that when those responsibilities were transferred, the staff who dealt with them would be transferred with the work. Would it not be sensible to transfer people with years of experience and expertise from the WEU in Brussels to the EU in Brussels?
My colleagues and I were surprised to learn that that is not the intention. Apparently, it is intended that about 100 people working for the WEU will be dismissed and new people will be recruited, trained and employed by the EU to undertake exactly the same responsibilities. That is an incredible decision. It is extraordinary that Governments in the EU should want to behave in that way and waste experience and expertise in such matters. That is what they will lose when they start again from the beginning. Presumably, if the EU decided to use wheels, it would insist on inventing them again.
However, things are worse than that. Is it not extraordinary that the Governments of the EU should wish to spend taxpayers' money on redundancy compensation for employees of the WEU and then spend more taxpayers' money on training other people to undertake that work? That is the intention, although I find it hard to believe. Mr. Solana, the Secretary General of the WEU and Mr. Common Foreign and Security Policy, admitted it last week in the WEU Assembly. When my colleagues and I raised the matter, Mr. Solana made a slip and said that he intended to obtain the most generous compensation that he could. That was a dead giveaway, as there would be no compensation if people moved with their work. However, Mr. Solana encouraged us to raise the matter in our national Parliament when we returned to Westminster this week and encouraged our colleagues in other countries to take similar action.
It follows that the EU is going to waste experience and expertise, damage European security, waste money on redundancy compensation, destroy people's careers and spend more money training other people. That would be extraordinary in itself, but what example does it set in industrial relations? What would the European Commission, the European Parliament and the governmental bodies within the EU say if private sector employers behaved like that? If one company took over
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another, sacked all the staff—if it was that foolish—and recruited more people to do the work, would not a Labour Government protest? Of course they would. Would not the European Union protest? Of course it would. I ask only that the European Union practise what it preaches. If a member Government behaved in that way, I would expect criticism to come from the EU. I find it extraordinary that we should go along with the decision.
I am most disappointed with the correspondence that I have received because it indicates that the Government accept the decision. I simply ask why. The Foreign Secretary has told me that it is not possible to transfer the staff with the work. I hope that when the Minister replies to the debate, he will explain why it is not possible.
Another detailed point in the development of the European security initiative is the role of Parliaments. I support the Government in their insistence that national Parliaments are pre-eminent and that this is not a subject to be discussed by the European Parliament, but there is another issue. At present, we have the WEU Assembly. I do not pretend that it is perfect; it could be improved in many ways. However, it is proposed that when the transfer is made, there will be no scrutiny, except that by national Parliaments, of the responsibilities that are at present scrutinised by the Assembly.
I insist that the Government are accountable to Parliament, but there is a need for another body to co-ordinate and liaise between national Parliaments, to exchange information between Members of national Parliaments and to provide parliamentary scrutiny of common responsibilities and institutions. Apparently, however, a vacuum is to be created and there is to be an increase in the democratic deficit. I hope that our Government will think again on that issue and insist that it is wrong to scrap the Assembly and lose parliamentary, democratic scrutiny. NATO, after all, eventually found it necessary to establish the North Atlantic Assembly. Will we not have such an institution for Europe, as we should?
We should also ensure that such an Assembly includes representatives of national Parliaments outside the European Union. It is all right for my hon. Friends to say that the Governments of Iceland, Norway, Turkey and other associate partners, members and observers throughout Europe—a total of 13 at present—who participate in the WEU have accepted that they will be consulted in future. I hope that the Minister will tell us not only that there will be consultation, but that those countries that are involved in WEU discussions at present—month in, month out—will continue to enjoy exactly the same rights of consultation and involvement in future. It is believed that they will have fewer rights than they do at present.
I must tell my hon. Friends that if countries such as Iceland, Norway and Turkey have less involvement and participation and fewer rights, Members on both sides of the House will regret it very much. It is not enough to say that the Governments concerned accept that situation, because there is widespread concern among Members of Parliament from all parties in those countries about what is happening and what their future involvement will be.
I turn now to one of the most important issues in European affairs—the situation in Russia with particular reference to Chechnya. This has caused a great deal of discussion among the public, the media and the politicians

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of Europe. It is not surprising that the matter has been discussed several times in the Parliamentary Assembly of the Council of Europe.
I remind all hon. Members that Russia asked to join the Council of Europe and was admitted in 1996 on the basis of commitments that must be honoured. Russia agreed not only to join the Council of Europe and to be involved but strictly to respect the provisions of international humanitarian law, including in cases of armed conflict on its territory, and to settle internal and international disputes by peaceful means.
I do not need to detain the House by describing what has happened in Chechnya recently. I speak as someone who would defend the territorial integrity of the Russian Federation, and as someone who condemns terrorism and the appalling human rights abuses committed by Chechens in Chechnya. I do not defend what the Chechens have done. However, we are talking about the Government of a member state of the Council of Europe, and the hard truth is that their means of dealing with this most difficult problem have not been proportionate. That is the almost unanimous view of Members of Parliament from the 41 member states of the Council of Europe or, perhaps I should say, 40 member states because, not surprisingly, most Russian Members do not agree with us.
In January, the Assembly condemned what was happening in Chechnya as totally unacceptable. It condemned the conduct of military operations there, the indiscriminate and disproportionate use of force and its effect on innocent civilians, and the violations of fundamental human rights, especially the rights to life, to liberty and to security. The Assembly overwhelmingly adopted a recommendation that called for an immediate and complete ceasefire, an end to disproportionate military action and an immediate start to political dialogue, with a view to achieving a comprehensive political solution. It called also for the fundamental human rights of the civilian population to be respected.
I must tell my hon. Friends that, unfortunately and deplorably, there has been little progress on those important points since January. When the Assembly returned to the matter in April, as we had promised to do, we came to the conclusion, not surprisingly, that there had been very little response. We then called on the Governments of the 40 countries to recognise the situation, and, if there was not substantial, accelerated and demonstrable progress immediately, to face the inevitable and to suspend Russia from the Council of Europe.
I am deeply disappointed by our own Government's response to those recommendations, including the recommendation that they should bring an interstate action against Russia under article 33 of the European convention on human rights, as they are entitled to do. The Government have apparently co-ordinated their response with the other 14 members of the European Union. We are therefore told that the 15 members of the EU will not respond to the recommendations from the parliamentarians of some 40 countries in Europe. Instead, the British Government will. unfortunately, continue to rely on pressure.
I have always been a strong supporter of dialogue between us and the Russian people, parliamentarians and authorities, but after the months that have passed without any sign of progress on these important requests by the Assembly of the Council of Europe, I am deeply
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disappointed that the Government's only response is, "Continue talking." Many of us regret and deplore that weak and feeble response. That is not what we would call an ethical foreign policy, and I have to say to my right hon. and hon. Friends that they make the Council of Europe's Committee of Ministers look all bark and no bite.
2.57 pm
Mr. Menzies Campbell: The final remarks of the right hon. Member for Birmingham, Hodge Hill (Mr. Davis) were extremely powerful and found sympathy in many corners of the House, not least with me because I was one of those who had reservations about the alacrity with which Mr. Putin was received in No. 10 Downing street and taken to see Her Majesty the Queen.
This debate has the avowed purpose of focusing on the Feira Council, but it has become clear that in all debates about Europe, right up to and including the general election, there will inevitably be some focus on the single currency. I was trying to characterise the difference in view on the single currency here in the House, and it seems to me that it has some of the characteristics of the dispute over transubstantiation. That is to say that those who firmly believe in its virtues are unlikely to be persuaded of any vice, and those who are firmly of the view that it is something with which the United Kingdom should not be associated are unlikely, in this debate or any other in the House, to change that view.
Let me make it clear that my view and that of my right hon. and hon. Friends is that membership of the single currency would bring great benefit to the United Kingdom economy, protect existing employment and help to create new jobs. However, we have consistently said that we should join the single currency if, and only if, the conditions are right. My right hon. Friend the Member for Yeovil (Mr. Ashdown) was the first to say that this was a decision of such importance that it should carry the endorsement of the people of the United Kingdom before there was any entry into the currency. It would be folly indeed to join the currency regardless of economic circumstances, and it would be folly to join the currency if the convergence arrangements had not been properly fulfilled.
My complaint is that a Government who have agreed in principle to join the single currency, as the Prime Minister repeated only yesterday afternoon, should now be actively pursuing policies which have as their purpose the achievement of convergence between British and continental economic cycles. Simply waiting for convergence to happen will not do. The Government should have a published strategy to achieve the conditions for entry, including a competitive exchange rate.
Mr. Redwood: What might that competitive exchange rate be? I am sure that the right hon. and learned Gentleman will concede that, if one believes in that policy, getting the entry rate right would be important. What is the right hon. and learned Gentleman's preferred rate, how would he get there, and how would he persuade our partners to allow us to go in at that competitive exchange rate?
Mr. Campbell: The right hon. Gentleman made an interesting point in his last comment, which is that the

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longer we delay, the more those who are part of the single currency may have reservations or anxieties about the extent that they will willingly admit us. It would be foolish for anyone to speculate on the level at which we should enter. Conservative Members in government had some experience of levels of entry, which in the end proved extremely, shall we say, exhilarating. Few of us can forget that day in September 1992.
Mr. Maude: The Liberal Democrats supported that.
Mr. Campbell: We did not support the rate.
Few of us can forget that day in September 1992 and the scenes outside the Treasury with the Prime Minister, whom all those Conservative Members who are now cheering supported with such enthusiasm and respect, as I remember, through the long watches of the 1992–97 Parliament.
Mr. Maples rose—
Mr. Campbell: If the hon. Gentleman will forgive me, I shall not give way.
In the end, this is an issue that will have to be decided by the votes of the British people. That is right and proper, because it is an issue that goes beyond simple economic management, and it is more than an economic project. If one thought that it was simply a question of economic management, there would be little justification for a referendum. If one goes back to the period immediately after the last general election, the independence of the Bank of England became a matter of economic management—with profound consequences, it must be said—but I do not remember any great pressure at that stage from those who form the official Opposition for a referendum on that topic. The fact that it is now agreed—I think on both sides of the House—that there should be a referendum is an acknowledgement that entry into the currency has constitutional implications.
The sensible timing of that entry will depend on economic convergence, and I have already pointed out what I think about that. It also depends upon the Government's five tests. Anyone who has read the five tests recently will see that they are astonishingly subjective. Indeed, they are so subjective that they clearly lie within the absolute discretion of the Chancellor of the Exchequer, and that was, no doubt, by design.
However, I do not believe it is possible for Her Majesty's Government to put the issue into the deep freeze. Timidity now will certainly not carry the day in the next Parliament. There is an argument to be won, not least because the position of those opposed to the currency was somewhat shifting in nature to begin with. They said that it would never happen, but in fact it has. Now they say that it will for ever destroy our nationhood. I see little sign in the way in which the French or German Governments conduct themselves that France has abdicated from nationhood or that Germany has abandoned the robust defence of its interests. But the message for the Government has to be that, in an adversarial political system, the argument can be won only if one has the courage to put it.
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The speech made by the right hon. Member for Horsham (Mr. Maude) in Germany recently has been the subject of what might even be described as textual exegesis. It was certainly a good speech which is worth reading. I hope that Conservative Members have read it and have understood its implications. The right hon. Gentleman said in terms that there should not be any lurch in the Conservative party's policy. That was a responsible and sensible thing to say. He also said that there should be no further extension of qualified majority voting on European legislation at all. That raises the interesting question of whether that is a pledge for ever, or simply a pledge for the next Parliament.
However, there must have been something of a lurch to persuade Mr. Sykes to throw his lot, and his loot, in with official Conservative policy. I wonder what kind of greeting he will get from those Conservative Members whom he tried to have deselected just a few months ago. The referendum that he now apparently seeks, as evidenced from this morning's newspapers, is a referendum not on going into, or staying out of, the single currency, but a referendum on whether Britain should remain within the EU at all. That is a fundamentalist position which, on any view, if it were to be adopted would represent a considerable lurch.
Mr. Maude: I am happy to make it clear that we have no intention of making such a commitment.
Mr. Campbell: There is the old principle of caveat emptor. I hope that Mr. Sykes was aware of that when he announced, with such enthusiasm, his reconversion to the Conservative and Unionist cause.
Mr. Redwood rose—
Mr. Campbell: The right hon. Gentleman will forgive me if I do not give way.
In The Times on 5 October 1998, the right hon. Member for Horsham also said of the single currency that
staying out was not a matter of religious principle—
again, one might think, an entirely sensible, moderate and reasonable approach. But if that is his approach, fanaticism appears to have crept in elsewhere, because some of the published opinions of prospective Conservative Members of Parliament appear to go rather further in that regard than he obviously would have thought prudent.
What is fascinating is that we now have the principle of save the pound, but it is a principle for only the four or five years of the next Parliament. It introduces a new political construct—the shelf-life principle. It is a principle which, even it if were demonstrably in the United Kingdom's interest to join the currency, would not be departed from. One must examine the logical basis of such a principle with some care before one can accept it as valid.
One of the problems about the debate on the EU, which those of us who are enthusiastic about the EU find difficult to deal with, is the rather curious lack of self-confidence which many of those who are opposed to it appear to have about Britain's capacity to continue to exist within the EU. I find myself forced to ask whether our institutions are so fragile and our way of life so impermanent that we are at risk. To go back to domestic

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experience, Scotland has been a member of an economic union since 1707. It would be difficult to argue that the characteristics of Scotland and its differences have been eroded in that period of 300 years. That makes me believe that, where countries embark upon an exercise of shared sovereignty, their characteristics are not likely to be lost or in any way damaged.
If the EU and its institutions are so defective, why do so many countries want to join? Anyone listening to the Foreign Secretary's speech and the interventions would see that there is a strong view on the Opposition Benches that the institutions of the EU are defective. It is said that such countries are under some form of blackmail. I am not so sure about that. If one takes the common agricultural policy, I do not think that Poland feels blackmailed. It is not that it is being asked to take part in the reform of the CAP which it regards as blackmail; it is desperate to become a member of the existing CAP. As the right hon. Member for Horsham explained comprehensively, the CAP cannot be sustained. One of the disappointments of the current and the previous intergovernmental conference is the lack of effort to reform a CAP that occupies approximately 50 per cent. of the European Union's budget.
Mr. Bercow rose—
Mr. Cash rose—
Mr. Campbell: I give way to the hon. Member for Stone (Mr. Cash).
Mr. Cash: I am grateful, as ever, for the right hon. and learned Gentleman's courtesy. I mentioned blackmail because I had heard people in the candidate countries referring to it. I refer the right hon. and learned Gentleman to the recent speech of Mr. Geremek in Poland. He makes a good case for not wanting to be taken into the sort of European Union that is being proposed.
Mr. Campbell: I visited Poland not long ago. Politicians of any party to whom I spoke were at pains to tell me that the United Kingdom had to ensure the success of the intergovernmental conference that dealt with enlargement, and that Poland's entry into the European Union was not delayed. Consideration of its candidacy comes hard upon its entry to NATO. Poland, like the Czech Republic and Hungary, views the twin track of NATO and the European Union as fundamental to underpinning the democratic process on which they have embarked after the years of the cold war.
It is essential for the meeting to lay a proper basis for the treaty of Nice, which will follow. That requires re-weighting votes in the Council of Ministers. Such a measure will protect the interests of larger states, including the United Kingdom. We need a formula to prevent the size of the Commission from increasing unreasonably. Again, that is in the interests of the United Kingdom. When qualified majority voting suits United Kingdom interests, for example on liberalising transport, we should be willing to consider an extension of QMV on
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a case-by-case, merit-by-merit basis. Many people would believe that forgoing that opportunity would deny the interests of the United Kingdom.
Mr. Paul Tyler: Does my right hon. and learned Friend accept that QMV would be critical in reforming the CAP, to which hon. Members have referred?
Mr. Campbell: How, without a system of qualified majority voting, shall we reform the CAP, which takes 50 per cent. of the European Union's budget? However, let us be clear: there can be no question of moving towards QMV on defence, taxation, resources, social security, borders and treaty change. Those are of such peculiar and distinct interest to the people of the United Kingdom that the veto must be retained. I suspect that the those on the three Front Benches are united on that, if on nothing else.
Re-weighting votes, considering the size of the Commission, and the case-by-case extension of QMV cannot prejudice the interests of the United Kingdom. There is also another check and balance: any treaty of Nice will have to be ratified by the House. Some of us are survivors of the Maastricht debates. We stayed up quite late at night; we were sometimes sent home at 10 o'clock because the Government of the day could not guarantee carrying the 10 o'clock motion. However, no one could argue that the Maastricht treaty was not subject to line-by-line examination and that the anxieties felt by hon. Members—mainly Conservative Members—were not properly canvassed and taken into account. If there is a ratification process, there will be every opportunity to consider the interests of the United Kingdom, about which hon. Members are rightly concerned.
There is something to be said for the almost lyrical view of enlargement that the right hon. Member for Horsham espoused. Any delay or blocking of enlargement will prejudice the interests of those who have applied for entry: it will certainly dash their hopes. Most important, it will inhibit their progress towards fully fledged, free-market democracy, which is in their interests and those of the rest of us.
The right hon. Member for Richmond, Yorks (Mr. Hague) has a proposal for referendums; it is not only one referendum that he has in mind. We should examine the proposal with some care, lest it prove a recipe for paralysis. It may turn out to be a recipe for a constant referendum campaign. As has already been said, there was no referendum on the Single European Act 1986 or on the Maastricht treaty. If there is to be a referendum on, for example, agreeing to QMV on transport, I suspect that the United Kingdom electorate would quickly suffer referendum fatigue.
There is a constant argument about clarity in the European Union. It is argued that there is a need for clear specification of the rights and the responsibilities of nation states, a clear description of the rights and responsibilities of European Union institutions and a clear acknowledgement of the rights of individual citizens. There is also a constant and justified clamour for ensuring constitutional recognition of the principle of subsidiarity. That is why I do not shrink from the notion that we need a constitution for Europe. Such a constitution should embody the principles that I outlined. Perhaps it should

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provide for freedom of information so that transparency can be more easily achieved. It could provide that the Council's legislative deliberations should be held in public.
Anxiety has been expressed about a charter of fundamental rights. It was clear from the exchange between my right hon. Friend the Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) and the right hon. Member for Hodge Hill, who leads the Council of Europe delegation. that there is a problem because the European Union treaties contain no code of human rights and the European Court of Human Rights has no jurisdiction when any EU institution breaches the convention of human rights. It cannot give redress to any individual who has been the subject of behaviour or conduct that might otherwise lead to a right of redress.
The House of Lords report, which was published on 24 May, has already been mentioned. It stated:
The purpose of the charter should be to protect individuals against infringement of their fundamental rights by the institutions of the E. U. or by member states applying Community or E. U. legislation.
It continues with the following judgment:
To this extent the charter could be regarded as restricting the competencies of the E. U.
Considered in that way, there is a great deal to be said for a charter.
The incorporation of the European convention on human rights in domestic law has already occurred in Scotland, and will happen in England and Wales later this year. The Scottish experience would persuade anyone that incorporation is not without implications or some surprising consequences. I accept that the judicial system north and south of the border must have time to adjust to the incorporation of the European convention on human rights in domestic law.
To incorporate a new charter at this stage would significantly increase the burden on the legal system. I therefore support the proposal that the European Union should accede to the convention. That would create a right of jurisdiction in the European Court of Human Rights in the circumstances that I outlined.
Mr. Bercow: Will the right hon. and learned Gentleman give way?
Mr. Campbell: If the hon. Gentleman will forgive me, I want to make a little more progress. I do not wish to blunt his anxiety.
The correct place for such a charter, if it is to be justiciable, is at the heart of a constitution for Europe. I agree with the right hon. Member for Horsham about that. I believe that a constitution is desirable for the reasons that I have already outlined, but we cannot expect such a development for some time. I would expect and hope all hon. Members to wish to subscribe to a charter that establishes the fundamental rights of individuals, guarantees them from abuse of power and affirms their personal liberty.
Mr. Bercow: I am grateful to the right hon. and learned Gentleman for giving way. Would he concede that it is improbable, to put it mildly, that the centralising majority
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of states in the European union would agree to a decentralising constitution? Would he agree that one does not have to look into a crystal ball when one can read the book? Does he recall that neither under article 3b of the Maastricht treaty, on subsidiarity, nor under the protocol on subsidiarity and proportionality of the Amsterdam treaty has a single directive or regulation adversely affecting this country been repealed?
Mr. Campbell: I am a devolver by nature. I have supported home rule for the United Kingdom all my political life. If a model constitution appeared that did not contain in sufficient form the principle of subsidiarity, to which I have already referred, I would not subscribe to it. If we are to have a constitution, the principle of subsidiarity must he a fundamental part of the approach that it enshrines.
Let me deal with the European security and defence policy—the ESDP as we must learn to call it now, rather than ESDI. I am sorry that the right hon. Member for Kensington and Chelsea (Mr. Portillo) is not present, because he might have detected a hint of nostalgia in what I am about to say. No one is proposing Brussels cap badges; no one is proposing a European army. There is no replacement of NATO, and no bar to individual states taking military action in their own interests, as in Sierra Leone or the Falklands. It is a capability-driven exercise designed to allow Europe to take a far greater share of responsibility for its own security.
The way to enshrine the primacy of NATO is to ensure that it has a formal right of first refusal, and that no action by the European Union members of NATO can be taken until NATO has considered whether it is an operation in which it wants to become involved. That would deal with the anxieties of people in the United States, and certainly with those of members of NATO that are not members of the European Union.
The decision to commit forces should remain with domestic Parliaments in all circumstances. Indeed, I would go a little further than that. The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) recently made a compelling point about the need to ensure that when British forces have been committed, they enjoy the support of the House of Commons in a resolution. We deploy troops under Executive privilege—as part of the royal prerogative. Some constitutional change in that area would he highly desirable.
It is unquestionably true that a weak European security and defence policy will damage NATO. A strong policy would sustain it, and would rebalance an Atlantic partnership that I do not believe can be sustained in its present form. The Clinton Administration have shown an understandable—from their point of view—reluctance to engage on the ground in Europe. We should ask ourselves whether we think that a Gore or Bush Administration would be any less reluctant. To put it a little more colloquially, are we willing to bet that for the foreseeable future the United States Administration would, in all circumstances, be willing to come to the aid of a Europe whose collective securities is not at risk, and for which an article 5 situation did not arise, but which was unable to deal with instability on its own borders? The answer to that question has to be that we cannot afford to make that bet. That is perhaps the most compelling of all arguments for the creation of a European security and defence policy.

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In the forthcoming general election. whenever it is held, there may be vigorous debate on the European Union. However, I suspect that the public find these matters rather less compelling than the House does on occasions such as this. In that debate, Liberal Democrats will be happy to defend our policies, not least because our record in these matters has shown that our judgment has consistently proved to be well founded.
3.25 pm
Mr. Denzil Davies: A mere glance at the list on the Order Paper of the documents that are before the House for this debate shows that, once again, the integrationist wagons of the European Union are on the move. Those documents deal with defence, legal reform, removal or possible removal of the veto over taxation matters, and developments on the euro.
I was interested to hear my right hon. Friend the Foreign Secretary's speech. He is clearly now one of the drivers of those integrationist wagons. He chided—probably correctly—the right hon. Member for Kensington and Chelsea (Mr. Portillo) for going to Damascus. My right hon. Friend has been to Damascus quite a few times in his political career. Saul became a greater man after going to Damascus. I do not know whether my right hon. Friend could be said to be a greater man: that is a matter for history to decide.
Step by step, the sovereignty and the democratic powers of the Governments and Parliaments of the old nation states of Europe are being dismantled, and they are being vested in a centralised European state that largely comprises bureaucratic institutions, perhaps tempered by a thin veneer of democratic legitimacy and accountability.
That erosion is taking place in all the nation states—not just in Britain. I suspect that the consequences for Britain will be more far-reaching than for most of the other member states. I understand that a Scottish sheriff has this week decided that Scotland is not a nation but a department of Britain. I shall leave that to one side, but my feeling is that Britain is more of a state than a nation. It comprises three nations, and to meld the three nations into the British state, which has been done quite successfully, it has been necessary to have central institutions of some power and authority with the Crown in Parliament at their apex. I have been in the House for 30 years—perhaps too long—and I believe that Parliament and the institutions of Britain are under a greater challenge than they have ever been in that period.
My right hon. Friend the Prime Minister recognises that because, in his speech to the national conference of the Women's Institute—[Laughter] It is no good Conservatives Members laughing. The Prime Minister made an important point and sought to reassure his audience—whether he succeeded is another matter—of his commitment to Britain and to Britishness. The reality is that the Government's policies on devolution and the whole modernisation ethos that they have fostered, together with the drip, drip, drip of continuous erosion of power to Brussels, have led many people to question the Government's commitment to Britain, notwithstanding the Prime Minister's attempts at reassurance.
We have heard much about defence, so I shall not spend long over it. My right hon. Friend the Foreign Secretary and I participated in arguments on defence during the 1980s before the wall came down, when
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defence was perhaps a more fraught subject than it is now. Attempts to create a European defence, security or strategic force—call it what you like—have in the main come from France, but, for obvious reasons, successive British Governments have resisted them, until my right hon. Friend the Prime Minister at the Cologne or Berlin summit, I cannot remember which, finally succumbed because the French were very persistent.
Perphaps we have not yet been enlisted in a European army, but I expect the consequences of developments involving the European defence system to be important for Britain. We have heard all this before. We have been told, "Of course this will not happen. It is just to help the Americans." Well, we can help the Americans through NATO, if we want to. It is not about that; it is about the fact that France, in particular, wants to stand up to the Americans, and have something different.
If a state is to be centralised, it will need a currency. It will need its own defence forces, and a uniform legal system. Work has been done in that last regard. At Feira or Nice, not much may be heard of something grandly called corpus juris. That is an elitist title if there ever was one.
Mr. Menzies Campbell: It is a Roman title. That does not make it elitist.
Mr. Davies: I was being slightly ironic. In fact, it is a Latin title. Those of us who attended not just provincial universities but elitist universities know that Justinian's jurists—Byzantine jurists, in fact—thought it up.
These guys were clever. They did not choose the words "corpus juris" for some eccentric reason; they were sending a message. They were saying, "We need this again. We need a uniform legal system for this centralised European state." Justinian said the same, and, in the end, the Romans got it.
There is also the question of the charter of fundamental rights. My right hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) rightly expressed surprise and frustration about the fact that the European Union did not simply subscribe to the one that we have. Of course it will not. Nowadays, every state must have a charter of human rights, and they want the European Union charter rather than any other charter.
Both the Prime Minister and I went to elitist universities. We have the advantage over most Members who are present today, in that we read—rather than studying—a subject called jurisprudence. We read a lot about rights, so I know a lot about rights. What I cannot understand—being, at the end of the day, a simple common lawyer—is how it is possible to have rights that are not legally enforceable.
I know that some "jurisprude" went to an early grave when he talked about abstract rights. I understand that the Prime Minister has appointed Lord Goldsmith—a distinguished commercial lawyer—to negotiate on such rights. I am worried about that, because I believe that Lord Goldsmith comes from the same stable as Lord Irvine and Lord Falconer. I ask my right hon. Friend—rhetoricallyhow it is possible to have rights that are not legally enforceable. Perhaps brilliant commercial lawyers and Lord Chancellors can explain, but simple common lawyers do not quite understand.

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I think that we are in the realm of metaphysics when we start talking about rights not being legally enforceable. Of course they will be. Sets of chambers are sprouting in the Temple every week. The aim is to milk this human rights business, probably even more intensely than Welsh farmers milk their Holsteins and their Friesians. The matter will go to the courts, and, as we know from the speech of the right hon. Member for Horsham (Mr. Maude), it will be part of the constitution that a single European state needs.
Then there is the euro. My right hon. Friends the euro-enthusiasts—the Foreign Secretary and the Secretaries of State for Northern Ireland and for Trade and Industry—are obviously panicking, as are their friends in business and the trade unions. I understand why they are panicking. They fear that, the longer the debate goes on, or does not go on, or the longer the time before a referendum comes along, the more difficult it will be to win.
One reason for that is the fact that the integrationist wagon is moving even on the euro. No doubt, by the time the referendum comes, we shall have seen more integration. The French are already calling for it, and what the French call for the French get, because they are cleverer than everyone else. The current Finance Minister, Mr. Fabius, is as clever as the last, and probably more of a euro-fanatic. The French have spotted what is happening, and they want an economic government.
When the strength of the euro descended from $1.17 to 85 cents in a fairly short time, the European elite was clearly rattled. I understand that, with a bit of help from its friends, the euro has now risen by a dime, but it can go down again. There are many reasons for the fall. I think one is the fundamental problem of the euro: it is a currency without a country, or a currency without a government.
Let us consider the days before Italy, for instance, joined the euro. If there were problems with Italy's budget, the financial markets—the teenage scribblers, as Lord Lawson once called them—would sell the lira. If there were problems in Greece, which I am told will join the euro, they would sell the drachma. Once the euro comes along, however, if there are economic problems in Italy, the Goldman Sachs of this world will sell the euro. It is necessary not only to co-ordinate, but to ensure that member states have very little discretion in their economic policies, because such discretion could affect the euro and other countries. Economic government is necessary.
The French will get their way. We have already seen the removal of discretion in monetary policy, which has gone to the Bank of England. The same applies, in part, to fiscal policy: we have the stability pact, which has removed much of the control that member states had over public expenditure. We need to go further, however. We need to deal with taxation. It is not possible to isolate taxation from monetary policy and, ultimately, from fiscal policy. Whether it is done by removing the veto, through co-ordination or by means of the guidelines that everyone likes to use nowadays, what needs to be done will be done in some way. I predict that, by the time the referendum comes, if it ever comes, the British public will be asked to buy not just the euro but a common system—or something close to it—of direct tax, income and corporation.
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I understand why euro-fanatics like those in the Cabinet are worried. Time is running out, and they are not in control of events. Defence, the legal system, the currency, public expenditure and taxation are all going to Brussels, Frankfurt or the court in Luxembourg. There is not much left for the British Government and Parliament to do, and not much for a British electorate to vote for. Who knows? Perhaps there is not much left of Britain.
3.39 pm
Mr. John Redwood: I hope that the Foreign Secretary listened carefully to the magnificent speech of the right hon. Member for Llanelli (Mr. Davies). I gathered from the Foreign Secretary's remarks that he had not understood or appreciated the force and common sense of the speech of my right hon. Friend the Member for Horsham (Mr. Maude), but I hope he will take seriously the strongly worded pleas of his right hon. Friend.
The right hon. Gentleman speaks for many people in this country who want to co-operate with our European partners, want to be friends with them, want to trade with them, want good relationships with them and want to encourage peace and prosperity across the continent, but do not believe that the right way of doing that is to surrender more powers of independent self-government to the Brussels bureaucracy.
Members on the Government and Liberal Democrat Benches have said that some dirty deal has been done between the Conservative party and Mr. Paul Sykes, so I should like to put the record straight. I phoned him, having heard the remarks of the Leader of the Opposition and read the excellent speech by the shadow Foreign Secretary setting out the Conservative party's new policy, confronted as we are with a possible fait accompli from the Government at the time of the signing of the treaty of Nice in a few months.
I explained the policy to Mr. Sykes. I am pleased to tell the House that, this morning, he phoned me back. He told me that he had reflected on what I had said and on the speech, which he had read; that he thought that the referendum guarantee now offered by the Conservative party in the form of words used by my right hon. Friends was fine by him; and that, on that basis, he was seeking to rejoin the Conservative party.
There was no deal as far as I am aware. There was certainly no request for money. That is the decision of an independent man who has taken a great interest in the issue, who did not like the Conservative party's policy under its previous leader, the previous Prime Minister, and who now backs the leader of the Conservative party in his latest policy.
The Government are so worried and desperate about it that it was, I understand, one of the big issues, if not the most important issue, on the agenda of the political Cabinet today. Can Members believe it? With the health service in crisis, with schools not responding in the way in which we would like, with stealth taxes everywhere and with a massive meltdown in Government popularity, Ministers spend Cabinet time debating Mr. Paul Sykes and his relationship with the Conservative party.
I suspect that the reason why Ministers did that is their fear that hundreds of thousands of people who either stayed at home or supported the Referendum party in 1997 are now persuaded by the leader of the Conservative

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party that they can trust him with their vote at the next election. That is what they are worried about. That is why they are now trying to make those entirely false allegations about the relationship between the party arid a potential new recruit, and the basis on which that friendship has been rebuilt.
Mr. Ian Taylor: My right hon. Friend has clarified wisely that no deal was done. Like many other people, Mr. Paul Sykes is free to apply for membership of the Conservative party. Given his record, I strongly hope that we will not accept that application. Given the views that he has expressed both in the Democracy Movement and before the last general election, I hope that the Conservative party—including Conservative Front Benchers—will wisely distance itself from him.
Mr. Redwood: I think that that is a point for the chairman of the Conservative party rather than for me, but all I can tell my hon. Friend is that Mr. Sykes told me clearly today that he supported the Conservative party's policy on that sensitive and important issue. That is good enough for me. We will see what follows.
The big issue that is at stake is: are we going to have an honest and open debate about these mighty matters? They include our relationship with our partners in Europe, whether we wish to abolish the pound and whether we are moving on from that to common taxation with our partners, to a common army and to all the other trappings that are debated on the continent, but denied here by the British Government.
The one thing that I disagreed with in the speech of my right hon. Friend the Member for Horsham (Mr. Maude), the Opposition spokesman, was his kind remarks to both the Secretary of State for Northern Ireland and the Foreign Secretary. He said that the Secretary of State for Northern Ireland for once had done the right thing, come out and said that he wanted an open debate on the euro.
I, too, read those newspaper comments, but I should like my right hon. Friend to know that I immediately wrote to the Secretary of State for Northern Ireland saying that I was delighted by his conversion on the road to Damascus to the need for open debate on that crucial issue and that I would be happy to debate the matter with him any time, any place, on any radio show or any television show—whatever he liked to name. If my right hon. Friend wishes to volunteer some other senior Conservative who takes a particular interest in these matters, I am sure that that person will be willing to take up the challenge, but I regret to tell the House that, so far, I have had no reply. I have the nagging doubt that the Secretary of State for Northern Ireland has no serious interest in debating the matter whatever.
Over the past five years, when I have taken an interest in the abolition of the pound, I have offered to debate the matter with Labour spokesmen when they were in opposition and with Ministers in the past three years that they have been in government. I regret to tell the House that no single official spokesman for the Labour party, either when in opposition or in government, has been prepared to come forward and to debate it with me.
I have managed to debate with some very pleasant Labour Back Benchers. We have had good debates about whether we should go for the euro, but none of those Labour Back Benchers ever supported the official line of
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the Opposition or Government whom they purported to represent. They usually wanted to go a lot further and a lot faster than the official Opposition before the election, or the Government now. It is obvious, as we will see from today's debate, that the Labour party is split every which way on those crucial issues and that the Cabinet is scared stiff about coming out and debating them.
The Secretary of State for Northern Ireland would be better dubbed the grim briefer. He seems to be the man who wishes to scythe his way through half the Government—through half his colleagues—because they do not happen to agree with him on the issue. He clearly wants to scythe the pound down and go into the euro as soon as possible, but I have a word of advice for the Foreign Secretary. He might feel that he is on the side of the grim briefer today and is not being briefed against by him, but, come reshuffle time, we may find out the real plot: the grim briefer is not happy enough in Northern Ireland and wants to be Chancellor of the Exchequer and Foreign Secretary at the same time. I suspect that he will regard the Foreign Secretary as the more vulnerable of the two. We might see a bit of grim briefing against the Foreign Secretary from the Secretary of State for Northern Ireland when we get nearer the time of the Prime Minister making decisions about shuffling his rather stale, under-performing team.
I was not entirely happy with the support that was offered to the Foreign Secretary. My right hon. Friend the Member for Horsham was very generous. He said that he thought that the Foreign Secretary had attempted to make out a case for the euro. It was a small and slender case. One had to be very careful in listening to hear it.
As I understood it, three points were made. First, the Foreign Secretary said that we had to join the euro to trade with Europe. What complete nonsense. As he himself said elsewhere in his speech and on many other occasions, we trade a lot with our continental partners already. There is no danger of that trade disappearing whether we join the euro or not. It will take place. It has taken place for many years when we have not shared the same currency. There is no suggestion that our massive trade, particularly in invisibles and investment, with the United States is at risk because we are not seeking to apply to the Federal Reserve bank to abolish the pound in favour of the dollar. There is no rule that says that we must share a currency with people to trade with them.
Secondly, the Foreign Secretary said that the great advantage of joining the euro would be that we had greater transparency; we would know which things were dearer in Britain, to put it in more sensible language, and which things were cheaper. It is already crystal clear. Let us take a case in point. It is obvious to all observers that, for a long time, cars have been a lot dearer in Britain than in many continental markets. We do not need to change currencies to discover that. Which magazine, newspapers and television do it regularly. Customers know it. Some go to Belgium to buy a car because they have worked it out for themselves. We do not need to change currencies to have greater price transparency.
What we do know is that the Government, who lecture us on rip-off Britain and who say that it is all the fault of the private sector, are the biggest rip-off artists of the lot. What we have is not so much rip-off Britain by the private sector as a rip-off Government sticking our petrol prices

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up through the roof, so that they are much more expensive than those on the continent. That is just one example of the damage that they do.
Therefore, the Foreign Secretary should be careful. Perhaps he wanted to land the Chancellor in it by referring to price differentials, but, clearly, the biggest price differential is caused by the Chancellor. We can see that without changing currencies. We would like a Chancellor who cut tax, not one who abolished the pound, just so that it was even more obvious to the Foreign Secretary—if not to the rest of us—that things were dearer here than over there.
Thirdly, the Foreign Secretary said that joining the euro would reduce transaction costs. He should ask for a briefing on what has happened so far to banking charges within the eurozone, because, as he will find, it makes rather disappointing reading. Banking charges are rather high in the eurozone. The abolition of the foreign exchange element of the transaction still leaves banks wishing to charge for moving money around the eurozone, and those charges are rather uncompetitive. That is part of the reason why, to date, so few businesses on the continent have chosen to undertake transactions in euros. Businesses are mainly waiting until they have to undertake them when the final changeover occurs.
Therefore, we have a Government who—with the exception of those three pathetic arguments produced by the Foreign Secretary—will not engage on the issue, or appear on radio or television to engage on it. They are trying to destroy the pound by stealth, but will not come out and argue their case.
I imagine that, if Ministers ever get round to coming out with the case, they would say, for example, that abolishing the pound will increase currency stability. I ask the Foreign Secretary and the Chancellor to consider the experience of the euro against the dollar compared with the experience of the pound against the dollar. They will see that, had we been in the euro or linked to it so far, far from having more currency stability against the dollar bloc and the yen bloc—which are two huge trading blocs for us—we would have had more currency volatility. They must do an analysis of all the transactions undertaken by British business if they wish to come to a bottom line on the stability point.
The second really big point that the Government will probably produce—I have heard it made by some Labour Back Benchers who are less shy than Ministers—is that, if we join the euro, it would mean cheaper mortgages. They seem to have ignored the point that long-term interest rates in Britain are lower than long-term interest rates in countries such as Germany, and to have ignored the bitter experience that we had in the late 1980s and early 1990s, when all the major parties recommended linking to the deutschmark, and when, far from having cheaper mortgages, we had punitively expensive mortgages.
The Government should also remember that rates in the eurozone can go down as well as up. They are currently going up, and may eventually overtake rates in the United Kingdom, because the economies have not yet come together.
The biggest set of errors in the Government's approach to this debate has of course come over the draft treaty of Nice. We are always treated to the same nonsense from
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the Government whenever they are negotiating a treaty. First, they say that there is not a negotiation or a treaty. When it becomes quite obvious that there is one and we receive drafts of the treaty and hear the speeches of continental politicians—who, in good faith, are driving ahead to create a political union or state on the continent—the Government say, "You do not want to believe what you read in the drafts. The Commission does not usually get its way. The Foreign Minister of Germany does not know what he is talking about, and the Prime Minister of France must be ignored. You must not believe anything that those people say." That really is not good enough, and it is an insult to our partners.
I think that we owe it to our partners for Britain to set out clearly—now, in this debate, or in a piece of professional spin by the Secretary of State for Northern Ireland if that is the only way in which the Government can operate—where we stand on these crucial issues in the current draft Nice treaty.
Has the Foreign Secretary read draft clause 93, which clearly states that, in a large number of areas, the Commission and, I think, France and Germany wish to move rapidly towards common taxation? Is he aware that, on the continent, they believe that having common taxation imposed from Brussels is a necessary part of completing the single currency and the single market project?
On the continent, they really do believe that we need a savings or withholding tax to be fair across the whole integrated monetary area. They really do believe that that should be the first truly European tax, imposed on more things than it is imposed on in Britain and at a standard high rate. They also believe that it should be collected by the European Union and granted back to countries according to a formula settled by the European Union.
On the continent, they really do believe that the tax breaks offered to business in countries such as the Republic of Ireland and the United Kingdom are unfair competitive practices, and that they should be eliminated, preferably by agreement, but perhaps eventually by treaty change and against our will.
On the continent, they really do believe that we need extra taxation on energy, on top of the massive taxation that our Chancellor has already imposed on things such as petrol. They really do believe that the Union needs to collect much more tax, because the Union needs to distribute more money around the area of the Union to compensate for the single interest rate and the single exchange rate that one gets with the euro.
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The right hon. Gentleman's time is up.
Mr. Redwood: We really must have replies to those points.
Mr. Deputy Speaker: Order.
3.55 pm
Mr. Donald Anderson: The right hon. Member for Wokingham (Mr. Redwood) began with an explanation of why Mr. Sykes, the right-wing gentleman with bagfuls of money, has transferred his affections back to the Conservative party. I do not think that anyone

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seriously suggests that there was a type of binding contract between the two parties, with express terms and protocols—but there are certainly some implied terms.
The right hon. Gentleman may have noticed the editorial in yesterday's The Daily Telegraph—which is currently the Conservative party's house magazine—describing Mr. Sykes's Democracy Movement as the natural lateral successor to Sir James Goldsmith's Referendum party, which, in 1997, fought in most if not all constituencies against the Conservative party. That fact gives some idea of just how far the Conservative party has moved on the issue in the period since the general election.
The right hon. Gentleman said that Mr. Sykes is happy to return because the Leader of the Opposition has promised a referendum on any change in the powers held by Brussels and the European Union. As the right hon. and learned Member for North-East Fife (Mr. Campbell) pointed out very well, some of those changes would be very much in the United Kingdom's interests. Will there be referendums on those changes?
Will there be a referendum on changes to the European Court of Justice, where justice is very slow? As the House will know, justice delayed is justice denied. Will the attempt to remove some of those impediments be defined as an accretion of power to Brussels? Will there be a referendum on changes to powers in transport matters that also would be very much in our interests?
The broad promise on referendums—which was enough to bring back on board Mr. Sykes, the right-winger—suggests that there would be a series of referendums, even on matters that clearly are in our national interest or are seemingly relatively minor. However, that is clearly a matter tin accommodation between Mr. Sykes and the new right-wing Conservative party. It may also be that, if the promise is not delivered, Mr. Sykes will ask for his money back and there will be a certain embarrassment.
Mr. Robin Cook: Perhaps it will not be refunded.
Mr. Anderson: Perhaps not.
One of the documents listed on today's Order Paper is the minutes of evidence from the Foreign Affairs Committee's session, last week, with the Foreign Secretary. I like to think that one of the key aspects of the Committee's work is our policy always to meet the Foreign Secretary before every European Council. Happily, he has always accepted our invitation. In our view, our reports are always a useful platform for debates such as this one. I hope that colleagues will agree that we have successfully prepared for today's debate by addressing some of the key issues that will arise at the Feira Council.
No Council is an entirely new start—there is no tabula rasa—but each six-monthly Council is significant in itself. Each Council is essentially work in progress. At Feira, the work in progress is the intergovernmental conference, in preparation for the Nice treaty, which in itself is an essential prerequisite for enlargement. Those who seek to scupper the institutional changes arising from the intergovernmental conference are effectively—whatever their professions of support for enlargement, to include the Luxembourg six and the Helsinki six—putting obstacles in the way of enlargement.
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We know that there will be a presidential progress report on the IGC at Feira. We also know that a maximalist position has been set out, for example in the report by the three wise men—Dehaene, von Weizsäcker and Simon. The Foreign Affairs Committee heard that position expressed when we interviewed Commissioner Barnier, who had the absurd suggestion that there should be elections to the European Parliament on an all-Europe basis. I understand that that suggestion has met with very little, if any, favour among national Governments.
However much the maximalist position frightens the Tories, and however much they try to use it to frighten others, it will not happen, partly for time reasons—a fair part of the French presidency will be during the holiday season in Europe—and because no consensus exists, as my right hon. Friend the Foreign Secretary pointed out. The minimalist position, which the Government have espoused, is most likely to be accepted, for practical and other reasons. It will include the so-called leftovers from Amsterdam, for example, and the question of the commissioners—whether we have 20 commissioners with rotation, or one from each member state. In spite of the idea that commissioners should represent Europe as a whole, rather than national Governments, it is likely that the new member states will want their own commissioners, if only for honour's sake. We will have to balance that with the weighting of votes at the Council, including double majority and so on.
We will need to move forward on QMV in some areas. The right hon. and learned Member for North-East Fife stressed the point of subsidiarity, and we share the view that although we are an evolving and dynamic Europe, we have certain criticisms of that Europe. The great absurdity of the Opposition is that they can find no good in Europe. The hon. Member for West Suffolk (Mr. Spring) grimaces, but if he can point to anything positive in the litany of criticism of the European Union that we heard from the right hon. Member for Horsham (Mr. Maude), I would be very surprised. There must be something positive he could have said, even in a footnote or in passing.
In addition to the leftovers, the IGC may also deal with the question of the incorporation, or otherwise, of the charter of fundamental rights. It is somewhat naive to claim that that would not be justiciable, because the charter—although it brings together existing rights in individual countries—will almost certainly be used by the European Court of Justice in its judgments. I recognise that and I am prepared to be open and objective about it, in a way that the Opposition have not demonstrated. Some of the instructions to Lord Goldsmith, who leads the UK team, have been somewhat negative and we should take a more positive approach, for example, to social and economic rights.
We know from the meeting of Foreign Ministers earlier this week that the issue of enhanced co-operation has been put unanimously on the agenda of the Council, and it would be helpful to have the implications of that spelled out. We know that the issue of security and defence will be discussed in relation to crisis management and peacekeeping. One good reason why little case has been made so far for transferring even more responsibility for that to Brussels is that the whole culture is against the preservation of secrets and intelligence. It is a leaky organisation, with the interpreters having their own union

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rights, and walls with ears. Unless and until Brussels does something serious about the security of its documents, it will be difficult to make progress in that direction.
I admired the contribution by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis), who posed three key questions that arose from his experience in the Council of Europe, including issues of parliamentary accountability. My right hon. Friend the Foreign Secretary said that national Governments, with Mr. Solana as a sort of national security adviser to the European Council of Ministers, will have the key responsibility; hence it is the national Parliaments—and the co-ordination of those Parliaments through institutions such as the Western European Union—which will have the final responsibility.
Although Opposition Members have talked about debate, it is sadly difficult to have a rational debate on Europe when everything they say is wholly negative. That negativity will no doubt increase as we approach the general election. I still believe in subsidiarity, but it does not end in London. Therefore, I support its extension to the Scottish Parliament and the Welsh Assembly, and—if there is a demand for it—to the English regions as well. It is subsidiarity to move decisions as close to the people as possible. There should be no block in London, and that is where the argument for subsidiarity from the Opposition stops in its tracks.
However, old habits die hard in the Commission, and attempts are still being made to meddle in areas that it should leave alone. I had brought to my attention yesterday the proposal for a Council directive that would establish a general framework for equal treatment in employment and education. That sounds good, but the effect could be very serious for religious organisations. Professor Leigh of Durham, who specialises in the issue, has said:
This directive has all the potential to seriously undermine freedom of association for religious people. It places the modern concept of "equality" over and above religious liberty. By requiring religious organisations to radically alter their recruitment practices, it will make it difficult, or impossible, for them to maintain a distinctive religious ethos.
Professor Paul Beaumont, the co-author of "EU Law", has said:
This is a kind of liberal fundamentalism which makes it difficult or impossible for a Christian medical practice to only hire Christian doctors, for a Jewish hospice to only hire Jews, for a Muslim society to only appoint male heterosexuals to office.
I cannot believe that it is right that Brussels should seek to override religious liberties in member countries. That is wrong and meddlesome, but unfortunately the proposal has had little publicity in this country. The proposed directive went to the House of Lords European Union Committee, which said that it did not have enough evidence to pronounce on the document. It is still being considered by our European Scrutiny Committee, which is chaired by my hon. Friend the Member for Clydesdale (Mr. Hood). The directive will come before the Council of Ministers in September, but so far there has been no debate. The issue is an example of the criticisms that I am open enough to make of Brussels, where necessary. I hope that my right hon. Friend the Foreign Secretary will consider the implications of the directive, and various legal opinions that I shall put to him, and seek to counter the liberal fundamentalism that threatens to override deeply held rights in this country.
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I hope that we will be able to have a serious debate, although I fear that it will be difficult to have such a debate. I fear also that the treaty of Nice will come before the House at a highly inopportune moment, because we shall be in the frenzied atmosphere of a pre-election or an election campaign. It will be difficult for colleagues to look pragmatically and objectively at what is put before us. I hope that at least some of us will make the effort.
4.9 pm
Mr. David Curry (Skipton and Ripon): There is a version of Bangui's ghost at this feast, in the form of Mr. Paul Sykes, so perhaps I should declare an interest. Mr. Sykes is one of my constituents, and I have perfectly cordial personal relations with him. However, if he signs up to the Conservative party and pays his £15, I hope that I will be notified, in case he joins my association. If he did, I would be anxious to reinforce the point made by Conservative Front-Bench Members, who have made it clear that our party policy is to rule out the single currency for this Parliament and the next. However, the implication of that is that the policy admits of the possibility that a Conservative Government might wish to join the single currency thereafter.
I would not want Mr. Sykes to be under any misapprehension about Conservative party policy. Meanwhile, I am glad that I have taken out the insurance policy of being reselected on the basis of the views on Europe that I have consistently held.
It needs to be said—perhaps especially by Conservative Members—that the European Union is a colossal and immense achievement. I belong to an organisation call the British Association for Central and Eastern Europe, which seeks to help create civic and civil society in countries of the former Soviet Union. That involves working towards the creation of an honest police force and an impartial civil service, and towards putting in place the building blocks of a proper functioning democracy.
The hatreds exposed in those societies are based on history. In the Baltic states, for example, the Russian minorities are oppressed, but they used be dominant. Again, Croatia is the most successful of the Balkan countries and is struggling towards a sustainable form of democracy, but the world knows about the problems and hatreds that it has experienced. The fact that western Europe suffered the same problems a generation ago demonstrates how effective the European Union has been in putting an end to them
There is a foolish absolutism about the European debate. The EU has not created peace, and of course NATO has had a role to play. However, it has created structures that enable people to live together in a form of civic society that might not have been possible if it had not been created.
I speak with some personal emotion on this matter. Emotion is at the heart of the origins of the European Union, as well as materialism, and there is nothing wrong with that. My father-in-law was a French clergyman and he was shot for resistance activity in a concentration camp in the final year of the second world war. People who analyse Europe purely in terms of its materialistic and political construction forget that there is a powerful charge of emotion behind it.

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For the continental countries, Europe was the means by which they regained their sovereignty and re-established their nationality. It enabled them to resume their nationhood. That is an important matter and must not be overlooked.
Britain, in contrast, was the only European country to win the war, and it took us a generation to realise that we were in the same position as those who had lost it. For us, the act of signing up to Europe became an act of abandonment, or surrender, of sovereignty. It was the end of the search for alternative ways to continue to play the major role in the post-war world. It is important to understand the psychology that underpins the EU, and to acknowledge that it exists.
The countries of central and eastern Europe are queueing up to join the European Union. They want to be members of the World Trade Organisation, and some of them want to be members of NATO, but above all they want to be members of the European Union. One of the problems with Europe is the cumbersomeness of its response. That is evident not only in the formal enlargement talks, but in its ability to help countries that need help here and now, before enlargement.
Croatia again offers an example of what I mean. It has made significant changes and advances in foreign policy, but is desperate for help with economic reform. The European machine is poor at responding to situations that require immediate assistance.
However, the European Union's greatest vocation—and I use a French word without apology—is that it stands for the creation of a liberal, civil society. Its greatest task lies in guaranteeing the spread of that society across the expanses of Europe. I would not want anything to obstruct that goal, and I hope that the treaty already mentioned in the debate will clear the way. It may sound piddling to talks about numbers of seats in the European Parliament and numbers of commissioners, but they are important elements in the pebble-dash wall that must be put in place before enlargement can proceed. That should have been done at Amsterdam, and it needs to be done at Nice.
I regret the way in which European affairs are described in Britain as a sort of permanent world cup, in which we either win or lose and occasionally complain about the referee. The Foreign Secretary is not immune, as he talked about being in the driving seat. In Britain, we are always talking about being in the back seat or the driving seat, but the EU is not the sort of institution that lends itself to sporting description. That may be a pity, as it would be more convenient for politicians if it did.
The trouble is that there are too many simplistic distortions about the European Union. They often take the form of that most convenient political shorthand—the fundamental choice.
I have been in politics long enough to know that, most of the time, politicians do not face fundamental choices. Life is not so easy or simple. It is much more complicated, and one's range of choice is much more restricted.
One allegedly fundamental choice, for example, is between the superstate or the nation state. I do not believe that, to be honest. However convenient, it is an intellectually shoddy formulation. The European Union pursues policies that are sometimes contradictory and often erratic—but so do Governments of nation states. That is the nature of the political animal. The idea that there is some fixed, unchanging, driving purpose is
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wrong. The fact that its history means that the European Union tends to have to describe itself in those rather grandiloquent terms should not be taken as indicative of some biblical fundamentalism that is universally promulgated. I think that that approach is silly, and I am as much against it as anyone.
However, Mr. Fischler's plea for more union has attracted a very French riposte from Mr. Vedrine, who has been pretty categoric in his dismissal of the idea as a load of nonsense. That dialectic between the visionary and the practical is at the heart of the European debate, and always will be.
Equally, we are always redefining the nation state, and there has been devolution in the United Kingdom. Is the idea of the nation state British, English, or Welsh? Is the Spanish nation state, with all its nationalities, the same as the Danish? Is the Dutch nation state the same as the French?
The answer to all those questions is no, of course not. The nation state is not some final construction in history, and there is nothing especially final about the condition that we have arrived at. It has evolved, as has every other form of political organisation. I decline to believe that, with the nation state as it exists today, we have reached some political apotheosis that cannot be surpassed. That is simply not the experience historically.
The European debate is also described in terms of liberalism versus dirigisme. That is not true either, although it contains elements of truth. This Government are right to say, as did their predecessor, that Europe's economic mechanisms should move towards greater liberalism. However, the German reform to the rules governing holding companies and their disposal of assets in other enterprises is a radical change. The French have implemented their own privatisation programme, and have hesitated over pensions reform. The policy clearly is liberal, with some dirigiste instincts at the same time.
Politics is about that dialectic. Our national politics is about a similar argument, so why should Europe be different? The virtues of the Netherlands deserve to be sung more frequently, as that country has succeeded in combining liberal market reforms with the maintenance of a strong social safety net. It is perhaps one of the most successful countries in the European Union.
The European Commission should be seen as a force for liberalism, with its drives for the single market and to liberalise postal services, telecommunications and electricity supply. Conservative Members believe in that approach, as do an increasing number of Labour Members. The Commission is the instrument for delivering the policies that we want in that regard.
It is true that dirigiste policies still exist: the common agricultural policy resembles one of the last command economies, but even that is changing more than many hon. Members recognise, and the new rural development programmes show that the policy is finally addressing the issues of the countryside, rather than the specific issues of agriculture.
I firmly believe that the euro is an instrument of liberalisation. However, it is like an animal that has been let loose and I do not think that many continental Governments have come to terms with how imperative the drive towards liberalisation will be under the impetus of the euro. I described it previously as an instrument for

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the Thatcherisation of Europe, and I do not resile from that. But there will not be steady progress. The trend is that it will be an erratic process, like everything else.
There is also the question of the veto as opposed to majority voting. I ask hon. Members to reflect on how real the power of veto is. The veto is becoming almost unusable because the Council's practice is to build consensus and to reach a position that everyone can live with. So we should not take too categorical or too biblical a view and defend the veto as if it were a fundamental symbol of the virility of nationhood.
Nor should we make choices between Europe and America as if they were Orwellian powerblocks. I rather regret the tendency towards the consolidation of the defence industries into a European block and an American matrix. The consumer and the Government would be much better served if we had competing blocks that spanned the Atlantic so that the imperative to buy from one side or the other would be less powerful.
Finally, I turn to the Government's attitude. They appear to be locked into a rigid theology. The five economic tests are spelt out as if there were a fruit machine, and one day we would get five lemons in a row and everyone would say, "That is fine. We knew that it was right in principle and now it is all right in practice, so here we go chaps." The tests are subjective and there will never be a clear verdict. Anyone who thinks that, economically, we will be delivered a categorical judgment on one side or the other is living in a fool's paradise. Those who, like myself, believe that the United Kingdom probably ought to join the single currency, are unlikely to be convinced by arguments that we are drifting towards the United States or that it will not work because we are structurally different.
I fully accept that my right hon. and hon. Friends who take a different view will not be convinced by the argument that once the Chancellor's tests have been met, we can go ahead. At the end of the day it is about politics. We avoid the fact that Europe is a political institution, but as a politician I am in favour of political decisions. I was elected to make such decisions. It is my vocation. Ultimately, the decision will be about how we see the United Kingdom, our view of its role in the world and its influence—that curious word that we cannot escape as it is at the heart of modern politics. It is about power and pretension and the evolution of political events such as the development of the euro 11 and the instruments of political decision making in Europe, not just economic factors.
The Government have got the means to make the weather. If they cannot make the weather with a majority of 169, they will never do it. It is no good standing up with a little finger wetted with spit waiting to see which way the wind blows or eternally watching the weather vane. Governments can influence events. When the countries that subscribe to the single currency set their exchange rates nine months before the single currency came into effect, people said, "The markets will blow that away." But the markets did not do that because they felt that it had credibility, so there is a role for political decision making in setting the tone and the environment for economic decision making. I wish that the Government would influence events by clear statements
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of intention that carry credibility. If we wait for events while arguing about that, we shall simply get the worst recipe.
I appreciate and understand that the Conservative party wishes to take a sceptical attitude towards Europe. I have no problem with that. It is not religion; it is politics. Silly things happen in Europe as they happen here and some jolly good things happen in Europe as they happen here, but I do not feel that I need to define my entire existence by a description of whether I am for or against. I believe that we have a vocation to be in the European Union and that we will be greater by doing so. We will better fulfil our idea of ourselves by doing that, but of course we should keep a weather eye on what happens and try to make sure that we end up with a system with which we feel comfortable and that we consider to be most apt for the larger Europe which is still the greatest vocation that my generation has to achieve.
4.24 pm
Mr. Roger Casale: I speak on my own behalf as a member of the European Scrutiny Committee and also on behalf of my hon. Friend the Member for Clydesdale (Mr. Hood), the Chairman of the European Scrutiny Committee, who is unavoidably absent on parliamentary business.
The European Scrutiny Committee recently conducted a detailed investigation into the intergovernmental conference. Indeed, our published report has been attached to the debate.
Before I turn to the work of the Select Committee, I would like to make a few introductory comments. I congratulate the Government on their constructive role in the European Union—something that we have been able to track in the Select Committee report.
The Government are rightly concerned that in future British citizens should enjoy the same benefits as accrue to all other citizens in the European Union, and want Europe to be shaped by Britain and the British Government. Those comments should be almost superfluous in a debate prior to a European Council meeting, but unfortunately speeches from some Conservative Members—I except the right hon. Member for Skipton and Ripon (Mr. Curry) and others who have taken a more positive stance—show that the contrast between their attitude and that of the Government could not be greater.
There has been a recent shift in Opposition policies towards Europe from a position of scepticism and of saying, "Let us wait and see. Let us be cautious. Perhaps there is something good about the European Union, but we want to be sure what it is before we take the next step." They are now more overtly against the European Union, and many of the core ideas and values on which it is based.
When the right hon. Member for Horsham (Mr. Maude) asked, "What is the point of a charter of rights for the European Union?", "What is the point of reforming the European Union prior to enlargement?" and "What is the point of trying to reach consensus within the European Union?" he was really asking, "What is the point of the European Union at all?" I shall not detain the House with a long and detailed response to that question, but suffice it to say that the purpose of the European Union is to preserve and safeguard the very diversity that is so

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celebrated by the right hon. Gentleman. We are not attempting to build a superstate, the spectre of which he tried to raise once again today, but rather to continue what is a unique historical experiment which is vital to the future prosperity and well-being of European citizens. In that respect, it is vital that the European Union succeed.
As the Select Committee has acknowledged, the European Union is in urgent need of reform in order to work better and be seen to work better. It is also in need of reform so that people can more clearly understand what it does, its purpose and the benefits that it delivers, and so that it can be brought closer to the people of Europe. Such considerations certainly need to drive our approach to EU reform. Crucially at this stage of its development, the European Union is in need of reform in order to prepare for enlargement.
Our Committee also has an answer to the question raised by the right hon. Member for Horsham, who leads for the Opposition on foreign affairs: is it necessary to reform the institutions before enlargement can take place? Our report concludes that institutional reform is necessary to prepare for an enlarged European Union which may, in a few years' time, have 28 or even 30 members. Let us hope that it does. Institutional reform is essential if the European Union is to function in future and to continue to produce benefits for European citizens. That is the central conclusion of the Select Committee report. Furthermore, as that institutional reform is so important in order to prepare for enlargement, the intergovernmental conference should focus on the Amsterdam triangle and not try to reach agreement at Nice on many of the other issues that are being taken up through the intergovernmental process.
We took evidence from Commissioner Kinnock and others, and scrutinised many documents, and it was interesting to see not only how the agenda for the intergovernmental conference had developed, but how the process of preparing the negotiations had taken shape. We have had some debate in the Committee on whether to use the term "horse trading" to describe the late-night battles that will undoubtedly take place to ensure that each country ensures for itself the best possible deal. I have no doubt that our Government will not let us down in that regard.
We decided to refer not to horse trading, but to tough political negotiations—and the negotiations will indeed be tough. However, it is also important that the mood music is right. We will need allies at a bilateral and multilateral level who agree with our point of view if we are to make it prevail. The contrast with the disengaged and negative approach of the Conservative party on this could not be greater. To get results from this important negotiation, we must have allies and we will have to bargain in a tough way, but ultimately we will have to make compromises and reach consensus.
The Committee considered three key issues of institutional reform—they have already been referred to as the Amsterdam triangle, or the leftovers from Amsterdam. They are: the size of the Commission, qualified majority voting and its extension, and the weighting of votes in the Council of Ministers. These issues are linked, and they will be linked in the negotiations as they proceed.
The Government will be careful not to reveal their whole negotiating strategy in advance, but we of course accept the need for the size of the Commission to be
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modified. We welcome the fact that the Government see no objection in principle to reducing the number of Commissioners for Britain and other countries from two to one. That seems absolutely necessary. However, the Government are also suggesting not automatically having one Commissioner per state, while Britain nevertheless would continue to have its own permanent Commissioner. It will be interesting to hear from the Minister whether he believes that that that will ultimately be a sustainable negotiating position. Clearly, change will be needed in terms of the number of Commissioners that each country has in an enlarged European Union—the Committee accepts that. However, we have serious questions about how this will work in practice.
The Committee concluded that it expected a minimal extension of qualified majority voting. Some 73 articles of the treaty of Amsterdam are still subject to unanimity. In many areas, there is no justification for that, but in others, it is essential that we retain unanimity, and we have no doubt that that will continue to be the case. There is an area in between in which the negotiation about QMV and its extension will take place, and the Committee would like to see clearer criteria—rather than a decision being made on an ad hoc basis about each article—for how qualified majority voting should be extended and which articles will remain subject to unanimity. We should like to know the Government's views on that in advance.
On the re-weighting of votes, if we lose a Commissioner, larger countries will want a greater say in the Council of Ministers. Despite the talk about a European superstate, the Council of Ministers and the intergovernmental side of the European Union seem to be getting increasingly strong and will be further reinforced through this intergovernmental conference. In strengthening the intergovernmental side of the EU and in giving a greater say to the Governments of the EU in its future development, larger states, such as Britain, will also want a greater share of the votes.
The Committee was not in favour of the German Government's proposal for a dual majority, with states needing a majority of votes as well as a voting system that reflects the different populations of the states. We believed that that would introduce a further element of complexity into the necessarily complex institutional architecture of the European Union, taking it further away from the citizen. However, we recognise the need—especially, perhaps, as a trade-off or compromise on the size of the Commission and QMV—for larger states such as Britain to have a larger weight in the votes.
I do not have time to mention all the other issues considered by the Committee which are being taken up by the IGC, but colleagues on the Committee who are present might elaborate on them later. The issues include the need for reform of the European courts. Given the enormous amount of business that the European Court of Justice has to deal with, there will need to be, now or in the future, changes to its mode of operation to enable it to work effectively.
Secondly, we had reservations about the European charter of fundamental rights. We understand what is being proposed and the importance of codifying the rights that people have as citizens. We need to make people understand that the European Union is not just about money and materialistic things, but about strengthening and underpinning their rights. However, we had particular

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concerns about the development of two parallel charters—the European convention on human rights and the proposed charter of fundamental rights. The charter will operate within the European Union, but we want to do nothing to undermine the convention, which would have a wider scope, particularly with regard to applicant countries and beyond. For that reason, the Committee would not like the charter to be binding and, in that respect, we support the Government's view.
In conclusion, there is a strong need for reform of the European Union if it is to do its job better in the future. We have the unique historic opportunity of enlarging the European Union to the east. We are on the threshold of a new century in which the European Union can be seen as one of the most important legacies of the previous century and, for the foreseeable future, as a cornerstone of peace and stability in Europe.
There has been some discussion of the arcane and difficult nature of these negotiations in the intergovernmental conference. They may be difficult; they may be complex. However, the IGC is the doorway through which we must pass in order to enlarge the European Union. By doing so, we will lock in respect for the values of democracy, tolerance and justice, without which co-operation within the European Union in the future will no longer be possible and on which European co-operation up to now has been based.
There were different views in the Committee about how the Amsterdam triangle of issues may be resolved, but we agreed that resolution of the key institutional issues is absolutely necessary for enlargement. That is why we must inject a new sense of urgency into the intergovernmental process. It is why we wish our Government and Governments of other member states to focus the IGC on the Amsterdam triangle in order to resolve these issues and so make way for an enlarged European Union, rich with possibilities for the future.
4.38 pm
Mr. John Maples: The hon. Member for Wimbledon (Mr. Casale) is right that some extremely important issues left over from Amsterdam have to be settled at the IGC. However, I do not intend to follow him too far down that road other than to say that I think that we should go for a radical reduction in the size of the Commission, freeze the size of the European Parliament and go for a dual qualified majority hurdle in the Council of Ministers.
I want to look at what kind of a European Union is being created. I have spent most of the past year getting to know European politicians and the institutions of the European Union a lot better. I started the journey as a mild Euro-sceptic, and I am afraid that I ended it as a rather less mild Euro-sceptic. I defy anybody to spend a lot of time with the European Parliament or the Commission and to love it any more after the experience than they did before.
What concerns me is that a great many European politicians, from the Commission and from the European Parliament, advocate an agenda for far greater integration. That was outlined by the right hon. Member for Llanelli (Mr. Davies). When I held the position now occupied by my right hon. Friend the Member for Horsham (Mr. Maude), I set out the alternative of a flexible Europe, where everyone was not bound by the same rules.
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There are two ways of dealing with the problem of enlargement. It is right that a European Union of 30 member states cannot subsist according to the present model and with the present rules. We could either go for increased integration—lots more qualified majority voting, where the majority wins and everybody complies with the rules—or we could have a much more flexible attitude as to which rules everybody must comply with. We should then have a multi-speed Europe or a Europe of variable geometry—depending on the phrase one wants to use. Those are the alternatives.
Unlike my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), I do not believe that there is a third way. One of the fallacies is when people kid themselves—the Foreign Secretary is one of them—that they can finesse their way through this jungle. One has to make up one's mind about which model one wants.
We must face what further integration means. It may not happen at this intergovernmental conference—it may not happen during the next two or three years—but the direction and the destination are becoming clear. Further integration means more power to the Commission; more decisions taken by qualified majority voting; home affairs and foreign affairs coming under the first pillar of the treaty; and one legal area. The euro is already leading to pressure for a single fiscal policy. Mr. Solana has called for the EU to have a seat on the Security Council of the United Nations. There is talk of a constitution. The charter of fundamental rights sounds very much like the United States Bill of Rights—we all know about the extensive federal law that has been built up by the Supreme Court on the basis of that document.
If the EU has all that—a currency, a foreign policy, a Bill of Rights and a court—it will be like a state. That has not happened yet, but it is the direction the integrationists want to take. I should be very unhappy about that. It could work as a way of dealing with an enlarged community of 30-plus member states, but it would result in a massive loss of sovereignty for all the countries of Europe. I am especially concerned about the United Kingdom, but the matter is important for the many countries of Europe that have proud histories as nation states. Furthermore, it would bring more and more costly regulation on business flooding towards us. I shall say more about that later.
I understand those who argue for a federal European superstate model of increased integration. I can see why some people feel that that is a great internationalist ideal. Obviously, I can understand my own point of view—that that is wrong and that a flexible Europe would be better. However, the real danger is to pretend that one can finesse one's way through and that the dangers do not exist. We have been hearing for too long that, for example, the social charter was just a series of aspirations and would amount to nothing. Within five years, it was the social chapter. It now produces law, which is binding on us. If we want measures such as the working time directive—I realise that that does not come under the social chapter—we should pass them in the House so that if, in a few years' time, we have a new Government who want to change them, or if different circumstances prevail, we can change them. However, we cannot change measures that come in the form of a European directive.
To those who say that the European superstate is a bogey, that further integration is a lot of nonsense and that we do not have to worry about it—that we are paranoid, in the words of the Minister for Europe—I reply that they

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should read what is being said. They should read what was in the Finnish presidency programme. Six months ago, it referred to qualified majority voting on tax to prevent harmful tax competition. The Helsinki conclusions stated that the
IGC will examine the extension of qualified majority voting.
The European Parliament's submission to the IGC was perhaps the most federalist. It talks about creating a European Foreign Office. It also talks about a massive extension of QMV—on indirect tax, on the common judicial area and on social, fiscal and cultural policy. The wise men's report emphasises the need for QMV. Mr. Prodi, in his speech to the European Parliament at the end of last year, reiterated those suggestions.
The Commission's proposals in November last year, under Mr. Prodi, and in January this year state that QMV should be the rule and that, on taxation and social security, there should be QMV in so far as it relates to the single market. I do not know what the single market excludes when it comes to deciding whether differences in tax and social security can have "harmful competitive effects", but I know who that proposal is aimed at: it is aimed at us. We have the most benign tax and social security arrangements.
Those proposals—like the costly regulation on business—are to do with countries that have uncompetitive tax regimes and costly business regulation. Instead of tackling those problems domestically, as we did in the 1980s, they want to put the same ball and chain around the feet of all the other people in the EU. We should resist that. The Portuguese presidency's note stated that tax rates and bases might need to be harmonised and suggested QMV.
Those are the people who will hold the presidency at the Feira Council—fixing minimum rates; taxing company profits; imposing environmental taxes and other forms of direct taxation. The Commission reiterated the point in its communication in March. It stated that QMV on tax would be necessary to allow the
proper functioning of the internal market.
Anyone who thinks that that view is held only by the European Parliament and the Commission, and that it is not shared by Ministers of the Governments who will be making the agreement, should read Joschka Fischer's speech. Germany is the driving force of the EU. The speech has been dismissed as paranoid ramblings, but it is not. The German Government believe those views. Their published submission to the IGC states:
Germany favours the broadest possible extension of qualified majority voting.
At the Mainz summit last week, France said that Germany and France were in agreement on the extension of QMV. It is not only those two countries. That significant extension of QMV is also supported by, among others, Finland, Denmark, the Netherlands, Belgium, Luxembourg, Italy, Greece and Portugal.
It may be that the Foreign Secretary and the Prime Minister will go to Nice and say no—although I doubt that from the Foreign Secretary's previous voting record. However, they would have to do that to stop the process. At some point, someone will have to say no. It is a relentless tide. The process is being pursued openly, honestly and, I believe, honourably by many of our partner Governments.
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My exposure to the views of European politicians during the past year—which has been extensive, on both the left and the right—has shown me that most people share that view. That is where they want to go. They have a different view of what the nation state is about. For us, it is a proud and successful institution. For most of them—as my right hon. Friend the Member for Skipton and Ripon said—the second world war was a disaster for their nation state; they are happy to create something else.
Some of them have serious regional problems that make national government difficult—for example, Belgium, Italy and, to some extent, Spain. Others receive large cheques. I dare say that, if our cheque were as large as the one received by Ireland, our view of the EU would be rather different. The amount would be £1 billion a week if it were 7 per cent. of our gross domestic product, as it is in Ireland.
One of the reasons we need flexibility is not merely to avoid the superstate route of integration, but the raft of costly regulation that is being imposed on European business. It all adds costs. It is estimated that the working time directive has added costs of £2 billion to British business. The bureaucracy for works councils will also be costly.
The EU is turning its attention to e-commerce. That is the most internationally mobile business, but Brussels thinks that it can regulate it and impose VAT on it. That will lead to uncompetitiveness. The costs imposed on European businesses will be far higher than those imposed on our competitors. Unemployment in the EU is about 11 per cent., whereas in the United States it is 4 per cent. The US created more jobs in one month last year than France and Germany together created in the whole of the 1990s.
It would be all right to put balls and chains round everyone's feet if we were operating in a vacuum. However, the Americans do not follow that approach in south-east Asia; they try to make businesses more competitive and to reduce the costs that Governments impose on them. If we persist down this route, the danger is that we shall be uncompetitive and lose jobs. In addition, the protectionist instincts that are in the forefront of the minds of some politicians and countries in Europe—particularly France, which killed off the transatlantic marketplace that Leon Brittan tried to develop with the Americans—will be followed. If we finds ourselves becoming uncompetitive, the answer will not be a bonfire of regulations and taxes, but the reintroduction of protectionism. There is a good practical reason to choose a flexible arrangement and to resist more integration.
I share the view of many Conservative and Labour Members that the European Union has been of enormous benefit to us and to Europe. Its promotion of competition and free markets when that was unfashionable was very valuable. The free trade agenda, uncompleted as it is, is important. The EU has helped to tackle the problem of state aids; it has given us help in attracting the lion's share of the EU's inward investment, which is what we get; it has entered into trade negotiations with the United States and Japan; it provided European cohesion and vision in the face of Russian hostility during the cold war; and it brought France and Germany back together so that it seems inconceivable that they will fight each other again as they did three times in 80 years. Those are all huge benefits.

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However, there is a massive uncompleted agenda. The visionaries are toying with a superstate, integration and a charter of fundamental rights, but let me suggest a few things that should be on politicians' practical agenda and that would benefit the citizens and businesses of Europe. They include agricultural reform, tackling fraud and waste and completing the free trade agenda. There are 15,000 separate external tariffs for imports into the EU. We talk about rip-off Britain, but—my God—it is rip-off Europe. Why should European consumers pay a 10 per cent. tax on imported biscuits or chocolate, or 9 per cent. on ski boots for some bizarre reason? The average tariff may be 4 per cent., but many tariffs are 10 per cent. or more.
State aid is another issue. Enormous state aids are paid to Alitalia, Air France and the German banks, which receive subsidies from their Lander. The completion of a single market in services is far from being achieved and the transatlantic marketplace is another objective that we should achieve. On enlargement, it is a scandal that countries have waited 10, 11 or 12 years from the end of the cold war to become members. The European Union has a huge role to play in regenerating the countries of central and eastern Europe and their economies, in creating a constructive relationship with Russia and in helping to manage its relationship with Europe and, I hope, in bringing peace and stability to the Balkans.
The European Union has a huge unfinished agenda of practical measures that it could carry out. In many cases, they have been started on, but politicians seem to have given up on them because they are too difficult to achieve. Therefore, they go for integration and a charter of fundamental rights so that they can talk philosophy. It is like a business man giving up on earning his first £1 million because that is too difficult, and starting to try to earn his second. We should return to the agenda for which the European Union exists—the things that it can deliver. We should forget or leave to the far distant future all the philosophy about a single state and integration. The agenda of practical measures that still need to be achieved does not require qualified majority voting or a Bill of rights; it can be done without them. That is the right approach for Britain to take.
I want to say something about the European security and defence identity, because I think that the Government are making a mistake on that. The proposal is part of trying to create a state, and it is a dangerous way to proceed.
People say that it is impossible to achieve the strategy that I have outlined, but I do not think that it is. We were told that it was impossible to achieve an opt-out on the single currency and the social chapter, and Margaret Thatcher was told that it was impossible to obtain a rebate. However, all that was achieved. My aim would not be possible through the Government's supine style of negotiating. They give way on the social chapter and the European security and defence identity without receiving anything in return. However, if we negotiated hard, we could do the things that I have described. We would then achieve my vision of Europe and the vision of the vast majority of Conservative Members and people in the country. We would create an open, outward- looking, free enterprise and free trade
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Europe—a flexible Europe of nation states. It is time to stop being carried along on a tide of unnecessary integration and damaging regulation.
Of course, we are fundamentally part of Europe, but we are part of the world as well. We have a long history as a proud, independent and successful nation state.
4.53 pm
Mr. Alan W. Williams: I want to speak about the single currency. I am a strong European and I am glad that the speech of the hon. Member for Stratford-on-Avon (Mr. Maples) contained a measured acknowledgement of the positive results that we have obtained through our membership of the European Union.
The single currency has been launched and I take the view that my right hon. Friend the Deputy Prime Minister expressed a few years ago. There is no sense in being part of the single market without being part of the single currency now that it has been launched. It would be of enormous help to manufacturing, agriculture and tourism.
Most British people spend their holidays in Spain, Greece or in continental Europe. It has struck me over the decades that whenever we travel abroad, we lose money when we exchange currencies. Despite the comments of the right hon. Member for Wokingham (Mr. Redwood) about transparency, it would be much easier to compare prices when on holiday in Greece or elsewhere if there were a single currency. It would encourage much more tourism, too.
The problems with joining the new currency are public opinion and the fact that since the euro was launched in January last year it has gone through difficult times. I do not think that anyone would have predicted that the first year and a half would be so difficult or so stormy, and that such a substantial devaluation would take place, amounting to 20 or 25 per cent.
I have felt impatient during the past three or six months, feeling that something should be done about interest rates or that there should be intervention. I am pleased that over the past four or five, weeks things have changed. The euro has substantially strengthened in value. I put the change of opinion down partly to the comments of Economic Ministers on 8 May, including my right hon. Friend the Chancellor of the Exchequer. His remarks have been much quoted and they are prophetic. He said:
The present sterling-euro exchange rate cannot be justified by any view of the long-term fundamentals.
It was obviously our opinion, but it was the first time that my right hon. Friend expressed that view. Since then, over the past four weeks, the euro has appreciated in value by about 10 per cent. against the pound.
On the Government Benches, and certainly among some members of the Cabinet, there has been increased enthusiasm for making the case for joining the single currency. My right hon. Friends the Secretaries of State for Northern Ireland and for Trade and Industry, the former Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr. Clarke), and the former Prime Minister, the right hon. Member for Huntingdon (Mr. Major), have all made positive remarks about the euro.
The right hon. Member for Huntingdon made quite a strong speech earlier this month. He said that
the euro is Britain's ultimate destiny.

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He added:
The new currency is far bigger than the pound or the yen. It is big enough in time to rival the dollar. It has huge gold reserves to back it. It will end exchange risks in Europe.
Given the events of the past 24 hours involving Mr. Paul Sykes, talk of a referendum and the lurch to the extreme right by the Conservative party on the single currency, I would be surprised if the right hon. Member for Huntingdon expressed a different view.
A week ago, the OECD referred to convergence criteria in its report and underlined the fact that we have met them extremely well. The public sector borrowing requirement is in surplus and inflation is well under control. The ratio of debt to gross domestic product is the lowest in Europe. However, two elements of convergence are not moving so quickly, and these are interest rates and exchange rates. Our interest rate is 6 per cent. and that of the European central bank is 4.25 per cent. There is considerable convergence, but there is a substantial step to take. If that happened quickly—for example, over six months or a year—there would be an unsustainable boom in the United Kingdom. We must phase ourselves towards convergence on interest rates.
As for the exchange rate, manufacturers and farmers are not happy even with the present rise in the euro. It needs to rise by at least another 10 per cent. I noticed that, in May, the Bundesbank estimated that the euro was 20 to 30 per cent. undervalued.
Currently, the exchange rate is about DM3.10 to the pound. Even though I am enthusiastic about joining the single currency, the exchange rate at which we do so must be competitive and sustainable. There should be a national debate on the correct rate; I should like it to be around DM2.60 or DM2.70 to the pound—almost a 20 per cent. devaluation from the current rate. Our problem is that we cannot recommend to the country that we join the single currency until the exchange rate is competitive. In principle, we support entry, but the economic tests set out by my right hon. Friend the Chancellor must be met.
If the pound falls and the euro strengthens, with the time lag taken into account the result will be higher inflation. Mervyn King of the Bank of England's Monetary Policy Committee estimates that a 25 per cent. change in the value of the pound against the euro would put an extra two or three percentage points on the inflation rate. If that happened within 12 months, we would have serious problems, but if it took place over two or three years, we could accommodate that within the Bank of England 2.5 per cent. inflation target.
We must give ourselves two or three more years to get into line with the European economies. I hope that interest rate movements, our economic performance and domestically generated inflation will be compatible with at least no increase in interest rates—preferably with a lowering of interest rates, so that we match that 4.25 per cent. average European rate—and that the exchange rate stays in line with that.
The Government's policy on the single currency is the only one practicable: prepare and decide. We are making preparations, and the decision on whether we meet the five tests will be taken soon after the next general election; then, it will be up to us to put our case to the country. The events of the past month to six weeks have helped and I am confident that we are moving closer to joining the single currency.
5.5 pm
Sir Raymond Whitney: I believe that the hon. Member for East Carmarthen and Dinefwr (Mr. Williams) draws the right conclusions from what has happened to the euro since its launch. Many of those who were hostile to the euro predicted that it would never be launched, or that it would fail immediately after take off. Since then, they have seized on the changing dollar-euro exchange rate and, in my view, drawn the wrong conclusions. The great majority of those who live in euroland regard the single currency as a success; they are confident that it will consolidate that success in future, and I believe that they are right to be so.
This is an unhappy occasion—the latest in a series of unhappy occasions on which the House has debated European issues. We in this country used to be regarded as a mature and confident nation, stable and consistent, who believed in ourselves and in our values. That was especially true of the Conservative party, but I am sorry to say that it is not true of the national reaction to the European Union. Events in the Chamber reflect the mood of the country as a whole.
The chapter that starts with the launch of the Common Market, as it then was, is an unhappy one in Britain's history. Even though Churchill was in favour of joining in 1948, we held off from the launch; then we were rebuffed by de Gaulle; only later did we get in. As soon as we were in, we held a referendum in 1975, which, we were told, would end the debates; it failed to do so, as today's debate demonstrates. Here we are, 25 years or more since joining, still arguing.
Of course there are problems in the European Union, and of course we must have a detailed debate about what should be done in the IGC to make an enlarged Europe function effectively, but the tenor of so many people's argument is negative, destructive and unhelpful. People say that they believe in the European Union, but their approach is neither positive nor constructive. We must widen our horizons and understand that the European Union is working, and that it is in Britain's interest to be part of it and make it work even better.
The attitudes that are so prevalent in this country and that have been so well reflected in many of the contributions to the debate today are based on a resolute determination to ignore what has happened since the war. We are all proud of our great national history, our empire, the sterling area, the role that we played in two world wars, and our relationship with the United States. We find it difficult to understand how much the world has moved on and how much more rapid and fundamental that change will become in the years ahead.
That should not make us retreat into our shells and become little Englanders. We should recognise that we are a fortunate and well-endowed medium power, with many opportunities. One of the crucial opportunities is the European Union, which is an extraordinary construct. Even its critics should recognise that. We must be inside it to make it work in a sensible direction—in our direction.
I hope that I do not offend too many other countries when I say that the history of western Europe has always been the relationship of the three big countries—France, Germany and Britain. Even my Spanish and Italian friends would agree with that, I think. Within the troika, the balance moves one way or the other. Sometimes it is Blucher and Wellington against Napoleon, and sometimes

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it is the entente cordiale. Since the war, for all sorts of reasons, some of them better than others, there has been the Franco-German axis.
Far from being frightened of that, we should seize the opportunities offered. We have so many allies in the EU, but that is not apparent from the general tenor of the debate. We have songs to sing and products to sell in the EU. We need free trade and openness, and a constructive relationship with the United States, to make NATO work.
We know what we stand for, but it is no good being a shrinking little offshore island, not playing a positive part in the game. That way lies the marginalisation of Britain. It is no good thinking that we can somehow join the North American Free Trade Agreement and become the 53rd American state.
We must seize the opportunities offered to us. The opportunity available to us now, apart from making a success of the IGC, is the euro. It is extremely important that the debate be opened up. The silence and the pussy-footing on the part of the Government, particularly No. 10, have been lamentable, but I welcome the recent stirrings in the Cabinet ranks and the attempts to put the issues on the table. Let us have them out.
We are told that there are risks in going into the euro; there certainly are. However, we are not told much about the risks of not going in. They must be described between now and the election and between now and the referendum, which has to be held. Although the euro is an incredible subject on which to hold a referendum, that is now a given factor in the equation.
We must understand the damage that will be done if we stay out of the euro. We can already see it with the high pound and what has happened to Rover and Ford—about 200,000 jobs have been lost in the past two years. As the euro becomes more and more established, the poor old pound will be squeezed between it and the dollar. That squeeze will be greater when Greece and possibly the other two countries join, and we may be the only EU member outside. That will produce tremendous volatility. The volatility of our currency—not necessarily only a high pound—causes so much damage to our own manufacturers and discourages inward investment. We have rightly prided ourselves on how well we have done with inward investment over the past 10 to 15 years, but that will be under serious threat if staying out and playing fast and loose with the EU continues.
The transparency that a single currency provides must be of huge value to this country as well as to others. We already have access to a market of 300 million people and an element of having that access must be the single currency itself. We are losing influence in Europe and it cannot be that our interests are protected when the 11 Finance Ministers of euroland meet, leaving those of Britain and three other nations outside. We are absent, but we must be there. We can debate when, how and at what rate.
I have serious reservations about the adequacy of the five tests of which we always hear from the Chancellor and the Prime Minister. What happens to the exchange rate is crucial. I would not seek to diminish the problems of getting us lined up to go into the euro. However, as the Organisation for Economic Co-operation and Development recognised the other day, it is entirely
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feasible that they could be overcome within 18 months or two years. I hope that all the necessary bricks are put in place so that that can be achieved.
There will be other difficulties, but not nearly so many as we hear about. Famously, we hear that we will end up paying for German pensions. That happens to be specifically excluded by the treaty. I do not hear the French saying, "Whoopee! We will pay for German pensions." That is not a realistic issue. So many of the other scares, which are the constant diet of many Members from the two major parties, are misleading and do great harm to our nation.
For goodness' sake, let us recognise the modern realities of coming into the 21st century—we are not quite there yet. We have great opportunities that are represented by Britain being a full member of the EU. We cannot be a full member until we use the opportunity of European monetary union. That can be achieved with rearrangements of sovereignty issues, which will by no means damage our national identity. Have the French lost any national identity since the euro was launched? The answer is certainly not. Let us have more national self-confidence; then we can make a success of the euro for our benefit and that of the rest of western Europe.
5.14 pm
Mr. Austin Mitchell: It is always a pleasure to follow the hon. Member for Wycombe (Sir R. Whitney) and his naive, Foreign Office-bred enthusiasm for Europe and all its works. Perhaps he should change the slogan, "My country, right or wrong," to "My Europe, right or wrong." I observe only that the hon. Gentleman is obviously still crazy after all these years; it is just that the nature of his asylum and the expressions on the faces of the warders around him have changed.
I have not spoken in a European debate for a long time. [HON. MEMBERS: "Hear, hear."] I knew that enormous regret would be expressed. I thought that at this stage in the life of the Government it was time for a futile gesture. I should like to declare that I have a past that I have been trying to live down. I adhered to the truth that now, at least in the Labour party, durst not speak its name: I was a Eurosceptic. In fact, I still am. I have kept quiet about it because I did not want to affect my promotion prospects, but time is slipping away.
When I observed the dewy-eyed, naive enthusiasm for Europe in the faces of all my young friends—we are a young party now, refreshed and enthusiastic—I could not bear to tell them the truth about Europe, just as I could not bear to tell my grandchildren that there is no Santa Claus. Besides, it is fun watching the learning process that all Governments go through. Even Mrs. Thatcher was enthusiastic about Europe when she came to power and said that we were going to make our mark in Europe. The right hon. Member for Huntingdon (Mr. Major) said that we would be at the heart of Europe. We have come to power saying much the same rhubarb, but within a short time, we have been driven back into a recalcitrant position because of the remorseless drive towards unity which steamrollers over anything that this country has to contribute.
We are now reaching yet another of the crunch points that we experience in Europe, and it is the biggest since Maastricht. There is pressure to build a European

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superstate with all its appurtenances. While Europe is applying that pressure, the British public are having an increasingly strong reaction against spin and truth doctoring. Frankly, they are fed up with it, and so they should be. However, spin and truth doctoring are the cement that holds Europe together. The people no longer believe the rhubarb, whether it comes from the Government or the world's biggest rhubarb manufacturer, the European Union.
It is time that Labour Members and the Government, whom I support so strongly and energetically, are clear about what is happening. We always over-egg the case for Europe. It has produced so few real gains that it has to be hyped up as having enormous benefits. The leader of the Liberal Democrats is constantly telling us about the enormous gains that we make by being in the single market. I query that. We are still contributing, and our net payment is to rise to £4.5 billion. That is equivalent to a tariff on the goods that we export to Europe which is higher than the 4 per cent. external tariff that the EU would impose on us if we were not a member.
We carry the burdens of the common agricultural policy, even though that does not suit this country, as a net food importer. We carry the burdens of the common fisheries policy. If the single market is so good for us, why did we have a £64 billion cumulative trade deficit in the five years after it was set up, whereas our real surplus with the rest of the world was £48 billion in the same period? The single market has not given us the benefit or economic advantage that was claimed for it, yet we keep hyping it up.
That is the process of deceit that says that the people must be told things that are not true. They do not—they can stick with the truth. They might decide that it is worth while being in Europe for political reasons, but that is their decision; we do not have to tell them tall tales about the enormous benefits that we get, when they are not benefits at all. It is wrong to negotiate from the position that we will be weak and deprived of an enormous benefit if we rock the boat or resist the pressures from Europe to go further.
It is wrong, too, to scaremonger. I am glad to see the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Leicester, East (Mr. Vaz)—and he is a friend—on the Front Bench. He wrote to me and other hon. Members enclosing a copy of a speech in which he said:
We know where the anti-Europeans are—
"We know where you live brother." I hasten to add that he did not put that in handwriting at the end of the letter, as Lord Tebbit said. He said:
we will be targeting more than 60 anti-Europeans.
I was paranoid when the letter came. The speech continued:
We are targeting these people because they are involved in the irresponsible anti-European campaigning that has fostered public support for British withdrawal from the EU.
With the same letter he attached statistics showing that 8,893 jobs in Grimsby face the axe. People on the street corners were sobbing, saying "Protect us from this Keith Vaz, Austin. What are you going to do about it?" The letter said that 3.5 million jobs in the whole country face the axe. That just was not true. That was based on research by Professor Iain Begg, who should have had more concern for his academic integrity than to allow it
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to be published under the heading, "Jobs facing the axe", when, essentially, it was jobs which, in part or whole, were involved in trade with Europe. They did not face the axe. No one suggests that trade with Europe will stop. Even if we pulled out totally, it would not stop.
On the one hand there is the creation of fear, that if we do not go along with Europe we will all be unemployed, no investment will come to Britain and we shall be starving in the streets, and on the other hand there is the creation of a puff pastry picture of Europe with its infinite benefits. That reduces the whole process to a farce, which alienates the British people.
Now we face another crunch. My right hon. Friend the Member for Llanelli (Mr. Davies) said that the wagons are rolling. Well, the tanks are massing. This time there is a process of state building, because it covers defence, rights, law, currency—the central powers of the institution. That is always the case in Europe. When in doubt, drive the thing forward. The doubts were enormous in 1978, so the exchange rate mechanism was created to drive it forward. As a result, we had two decades of low growth and high unemployment.
There were doubts and hesitations again in the late 1980s, and the result was Maastricht. Now the whole thing is stalled. We have arguments between the Parliament and the Commission and between the Commission and the Council of Ministers. We have the argument over going wider and deeper. The whole thing is stalled. So, when in doubt drive forward, which is what is now being done.
President Chirac told us that the Franco-German drive motor is now running again—in the tank towards centralisation. The pressure is on. My right hon. Friend the Foreign Secretary says that we shall resist qualified majority voting. I am delighted to hear that, but there is a range of issues. There is qualified majority voting—the euro 11 of the Finance Ministers of the states in euroland. There is the argument about making VAT uniform. There is the CAP argument, because the CAP reform, which Britain wanted and for which our Agriculture Minister pressed strongly, was completely stalled by the torpedoing by the French of the Agenda 2000 proposals, and the withholding tax argument continues.
The problem is that we are fighting on so many fronts. Arguing and fighting in Europe is like wrestling with a blancmange—one is pushing at one point and engulfed at another. There is not a single front on which one can proclaim victory and come back saying, "Peace with honour," or "A piece of blancmange with honour." That is the engulfing process in which there is more horse trading than there is this week at Appleby horse fair. That is the system by which it lives.
We must have a clear position—thus far and no further. To come back and proclaim victory on e-commerce, or some other kind of magic formula that has suddenly converted Europe, is not good enough.
There are similar pressures over the euro. The enthusiasts for the euro as a currency are remorseless. For the European movement, it is a matter of religion. We heard that from the hon. Member for Wycombe. The enthusiasts want it because they believe that it builds unity, but they will not say that, so they conjure up economic benefits for the euro that do not exist. The consequences of joining the euro are disastrous for our democracy. The people know that. It means that we shall

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surrender the power to manage our economy, and run it for our purposes. That applies to our interest rates. I appreciate that we have surrendered power to the Bank of England, but we can take it back. If the power is surrendered to Europe, it is gone for ever. The accountability of a Government who fail economically and are thrown out is also gone for ever. What protest could people make against it? What influence could they have?
In the past couple of weeks, the Organisation for Economic Co-operation and Development report has given rise to the argument again. It simply stated that we were converging with euroland more than some countries in it. However, the real reason for the argument's re-emergence is the high pound. We are considering a sort of surrogacy; people who criticise the high pound view the euro as a way out. It is not. The pound is disastrously high, but it is impossible to turn to the euro to escape from the problems of the high pound.
The exchange rate translates our costs into their prices. It is therefore crucial. If we go in with a high pound, we are locked in at a level of uncompetitiveness, which will make it totally unprofitable to produce or manufacture in this country. We would be locked into that cost structure. Moreover, we must maintain the relative exchange rate for two years before entry.
I went to the Bank of England with a group of other Labour Members, and the Governor talked to us. We witnessed an amazing spectacle. We asked what we could do about the high exchange rate, which is hitting manufacturing. He advocated prayer. My mouth fell open and I began to mumble a few words of prayer. The position is disastrous, not only for exports, but for multinationals, which can no longer attract investment from parent companies because it is uncompetitive to produce in this country. Investment goes to markets with a more competitive exchange rate.
Next year, we will be in manufacturing recession. We are on the down escalator; next year, it will hit hard. It is hitting already—250,000 jobs have gone. If the Government cannot or will not get the pound down not only to protect, but to save manufacturing, it is inconceivable that they will get it down to enter the euro at a competitive rate. Yet they must get it down and hold it down for two years before we can lock into the euro at that exchange rate. All those who speak of the euro as an escape from our current severe problems are talking economic nonsense. It is wishful thinking. Early entry would mean starting the process of getting the pound, which is substantially overvalued, down to a competitive level now. That is the situation for the Government in their negotiations and the economy in relation to the pound.
This debate is reminiscent of 10 years ago. It is fascinating to revert to it. Our Front Benchers now adopt the position that Conservative Front Benchers took 10 years ago. Meanwhile, the Back Benchers are equally divided between euro-enthusiasts and eurosceptics. We are continuing with the same argument. The debate is like a piece of history; participating in it is a fascinating experience.
We must stop the arguments on the euro in the Cabinet. It is crazy to argue—that way lies the right hon. Member for Huntingdon (Mr. Major) and the fate of the
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Conservative party. We must stop pumping out myths about the extent to which we need Europe and the extent of our achievements there. We must maintain a firm and absolutely clear position in the negotiations. We must get Europe in perspective. European countries have had a competitive devaluation and their economies are roaring ahead. Our task is to get our economy roaring ahead to build up our strength. We can then make a decision on the basis of strength.
Several hon. Members rose—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I appeal to hon. Members who are still seeking to catch my eye. There will be much disappointment if the remaining speeches each take up the full 15-minute allocation. I ask hon. Members to bear that in mind.
5.30 pm
Sir Richard Body: I always try to be nice to the hon. Member for Great Grimsby (Mr. Mitchell), because every time he makes forays into my constituency people agree with him. I must say to his hon. Friends that members of the Labour party seem to regard him as a hero, and echo his sentiments. I do not think that the hon. Gentleman need despair about his party. I think that he is expressing the authentic voice of the rank and file of the Labour party. Some years ago, just a few people were trying to express the views of the rank and file of the Conservative party and eventually won the day, so I like to think that he, too, will win if he sticks at it—that is what he must do. He must keep at it and not worry about Boston and Skegness.
The Order Paper gives a list of documents that are relevant to the debate. It is disgraceful that so little time has been allocated to the debate, and therefore little has been said about those important documents, all of which have a bearing on the lives of the British people. I would like to touch on one of them, Cm 4762, which is the Government's half-yearly report on developments in the European Community in the latter part of last year. There is only one thing about it that cheers me up: I like looking at the photograph the Minister with responsibility for Europe, the hon. Member for Leicester, East (Mr. Vaz)—it shows his usual kindly nature. Apart from that, the report is pretty awful and rather frightening.
According to the report, 22 areas of Government policy have been transferred, either wholly or partly, to Brussels, every one of them as a result of legislation passed by the House. In addition, 62 judgments of the European Court of Justice have a bearing on how we must behave in this country. Not one of those judgments would have been possible a quarter of a century ago, yet every one of them was decided according to procedures and principles that had been alien to our system of law over almost a millennium.
The report also lists 15 treaties that have been entered into on behalf of this country within that six-month period. In the past, no treaty was binding on this country unless it was ratified by the House. None of those 15 treaties was ratified by the House. That statistically supports what the hon. Member for Great Grimsby said. Power is rapidly moving away, and we are nearing the end of the stepping stones that take us to a state far different from what we were a quarter of a century ago.

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It is understandable that Governments—I regret to say successive Governments—like this procedure. It is only too easy for a Minister or his civil servants to slip across to Brussels with some pet notion of how the British people ought to be regulated, and to meet some official who would gladly extend his role. The proposal would go before a Council of Ministers or would be made in secret, with no member of the public entitled to overhear the discussion and no member of the media allowed to be present. We then find that it has been added to the law of this country.
We now have 80,000 pages of law that we must comply with, none of which has been passed by the House. That should shame those who have gone into the Lobbies to vote on matters about which they know hardly anything.
One can understand the Government's wish to act in such a way. It is irritating to have to come here and persuade the House, Committees and then the other place of the need for a change in the law. It is sometimes very frustrating. The procedures that we are discussing, however, are intended to work in the way I described just now.
Those of us who read law years ago may remember the words of a great English jurist, perhaps the greatest of all. Blackstone said—although he said it long ago, it is still true—that freedom lies hid in the interstices of procedure. When we streamline procedure as we have in this instance, by enabling legislation to be passed in Brussels rather than here, we should remember that we are talking about people's freedom.
Governments can do nothing unless they first take away our freedom or our money. They have two weapons: legislation and taxation. Both are powers of coercion which, in a democracy, can be justified only if they are approved by a majority of those who will be coerced. They must be approved directly, or approved by elected representatives in an assembly such as ours, answerable to those who will be coerced.
We are moving—have already moved, over the past quarter of a century—very far from that fundamental principle of democracy. If the hon. Member for Great Grimsby continues to say what he has been saying, his party will doubtless be forced by its rank and file to appreciate that what is being done was provided for by the Amsterdam, Maastricht and Rome treaties, and the Single European Act. All those measures were steps against democracy. The damage that has been done can never be rectified by any European Parliament, however it is elected.
Much of the debate has been about the enlargement of the Community. We speak as though the centre of Europe were Brussels or Strasbourg, although I believe that, geographically speaking, it is somewhere in Lithuania. This is the tragedy of what has happened in the past half century, or indeed the past decade. We had an opportunity to end a thousand years of history during which Europe has been divided. When I say "Europe", I do not mean just western Europe; I mean Europe truly. I mean the Europe of Tchaikovsky and Chekhov. That is Europe just as much as our part of Europe.
Any major war that has taken place in the past half century, or is likely to take place in the future of our continent, will have been, or will be, a war between eastern and western Europe. We should therefore lose no opportunity to unite all Europeans within an institutional
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framework of some sort. Obviously that cannot involve an acquis communautaire leading to every candidate's being required to sign up to everything that has already been agreed to; such a position would be intolerable. We must have a looser, more flexible arrangement, enabling us to co-operate in groups when it is in our interests to be in such groups. We need to co-operate on many issues that are now crossing the frontiers of the individual nation states of Europe.
The proposals that will be considered in Nice and thereafter in negotiations will not face up to the possibility that I have described. That is a tragedy. It is sad that many Labour Members, with some notable exceptions, fail to recognise what Europe really is and how important it is to bring some sensible unity to our continent, which it has lacked for too many centuries.
5.40 pm
Ms Jenny Jones: I am grateful for the opportunity to contribute to the debate. May I pick up on the final words of the hon. Member for Boston and Skegness (Sir R. Body), who talked about the importance of uniting what I call the greater Europe? That is the issue that I want to address.
Great interest has been shown, in Parliament and outside, in the charter of fundamental rights. The relevant documents to the debate include the report by the Select Committee on European Scrutiny on the forthcoming intergovernmental conference. If Members read it, they will see that the Committee has done a lot of work in examining the need for the charter.
The House of Lords Select Committee on European Union has produced a report completely on the charter, and I understand that the other place will debate it soon. In February, we had an Adjournment debate in Westminster Hall on the topic. Naturally, the Council of Europe Parliamentary Assembly debated the charter in January and it will do so again at the end of the month.
I wish to make it clear from the outset that I am an enthusiastic supporter and advocate of human rights protections. I have the privilege to be part of the United Kingdom delegation to the Council of Europe Parliamentary Assembly. I am extremely happy with our Human Rights Act 1998 because it means that, at long last, we have incorporated the European convention on human rights in our legislation. I look forward with interest to its being implemented later in the year. It is because I am so keen on human rights that I am extremely wary and uncomfortable about the charter. It will present us with an awful lot of difficulties.
If the European Union wishes to demonstrate its commitment to human rights, I have no problem with that. Apparently, one of the reasons why it wanted to embark on the charter was to have something that demonstrated to the citizens of the EU that it was serious about human rights. If it wishes to do that, it can take the relatively easy step of acceding to the European convention on human rights, which it has considered doing several times. Before someone reminds me, I know that the 1996 European Court of Justice ruling put a bit of a dampener on that, but I gather that the EU is revisiting the possibility of acceding. The reports of both the European Scrutiny Committee and the European Union Committee recommend that. In January, the Council of Europe Parliamentary Assembly formally invited the EU to accede to its own convention on human rights.

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The process of drafting the charter is well under way. As is the nature of these things, it will no doubt grind on inexorably towards a conclusion, but one of my fears is: what will we get when drafting is concluded? It seems rather odd to embark on drawing up a charter when we do not know whether it will be just a declaration, or legally binding.
My hon. Friend the Minister for Europe has made the Government's position clear: they just want a declaration. If that were the only option available, that would be fine, but he knows as well as I do that other EU members want a legally binding charter. They want it to be justiciable. He knows that representatives of those member states and our representatives sit on the drafting body. They have had some heated discussions centring around whether the charter will end up as a declaration or be legally binding. It is a little unfortunate to have embarked on the thing without resolving from the outset exactly what the EU wanted to achieve.
I have reservations about making the document only a declaration. If the declaration is meant to show European Union residents that the Union is serious about rights—be they human, fundamental or other rights—residents should reasonably expect the declaration to have some teeth. If they feel that the declaration does not ensure their just rights, they may expect to be able to do something about that. I think that, when they realise that they can do nothing about it, disillusionment will quickly set in.
I should, however, like to explain why a legally binding charter would be not only bad news, but dangerous for human rights protection in greater Europe. I assure the Minister that I am trying to assist him and to strengthen his arm in the wrestling match which I suspect will await him when the drafting body has finished writing the charter.
I am not a lawyer, and I have never had legal training. Although I have been to three universities, they were definitely very non-elitist. Nevertheless, it does not take a lawyer to work out very quickly what would happen if Europe had two systems of legal rights protection and two courts trying to judge on human rights matters—we would end up with a complete mess.
Mr. Mitchell: And a lot of jobs for lawyers.
Ms Jones: We will not go into that subject just now.
With two systems, we would end up with all the problems associated with conflicting jurisdictions. Therefore, almost everyone from whom the European Scrutiny Committee took evidence felt that a legally binding charter was an extremely bad idea. I remind the House that the Committee took evidence from, among other people, a judge from the European Court of Justice and one of the United Kingdom's leading human rights barristers.
My main concern is that a legally binding charter would result in a two-tier system of human rights protection in greater Europe. We could end up with a system in which the older and richer western democracies are within the charter's jurisdiction and use the Luxembourg court, whereas the Council of Europe's 26 other members are left out in the cold and remain within the jurisdiction of the European convention on human rights and the Strasbourg court.
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One of the Council of Europe's greatest features is the work that it does for the younger democracies that join it. Usually, those states are leaving communism behind and rely greatly on the council to help them to establish the rule of law and various democratic procedures, including human rights protection. Every single one of the states seeking to join the European Union is a member of the Council of Europe. When they see the European Court of Human Rights hand down judgments against countries such as the United Kingdom, as occasionally happens, and when they see the United Kingdom Government agree to abide by those decisions, they receive an important message. The message is that the European convention on human rights is applied equally across all 41 member states, and that—regardless of whether a country is a founding member of the Council of Europe and has a centuries-old democracy, or is a newer member that embraced democracy in just the past one or two years—human rights protection applies evenly to everyone. The message is extremely important for younger democracies and newer members.
My biggest fear is that, if the charter becomes justiciable and we end up joining what might be considered to be the more exclusive or superior human rights protection club, we shall be sending the completely wrong signal to the Council of Europe's remaining members. We would be seen effectively to be turning our back on the other 26 members. By looking to the Luxembourg court, we shall inevitably be weakening the Strasbourg court and the European convention on human rights. I think that it would be dangerous to take that route on human rights protection in Europe.
I am disappointed that the European Union has decided to take that route, primarily because I think that it has much better things to do with its time. Enlargement of the EU is important—I completely agree with it—and much work needs to be done if it is to be successful. The UK Government have made their position clear: they want only a declaration. As we all know, the nature of the horse trading—I am aware of what I am saying when I use that phrase—that goes on in Europe, which sets the tone for the negotiations, will mean that immense pressure will be put on my hon. Friend the Minister of State to go along with a charter that is legally binding. That may not happen this year, but it will in a few years' time. If it happens, it will be a sad day for human rights protection in greater Europe.
5.50 pm
Mr. William Cash: The value of the report from the European Scrutiny Committee lies largely in the fact that, contrary to all the spin that we get about Europe from both sides of the argument, it describes what is really happening in the European Union. I strongly recommend that people read it for that reason, if for no other.
I also strongly support my party's position, including its general view on preventing political union and on the saving of the pound. The question that I wish to address, which is relevant to both sides of the House—there are differences of opinion on both sides and throughout the country—is not merely whether a problem exists, but what we are going to do about it. The remedy simply cannot be achieved without fundamental renegotiation of the treaties.
I was delighted to hear from my right hon. Friends on the Front Bench that we shall oppose the Nice treaty, although how far and to what extent has not been made

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explicit yet. Furthermore, we would subject any additional powers that might be granted under the Nice treaty to a referendum. However, the tree of European government has grown from the root of the Maastricht treaty, whereas the Single European Act and other previous treaties were not about European government, although they involved degrees of political co-operation.
The fundamental reason that we need a referendum on the Nice treaty—and on the Amsterdam and Maastricht treaties, and therefore the whole issue of European union—is that the issue is one of European government, as many right hon. and hon. Members who have spoken today have conceded. If the question is who governs Britain and how, and we are prepared to have a referendum on the treaty of Nice, it follows—as night follows day—that we must have a full and comprehensive referendum on the root of the problem, which is Maastricht itself and the treaty on the European Union.
The guiding principle on those questions, for both parties, must be the national interest, and not merely party unity. I urge my right hon. and hon. Friends, and—if I may presume to do so—Labour Members to bear that in mind. In respect of our great Conservative party, we have been through all this before on several occasions in the past 150 to 170 years. For example, we went through it with repeal of the corn laws, with tariff reform and home rule, and with appeasement in the 1930s. Although there were apparent splits in the Conservative party on those occasions, the matters involved were resolved in the national interest.
With the corn laws, for instance, Peel eventually had to resign, and the Conservative party adopted a policy of free trade. We progressed from that to democracy. A free market and a free political system run together—one is not possible without the other. The same process applied to the question of the future of Europe in the 1930s.
The national interest will prevail in the Conservative party. I am delighted at the direction adopted by the present leadership of the party. If I urge the party's leaders to go a little further than they would prefer, I do so because I want them to succeed. I believe that we will succeed if we have a policy that is clear enough for the British people to understand.
I also believe that if we do so we will close the 3 per cent. gap between the Conservative party and the Government. I pay tribute to my party's leadership for everything that has been done to narrow the gap. I congratulate the Government on what they have done to contribute to it as well—as the Prime Minister might have said to me on another occasion.
An interesting poll of Conservative Members has been held over the past year and a half. It was a confidential poll, prepared under the auspices of Nottingham university. I make no secret of its findings, which have appeared in the newspapers. Indeed, I wrote an article about them for The Daily Telegraph some time ago.
The poll found that 67 per cent. of Tory Members responded positively to the question whether they wanted to rule out the single currency for ever. It does not follow that people who repudiate monetary union and the single currency and want the treaties to be renegotiated must therefore want to withdraw from the European Union.
Mr. Donald Anderson: It is even more alarming that a similar poll of candidates selected to represent the Conservative party in safe seats found that they are as extreme as existing Conservative Members of Parliament.
Mr. Cash: There is nothing extreme about wanting to preserve democracy. In this debate, hon. Members of all parties have refused to see the extent of the powers that would be conferred on a European central bank if Britain were to adopt the euro. In fact, the Red Book shows—and the Chancellor has admitted—that this country, as a result of the stability and growth pact and the Maastricht treaty, is already within the confines of European economic government. However, that is a separate but important question.
The arrangements for the central bank mean that the bankers from the member states would not be allowed to seek or take instructions from member states. That means that we risk having our democracy and accountability taken away. No Member of Parliament, Conservative or Labour, would be wrong to insist on ruling that out absolutely.
The extent of the central bank's proposed powers is the reason why some 70 per cent. of people would reject the single currency. Real people in this country—not the euro-fanatics or the theoreticians—know what is at stake. If we lose the right to govern ourselves, we will lose the right to family life and to existing within our nation and our society. It affects every aspect of our lives.
On the question of renegotiation meaning withdrawal, let me say that we cannot predict the outcome of negotiations. Every single negotiation—and the IGC is yet another—is conducted under the auspices of article 48 of the treaty. It is here in the European Scrutiny Committee report on the IGC and it has been reaffirmed time and again. It states quite clearly:
Article 48 of the Treaty on the European Union (the TEU) prescribes the procedures for its own amendment and that of the Treaties founding the three European Communities. The process is begun by any Member State or the Commission submitting proposals for Treaty amendments;
it does not say one way only.
There is an obligation on the Government to have regard to the wishes of the British people and—if the 70 per cent. figure that I have given is anything to go by—to table amendments in line with those wishes, and not to take the view that people's rights can be taken away and their democracy undermined by giving in to the kind of system that is now under way.
I now turn to other matters and begin with defence. At about midnight, a paper became available that should have been provided to the European Scrutiny Committee yesterday. It sets out "Principles for consultation with NATO on military issues and recommendations on developing modalities for EU/NATO relations". I alluded to it briefly in an intervention in the Foreign Secretary's speech. I wish that I could read it all out, but I shall not.
Yesterday, the European Scrutiny Committee considered papers in respect of the strengthening of the common European policy on security and defence. The explanatory memorandum that was signed by the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leicester, East (Mr. Vaz), stated:
These proposals are likely to be implemented in due course by amendment to the Treaty on European Union. These will be put forward in the context of the Inter-Governmental Conference which

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is due to begin early next year. The Government supports the proposal in the report for interim arrangements to be put in place within the EU before any permanent measures are ready for consideration in order to ensure a consistent and coherent approach to the development of military structures within the EU.
I dare say that the Minister for Europe knows—certainly Defence Ministers will know—what the EU structure comprises. It involves, for example, references to our potential adversaries having access to nuclear weapons, so we are not talking about a minor issue. The Minister looks puzzled; perhaps his officials forgot to put that in his Red Box.
The permanent structure to which I have referred crops up yet again in the paper that was presented late. It states:
While being mutually reinforcing in crisis management, the EU and NATO are organisations of a different nature.
It also sets out the following principle:
Development of consultation and co-operation between the EU and NATO must take place in full respect of the autonomy of EU decision-making.
It could not be clearer that under these arrangements—buried in the middle of the night and not revealed, as they should have been, by the time of this debate, with the Government covering up so that we would not be able to debate them properly—there is a problem that is identified in the Defence Committee report, which was annexed yesterday, but which there was no opportunity to read in time. It says:
This is not a new problem, but the new arrangements will create their own new set of tensions. There must be absolute transparency between the EU military element and NATO at all times and in all circumstances. There must be no secrets between them …
Therefore, we have a great deal to consider in relation to this IGC.
We also know that there are proposals for the common foreign and security policy to be made an integral part of the treaty arrangements. I should be very interested to know whether the Minister for Europe is prepared not merely to waffle about it but to tell us explicitly, as he has not done with respect to the charter of fundamental rights, that we will not merely rule it out, in the words of the Foreign Secretary, but veto the proposals. These papers, which are for Feira, clearly show that these matters will be discussed at Feira and that they will do immense damage to the British people.
Finally, I do not agree with the notion of flexibility. The hard-core, two-tier Europe was run out by the Conservative party in the 1996 elections—
Mr. Deputy Speaker: Order. I call Mr. Kelvin Hopkins
6.6 pm
Mr. Kelvin Hopkins: One of the great pleasures of entering the House was that it gave me the opportunity to listen to the speeches of my right hon. Friend the Member for Llanelli (Mr. Davies) and of my hon. Friend the Member for Great Grimsby (Mr. Mitchell). It is a special pleasure today, because I actually agree with them. Right hon. and hon. Members will not be surprised, therefore, when I say that I do not support economic and monetary union.
I was most interested by the contribution of the right hon. Member for Skipton and Ripon (Mr. Curry), who said that EMU and the single currency were about the Thatcherisation of the European economy. If by that he
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means supporting neo-liberalism, the free market and taking the Government out of the economy, I agree with him, because that is what the EMU project is about. Taking away from elected Governments the power to operate the levers of macro-economic policy, leaving the rest to the market and letting it do its worst is surely the Thatcherisation of an economy. That is what I think that the project is about, which is why I oppose it.
I believe that democracy is about having control of one's economy, even within a relatively "marketised" economy such as ours. It means having control of the macro-economic framework in which it operates and having a system of laws, taxes and fiscal policy that govern the way in which our lives are run. It gives us our living standards and a sense of equality, redistributes income, and so on. It is legitimate and necessary for democratic Governments to have some control in that respect. This project is about taking away that power, which is why I ant unhappy about it.
I was also interested in the right hon. Gentleman's reference to the contrasting views of how Europe should progress within the European Union as it stands—the dirigiste versus the neo-liberal. The right hon. Gentleman is right. Sadly, one or two genuine friends, such as John Monks, secretary general of the TUC and former colleague, think that they are signing up to the dirigiste version when they support the single currency, but I think that they are signing up to the free market version. This is where we have an interesting debate.
There is tension in Europe. When it becomes clear to people, particularly in the trade union movement for example, that we are moving towards a much more open free market and away from laws that protect working people and ordinary people, I think that they will start to think more seriously about it.
There is scepticism within the European Union even now. I have spoken at many meetings with colleagues from the continent. Indeed, some time ago, I asked Finnish newspaper editors what the view was in Finland where, in general, the population is opposed to the single currency. I asked. "What would you do if there were a referendum?" They answered, "We wouldn't have a referendum because people would vote the wrong way."
I am glad to say that our Government will be holding a referendum, and I hope that people will vote in what I think is the right way. I think that the majority view is against having the single currency in Britain.
Another interesting point is the emphasis on economic success in the European Union. In the 1960s, there was, in total, a growth rate of 5 per cent. in the European Union, which was higher than that of the United States of America, and there was relatively full employment. At present, the growth rate is about 2 per cent., with about 10 per cent. unemployment. Growth in the EU was ahead of the US, but it is now well behind. I do not suggest that we should adopt US policies; I am only demonstrating that the EU has not been successful in economic terms.
It is interesting that some EU countries are doing quite well. One is the UK. We have lower unemployment than the rest of the EU. Sweden is doing even better; it has a rapid growth rate, a healthy economy, high living

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standards, an expansive welfare state and lots of worker protection, as well as low inflation. It is significant that Sweden and Britain are outside the single currency.
Swedish newspaper editors and representatives of Swedish business organisations have told me, "Your views are the same as those of the Swedes." I am glad that the Swedes are so sensible—they, too, hold the view that co-operation in Europe is fine but that the single currency, EMU model is not.
It has been suggested that people who share my views are against Europe. I am a European, root and branch. In a few weeks, I shall be sojourning in Burgundy, sampling its pleasures. I love Europe; I go to the continent for my holidays every year. I try to speak other European languages—although not very well. I am a European in every sense, but I do not support the particular economic project—EMU—that is being proposed.
There are alternative ways to run Europe. We have heard some suggestions during the debate. On another occasion, my right hon. Friend the Member for Chesterfield (Mr. Benn) proposed a democratic commonwealth of nations in Europe—stretching from the Urals to the Irish sea. That would not exclude any nations; nor would it promote the dangers that have been referred to in the debate—for example, that there would be a hard division between those countries that were in Europe and those that were in the EU.
Mr. Bercow: I hope that the hon. Gentleman will not pursue his economic reductionism too far—notwithstanding his views on the Thatcherisation of Europe. Does he agree that, when the President of the European Commission, the president of the European central bank and the Chancellor of Germany all agree that the European single currency project is about the creation of a European state, it is incumbent on the Foreign Secretary to explain why they are all wrong and he is right?
Mr. Hopkins: My right hon. Friend can speak for himself, so I should not presume to answer that question. Hon. Members can probably guess my views.
During the past few years, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), a former Prime Minister, has spoken in the Chamber against enlargement. He realises that it would change the nature of the EU; it would loosen the bonds that have built up between a tightly knit group of western European nations. That is why he is against it. I am inclined to support enlargement for the same reasons—provided that it goes right across Europe. It will force us to think about a reasonable way forward for Europe rather than pursuing the EMU project. There are alternatives.
I speak in jest but I was reminded recently that, some years ago, there was a proposal for a socialist states of Europe. I am not a Trotskyist but apparently, in such circles, they talked of little else 30 or 40 years ago. Despite my democratic socialist views, I think that is unlikely, but it is an alternative possibility.
There are many approaches that Europe could adopt—including the big tent or the commonwealth of nations. I hope that the Government and the House will examine them objectively and fairly and that they will not plunge straight into EMU and the single currency—that would be a mistake.
6.14 pm
Mr. Ian Taylor: We have heard a fascinating example of a fourth way for Europe—yet another version, among a highly eclectic collection, of Labour differences on the issue. Each rivals the other in its exotic nature.
I came across another example this week. Unlike my right hon. Friend the Member for Wokingham (Mr. Redwood), I had the great pleasure of finding a Labour personage prepared to debate with me. I had a debate with Lord Healey, who was in tremendous form. He disagreed with the current Chancellor of the Exchequer and also contradicted himself, which made the debate quite spicy. It was on Sky television, on which the hon. Member for Great Grimsby (Mr. Mitchell) has often exercised his influence.
Some rigging took place before this debate. I was approached and it was suggested to me that, if I did not speak in the debate, my hon. Friend the Member for Staffordshire could be prevailed upon not to speak.
Mr. Cash: I represent Stone, actually.
Mr. Taylor: Stone is in Staffordshire, but I apologise to my hon. Friend the Member for Stone (Mr. Cash) for getting his constituency wrong. However, I chose not to exercise the voluntary restraint that was suggested, because I thought that the certainties of the European debate would be undermined if the two of us did not take part.
Mr. Donald Anderson: Will the hon. Gentleman give way?
Mr. Taylor: I will not, because I am under time constraints. However, the hon. Gentleman may catch my eye later when I am fully into my swing.
I begin by agreeing with the speech that my right hon. Friend the Member for Horsham (Mr. Maude) made in Berlin. He said:
On any audit of achievement, the European Union has much to be proud of.
He then set out the benefits achieved and added:
We should relish these benefits. So in this spirit, let me reaffirm: membership of the European Union is of real value to Britain.
Like the right hon. Member for Llanelli (Mr. Davies), my right hon. Friend also made it clear that we are in a political union, and that is a point that I want to emphasise. It may underline some of the differences that I have with one or two colleagues.
We joined a political union in 1973 and there was no question about its being a political union. The question was how its politics and structures would develop. Once we joined, we had as much opportunity to influence those structures as any other member. Because we like to think highly of our debating skills, we had more ability to do that than might otherwise have been the case. There is much myth making about how we joined an economic community and that no one told us about the politics. That is balderdash. We left a free trade area to join a political and economic union with its institutions and infrastructure. The European Court of Justice already existed and was pre-eminent in the areas in which the treaties gave it power.

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We joined a political structure and I was part of the campaign in the 1975 referendum to encourage the British people to remain in it. I have always taken the view that we should participate in the debate not only to influence the structures, but to make sure that they work. As a Conservative, I am, at heart, pragmatic. Sometimes we got it wrong. Sometimes our ideas were not forceful enough and we have made mistakes of judgment. The European Union itself has also made mistakes. There have been times when it has been over-interventionist and it has then reacted. After the cassis de Dijon ruling, it took a different route.
Sometimes the European Union has delved too deeply into the detail of matters that we have subsequently decided should be dealt with on the basis of subsidiarity. Many times British Governments, including the Government of whom I was a member, took a general regulation from the European Union and gold plated it to make it so intrusive into the affairs of small companies and other business that it went well beyond the intentions of the original discussions held at EU level.
Yes, the EU can make mistakes; it has not been a perfect entity. However, it would have been extraordinary if it had been perfect because it was created as we went along. There was no fixed game plan. If there were ever a game plan with which we were uncomfortable, that was largely because we had not influenced it, not because it was pre-ordained.
As a pragmatic Conservative, I want the EU to work. I want a single market and I want it to be effective, which means that I want a strong Commission and a strong European Court of Justice. They are vital ingredients in achieving what we want.
The four freedoms are the movement of goods, of services, of people and of capital. Once we established a single capital market—many of us thought that it would be almost impossible to achieve—Lord Howe, then Geoffrey Howe, astonished everybody when he abolished capital controls in 1979–80. Unbelievably, under our influence, the French did the same in about 1987. That happened against all expectations.
Having established a single capital market, we have to understand the implications of it. They are that money will flow round the single market area to find the best return and the best investment opportunity. That flow will not stay stickily in any one country because a Finance Minister or the Chancellor of the Exchequer wants it to do so. In those circumstances, it is essential, first, that countries within the European Union develop common policies that mean that capital efficiency within the EU can be as stable and effective as possible, because that is in the interests of the Union as a whole. Secondly, if for any reason countries differentiate themselves from what I shall call the norm, there will be consequences, both good and bad.
For example, if taxes increase to too high a level, people will move progressively to another country that has more attractive taxation. Thank goodness, taxation stays the preserve, in its broad and most important senses, of the nation state. It is a flexible lever. It is also part of the competition within the single market, and an essential part of the disciplines of that market.
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We have a single market and I want it to be made effective by a single currency. I make no apology for saying that I think that a single currency is an inevitable part of a single market. We could stay out, but I believe that the political and economic costs of so doing will grow. Some people say that all the costs are on the side of the decision to join. I think that it will become self-evident within two or three years that the costs come from staying out. That means that the decision that the British people need to take will come at us sooner than the Conservative party's official policy would allow us to believe.
It does not make sense for us to say that for a finite time—let us say, the next Parliament—we will not join a single currency. The decision must be made now. By "now" I do not mean today. So that the decision can be made in two to three years, the debate must start now.
I hope that the Chancellor of the Exchequer will understand that tonight. I understand that he is to make a speech at the Mansion House later today, and I am sure that he will touch on the matter. I do not expect him suddenly to announce that his five tests have been abandoned. Nor would I expect him to say that those tests, magically, have suddenly been met. He can stick to his mantra, with one exception. It is about time that he said that Government policy is aimed to make it possible to join the European monetary union at the earliest possible moment, and not merely that it would be a good thing if the tests were met. He should make it clear that there is an active will to secure the opportunity for the British people to make a decision on the issue within two or three years, which plausibly is the period that it will take, whether we take OECD or Treasury figures about the way in which our economies are converging.
Staying out of the single currency will involve costs that I believe British industry will not find acceptable. I do not believe that the House would find them acceptable. We are already beginning to see the Euro 11 reinforcing their situation. I predicted some time ago that that would happen, and now it is. They will start to define the terms on which they will reinforce the decision making of the European central bank, and we shall be excluded from that process.
Having said that I want a single currency in a single capital market and that I want the EU to be efficient, I also want there to be the sort of reforms that will make Europe as a whole an economy capable of challenging the United States. We saw the opportunities to do that emerging out of the Lisbon summit. Measures with which I was closely involved when Minister for Science and Technology, such as telecommunications, have begun to have a huge impact on European economies.
In January, in Madrid, I spoke to the Conservative Spanish Industry Minister, who said that one of the contributions that I had been able to make during negotiations on those matters in 1996–97 was to explain why Spain should not take the three-year derogation to which it and Portugal were entitled under the treaties to enable them to liberalise their telecommunications three years after everyone else did. I explained that for Spain to do so would he commercially disastrous. In fact, Spain took only six months—an action forced upon the country because it had not acted quickly enough previously—and Spain is now one of the more interesting economies in

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that respect. Not only has there been an opening up, which continues, but BT and Vodafone are jointly discussing acquisitions in Spain.
The Lisbon summit objectives are vital for the EU. If we can achieve them, they will revitalise the European economy in ways that we now think are impossible. Sometimes, we do not even bother to look at changes that are staring us in the face. For example, there are currently significant developments unfolding slowly—too slowly—in Germany; the Government there are changing the way in which they tackle some of the problems affecting the German economy. In France, the socialist Government—believe it or not—have pushed through more privatisations than their right-wing predecessors, with remarkable implications for the competitive position of French industry, domestically and abroad.
We have witnessed the changes in Spain under a Conservative Government, although it is sad for British Conservatives that the Prime Ministers of Britain and Spain appear to be ad idem: one is new Labour, the other Conservative, but at least in the sense of influencing the debate in Europe and not leaving it to the more dirigiste members of the EU like France and Germany, what they are doing is a good thing. Such reforms are crucial to ensuring that the single currency zone is ultimately successful in a competitive world market.
I want EU enlargement to be successful. Enlargement is a political, social and economic necessity; it is not all about widening versus deepening. The EU requires institutional change to provide an effective structure that can cope with enlargement: that means changes in the Commission and changes in voting procedures—inevitably, there will have to be more qualified majority voting, albeit not in the key areas of defence and taxation. Such changes are an essential ingredient of enlargement.
I hope that the Minister for Europe will take into account a point I made in an intervention on the Foreign Secretary: I remain unsatisfied that the agenda for this weekend's summit properly addresses the timetable for the entry of at least the earliest applicant states. It needs to be made explicit, not only that there will be an intergovernmental conference to discuss the matter, but that there is a timetable that sets targets that both applicant states and existing member states have to meet.
If the EU is to be effective, it needs to tackle the issue of defence. That does not mean that NATO will inevitably be undermined. I take the view that a more active European involvement in defence policy is likely to vitalise the NATO alliance, not undermine it, and many observers in Washington and in this country, for example, Sir Charles Guthrie, agree. Of course, we must be careful and act in conjunction with NATO, but that is precisely what the discussions in Vienna, Cologne and elsewhere have been about.
In all the areas that I have mentioned, Europe has an opportunity to make itself more successful for all its citizens.
6.29 pm
Mr. Richard Spring: In the past few hours of the debate, we have seen revealed a total muddle. We knew about the major splits among Government Front Benchers in respect of the euro, and we have seen it this afternoon under the headline "Cook dumps speech praising euro". The Foreign Secretary left out key
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passages from the speech that spin doctors handed out to the newspapers before the debate. Perhaps the right hon. Gentleman was blinded on the way back from Damascus, or perhaps he was nobbled by the Chancellor of the Exchequer on his way to the debate, especially as the Chancellor is to make an important speech this evening.
The Government's position is a shambles, and the Front Bench is split on a vital issue. The reaction in the Chamber and outside is a humiliation for the Foreign Secretary. There is no proper policy on the euro and no vision for Europe. This is not a brewery; it is the House of Commons.
We heard some excellent speeches this afternoon, expressing various points of view. In an impressive speech, the right hon. Member for Birmingham, Hodge Hill (Mr. Davis) spoke about European security considerations. He referred to problems in Russia, a point taken up by the right hon. and learned Member for North-East Fife (Mr. Campbell). At least on reform of the common agricultural policy, we can agree, although one can only smile wryly at the right hon. and learned Gentleman's suggestion that every Liberal Democrat Member of Parliament shares his enthusiasm for the single currency and his view of Europe.
The right hon. Member for Llanelli (Mr. Davies) made an excellent speech, in which he dealt with defence, NATO and burden sharing. All Governments in Europe are cutting defence expenditure, and the right hon. Gentleman spoke of the difficulties arising from that and about the implications of the single currency.
My right hon. Friend the Member for Wokingham (Mr. Redwood) spoke about the need for honesty in the debate about Europe. He pointed out the fundamental dishonesty of Ministers who will not face up to the challenges of an enlarged Europe.
The hon. Member for Swansea, East (Mr. Anderson) spoke about the effect of the extension of qualified majority voting on European legislation. We make no apology for our views, or for seeking referendums on major constitutional changes that may affect this country. I was a little disappointed that the hon. Gentleman spoke about the views expressed by my right hon. Friend the Member for Horsham (Mr. Maude) in a fine speech which, with respect, I do not think the hon. Gentleman had read fully.
I agree with my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) that the European Union has added greatly to peace and stability in post-war Europe. My right hon. Friend spoke movingly about that. Enlargement is, indeed, hugely important, and the Government seem to be losing sight of the central objective. There is no leadership from the Government in that regard.
The hon. Member for Wimbledon (Mr. Casale) spoke about the views of the European Scrutiny Committee on matters such as the weighting of votes. We all agree that the European Union must succeed, but we do not subscribe to the idea that there should be one size that fits all in an enlarged community.
In a fine speech, my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) spoke about competing models, visions of Europe and the need for clarity. He is right about the process of euro-osmosis—the evolution of concepts such as the social chapter and its effect on

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our law. I applaud the fact that my hon. Friend was one of the originators of the concept of flexibility, which we have taken up and extended.
The hon. Member for East Carmarthen and Dinefwr (Mr. Williams) was honest about his position and specific about the relationship between the deutschmark and the pound. Such honesty is lacking from the views expressed from the Government Front Bench.
We heard a contribution from my distinguished hon. Friend the Member for Wycombe (Sir R. Whitney), who has been consistent in his view over the years. As always, he made a conscientious speech, expressed with genuine conviction.
The hon. Member for Great Grimsby (Mr. Mitchell), in characteristically effervescent form, pricked the balloon of the waffle and soundbites typical of those on his Front Bench.
My hon. Friend the Member for Boston and Skegness (Sir R. Body) spoke about the need for flexibility, and the difficulties of scrutinising European legislation.
The hon. Member for Wolverhampton, South-West (Ms Jones) dealt eloquently with the dangers of the charter of fundamental rights—a bean feast for lawyers—and what will happen if that becomes an annexe to the treaties.
I was glad to hear some support from my hon. Friend the Member for Stone (Mr. Cash) for the views set out by my right hon. Friend the Member for Horsham in a speech made in Berlin. He may not have found them ideal, but I am glad that he approves of much of what my right hon. Friend said. He alluded to the crucial nature of our North Atlantic Treaty Organisation relationship. Very bravely, in a party of control freaks, the hon. Member for Luton, North (Mr. Hopkins) spoke genuinely—[Interruption.] Control freaks on the Back Benches, not the Front Bench. My hon. Friend the Member for Esher and Walton (Mr. Taylor) talked about the single market and the need for deregulation. He has consistently taken a favourable view of the single currency, and called for clarity and for the Government to take an active role.
I am glad that the Foreign Secretary has arrived because we are interested to understand why key passages of his speech were left out. For example, he was to say, "The Feira Council will confirm Greece as a member of the Euro zone. At that point Britain could be the only member state outside the Euro zone." He was also to say that we should "now resolve in principle that we want to be a member." He must consult the Chancellor before talking in those terms. He was also to say, "It is not difficult to identify why there would be benefits for Britain joining in a successful single currency. This Government will not let Britain lose by staying out." Clearly he was nobbled on the way to the Chamber. Why were those passages left out? We look forward to an explanation.
Mr. Robin Cook: The hon. Gentleman was present for my speech. If he casts his mind back, he will remember that I took three interventions during that passage of text. If the House wants to have a debate—it is right that it should do so—it cannot complain if a Minister does not
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read his speech by rote. As to that particular sentence, it is one that I have used at least half a dozen times, and I will use it again.
Mr. Spring: All I can say is that the idea that those omissions arose out of confusion is pretty lame. The Foreign Secretary left a key issue out of a central part of his speech. Perhaps the Chancellor will be relieved that even greater embarrassment not will be heaped on him by that speech. However, by leaving passages out the Foreign Secretary has made things worse.
The debate has once more revealed the parallel universe that Ministers seem to inhabit for discussions in Europe. Almost alone in Europe, the Government repeat their mantra that current developments on the intergovernmental conference, the charter and Europe's future defence identity are likely to be only technical and of no political significance. In August 1998, the Foreign Secretary said:
The concept of Europe as a superstate is one that is deeply unfashionable …
The British people would certainly agree, but, more than that, they simply do not want it. Ministers seem oblivious to the fact that many in Europe are saying the opposite, and my right hon. Friend the Member for Horsham quoted many examples.
The Government claim that the charter of fundamental rights will be a harmless restatement of existing rights, but Commissioner Vitorino says that it will mark a definitive change in the Community, helping it to become "a full political Union". Let us remind ourselves that Gunter Verheugen called for the charter to fulfil its function as the foundation stone of a European constitution. The Government simply will not tell us explicitly whether they will veto in advance the proposition that the charter become part of any treaty annex. The German Foreign Minister has called for a European Parliament and a European Government to exercise real legislative and executive power in a federation.
How do Ministers explain such a total divergence between their statements and those of other EU leaders? Why is it that, almost alone in Europe, the Government appear to be in denial about what is likely to be pressed on them at Nice? They are acting in the way that they always act: they hope that their spin will triumph over substance, but other leaders refuse to be spun and have the annoying habit of telling the truth. For example, echoing Harold Wilson's words about the white heat of the technological revolution, the Prime Minister talked about a
sea change in European economic thinking,
benchmarking and a lot of techno-babble. A matter of days later, the French Prime Minister said that
we do not intend to abandon the social model we have built over the last fifty years …
completely rejecting all that the Prime Minister seemed to suggest.
The Government constantly refuse to acknowledge the path down which Europe is heading because they lack the inclination and the will to put the case for an alternative route and for the kind of Europe that the moderate, mainstream majority of the British people want.
The European Union, on the verge of enlargement, faces fundamental issues. In Berlin a month ago, Joschka Fischer posed important questions, and last week, also in

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Berlin, my right hon. Friend the shadow Foreign Secretary set out the alternative case for a reformed, more flexible, network Europe. Where is the Government's vision? Where do Government Members see Europe in 10 or 20 years? Why do the Government think that Europe will change? How will it change with enlargement?
Why do not the Government show the same clarity of vision for the future of Europe as other European leaders? Why do they refuse to acknowledge, let alone participate in, the debate raging elsewhere? Lack of leadership means that our influence is suffering by default. So much for being in the driving seat—that is total nonsense.
What is happening to the force of European policy? It was reported that a new unit co-ordinating the work of Government Departments on Europe and keeping ahead of the game will be incorporated at No. 10 Downing street. As everybody in the Foreign Office knows, Downing street is effectively controlling more and more of the elements of foreign policy. The Foreign Secretary's position is to be further diminished, and nowhere more so than in the eyes of his European counterparts.
It would be a tragedy if the case were not put, at Feira and at the IGC, for reforms that would enable the EU to respond to the requirements of a diverse, enlarged Europe and a modern world. Many of the Opposition's proposals for the IGC have been challenged by no one in the debate today. No one has leapt to the defence of the current common agricultural policy, which will damage and destroy the process of enlargement if it is not dealt with.
No one has leapt to the defence of the common fisheries policy, nor could they. Even the Minister for Europe has not been heard lauding its equity and its exemplary record on stock conservation. No one has leapt to the defence of the EU's record on international development. The problems, which will become infinitely worse after enlargement, are universally acknowledged. It is just that the Government do not possess the vision to do anything about it. Where is the leadership? It simply is not there.
One of the necessary institutional reforms is for greater flexibility in Europe. Of course there is a need for safeguards in endorsing enhanced co-operation procedures, but on principle, the idea that nations should have more room for manoeuvre is in line with the realities of the modern world. The Government are simply out of date on this issue. The world has moved on from all their talk about fast lanes, inner circles, benchmarking and hard cores.
Cannot the Government see that an enlarged Europe will be more diverse? Cannot they see the need for varying relationships to suit the different needs and wishes of Europe's peoples? Cannot they see that that is the best way to enhance democracy and the accountability of Governments to their electorate for the decisions that they make? Cannot they see that it is the best way to preserve the integrity of the EU and to ensure that all its members feel at ease? We should be working for a gradual development of a Europe of interlocking and overlapping groupings, and of nations coming together in different combinations for different purposes and to a varying extent.
Today we have heard the two alternatives now available as Europe, on the verge of enlargement, stands at the fork in the road. We can choose the old one-size-fits-all dogma of yesterday. Down that road lies discord and disharmony as national interests are overridden. The Government are no friends of Europe for
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choosing that route, whether by design or default, and for allowing the EU to move step by step towards a single European superstate.
If Europe is to succeed in the new century, it must choose the other route. It needs agility and adaptability. A democratic Europe needs flexibility and diversity. It needs freedom and choice. That is a common-sense, rounded vision for Europe which makes sense for the modern world.
The IGC gives us a tremendous opportunity to start to fashion just such a European Union, which can survive and prosper for all its members. Nothing today has reassured the House that, on any level, the Government are facing up either to the will of the British people or the ability of a European Union to survive and prosper in the years to come.
6.45 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Keith Vaz): This has been a good debate, which has examined the agenda for the conference at Santa Maria da Feira next week. Some Opposition Members did not know where Feira was. I can assure them that it is in Portugal and Portugal is in the EU.
Like my right hon. Friend the Foreign Secretary, I pay tribute to the Portuguese presidency for its work during the past six months. The fact that we are following the successful conference at Lisbon with the upcoming Feira council shows the work that has been put in by the Portuguese, and we are grateful for what they have done.
We have had some excellent speeches, including those from my hon. Friend the Member for Swansea, East (Mr. Anderson), who is the Chairman of the Select Committee on Foreign Affairs, and my hon. Friends the Members for Wimbledon (Mr. Casale) and for East Carmarthen and Dinefwr (Mr. Williams). My right hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) rightly mentioned the problems faced in the Council of Europe and the Western European Union, and I pay tribute to him for his work in both organisations. It is good that Javier Solana suggested that he come to this debate to raise those points, because that emphasises the Government's firm commitment to ensuring that defence issues remain an issue for this Parliament. I promise to write to my right hon. Friend on the staffing issues that he raised. He will understand why I do not deal with them today.
My hon. Friend the Member for Wolverhampton, South-West (Ms Jones) raised the charter of rights, with which I shall deal. I also pay tribute to the right hon. and learned Member for North-East Fife (Mr. Campbell) for his usual eloquent and cogent contribution to debates such as this.
We had amusing, witty and whimsical contributions from my right hon. Friend the Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Great Grimsby (Mr. Mitchell). I am so glad that my hon. Friend the Member for Great Grimsby took the opportunity, once and for all, to stamp on the suggestion made by Lord Tebbit that I had written to him and scribbled on the bottom in green ink that we were coming to get him. My hon. Friend has been waiting to make that public denunciation of Lord Tebbit for some time and I thank him for what he has said. My hon. Friend the Member for Luton, North (Mr. Hopkins) also made a good contribution on the single currency.

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From the Opposition, we had a moving and eloquent contribution from the right hon. Member for Skipton and Ripon (Mr. Curry). I am sorry that I was not able to hear his entire contribution, but I was speaking elsewhere on a long-standing engagement with the right hon. and learned Member for Rushcliffe (Mr. Clarke) on European matters, but I know that it was extremely well received by the House and I thank him for what he said.
As usual, the hon. Member for Wycombe (Sir R. Whitney) made a good contribution. He rightly reminded us and his Front-Bench spokesmen that, if some Conservative Members followed the course of action that they wanted to follow on Europe—Mr. Sykes's road—Britain would be left a shrinking little island.
The hon. Member for Esher and Walton (Mr. Taylor) talked about a timetable. My right hon. Friend the Foreign Secretary rightly said that the timetable is the IGC. There is no point in setting timetables for the applicant states unless we get our act together. That is why we have set a strict timetable for the completion of the IGC by December 2000. Clearly, individual countries will have their own timetables. It would not be right to raise expectations, but each applicant wants to join the EU as quickly as possible, and we in the UK are doing everything that we possibly can to help, assist and ensure that that happens.
Mr. David Drew: Understandably, at least on the Government Benches, much of the debate has taken thoughtful account of the views of Mr. Paul Sykes. Would my hon. Friend care to comment on my predecessor, the former Member of Parliament for Stroud, who announced at the end of May that he could no longer stay within the Conservative party and joined the UK Independent party. because, he said, he could no longer accept "the bogus premise" behind the Tory argument, and he felt that the policies put forward by William Hague "do not mean anything"? Who does my hon. Friend think is the more principled individual?
Mr. Vaz: It is a difficult choice. Both Conservative Front-Bench spokesmen talked about forks in the road; perhaps they should have spoken about knives in the road.
The usual suspects also took part in the debate. Our good friend the hon. Member for Boston and Skegness (Sir R. Body) chided my hon. Friend the Member for Great Grimsby for entering his constituency without telling him. I assure the hon. Gentleman that Boston and Skegness remains in the European Union.
Sir Richard Body: The hon. Member for Great Grimsby (Mr. Mitchell) is always most courteous. He has always notified me in advance and he is always welcome.
Mr. Vaz: I am sure that my hon. Friend will be pleased to hear that. It is good of the hon. Member for Boston and Skegness to extend that invitation.
The hon. Member for Stone (Mr. Cash) is cross with the right hon. Member for Horsham (Mr. Maude). He goes on about the Maastricht treaty, of which I have a copy. He should know who signed it: the right hon. Member for Horsham. It is no good the hon. Member for Stone complaining to the Government about the Maastricht
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treaty and the fact that there was no referendum on it. He should address his comments to St. Francis of Maastricht—the right hon. Gentleman who signed the treaty. He says that he is not in favour of flexibility. Again, he should address his remarks to St. Francis of Maastricht. The right hon. Member for Horsham is the biggest supporter of flexibility. There is no point in complaining to us about those policies. He should make an appointment to see the right hon. Member for Horsham.
My right hon. Friend the Foreign Secretary underlined the fact that Feira is an important way forward after the enormous success of Lisbon. Feira will build on the tremendous achievements of the Lisbon conference. It will re-emphasise the United Kingdom's important role in Europe: in the driving seat, leading Europe and being part of the most important decision-making processes.
Mr. Maude: Will the Minister give way?
Mr. Vaz: I give way to St. Francis.
Mr. Maude: I am grateful to the Minister for bestowing a halo on me—I am sure that it is richly deserved. Earlier, I asked the Foreign Secretary whether, following the verbiage and persiflage of the Lisbon summit, he could give three examples of legislation that had been improved to help the lot of small businesses. There has been plenty of time in which to provide some examples. I mean genuine changes, such as matters that have been deregulated to help businesses.
Mr. Vaz: Before 10 o'clock tonight, I will give the right hon. Gentleman 25 examples. I will stick them in a letter and put them on the board. I am sure that he does not want me to repeat them now.
Let us consider the contribution of the right hon. Member for Horsham. What a disgrace, for a speech from the Front Bench. He spent 14 minutes expressing a negative attitude towards the European Union. I appreciate that Mr. Sykes is going to bankroll the save the pound campaign, but every comment of the right hon. Gentleman was negative and critical of membership of the European Union. He says that he will veto the treaty of Nice if it has an integrationist agenda. I assure him that the treaty of Nice will signify the work in preparation for the IGC.
The right hon. Gentleman wants the IGC to take place after enlargement. That is one of the silliest suggestions that I have ever heard. Let us imagine allowing 13 applicant countries into the European Union and subsequently changing the composition of the Council, the number of Commissioners and the re-weighting on the Council and considering qualified majority voting. That is ridiculous. However, it is interesting if that is Conservative policy.
I was pleased to hear, at last, a mea culpa from the right hon. Gentleman about his decision to sign the Maastricht treaty. He said that he was a reformed man. The sinner repents. He now believes that referendums should be held before such treaties are signed. He did not hold a referendum, but he believes that it should be done now. That is a substantial change of policy.
The right hon. Gentleman mentioned the visits that I have made throughout the United Kingdom. The Foreign Secretary and I believe that it is extremely important not

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just to go to Berlin to make a few speeches, but to go round the country and meet the citizens of the United Kingdom and to talk to them about the benefits of European Union membership. At least my means of transport do not break down, unlike the right hon. Gentleman's truck, which broke down when he went to France. That shows that the Tories cannot even get their transport policy in order, let alone their European policy.
Mr. Bercow rose—
Mr. Vaz: I am glad that the hon. Gentleman has got to his feet. He should learn to read to the ends of paragraphs before he starts quoting from Select Committee reports. He quoted a tiny bit of evidence. If he reads paragraphs 264, 265, 266, 267 and 268 of the evidence and the paragraph to which he referred, he will know that I have made it absolutely clear that this charter is to be a showcase of existing rights, that it is to be a showcase and not a launch pad, and that we consider that a declaration is better than any other course of action. We have said that from the very start. The Prime Minister has said it, the Foreign Secretary has said it, and I have said it. We have made it absolutely clear that this is to be a declaration.
My hon. Friend the Member for Wolverhampton, South-West does not agree with that, but we believe that it is the best course of action. We do not believe that the charter of rights should go beyond existing rights. It should be consistent with existing rights. It should be binding now if those rights are binding now, and there should be no extension. That view is shared by many member states in the convention and beyond, so there is no question of us having even to consider a veto. In the end, it will be a matter for the member states and not for the convention. I pay tribute to the work of Lord Goldsmith, Lord Bowness and my hon. Friend the Member for Bridgend (Mr. Griffiths).
On the euro, the hon. Member for West Suffolk (Mr. Spring) said that the Foreign Secretary had changed his speech. My right hon. Friend did nothing of the kind.
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Do Conservative Members want to hear this all the time? The hon. Member for Esher and Walton referred to it as a mantra. I shall repeat the mantra. Five economic tests were laid down by the Chancellor in 1997. Early in the next Parliament, we will assess those tests, and we will put the issue to the British people. In the end, there will be a referendum.
The decision will not be taken by Paul Sykes or by the shadow Cabinet. The Labour party believes in leaving such matters to the British people in a referendum—just the sort of thing that the right hon. Member for Horsham and the hon. Member for Stone were talking about. We believe that the British people should decide those issues, and only if they decide that we should do so will we enter the euro.
That view is shared by every member of the Cabinet. There are no camps in the Cabinet. There is one clear Government policy that we have repeated time and again. I am pleased to hear from the right hon. Member for Horsham that he found my right hon. Friend's performance reassuring. He is reassuring. When he comes to the Dispatch Box, he reassures the nation. When he goes abroad, he reassures Europe and the world. When the right hon. Member for Horsham goes abroad to Berlin, he causes havoc. That is why it is important that we restate our policy.
It is also important to make a final point about defence. There is no better supporter of our policy on defence than President Clinton. NATO remains the bedrock of our defence policy. The United States of America is relaxed about, and comfortable with, the important measures that we are taking to help the defence of Europe. Of course our NATO allies outside the European Union are being consulted: the dialogue is continuing all the time. We look forward to Feira. We believe that it is an opportunity yet again to state our central position in Europe.
It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Horticulture
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]
7 pm
Mrs. Marion Roe: I am grateful for the opportunity to speak about the United Kingdom glasshouse horticulture industry. The industry is close to my heart, not just because there are several dozen glasshouse nurseries in my constituency but because, until a few years ago, I was parliamentary adviser to the Horticultural Trades Association. My interest in horticulture goes back many years.
My constituency is on the western side of the River Lea in Hertfordshire. The Lea valley has been a renowned glasshouse growing area for well over 100 years. Today, the total area of glass in mainstream protected crop production amounts to some 275 acres, and the Lea valley is one of the three principal areas of glasshouse production in the United Kingdom. The other two are on the south coast and on Humberside.
The principal crops grown in the Lea valley are salads, especially cucumbers and lettuce, but there are also significant acreages of ornamental crops, bedding and potting plants, flowers to he sold as cut flowers and aquatic plants. The local industry is wealth-creating, and is a major employer.
The last few trading years, however, have not been good for the industry. The increasing commercial power of the major multiple retailers, who are competing more and more ferociously, continues to depress prices to their suppliers. Growers must find more and more ways of reducing their production costs, and trading more effectively and efficiently. Moreover, the continuing strength of sterling—or, perhaps more accurately, the continuing weakness of the euro—has meant that more and more exports of cheap produce reach our shores from the United Kingdom glasshouse industry's principal competitors, the Dutch and the Spanish.
Imports from those countries are made all the easier by the fact that fuel and transport taxes are lower abroad. Not only will a Dutch exporter receive more guilders for the pound realised on his produce sold in the United Kingdom; he will be able to transport that produce more cheaply than the UK growers or marketing organisations that are servicing their own markets. There may be free trade throughout the European Union, but the bases of that trade are far from equal.
I recently met representatives of the Lea valley glasshouse industry to discuss various issues of importance to their businesses. I learned that glasshouse growers in my constituency and elsewhere in the Lea valley—indeed, throughout the UK—view with alarm the Government's proposal to impose a tax on energy usage in the UK with effect from April 2001. The climate change levy will impose a particularly heavy burden on the glasshouse industry, which is energy intensive.
As a party to the Kyoto protocol, the UK became legally bound to reduce greenhouse gas emissions by an agreed amount. However, the Department of the Environment, Transport and the Regions has announced that the Government wish to exceed that target, and aim for a domestic goal of a 50 per cent. cut in carbon dioxide emissions by 2012. The principal instrument that they will
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use to achieve their target is taxation—presumably on the basis that the more expensive the commodity, the less of it will be used.
With effect from April next year, and for 2001–02, the climate change levy will be imposed on electricity at a rate of 0.43p per kilowatt hour, on coal and natural gas at a rate of 0.15p per kilowatt hour and on liquid petroleum gas at a rate of 0.07p per kilowatt hour. Most of the revenue from the levy will be used to cut employers' national insurance contributions by 0.3 per cent.; the remainder of the estimated £1 billion tax raised in the first year will be used to provide additional Government support for energy efficiency measures. The Treasury claims, therefore, that the levy package is designed to be revenue-neutral for the private sector as a whole.
What would this mean for the glasshouse industry? Of course no two glasshouse nurseries operate in exactly the same way, and different crops require different methods of production and heating levels. However, the National Farmers Union estimates that on average the levy would impose a tax burden of some £3,750 per acre of glasshouse. As I said, the Lea valley contains some 275 acres of glasshouses, so the levy would cost growers in that area alone more than £1 million.
Although glasshouses are energy intensive by reason of their function, nurseries are not generally employee-intensive. Any rebate to be had from the cutting of national insurance contributions would have an almost negligible impact on the overall tax cull from horticulture. There is no doubt that a tax of this magnitude would plunge UK glasshouse horticulture into inviability, forcing the closure of many nursery businesses and the loss of thousands of jobs.
To be fair, the Treasury has, to some extent, heeded the warnings of the glasshouse industry, and special provisions for horticulture were recently announced in the 21 March Budget. Essentially, those special provisions promised, first, to introduce
a transitional 50 per cent. discount on the levy for horticultural firms (for a period of up to 5 years), to help protect their competitiveness whilst … energy efficiency measures take effect,
and secondly,
the setting aside of part of a £50 million "energy efficiency" fund to finance a special package of measures for the horticulture sector to improve further the sector's energy efficiency.
In addition, the Treasury plans to introduce a system of 100 per cent. first-year capital allowances for firms—not just horticultural ones—making energy-saving investments. That is deemed to include the following technologies: combined heat and power systems, boilers, lighting systems, refrigeration equipment, pipe insulation and thermal screens. The Treasury had announced earlier that it intended to exempt from the levy electricity generated from "new" forms of renewable energy and in "good quality" CHP plants.
It would, of course, be churlish of my glasshouse grower constituents not to welcome the special provisions that have been made for horticulture. Of course, those provisions are appreciated. However, they may not be as beneficial as they seem.
First, glasshouse growers have noted that the Treasury is introducing a 50 per cent. discount on the levy for horticultural firms
for a period of up to 5 years.

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Growers have especially noted the words "up to". It is unlikely that those words were chosen unthinkingly. Of course, the statement thus constituted would allow the Treasury to reduce the relief period to, say, three years or even one year, and/or to reduce the amount of the relief from 50 per cent. to a much lower figure.
Moreover, the levy rates listed earlier apply for the year 2001–02 only. Might not subsequent years see those rates rise, perhaps even annually? Thus, even if the 50 per cent. relief for horticulture were to continue for the full five years, the full impact of the total levy would eventually be felt on growers' incomes, such that any energy-efficiency savings that may have been made will merely be paid to the Treasury in taxation.
As regards the "energy efficiency" fund, it is by no means clear at present how the fund will be operated, and what part of it is to be specifically allocated to horticulture. Indeed, details of the "special package of measures" have not been forthcoming, so it is rather difficult at this stage to know to what extent that will benefit the horticulture sector.
As for the enhanced capital allowances, it is commonplace to say that any business welcomes the opportunity to save tax. Nevertheless, such tax-saving opportunities are available only to those businesses that are making profits. If none is, and that is already the case with many horticultural businesses, there is no tax to be saved.
Combined heat and power systems would appear to be the answer, therefore. As I have said, the Government have given an exemption to such systems and the Treasury has highlighted those as being of particular benefit to the horticultural sector. However, the exemption is reserved for "good quality" systems, to use the Treasury's own words. The definition of "good quality" is highly complex and it is difficult to see how it might apply to horticulture.
A CHP unit must be efficient in terms of the use of both heat and power. That will cause problems. CHP is expensive, so most growers will be obliged to enter into agreements with electricity companies that build the units on horticultural sites. Such companies will require a minimum CHP size of around 4 MW. That is because of cost, especially the cost of linking into electricity supply lines to export surplus energy to the grid. Many smaller glasshouse growers will not be able to use all the heat that a 4 MW unit produces. Thus, it may not qualify as "good" CHP because the heat use is too low.
Furthermore, many growers will not have CHP available to them because they are located too far away from a gas supply line to fuel the CHP plant, and/or they are too far away from electricity lines to export the surplus power. Also, CHP may not be practical for producers of ornamentals, who require more light than heat.
That said, I am bound to report that a small number of CHP plants have been, or are being, established on glasshouse nursery sites in the Lea valley. It is sincerely hoped that all will fall into the Treasury's category of "good quality" systems. Those installations have become possible because of a collaborative project of a number of growers whereby a gas pipeline has been laid to supply a series of nurseries in the Lea valley.
The project has been massive, involving an overall investment of more than £750,000. However, it has enabled riot only a few growers to install CHP plants, but
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the remaining growers to convert their nursery heating systems to the far more "environmentally friendly" fuel of gas. Gas is also a more efficient fuel in a nursery context, and its direct supply by pipeline obviates the need for regular deliveries of fuel by road transport, as is the case for oil. That in itself is energy efficient, as energy must be consumed by lorries in the delivery process.
It has also been possible for those growers who have converted to gas to extract carbon dioxide from the waste gases produced by the burning of the fuel and to distribute that carbon dioxide to the glasshouses. The glasshouse plants absorb that gas in the growing process. It is of course an irony for those growers that, having invested heavily in a more efficient heating system for their nurseries, and while actively taking up greenhouse gases, they are now to be penalised by having a heavy tax imposed on them. What savings they might have made will for the most part be wiped out by the payment of the climate change levy, yet they will also have consumed the carbon dioxide that has been produced in the new combustion process.
The levy's aims are to encourage energy efficiency and to reduce greenhouse gas emissions. To what extent those aims will be achieved in the glasshouse sector is a moot point. As we have seen, growing plants absorb the principal greenhouse gas, carbon dioxide. Furthermore, growers do not need the blunt instrument of a swingeing tax to want to reduce energy consumption. Energy costs can count for between 20 to 40 per cent. of all costs in glasshouse crop production, and that has been incentive enough for growers to find, over many years, ever more ways of reducing those costs and fuel consumption.
The United Kingdom glasshouse industry has an exemplary record of energy saving, particularly since the energy crisis of the early 1970s, when fuel costs increased by more than 400 per cent. in one year alone. One clear proof of that can be found in tomato production. In 1985, 1 kg of tomatoes required 17 KWh to be produced. In 1999, that figure had fallen to 11 kWh. That is a drop of approximately 40 per cent. in energy consumption, which by any standards is a remarkable achievement. It shows that growers are committed to doing their bit to tackle climate change. Growers will continue to use all technology at their disposal to improve fuel efficiency and environmental effectiveness without the need for the added spur of an unfair and punitive tax.
The Treasury has said that its aim throughout has been to design the levy in such a way that the competitiveness of UK firms is protected, but how is that to be achieved in horticulture? The UK's competitors in protected crop production are mainly Holland and Spain. However, Dutch glasshouse growers have been exempted from paying their equivalent of the tax, and the Spanish seem so far to have made no proposals to introduce an energy tax at all.
Growers from those European Union states operate within the single market, and Dutch and Spanish growers have free and unrestricted access to UK markets. When the proposed levy—ignoring for the moment the temporary reliefs—imposes a financial burden of £1 million on growers in the Lea valley alone, I wonder how the Government can possibly argue that our growers' competitiveness is to be protected.
Competitiveness can, of course, be interpreted widely, and one might cite differential tax regimes generally in different member states. However, it would be difficult to

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find a tax advantage that UK growers might have over their Dutch and Spanish counterparts. It is recognised, I believe, that the tax regimes in the UK are generally more onerous than elsewhere in the EU. What will happen is that many UK glasshouse nurseries will lapse into unprofitability and close down, although demand for glasshouse produce in the UK, both edible and ornamental, will not decline. Indeed, the opposite is the case; we are seeing an ever-increasing demand for such produce. The produce will therefore come from abroad—from Holland and Spain, once again.
Those countries will need to consume the energy to produce the product. There will, therefore, be no energy saving. Even worse, it will be necessary to transport the produce to this country, thereby actually increasing energy usage. The climate change levy will ensure not only that the UK's fuel usage is exported to our competitors abroad, but that our livelihoods and jobs are exported as well. The balance of trade in horticultural produce will lurch irretrievably in favour of those competitors abroad. The CCL impinges most unfairly on the glasshouse sector in the UK. The levy package may be designed to be revenue neutral overall, but that will clearly not be the case for growers. As the tax burden will fall substantially and negatively on the UK glasshouse industry, it follows that others must benefit from the levy—that is to say, those with relatively low energy use but high numbers of employees, because their national insurance rebate will greatly exceed the amount of the energy tax. Those organisations will have no incentives to achieve energy efficiencies, thus negating one of the Government's principal aims. That is clearly neither desirable nor equitable.
If the CCL is imposed on the UK glasshouse industry in 2001, serious consequences for the viability of the sector will ensue. Given the determination of growers to continue to achieve energy efficiency, coupled with environmental effectiveness and the situation in respect of the levy, vis-à-vis their principal EU competitors, the only possible course of action for the Government is to exempt totally the UK horticulture industry from that inequitable tax.
7.16 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin): I congratulate the hon. Member for Broxbourne (Mrs. Roe) on securing a valuable and timely debate on horticulture, which is an important sector of UK agriculture. The debate is timely because of the discussions that are taking place between Government Departments and the industry, and because the Finance Bill is making progress through Parliament. Some of the debates on that Bill relate to the sector concerned.
The hon. Lady rightly recognised the contribution that the glasshouse sector makes and she is familiar with it, because of the presence of the horticulture industry in her constituency. She is well aware of the diversity of the produce of the sector, which includes vegetables, fruits and the ornamental sector. Some parts of the industry have been a particular success. For example, the heated tomato crop has seen great increases of 50 per cent. in yield between 1988 and 1999, which have allowed our annual production to be maintained at just over 100,000 tonnes,
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despite a decrease in planted area in that period. We certainly have an innovative and enterprising industry, and I pay tribute to it.
I appreciate the comments that the hon. Lady made about certain of the difficulties that the sector has faced in recent months. There is no doubt that, when competing with imports and seeking to export, the strength of sterling has proved a real problem. As the hon. Lady pointed out, the specific weakness of the euro has also caused many of the difficulties. The euro has strengthened recently, but it is still much lower in value than when it first came into being, and therefore the difficulties are not at an end.
My Department has a strong commitment to the horticulture sector, and this afternoon in Committee I spoke on the draft Horticultural Development Council (Amendment) Order 2000, which will exempt some of the smaller horticultural producers from the levy because it will raise the threshold. In Committee, hon. Members from both sides emphasised the importance that they attach to the Government-funded research and development effort on behalf of horticulture, and the industry's efforts and contribution through the horticulture levy.
Certainly, Government-funded research and development has contributed to the success of many sectors of horticulture. My Department at present spends £2.25 million on providing strategic research and development to help the glasshouse industry improve its efficiency overall. That improvement includes reducing reliance on pesticides and developing biological control programmes. They can be important in helping the industry to reduce costs—a welcome advance at this time.
Support is also provided through the European Union fruit and vegetables regime and the EU flower promotion scheme. We hope that that support will be increased in future years. We are also glad that horticulture fared well in the first round of the agriculture development scheme, which is aimed at promoting marketing initiatives. I was delighted that horticulture accounted for about a quarter of the grant allocations made under that programme, and my Department is keen to help horticulture.
Substantial benefits for the industry have arisen from the 1996 reform of the EU fruit and vegetables regime. Producer organisations receive funding for work to improve production techniques, quality, preparation for market, marketing and promotional activity, as well as for developing the use of environmentally sound practices. Total EU payments to UK producer organisations for work done in 1999 will be in the region of £9 million.
The hon. Lady will know that, in our proposals for the future direction of agriculture and for exploiting the EU rural development regulation, one of our priorities was to help sectors such as the horticulture and pigs and poultry sectors, which up to now have received little support from EU common agricultural policy sources. The rural development regulation applies to all sectors of agriculture, and its introduction opens up possibilities for the horticulture industry which it would do well to identify. My Department is keen to work with the industry, to help it exploit some of those opportunities.
The hon. Lady devoted much of her speech to the climate change levy. I can assure her that the Government are very much aware of the concerns of glasshouse businesses about the impact of the levy on their profits, competitiveness and employment. However, I also

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welcome the opportunity to discuss this matter further with the industry. Ministers in my Department have received a considerable postbag on this issue, and it has included letters from glasshouse businesses located in the Lea valley, about which the hon. Lady spoke at some length.
Ministers have also seen copies of correspondence about the levy between the sector and Ministers in the Treasury and in the Department of the Environment, Transport and the Regions. Furthermore, the hon. Lady may know that, in the run-up to the Budget, my hon. Friend the Financial Secretary met the president of the National Farmers Union. I met him too, as well as leading horticultural members of the Union, so that I could listen to their views in person.
I think that the hon. Lady recognised that my Department has taken the sector's concerns seriously and that we have been happy to represent them to our colleagues in other Departments. There has also been a lot of contact between officials. My officials in the Ministry of Agriculture, Fisheries and Food met their counterparts in the NFU and various parts of the horticulture sector.
Many glasshouse owners are concerned about the possible economic impact of the levy. They fear that the levy will increase running costs and thus cut net margins. They are also concerned that the levy will force them to raise the price of their produce and thus reduce competitiveness, particularly within the EU, as the hon. Lady emphasised.
The UK market for horticultural produce is fiercely competitive. In some EU countries horticultural producers enjoy considerable natural advantages such as a warmer climate and longer daylight hours. In other countries, they receive different treatment under their respective energy tax regimes. I am keen that the Department and the Government monitor what is happening in other countries. I am always interested to hear of any examples that come to the attention of hon. Members so that we can investigate them. If we suspect that unfair subsidies are being given, we raise the issue with the European Commission. In recent years, we have done so in relation to a number of areas of agricultural policy.
As the hon. Lady recognised, energy taxes are not the only ones that affect businesses in the European Union. The position is more mixed than she said. Certainly UK corporation tax rates are the lowest of any major EU economy. We need to look at the overall taxation system.
The framework that the Government have chosen to implement the climate change levy will provide some relief for sectors that are already meeting the obligations
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required under the integrated pollution prevention control directive which largely, but not entirely, also encompasses the intensive energy users. However, we appreciate that horticulture is a special case. Before this year's Budget, the Government listened very carefully to the concerns expressed by the glasshouse sector about the impact of the levy. We appreciate that the sector is an undoubtedly substantial user of energy, but does not fall within the scope of the IPPC directive. That means that, under the levy, the glasshouse sector cannot negotiate an energy saving agreement with Government in return for an 80 per cent. discount on the rate of the levy.
In recognition of that unique set of circumstances, my right hon. Friend the Chancellor of the Exchequer announced in his Budget this year that, subject to obtaining EU state aids clearance from the European Commission, the Government will provide a special package of measures to protect the competitiveness of the glasshouse sector.
The hon. Lady recognised that, at this stage, we cannot be categorical about the effect of the levy, partly because the package is still under discussion in Brussels, so it is difficult to give precise details about the overall package and its effect on different parts of the horticulture sector. However, I assure the hon. Lady that I intend to monitor the position closely and to continue discussions with the sector. I am also happy to meet people from her constituency and others.
Let me explain the position so far. First, there will be a special package of support to the glasshouse sector from the £50 million energy efficiency fund set up under the levy. The idea is to help the sector to further improve its energy efficiency and to take account of the competitiveness aspects of the levy. My officials are in touch with their counterparts at the NFU and the DETR to consider the types of services and measures which will best help the sector to improve the efficiency of its energy consumption. The NFU has developed some ideas on this score.
Secondly, the list of energy efficient investments which qualify for 100 per cent. first-year capital allowances is being extended to include thermal screens used in glasshouses.
The motion having been made at Seven o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at half-past Seven o'clock.

Preamble
[MR. MICHAEL J. MARTIN in the Chair]

Voluntary Sector
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Betts.]
2.30 pm
The Minister of State, Home Office (Mr. Paul Boateng): I very much welcome this debate on volunteering. Looking around me, I am left with the comforting thought that interest in volunteering outside the Chamber is considerably greater than it appears to be in it.
Volunteering and the voluntary sector play a crucial part in our society. They are the fabric and building blocks of our communities, both urban and rural. As such, the Government believe that it is vital to recognise the extent to which volunteers act almost as community glue. Volunteers are a sign of a healthy society.
We must give the voluntary sector the recognition and support that it so richly deserves. In 1997, nearly half of adults had taken part in volunteering in the previous year and 29 per cent. of adults volunteer in some form or other regularly each month. Their contribution to society has been valued at about £40 billion. As such, they are major players.
Central Government spend some £104 million a year supporting volunteering. Local and health authorities add an extra £150 million and the national lottery adds £145 million. That is £400 million in total, which is a significant investment in the sector. We must ensure that we get a clear picture of what that investment generates and what we are spending it on. The Government have a responsibility to promote and encourage voluntary and community activity and we are assisted in that task by the active community initiative, which has been established to ensure that we give the voluntary sector the attention and support that it deserves.
I should like to spend a few minutes outlining the key themes of the initiative, which aims to promote and encourage more voluntary and community involvement. We want to raise awareness and inspire more people to get involved. We want to increase opportunities for volunteering, make it easier for people to get involved and support the development of active community up and down the country. This should not be seen as the Government getting people to do something for nothing, which would not be an appropriate basis for Government involvement in the voluntary sector and in volunteering. It is about supporting and encouraging folk to contribute to their communities, to have a voice in the services that they receive—and often help to deliver—and to feel an integral part of the society in which they live. It is all about empowering and engaging people and combating social exclusion.
One of the Government's first tasks in advancing this agenda is to establish how best to motivate people to volunteer. Most Members of Parliament have
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volunteered at some time and many still do in one form or another. We began our involvement in the communities that we serve as volunteers and many of us know that volunteering, as well as reflecting the needs and problems of other people, can be enormously fulfilling in itself. It can enrich volunteers' lives.
For the past few years, I have attended the Whitbread volunteer action awards, which is always an inspiring occasion and a pleasure to attend. It is a source of inspiration because meeting the organisations and individuals who are being honoured gives one a sense of what they have gained, as well as what they have given, through their voluntary activity.
Members of Parliament are often invited to a whole heap of dos and occasions, some of which are a greater pleasure than others—I make that bold confession, with which I am sure colleagues will identify. The Whitbread awards are a genuinely unalloyed pleasure because of the sense of can-do, excitement and commitment generated by people who give so much to others. It is a genuinely uplifting experience. As a society, we need not only to build on such occasions, but to give them the profile and recognition that they deserve—and the Government are determined to help with that.
We are taking several initiatives, one of which I should like to share with the Chamber this afternoon. I refer to TimeBank, which we launched on 29 February in partnership with the BBC. It may not be into Premiership football, but it is certainly into volunteering, in a big way. The aim is to involve more people by encouraging them to donate time as part of a national campaign.
The new initiative recognises the changing pattern of volunteering. The pressures, complexity and demands of modern life—including family life, as well as work—affect individuals, who may be able to give two hours one week, none the next and eight the week after. The voluntary sector must be able to respond flexibly to demands and TimeBank enables—through the concept of banking up hours—the donor and recipient better to organise their contributions.
Mr. David Drew: I am sorry to have missed the opening of my right hon. Friend's speech. It is good to hear him speak about the voluntary sector again, as he did in my constituency some time ago.
Judith Taylor, a local representative of the Women's Royal Volunteer Service in Gloucestershire, has told me that people can find it difficult to attend pre-retirement courses. It is not just a question of the time available from week to week; it depends on how much time people have at different stages of their lives. Judith Taylor often used to be invited to pre-retirement courses to talk about the benefits of volunteering, but that no longer happens. Would my right hon. Friend like to comment on that?
Mr. Boateng: I certainly would. I know how healthy and active the voluntary sector is in Stroud, having visited the town and seen for myself the contribution that people are making to the creation of safe communities. That is an important aspect of the contribution that the voluntary sector can make to crime prevention and reduction strategies.
Changes have undoubtedly taken place in the generational pattern of volunteering and I want to deal with creating opportunities. We need to deliver

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high-quality volunteering opportunities and schemes in which people want to get involved. One of the four target groups that we have identified for action is older people. Alongside young people, employees and those from minority ethnic groups, they represent a particular challenge in ensuring that they can access volunteering opportunities. We must also address certain trends that have developed in volunteering, as they affect those target groups.
The Government have approached the issue of older volunteers in precisely the same way as my hon. Friend the Member for Stroud (Mr. Drew). First and foremost, we have listened to the views of the target group and those working with it. A number of hon. Members will be aware that we have been holding listening events up and down the country over the past few months to hear what older people have to say and we have received several messages about older people and volunteering. The debt of gratitude that we owe older people was brought home to us forcefully at the final large event, which was held at the Queen Elizabeth II conference centre. Many older people have devoted a lifetime to volunteering and a big thank you is owed to them.
The number of older people volunteering is now dropping off. We need to ask why and find out what opportunities exist for them to enter volunteering. Older people have a wealth of expertise, energy and experience to offer their communities. It is important that we value those skills and find ways of ensuring that they find a channel into our communities.
My right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael)—through his time at the Home Office and subsequently in Wales—has always taken an interest in the older volunteers initiative, which his work inspired. We launched that initiative to improve the quality and quantity of volunteering opportunities for older people. We have committed some £1.5 million to that task over three years to ensure the success of the project. To date, some 26 projects have been funded up and down the country, precisely to address the issues that my hon. Friend the Member for Stroud outlined.
I should like to say a few words about younger people, because it is at both ends of the spectrum that needs are currently unmet. It was to recognise and to tap into the energy and commitment of younger people that we launched the millennium volunteers. That is a flagship initiative, aimed at engaging 16 to 24-year-olds in voluntary activities. Some 160 millennium volunteer projects have been set up across the country. Some 4,000 young people have joined and many more join daily; 600 have earned millennium volunteer certificates and 300 have earned millennium volunteer awards. Those awards recognise the personal development of young people and the benefits that they have brought to local communities and gained themselves from the experience of volunteering.
Mr. Phil Hope: I want to emphasise the importance of engaging young people in their communities. Too often they are seen as the problem and not the solution. If we engage with them actively in their communities on issues of crime, vandalism or raising educational standards, we can achieve
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miraculous results, as I see in my constituency. Does my right hon. Friend agree that we want to see much more education for citizenship and community involvement in schools, as well as through local community groups, to get young people at the heart of tackling the deprivation that some of our neighbourhoods experience?
Mr. Boateng: I certainly agree with my hon. Friend. He has a wealth of experience on these issues, both personally and professionally in his work for the all-party group. We know that volunteering and the sense of civic responsibility that it brings gives a practical demonstration of the values and ideals that we want to inculcate in schools. That led my right hon. Friend the Secretary of State for Education and Employment to put a new emphasis in the core curriculum on civics, as it was known in my day. [Interruption.] It was not that long ago and should not be cause for ribald laughter. It is known today as education for citizenship and we owe an enormous debt of gratitude to Lord Weatherill for his work on forming the citizenship commission, which has informed the development of thinking in this area.
Finally, I should like to say a few words about the role and responsibilities of employers in this area. The millennium volunteers project has developed on the basis that it is important for CVs, future development and careers. Employees not only have the potential, sometimes unlocked, to make a contribution as volunteers, but, in doing so, they develop skills and expertise that make them better employees and an added resource for their employers. A number of employers are beginning to recognise that and to blaze the trail for others.
It was right for the Prime Minister to make one of the key elements of his speech at the active community convention earlier this year a challenge to employers to give their employees the equivalent of one day's paid time off in the next 18 months to work in the community. Several companies have already announced their commitment to the scheme and we hope to encourage others to join them. It is a way for employers and businesses to show civil responsibility and of adding value to the skills base of the work force.
It is important for the Government to give a lead in the matter, which is why the head of the home civil service, Sir Richard Wilson, has written to all Government Departments asking them to give their staff a day each year for that purpose. We have been working with business to support Cares Incorporated as well as the City Cares project, which is under way in 10 cities in the United Kingdom. It will bring 100,000 people into voluntary work, with business setting the example and encouraging and supporting others.
Mr. Simon Thomas: I heard with interest the Minister's remarks on support for employees who volunteer. I welcome the Government's initiative and leadership in the scheme, but does the Minister agree that taking part will be difficult for those who are unemployed and receiving the jobseeker's allowance who want to widen their skills portfolio? Some of my

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constituents still complain that the voluntary work that they undertake is questioned by officialdom. Will the Minister investigate that aspect of the matter?
Mr. Boateng: We are working closely with the Department for Education and Employment and the Department of Social Security on that issue, to which I shall refer later.
We have identified older people, younger people and employees as target groups for the activities we propose. A fourth group is also important: our fellow citizens in the black and minority ethnic communities, who have a long tradition of community self-help which they have not always identified as volunteering. They have not necessarily been seen by the mainstream voluntary sector as a group that would attract interest and involvement. That is a missed opportunity, because there are many black and minority ethnic citizens who are anxious and able to get involved and who currently are an untapped resource.
We are working to alert the mainstream voluntary sector that there is an untapped resource out there and to work with black and minority ethnic voluntary sector organisations, which, for too long, have been the poor relations in the system. We want to build up their capacity and link them into the voluntary sector infrastructure to maximise their opportunities to contribute to the development of society and the whole community.
To help that process, there are initiatives within the active community units, one of which is geared specifically to twinning black and minority ethnic voluntary sector organisations with their larger mainstream counterparts. That has a double benefit. It benefits the larger, mainstream counterparts because it helps them to attract more black and ethnic minority volunteers and helps them to establish themselves better in those communities. Secondly, and significantly, it helps to build the infrastructure and the capacity of the black and minority ethnic voluntary sector. We have taken that forward with a specific funding stream and a series of regional seminars to ensure that black and ethnic minority organisations are better able to become involved in partnerships, consultation and decision-making.
The hon. Member for Ceredigion (Mr. Thomas) referred to people who may not be in work but who want to develop voluntary activities that might cause them to fall foul of the welfare and benefits arrangements and asked how better we can reach out to them. There is a common myth that people on benefits cannot volunteer. Unfortunately, that myth is sometimes believed by people in benefits offices, employment offices and so on.
Unemployed people can undertake voluntary work and it can be a means of acquiring skills that help to lead to paid employment. We are well aware that there are further issues arising from the complexity of benefits rules. In particular, we know that the requirement that jobseekers must be available for work within 48 hours can discourage people from making a commitment to voluntary work—hence the importance of flexibility. We are considering what can be done to ease that problem and our considerations form part of a work programme that has been taken forward by a small group within the active community unit, which has been
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set up to look at barriers to volunteering. The group was established in response to one of the recommendations in Lord Warner's report, "Giving time, getting involved". My right hon. and hon. Friends in the Department of Social Security are committed to ensuring that benefits offices and employment offices are aware of the significant role that volunteering can play in getting people back into work.
I am pleased to announce today that, following legal advice, the Department of Social Security will provide new local guidance, advising that no account be taken of time credits earned in time exchange schemes when calculating income-related benefits. That is a major step forward and comes in response to long-standing concern in the voluntary sector. My hon. Friend the Under-Secretary of State for Social Security made that clear in a parliamentary answer to my hon. Friend the Member for Plymouth, Sutton (Mrs Gilroy).
I believe that the measure will assist enormously in taking forward a range of initiatives, particularly TimeBank. It would not have been helpful if interest had been generated in TimeBank as a result of prime-time television coverage, only for those expectations to be dashed by the complexity surrounding its interrelationship with the benefits rules.
To ensure that we encourage groups that have not previously been able to access volunteering opportunities to do so, we have provided nearly £1 million to set up a national database of volunteering opportunities. That is important because we know that new technology gives us hitherto undreamt-of opportunities to reach out to people, some of whom, for a variety of reasons, may be housebound. They may have access to a computer, but not have any way of getting out and about easily. Opportunities to volunteer could be made more widely known through the internet, and there are opportunities to volunteer on the basis of access to a computer. We want to build on the opportunities held out by the new and exciting developments in technology.
These are exciting times for the voluntary sector. We can ensure that the sector plays a full role in community self-help and development. The Home Office is leading a cross-departmental group on the resourcing of community capacity-building to bring greater coherence to the system under which community groups are funded and to give greater support to the community groups and leaders who rely—often almost exclusively—on volunteers. That is all part of a wider picture of support for the development of active communities.
The independence of the voluntary sector is important. It operates at a distance from Government, has the capacity to innovate and challenge established ways of doing things and is close to the people. All of those things should be cherished and preserved, but we must not allow that distance from local or national government to be an excuse for the Government to renege on their responsibility to create a context in which there can be true partnerships between the voluntary and statutory sectors. The partnerships must be based on an understanding of the importance of that independence and the vital integrity that goes with it.

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The work that has been done by the voluntary sector and the Government in the compact is important, for it lies at the heart of the understanding that must exist between the sector and the Government about what each party must bring to the table. That is the best hope for the future of the framework within which the partnership with the voluntary sector can develop. It is a great and exciting partnership, and we ought to be profoundly thankful for it.
3.3 pm
Mr. David Lidington: I am glad to follow the Minister, as I share his admiration for the organisations and individuals who contribute to the voluntary sector in this country and his assessment of the importance of a thriving and independent voluntary sector to the health of the United Kingdom.
The Minister rightly said that most Members of Parliament have engaged in voluntary work of one sort or another. One of the pleasant surprises that I had after being elected to the House eight years ago was to discover the sheer scale and variety of volunteering in my constituency. That is probably reproduced in each of the 659 constituencies represented in the House of Commons.
Probably all of us in the Chamber today could give a long list of the different organisations and committed individuals that we have encountered during our time as Members. I can cite everything from hearing dogs for the deaf to the Buckinghamshire Association for Mental Health to the Aylesbury elderly Asian lunch club, all of which contribute in different ways to social well-being.
The Minister rightly gave priority in his speech to the work of volunteers in giving practical service to others. I would not wish to detract from what he said on that, but voluntary organisations contribute to this country's well-being in another but related way—they provide opportunities to celebrate what brings us together as communities. At this time of year, many of us find ourselves attending various fetes and other such events, which raise funds for good causes and are usually a celebration of neighbourhood identity. That is something of value that the voluntary organisations bring to this country, which no Government agency, however well intentioned, can reproduce in the same way.
Volunteering and the organisations are one of the greater strengths of the British tradition. They are what Edmund Burke meant by his term "the little platoon" or what sociologists probably call mediating organisations. The Chief Rabbi, in his recent Mais lectures, referred to organisations that were not part of a state but which were greater than the individual and within which we learn habits of trust, mutual respect and regard for the greater good, which help to sustain the sense of mutual dependence on which the security of a market economy and a liberal and free political system rests. The health of the voluntary sector, which commands cross-party support in this country, is important.
Although I shall ask some questions and make some criticisms in my speech, I shall intend them, even more than usual, in a constructive spirit. As the Minister said,
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large numbers of people volunteer in this country. One estimate that I have seen is that 3 million people regularly volunteer. However, as he said, the number is falling according to some surveys, although it remains high. That is borne out by anecdotal evidence. I can give instances of youth organisations that have folded because they have been unable to get week-in, week-out commitment from adult leaders to enable them to function.
That phenomenon is probably partly the result of changes in society and at the workplace. People are under greater pressure at work and there are more families where both partners work who want to keep their limited free time for themselves as a family. The surveys bear out the truth of the adage, "If you want something done, ask a busy person to do it". One survey showed that people are more likely to volunteer if they do a lot of overtime at work, if they have children under 15 living at home or if they are carers of relatives at home. The lesson is that we should not be defeatist. The general trend, on which both the Minister and I have remarked, is that we, as legislators, need to do everything in our power to remove disincentives from the people whom we wish to become involved in the voluntary sector.
While I was preparing for this debate, I looked through the Government's recent publications on the idea of a compact between the Government and the voluntary sector. I say without reservation to the Minister that I wholeheartedly welcome the idea of codifying relations between Government and voluntary organisations in a readily comprehensible fashion. We should also inculcate throughout Government, in every Department and agency, an understanding of what needs to be done to make the Government's activities understandable to the voluntary sector and to take account of the needs and working culture of voluntary sector organisations.
I warmly welcomed the Minister's concluding remarks, in which he championed the independence of voluntary organisations. Risks are run when the voluntary sector becomes increasingly involved in carrying out what were previously Government functions. That is not a party-political point—much of the effort stems from the reforms to personal social services that were introduced by the previous Government.
As the Minister said, we, as politicians and members of society, value voluntary organisations' independence and their ability to innovate, experiment and engage with the particular circumstances of an individual or local case. That approach is not available to Government officials, who have to abide by the Whitehall rule book. There is a risk that growing dependence on the Government may lead to an erosion in the voluntary sector of those qualities that we value most strongly, which could be a disincentive.
Lord Griffiths of Fforestfach summed up the way in which such a state of affairs might come about. He wrote:
Typically, a charitable organisation starts, not infrequently with a religious affiliation, with a small number of highly committed individuals who are prepared to devote their time, skills and money to a cause. The organisation is then "discovered" by government and politicians are eager that they are seen to support it through public funding. Full time staff are hired to make the

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programme more professional, then new members are added to the board who lend credibility because of their experience on other government bodies. Certain of the original objectives are downgraded because of their more controversial character and because of this decision significant amounts of public funding are obtained. Volunteers however begin to feel their support is now unnecessary and drop out.
Whichever party is in office, it is right for the Government to seek to draw on the particular qualities and strengths of the voluntary sector. It is of the utmost importance that we avoid making voluntary organisations little more than another arm of the Government machine.
The Minister should bear in mind the concerns that faith-based organisations have expressed about bidding for funds. They feel that, whether they are dealing with the Government or local authorities, they are forced to choose between being true to their religious integrity and complying with the policy of the local authority or Department. Will the Government do everything within their power to simplify the funding arrangements, bureaucracy and form-filling with which voluntary organisations have to deal? I have been told by a number of organisations representing the voluntary and charitable sector that there are too many forms which are too lengthy and take too long to fill in. There are complex performance indicators, which often vary a great deal depending on which Department is responsible for a particular initiative—even where initiatives have been designed with similar objectives in mind.
Too many new initiatives emanate from the Government, not all of which are sustained for more than a short period. Several voluntary organisations are concerned about the balance between core funding and project funding. They are making representations about what they see as a tendency for money to be doled out in small parcels for which they have to spend a lot of time and energy bidding, but which do not guarantee the continuation of the organisation's activities over the medium or longer term, because the Government project may exist for only a short time.
Mr. Boateng: I am listening with great care, attention and some sympathy for the voluntary organisations concerned to the points that the hon. Gentleman is making. However, does not he think that his points would be that much stronger if he had prefaced them with a fleeting moment in the confessional? After all, it was the Government whom he supported for many years who began the Government tendency of unwillingness to commit to core funding. My sympathy for the voluntary sector would be stronger if he confessed his party's responsibility in that respect.
Mr. Lidington: As I said with regard to social services, I am perfectly willing to start from the premise that while the previous Conservative Administrations transformed this country for the better during their 18 years in office, we did not get absolutely everything right. One of the relatively few consolations of going into opposition is that it gives one the freedom to think through what one did right, or wrong, in the past.
Will the Minister explain how the Government see the way ahead? It is difficult to strike the balance correctly, because the Government's priorities are inevitably not
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the same as those of the voluntary organisations. The present Administration have a habit—which is not confined to their dealings with the voluntary sector—of top-slicing budgets and handing money out in little packages. That involves bidding bodies in a disproportionate amount of effort. Complaints on that score come not only from the voluntary sector, but from the educational and national health service sectors.
I should like to raise with the Minister two other matters on which I have received representations from voluntary organisations. The first is the impact of the national minimum wage legislation; the second, he will not be surprised to learn, is the Criminal Records Bureau. I shall be happy to spend a while in the confessional on the latter subject, because I understand the difficulties that he faces. We need to answer important questions on both those counts.
I shall deal first with the impact of the national minimum wage. I understand that section 44 of the relevant Act created an exemption from the regulations for what were termed voluntary workers. This has involved a great deal of uncertainty for voluntary organisations over definitions. The National Centre for Volunteering has suggested that the Act should be amended to insert into its preamble a sentence such as "This Act does not apply to volunteers", as a way of giving greater certainty.
A problem that has already arisen is the extent to which perks, benefits in kind and discounts on services provided by the charity should be counted as wages. Does the payment of such items take the person concerned out of the category of a volunteer helper and into that of an employee to whom the national minimum wage legislation would apply? For example, people who work in charity shops, for organisations such as the National Trust or as volunteer guides in historic buildings sometimes are allowed a discount on the product or services sold by the organisation for whom they are volunteering. Does such a concession mean that that person counts as an employee? Such questions are being asked in the voluntary sector.
The same point applies in respect of voluntary workers who are working away from their home. This issue might affect young people spending time away from home—perhaps in a gap year—carrying out voluntary work on a particular project. In many cases, such people would be paid some sort of pocket money, rather than a wage; an allowance to permit them an occasional visit to the cinema or a pint in the pub during the weeks or months when they are engaged in their voluntary work.
If those payments were to be considered wages by the authorities, it would provide a disincentive to that type of volunteering because the organisation would have to either pay those people the national minimum wage or discontinue such pocket money payments, which could restrict the take-up of that type of voluntary work to those able to afford to subsidise their volunteering from other resources. That would not be desirable.
On the Criminal Records Bureau, I understand the Government's dilemma very well. Someone has to meet the cost of checks. If volunteers were to be granted an exemption, the Government would have either to find the money from elsewhere in their expenditure

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programmes or load the cost of that exemption on to the fees charged to non-volunteers for criminal record checks.
The voluntary organisations are expressing growing fears that this system of charging will prove a great disincentive and make life even more difficult for them. The organisations serving young people are especially concerned. The Scout Association says that it already vets and trains more than 65,000 volunteers a year at an annual cost to the association of about £100,000. It estimates that if it had to carry out an enhanced criminal records check on each volunteer at a cost of £10 a head, it would incur a further cost of £750,000 a year, in addition to its running costs.
The Minister will know that amateur sporting bodies are also expressing concern. It is often overlooked that sports organisations attract more volunteers than any other part of the voluntary sector. It is estimated that about 1.5 million people give of their time to amateur sport in the course of an average year. Those hon. Members who, like me, are parents will probably agree that young people gain a tremendous amount from the time that other adults are prepared to give to coaching soccer, rugby, cricket, swimming and other sports. Sports bodies, the Scout Association and the Guide Association are therefore concerned about the imposition of fees for criminal record checks.
The National Centre for Student Volunteers has said that it is concerned not merely about the possible disincentive of the fee, but about the sheer hassle of having to apply for a check to be carried out, especially where the voluntary work will be done in a university vacation. In such a case, would there be any guarantee that the necessary paperwork could be completed before the opportunity to do the work had passed? The Government and the Criminal Records Bureau must try to ensure that applications for criminal record checks will be processed quickly. Whether or not a fee is payable, volunteers for whom a check is necessary should get clearance quickly, so that they do not give up, walk away and find something else to do because they are fed up with waiting.
A number of questions arise for the Government. What is the Minister's most recent assessment of the cost to the voluntary sector of the planned system of fees? How many people does he think will be affected? As he knows, in the past, several voluntary organisations have challenged the Government's published estimates. The Government are supposed to produce an impact assessment before the Criminal Records Bureau starts operating and charging fees. Given that the bureau will commence operations in 2001, I hope that the Minister can assure us that a detailed assessment will be produced later this year. Will he issue guidance on how the system will operate, especially the way in which the concept of substantial unsupervised access to children and young people should be interpreted?
Conservative and Labour Ministers have always taken the view that voluntary organisations are not obliged to have their helpers vetted and such arguments were used when my party was in office. However, I wonder whether the Government have taken full account of the pressure that insurance companies are exerting on voluntary organisations. In my
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constituency—and, indeed, on a wider scale—voluntary organisations are saying that they will feel obliged to ask not that the straightforward criminal record check be carried out, but the enhanced check. Otherwise, they fear that insurers will not provide cover where an organisation is sued because it failed to carry out a check that would have shown that a helper had harmed a child. The Government should not stand back and say, "It's up to the voluntary sector to decide whether to carry out checks." Voluntary organisations are under much pressure from insurers to secure checks on all volunteers who work with children and young people.
What thought are the Government giving to the impact of the requirement for checks on after-school clubs and other initiatives that they are helping to fund and that are directed at young people? I presume that volunteers who work in such organisations will be asked to permit a criminal records check to be performed. Will the Government allow for the cost of police national computer checks in their funding?
Although I have some criticisms of and questions for the Government, I start from the position of sharing the support for the voluntary sector that the Minister and his colleagues have shown. The thriving and innovative voluntary sector is one of this country's greatest traditions. It has existed for many years and all of us must work hard to pass it on in good health to future generations. In doing that, we will contribute to the greater well-being of the country.
3.32 pm
Jackie Ballard: Like others, I have been a volunteer—not just a political volunteer. However, I have discovered that one carries on being a political volunteer even after one is being paid to be a politician. I was also a recruiter and organiser of volunteers when I worked in adult basic education, so I know about the difficulties in finding suitable volunteers. The volunteers whom I had to recruit needed to give blocks of their time to help adults with literacy or numeracy problems, so I understand what the Minister said about the inflexibilities in the benefits system. Those inflexibilities affect volunteers who have to commit to being in a certain place at fixed time for a set period if they are to do an individual any good.
In our background research, we have all read papers containing figures on the number of volunteers and the hours that they work. I read a different paper from the Minister and the hon. Member for Aylesbury (Mr. Lidington). It said that volunteers give more than 18 million working days a year, the equivalent of contributing £1.4 billion to the economy. That figure is different from the £40 billion that the Minister quoted. I do not know how those figures were calculated. It is probably impossible to calculate the economic worth of volunteers, although it might be a worthwhile exercise. Does the Minister have another figure?
Mr. Boateng: No, but I wonder whether that was the same statistician who calculated what the Liberal Democrats could provide with an extra penny on income tax.
Jackie Ballard: I am so disappointed. I thought that the Minister was in one of his generous moods and that

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he would not go in for such petty political backbiting. He has disappointed me, as he so often does, but I will try to live up to the name that he gave me in Committee on the Criminal Justice and Court Services Bill and behave responsibly.
My experience of statisticians is that no two ever agree on statistics. We should not put too much store by statistics or statisticians. However, whatever the exact contribution made by volunteers might be, it deserves to be recognised in the country and at the heart of Government more widely than it often is, which is why I welcome today's debate.
In our jobs as Members of Parliament, we encounter many people every day who give up hours of their time to do voluntary work. I am amazed at how much time some people devote not just to the well-known charities, but to helplines or statutory organisations such as the NHS, which—to make a brief party-political point—often uses volunteers to eke out its meagre resources. Some people even volunteer to work for Members of Parliament.
I recently met a constituent who works full time, but devotes much of his spare time to running a youth club in Milverton. He saw that a need was not being met, rolled up his sleeves and got on with it. We owe such people a great debt of gratitude. Indeed, volunteers are the unsung heroes of our society, without whom many organisations would collapse and many people would fail to receive vital services. Our communities are much the richer for these people.
I shall mention several organisations in my own constituency to make a wider point. The first is St. John Ambulance, which I visited recently. I was made keenly aware of its difficulties in recruiting volunteers. There is a greater need for services as voluntary organisations grow, but fewer people have time to give, so it becomes increasingly difficult to recruit volunteers. Hon. Members will be attending fetes and carnivals in the next few weeks, many of which could not take place without the presence of St. John Ambulance—for insurance as well as safety reasons. It is vital to the success of other organisations in the community, so there is a knock-on effect. St. John Ambulance also provides training, internally and externally, which helps to save lives every year. As a result of lottery funding, it is running first aid courses in some of my constituency's villages to train first-line responders in the event of emergencies—a vital job to help support the emergency services.
Last Friday morning I was shown around Beech Grove school in my constituency by the head teacher and the chair of governors. It reminded me that school governors are another volunteer group—perhaps not one that immediately springs to mind—that performs a responsible and vital role. It is an increasingly time-consuming role, particularly for the chairman of governors. Some hon. Members have been chairs of school governors and some—perhaps the Minister—still are.
I recently attended a youth council conference in Somerset that brought home the importance of volunteer networks, without which youth participation in the form of youth councils could not take place. If we expect young people to become active and valuable members of society, we must provide opportunities for them to be consulted and give them an input into our
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democratic systems. There is a tendency to view voluntary work as about helping people in need, but it is also about involving people in diverse ways in their communities. Becoming involved in projects to ensure that decision makers listen to young people's views is another part of volunteering, as it is not always carried out by the statutory sector.
Last Saturday, the mayor of Taunton Deane organised a millennium parade through the town. A huge variety of voluntary organizations—more than 100—took part. The hon. Member for Aylesbury spoke about a range of organisations, and I noticed a range from the Samaritans to the majorettes—very different in their aims and objectives.
Many voluntary organisations value the framework and support that they receive from joining together under the umbrella of the Council of Voluntary Service. I note that neither of the two previous speakers mentioned CVS. I am especially aware of its work because I used to be a member of the executive of my local CVS branch. I know first-hand of its ability to bring together social, economic and environmental groups to contribute towards community planning. Local organisations and their communities need the CVS to build skills capacities and competences through partnerships.
I have regular meetings with voluntary organisations in my constituency and they all tell me that they do not want to lose sight of their core objectives and become over-bureaucratic to take on and deliver either the local government or national Government agenda. The CVS is in an ideal position to facilitate compacts, if it has adequate core funding. This comes down to the issue of core funding versus chasing project funding, for which I would not blame a specific Government. I have been a member of local government and this is not a party-political issue.
All Governments who see themselves as guardians of public funds are likely to put over-bureaucratic demands on voluntary organisations and to have bright ideas and seek bids for project funding. However, we must find a way to ensure that that does not overtake the core objectives of voluntary organisations so that they end up employing people to do their accounts and they lose sight of their original purpose. The whole process takes time and resources and that is why the CVS is an ideal player in it. There is a constant issue for voluntary organisations in managing the conflicts between their internal values or aims and the external policy environment, such as the divergent and changing expectations of partners and the new financial opportunities, especially bidding opportunities and the inevitable financial constraints.
Volunteering and the nature of voluntary organisations have changed a great deal in the past two decades. Their services are needed more now than ever before and perhaps in some ways the terms "volunteer" or "voluntary" are no longer suitable because without some of the services provided by the voluntary sector, the statutory services would find life incredibly difficult. As the hon. Member for Aylesbury said, many more people are now in paid work, so there are fewer volunteers to cope with the increasing needs of communities and statutory organisations.

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Some people feel that they have no skills to offer, but all that many people who are in need of help want is a little of someone else's time and attention—something that most people can offer. Many people volunteer their time to home visit schemes that are organised by local. authorities and charities such as Age Concern. They provide a lifeline for people who may not necessarily suffer from any disability, but who benefit from having someone to talk to once in a while. Lewisham health centre, which is nowhere near my constituency, runs just such a scheme to help older people cope with loneliness by providing someone to speak to them on the phone or visit them in their homes.
The Minister spoke about the BBC's TimeBank scheme. I should like to mention another. I do not know whether the Minister has come across the Lewisham time bank but it is attached to the health centre. It enables volunteers to earn time credits for helping their neighbours or others in their communities. They can spend those time credits on services for themselves. A general practitioner, for example, can prescribe a few hours of visiting for someone who is lonely or depressed—I do not mean clinically depressed, but what most lay people would describe as depressed. Such schemes can give a value not just to the act of volunteering, but to the volunteer.
In his speech in March, which has already been mentioned, the Prime Minister said
let us give generously in the twin currencies of time and money.
He was right to identify time as a unit of currency and it is one currency of which some people, such as the retired and the unemployed, have plenty. But many of them do not have much of the other currency—money. Why not allow them to exchange their time for goods and services?
The expansion of the scheme could be worrying for Governments. If local authorities were involved in time bank schemes, they could allow time credits to be exchanged for car park tickets or for access to leisure facilities. It may be a revolutionary idea, but when one starts to think about it, there is no end to where it could lead. One could set up an alternative society, swapping time and services with each other without using money. However, Treasury and Department of Social Security officials would get very worried about that. I am pleased that the Government are looking at the existing, or perceived, barriers to volunteering for people who are on benefits and I am delighted with the Minister's announcement about time credits, which is very positive.
There are many time-bank, time-credit or funny-money schemes in this country, but there are many more, and older-established ones, in the United States, where there is a long-established culture of volunteering. Like many hon. Members, I have an American intern working with me, and she tells me that university students in the United States compete for the chance to spend their holiday time volunteering, building houses, caring for children and so on.
There are service-learning programmes in which people give their services free of charge to help organisations in need. For example, accounting students give up their time to help in schools. Others
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volunteer to work in parenting schemes for at-risk children; in meals-on-wheels and family-assistance schemes in hospitals; in neighbourhood cleaning schemes; and in shelters for abused women. Volunteering is a worthwhile way to help others while learning new skills and being valued as an individual. As the Minister said, it is an impressive addition to any CV.
I will not repeat the argument advanced by the hon. Member for Aylesbury about voluntary organisations' anxiety that Government proposals will make them pay for checks on criminal records. However, I, too, have been lobbied by several organisations, including the guides and the scouts who rely largely on volunteers. I do not have to declare an interest as the honorary vice-president of Somerset Scouting Association as it is certainly not a pecuniary interest.
The checks are vital and it is important that voluntary organisations take as much care as statutory organisations and business about those who work with children and young people. I hope that the Government's review in July will show that they have much more money than they expected in their coffers and that they will thus grant voluntary organisations an exemption from the fee for criminal record checks.
We have much to learn from other countries that make use of people's volunteering skills. Many people are prepared to play a part in their community through voluntary schemes, although getting involved m local politics or the local council may be the last thing that they want to do. However, many of us became involved in local politics through the volunteering route. I was first involved in campaigning for a toy library, helping to set it up and running it when I had a very young child. Volunteering is often the route into politics, but many people do not want to get politically involved. They are happy to give up their time to volunteer for other things.
Volunteers should come from all sections of society—young and old, working and non-working. If working people are to give their time and skills to the community, they will need their employers' support. As the Minister said, the Prime Minister laid down a challenge to employers, many of whom do not recognise the value to their organisation and to society of having employees who are active as magistrates, local councillors. school governors or in voluntary organisations.
I am one of several Members of Parliament on a secondment scheme through the National Council for Voluntary Organisations. I chose to work with Crime Concern, which last night held a dinner for corporate sponsors, which I attended. I learned there of a large London brewery that released 50 members of staff during working hours to act as mentors to children at a local school who are at risk of offending. That is an excellent example to other employers, who I hope will take up the Prime Minister's challenge. However, one day in 18 months seems rather a small challenge to rise to and I hope that they will give more time.
I have long been interested in community measures such as time dollars and community banking. Mutuality has been missing from volunteering so far; community banking takes place with volunteer support to set up a mutual organisation, the idea being that communities band together to offer cheap finance. The bank is administered by a team of volunteers, so costs are kept to a minimum.

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The other attractive aspect of mutuality is harnessing the time, skills and caring of people who themselves need help. Rather than so-called do-gooders or mentors moving in to help the underprivileged or marginalised members of society, it is better to involve such people not as passive recipients of help but as active participants with something to contribute. In debates elsewhere the Minister and I have discussed how people who get into a spiral of offending often have low self-esteem and need someone to tell them that they could be better people. The same argument applies to people living in a disadvantaged community who feel that they are just the recipients of help with nothing to offer in return. Mutual volunteering could help to overcome that problem.
We are fortunate to have so many people who are willing to give up their time to help out in charity shops, hospices, meals-on-wheels services, day care centres, support groups and many other activities of our society. Volunteers do not volunteer for nothing; they gain from the experience. Whenever I recruited volunteers I was always careful to say that voluntary actions were not always done just out the goodness of people's hearts; volunteers gained a feeling of self-esteem and they were contributing something worthwhile to the community.
As the Minister said, volunteering can—through fostering regular attendance at meetings and putting some routine back into people's lives—help to get people back into paid work. We must be careful not to make volunteering too professional arid not to impose so many types of accreditation around it that it puts it out of the reach of ordinary people.
Mr. Boateng indicated assent.
Jackie Ballard: I am pleased to see the Minister nodding. Not every country in the world has the volunteers and volunteer networks that we have. We are fortunate to have a long tradition of volunteering. We must be careful not to destroy that tradition by good intentions.
3.54 pm
Mr. Alun Michael: Volunteering is the essential act of citizenship. Active engagement in the communities in which we live—not rights or the passports that we carry—is what makes us citizens, and I make no apology for reinforcing that point. My right hon. Friend the Minister made the same point when he referred to volunteering being of the essence and the fabric of society. Due to his wide experience of the voluntary sector and community interests, I am delighted that that aspect of Government policy is in his hands and I welcome his announcements here today.
The United Kingdom has a vibrant and successful voluntary sector. There has been enormous progress in promoting a spirit of partnership, but volunteering still has an old-fashioned ring to it. It is seen as dowdy here, in comparison with the United States of America, where voluntary work is increasingly seen as a core activity and is viewed by business managers as well as individuals as an essential element in a CV. We are talking only about
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image and language in that respect, because our level of activity and the range of our voluntary and community sectors are enormous—probably greater than in any other country. Even on that large base, much progress is being made by the voluntary sector—but much remains to be done. In my contribution, I want to recognise the value and work of the sector, stress the importance of partnership and look to priorities, particularly in innovation.
The previous Opposition day debate of 23 July 1996 was almost unique because there had been no debate on the voluntary sector or volunteering for many years. It was an opportunity for all those who took part to celebrate the work of the sector. I am pleased that this debate is taking place on the Government's initiative and I hope that it will become a regular feature of the House's calendar. Clearly, there is a mass of issues with which we ought to engage. They are not, perhaps, the controversial and partisan issues, but issues that should be teased out in intelligent debate between people who have experience of the voluntary sector and a concern for it.
It is the responsibility of Government to nurture the sector, although we must be sensitive to its need for independence. All parties have accepted those points. I am pleased that so much of what the Labour party called for when in opposition, in terms of the development of that partnership, in publications such as "Building the Future Together", has been delivered. I congratulate the Minister and his colleagues on their recent work. The development of the compact at every level throughout the United Kingdom is an enormous step forward. I pay tribute to my right hon. Friend the Minister for his participation and to people in Scotland, Wales and Northern Ireland, where separate processes have led to developments that are similar, but are very much owned by those countries.
Mr. Hope: I regret that my commitment to an engagement at the Trustee Conference 2000 means that I cannot stay to contribute to the debate. My right hon. Friend is hiding his light under a bushel. He is the author of the compact that is now establishing a brand new relationship between the Government and the voluntary sector at a national level and in regional and local government. Does my right hon. Friend agree that the work that he has done has set the standard—I am sure that he does—but that, although we have made progress, there is more to be done, particularly on rolling out the compact at local level?
Mr. Michael: Many people recognised the need for the developments and many people, including my hon. Friend, came to the House with experience of the voluntary sector. They brought their experience with them, so that the House is now seized of the need for the relationship.
The Labour party developed its approach in opposition, but did so in partnership with the voluntary sector—listening and debating. Parallel activity took place in the voluntary sector. The National Council for Voluntary Organisations took a major initiative that led to the Deakin report. That made a significant contribution in England and there were parallel working groups in Wales, Scotland and Northern Ireland, where the voluntary sector itself sought to develop a different

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type of relationship. It has been a collective effort, and I pay tribute to my hon. Friend the Member for Corby (Mr. Hope) for his contribution, both in his professional background and since he was elected to the House, particularly in his work with the Back-Bench group on the voluntary sector.
There is a great range of important innovation. The Prince's Trust has undertaken a variety of activities designed to motivate young people, taking risks that it would be more difficult for the statutory sector to take. On the Government side, there has been the development of the millennium volunteers. I am glad that my right hon. Friend referred to the role of older volunteers. Often, one hears people in their 80s talking about helping "old people" who are about 10 years younger than they are. I had that experience with my father, when he was alive. Following the year of older people, there has been increasing recognition of the important part that they play. There is potential for greater future involvement, as the number of older people and younger retired people increases. We need strategically to expand that innovation.
I welcome the cash commitment to expand the work of older volunteers to which my right hon. Friend the Minister referred. That approach needs to be developed in a strategic manner that does not simply involve one-off projects or funding for a short period. Much good work has been supported by lottery funds, but most of those efforts tend to be short term. A service that is provided for two or three years may disappear unless there is sustained funding, which can sometimes be provided by Departments, local government or voluntary contributions. However, the situation can be difficult—the example of the old urban aid funds shows that services can disappear, although they were good and the community came to depend on them. It is crucial to provide sustained support for the best projects.
I want to discuss two important innovations that suggest a way forward: those are, the community action network and the Cares programme, which was initiated by Business in the Community. Perhaps I should add that I joined the advisory board of the community action network, although that is not a pecuniary or declarable interest.
The purpose of the community action network, which has grown quickly, is to encourage the outstanding community projects around the country to exchange information and knowledge. Some of those projects are well funded, some are local and others, such as Track 2000, which is in my constituency, are grass-roots organisations.
During my time at the Home Office, with CAN we invited various voluntary sector organisations to take part in a discussion. They discussed, via the web, what they should say at that first meeting. As a result, it was one of the most coherent and well-prepared meetings in which I have had the pleasure of taking part. That shows how new technology can be used by the voluntary sector.
Some 350 members of the community action network are now helping to spread innovation and to compare practices and experience—they discuss what works and what can be transplanted, so that success does not
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simply remain local, although many of the projects, of their nature, are local. Local successes can be transplanted and replicated in other places. We should strongly encourage such efforts and I know that the Home Office is supporting this work.
The community action network brings together the public, private and voluntary sectors. Several innovations have shown that the three sectors have the capacity to work together. Experience to date suggests that there is a capacity for dynamic innovation, although it can be difficult to manage a dynamic relationship between different sectors, which may include several Departments. The ways in which health authorities work make it hard to secure a proper and sustained engagement with the voluntary sector in community development.
I also want to discuss the Cares programme. I had the privilege of being invited by Sandy Leitch, who was leading a task force for Business in the Community, to join him and the National Centre for Volunteering on a visit to New York to examine the work of New York Cares. That shows how the lead in such initiatives can come from various directions—it can come from a community or voluntary organisation, the Government or the business sector. We should welcome and encourage such diversity. That initiative led not to the transplanting of the American experience to the United Kingdom, but to the development of our own model. I am pleased to see how that has developed through the action days that have been organised. Some 275 companies and 7,100 employees have taken part since September 1999. That remarkable upsurge in activity is in addition to the existing activities of voluntary organisations.
Ten Cares partnerships are now operational in cities around Britain, including the Cares programme in Cardiff. Coincidentally, my constituency was one of the pilot projects. I am very pleased that the National Assembly for Wales has given £400,000 for Wales-wide development in every town and city. The programme's innovative activity is being matched with that of the existing voluntary sector. That is a positive approach; people are saying not, "We're new: we can come in and do everything", but, "We can add to what is already there and work with existing organisations."
I referred earlier to the role of voluntary activity in the CV of someone who is seeking employment. The National Centre for Volunteering has highlighted the fact that the 1997 national survey of volunteering revealed that 18 per cent. of those surveyed said that their employer encouraged voluntary work, and 40 per cent. said that they would be either very interested or quite interested in participating in voluntary schemes organised by their employer. That underlines the importance of voluntary work being seen as something that is encouraged. It also demonstrates the potential of the Cares programme, given employers' involvement in it. The National Centre for Volunteering suggests that government should help to encourage flexible working hours to facilitate the community involvement of employees. It also advocates schemes that could assist business in encouraging volunteers—for example, tax breaks or a scheme akin to payroll giving, with voluntary activity rather than money being the benefit that is provided.

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My right hon. Friend the Minister, when he spoke about encouraging employees, referred to the role of the Secretary of the Cabinet, Sir Richard Wilson. I pay tribute to him for the superb example that he has set in encouraging Government employees to become involved in volunteering activities. His initiative at the Home Office in 1997 had a significant impact. There is nothing like leading by example from the top and I pay tribute to the lead that he has taken.
The National Centre for Volunteering has raised the issue of unemployed people and people who are active social entrepreneurs in their local community. That is to do not only with unemployed people voluntarily giving their time, although I am pleased that more is being done to remove the obstacles. However, people who take a lead in their local community and become social entrepreneurs, doing valuable and fulfilling, but unpaid, jobs in the community, sometimes have to leave those jobs in favour of paid work. That can leave a vacuum, in that much voluntary activity collapses and, indeed, help for unemployed people disappears. The national centre suggests the inclusion of a social entrepreneur option in the new deal. There are potential difficulties in implementing that, but the idea merits further exploration.
Social entrepreneurship, as a concept, is as hard to put a finger on as entrepreneurship in the business sector, involving as it does the old question of whether entrepreneurs are born, developed or trained. I have looked with interest at the work of the school for social entrepreneurs, which was started by Michael Young—Lord Young of Dartington—who seems to have lost none of his capacity for innovation. If that school proves a success and the people who go through the training course are able to take a major leap forward, it would say a lot for education and training in that field. That is something on which we could then build for the long-term future.
Training needs a greater emphasis in relation to volunteering, voluntary organisations and voluntary activity. There is always a tendency to make savings on training when money is tight, as it is most of the time. However, if volunteers are to fulfil their potential, they need the opportunity to develop their skills and knowledge, just as employees do. We should place a great deal of emphasis on that.
I join my right hon. Friend the Minister in welcoming the report of Lord Warner's committee, and I hope that a long-term strategic approach will be taken to the implementation of its recommendations. Will the Minister tell us the Government's intentions in that regard when he sums up? The contribution of the voluntary sector to the new deal should not be underestimated. From the beginning, the most difficult young people have needed to be motivated and given the first step on the path into work. That is of interest to all of us, not only because we believe that all young people should have opportunities, but because it is those young people who need particular help who are likely to do damage to themselves and to the wider community.
I refer to the rest of the Minister's portfolio—the way in which the devil makes work for idle hands. If young people are to respect society, they have to be part of society. Young people from the most deprived communities—and often those from ethnic minorities—frequently have not had as many opportunities as
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others. I welcome the work of the voluntary sector in the new deal in that regard and I hope that it will be strongly promoted in the future.
Tradition and consistency are on the other side of the coin to innovation, and I share the view expressed earlier that faith-based voluntary organisations need to be encouraged and nurtured. The church is often the only professionally led organisation still in existence in some of our most deprived communities and run-down areas. Increasingly, in modern times, the mosque as well as the church may be the key to engaging the community in its own future. Tradition and consistency in the voluntary sector, therefore, must be nurtured.
I have some involvement in the Youth Hostels Association, of which I am a vice-president, and the citizens advice bureaux service. A variety of organisations should not be allowed to slip down the list of priorities for support and encouragement simply because they have been around for a long time.
I shall return to the most important development of recent times: the development of partnerships. That is where I started in voluntary and community work and, during the past couple of years, I have been pleased to see major innovations in Wales. The Wales Council for Voluntary Action has now based itself in Baltic house, a stone's throw from the National Assembly for Wales. The engagement between the new Assembly and the voluntary sector is vibrant as a result of that initiative. The Assembly has also established a partnership council as one of the three strands of partnership—the others being with business and with local government—that are the key elements in its being. Others could learn from that.
The development of local compacts has grown out of the agreement of the Wales Council for Voluntary Action and the Welsh Local Government Association to set targets together. The delivery has been patchy, but some of it is extremely exciting. During my period as Secretary of State, I asked all public bodies in Wales to establish a compact with the relevant voluntary sector. One of the most exciting developments was in Neath-Port Talbot, where the local authority and the local council for voluntary action joined with the NHS trust and health authority to adopt a tripartite approach to the development of volunteering and voluntary activity. Again, that approach strives to break down the barriers.
The development of a compact involves not simply codifying good practice, but creating a new vibrancy in society and a planned release of new energy into the voluntary sector. Certainly, there is a danger that the voluntary sector will be flooded if national or local government expect too much of it, and the relationship must be managed with great care. However, that relationship must also be strategic. If the voluntary sector is to continue to be successful, consistency is crucial.
I mentioned crime reduction and I was pleased to hear the hon. Member for Taunton (Jackie Ballard) mention that she is a former board member of Crime Concern. I regard the work of that organisation and others such as the National Association for the Care and Resettlement of Offenders, and Victim Support as crucial to crime reduction in this country. It is not simply that they do additional good work: they do things that the public sector cannot. Partnership between the public and the

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voluntary sectors—which, again, requires the involvement of business—is crucial, and such organisations are essential to delivering stability in society.
Finally, I too underline the importance of involving young people. As has been said, it is difficult to get young people to regard volunteering as exciting. In my experience as a youth worker, the only way to get them to volunteer was to tell them that they were volunteering only after the event, by which time it came as something of a surprise. One must get them involved and engaged, and words such as "action", "care" and "community" have a greater appeal than "volunteering". That presents a problem. One cannot talk about volunteering without using the word, but to attract people one almost has to avoid it.
In Wales, the National Assembly launched the "Young Voice—Llais Ifanc" initiative, the purpose of which was to use the internet and e-mail to encourage youngsters to talk to each other—rather than just the Government about policy. If we allow concerns and suggested remedies to develop independently, young people will engage in voluntary activity and, indeed, the political activity that is essential to the survival and development of our democracy. Political activity is, after all, a voluntary activity—none of us has been forced into it—and it is rather sad that we live in a society in which such activity is, in the main, denigrated. Just as volunteering needs a fresh and positive image, so does political activity, and perhaps the two are not entirely unrelated.
On the responsibility of Government, it is interesting to note that other countries are looking at, getting excited about and learning from developments in this country. Last weekend, Lord Dubs and I spent some time with people from eastern Europe who were interested in learning how to involve non-governmental organisations in the development of a civil society. They brought a refreshing air of excitement. I hope that debates such as this will engender greater interest and excitement among hon. Members.
Let us explore the words to be used in relation to volunteering, but let us speak positively and regard it as the essential act of citizenship. Let us press the Government in everything that they do to emphasise the importance of these activities. Many Government Departments—the Home Office, the Department for Education and Employment and the Cabinet Office—are now taking initiatives. The social exclusion unit has made a major contribution in promoting ideas of social inclusion. We know of the Chancellor of the Exchequer's interest, which has been put into financial terms in recent decisions; we know of the Prime Minister's close interest in the voluntary sector. We must move towards coherence from Government: perhaps sometimes there are too many voices, which makes it difficult for the voluntary sector to be sure what messages are coming from the Government. That can lead to energy being diverted in a variety of directions.
There is a difficulty about us wanting, as we all do, children and those with whom volunteers work, such as adults with learning difficulties and the elderly, to be properly protected by the use of the criminal records system. It gives a mixed message from the Government
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when that will ca use a burden for those organisations that use volunteers most. I recognise the difficulties and the dilemma that Ministers face in dealing with that. Ultimately, it becomes a central dilemma for the Government and one that the Chancellor of the Exchequer could perhaps look at again to ensure that they give a clear and simple message about the importance and value of volunteering.
In that context, all organisations in the public sector, including local authorities, must be encouraged to provide funding in a way that makes it easier for the sector to apply for and receive financial support within the new time scale. Now that the Government have moved to a three-year time scale for funding, there is no reason why that should not be passed on by public bodies and local government to the voluntary organisations.
Finally, new ideas are necessary if we are to get right the balance between core funding and project funding. I know that some thought has been given to strategic funding for the voluntary sector. That would allow continuity of thought and development without a return to the old system, where so much money went to administration that comparatively little was available for activity on the ground and the development of innovation and good projects.
Let us unite in persuading Ministers that encouragement of the essential act of citizenship has support from all sides of the House and from the community at large.
4.23 pm
Mr. Simon Thomas: I begin by declaring a possible interest. I worked for five years for the national representative body for the voluntary sector in Wales, the Wales Council for Voluntary Action. I still have pension rights, so I clearly have a stake in the future of the voluntary sector.
I welcome the Minister's announcement that time exchange schemes will be taken into account in the benefit regulations. I ask him to go a little further along the lines urged by the hon. Member for Taunton (Jackie Ballard), particularly with regard to local exchange trading schemes, which are local exchange mechanisms. A local exchange trading scheme in my constituency is having problems with unemployed people who pledge one another not only time but services, as a sort of currency. Local officialdom is not receptive to what is happening there.
I also welcome the pronouncement by the hon. Member for Aylesbury (Mr. Lidington)—I am not sure whether it was an announcement—who spoke glowingly for the Conservative Front Bench about liberal society. I thought that liberal society had gone downhill in the Conservative party. However, at least in this consensual Chamber I welcome his remarks on a liberal society without elitism. I agree with his remarks in that context.
I want to focus on the contribution of the voluntary sector to Welsh civic society, as seen from my own perspective and experience as someone who has worked for a voluntary sector organisation for several years and who, like other hon. Members, became involved in the first place by being a volunteer.

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I shall start by giving throwing some statistics into the pot. They differ from other statistics that we have heard, so perhaps we can take an average and work out where we are.
The annual income of the voluntary sector in Wales has been estimated at about £570 million, which is a significant amount and is equivalent to 2.2 per cent. of the gross domestic product of Wales. There are about 25,000 active voluntary organisations in Wales, of which 90 per cent. are small local organisations. It is important to remember that many voluntary organisations have their headquarters in London and elsewhere in the United Kingdom, which skews the perception of voluntary activities because they are often thought to be outside Wales. Wales has many small voluntary bodies.
The Minister said that 29 per cent. of the adult population in Wales are active volunteers, but my figures show that 80 per cent.—1.9 million people—are active volunteers and that each contributes nearly four hours of voluntary time every week. There is a big difference between 29 per cent. and 80 per cent., but statisticians use different methods to obtain figures. The value of that voluntary work to the Welsh economy is estimated to be £3.4 billion. The figures sometimes seem to go beyond reality and perhaps the new economics have gone too far. The contribution of voluntary organisations and volunteers is equivalent to about 15 per cent. of gross domestic product in Wales. Accusations are sometimes made of facts and figures being added together and totalling more than 100 per cent. of GDP when every sector has made a play for its part of the economy. However, the contribution of the voluntary sector in Wales is significant and it ranks alongside sectors such as agriculture, farming and tourism. It is in that league and it is important that its value is accepted.
For every £1 of statutory funding, the voluntary sector contributes £2.30p in matched funding, time and effort. We face the problem of finding resources for objective 1 structural funding in several areas in Wales and elsewhere in the United Kingdom and the contribution of the voluntary sector to meeting structural funding obligations can be significant. It has a full part to play, but that does not let the Government off the hook in finding sufficient matched funding in the comprehensive spending review. The voluntary sector should contribute added value to the process; it should not supply funds to substitute for Government expenditure.
Having put on the record some of the facts and figures from one part of the United Kingdom I want to say how important the voluntary sector is to civic society. The compact between the Government and the voluntary sector in Wales, to which the right hon. Member for Cardiff, South and Penarth (Mr. Michael) referred, states:
Voluntary action plays a central role in our modern pluralistic society and enhances the democratic process.
Within the past week or so we have seen how the voluntary sector can enhance the democratic process when it delivers its views to politicians.
I see from the voluntary sector it my constituency how flexible it can be and how it is able to respond to demand as it arises. Statutory organisations sometimes
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take years to conduct research and to put together funding bids, but the voluntary sector can be up and running in months, weeks or days and sometimes hours. Organisations in Aberystwyth that help the young homeless, Hype in my constituency, and the Ceredigion advocacy network, which helps those with mental health problems, have filled a gap and, at short notice, have provided a service that was not available in the statutory or private sector. The voluntary sector often brings such organisations closer to the people and encourages greater participation. In turn, that builds confidence and skills among participants. We have already heard a little about the contribution that volunteering makes to employers and those seeking jobs. I like to think that the voluntary sector is not only the civic society, but the learning society at work. Volunteering is the process by which most people gain new skills.
I support what the hon. Member for Taunton said about accreditation in the voluntary sector. We must monitor progress and the value of the public penny that goes into some voluntary organisations, but we must not overburden individuals with a requirement to gain national vocational qualifications or meet other criteria. We must maintain the maximum flexibility and allow people to gain skills and measure their own progress. When self-esteem is low, people measure their progress against that of their peers, not against external criteria that they must meet. It is important that Government policies give the voluntary sector sufficient freedom to continue in that way.
I want to illustrate the way in which the voluntary sector has worked in Wales by giving a short history of its contribution to the preservation and promotion of the Welsh language. I became involved in the voluntary sector and perhaps ended up in this House by that route. The first voluntary efforts to revive the Welsh language were made in the 18th century, when Madam Bevan set up circulating schools. They taught Welsh, which was forbidden by the state at that time. The Act of Union ruled out the use of Welsh in public life.
It took the voluntary sector, driven by the nonconformist faith communities, to realise what was happening. It set up a whole raft of initiatives, which are now familiar even to those outside Wales. The eisteddfod was restored to its current form in the 19th century. The Gorsedd, which started in London on Primrose Hill, was fuelled by a real voluntary visionary—Iolo Morgannwg. I think that he never had much of a job, but was a lifelong volunteer. He was also addicted to hard drugs, but I do not advocate volunteering in that way.
The eisteddfod and the Welsh language societies continued to flourish in the early part of the 20th century. The Urdd Gobaith Cymru—the Welsh league of youth—was set up and has proved an extremely effective way of teaching the Welsh language to children. It led to the first Welsh language school, which was voluntary. It was not allowed, or at least not encouraged, in the Government-funded system. That first Welsh language school was in Aberystwyth in my constituency. The 1960s saw an increase in the number of organisations such as the Welsh nursery schools movement—Mudiad Ysgolion Meithrin—which led to a revival of the language.

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Curiously, the Welsh language movement also saw itself as being outside the mainstream voluntary sector. As a result, many voluntary organisations in Wales now have difficulty attracting Welsh-speaking volunteers. That is both an anecdotal and a recorded problem. For example, the citizens advice bureaux in some parts of Wales want and need to provide a bilingual service, but have difficulty attracting Welsh-speaking volunteers. The Welsh language community has taken part in volunteering around chapels and churches, which has not been fully brought into the mainstream. However, that is developing, with the Assembly's encouragement, and I am sure that that will continue.
My crude interpretation of voluntary organisations is that they are often highly innovative and even radical at first. They challenge the system and attract opprobrium and ridicule. That leads the Government not to work with them, but against them. In time, the voluntary organisations start to deliver services; they become part of the fabric of provision and the services that they deliver are absorbed into what is done by the Government or private business. The hon. Member for Aylesbury set out the progress of a voluntary organisation in terms that were more elegant than my crude analysis, although he was quoting someone else.
Some voluntary organisations get fossilised; they pay too much attention to their representational role on committees and so on and progress is blocked. However, they often work in close partnership with local government organisations and businesses, which is encouraged by the Government. I welcome many of the Government's measures in that regard.
When voluntary organisations start to become old-fashioned or inward looking a new bud sometimes comes out of the old rootstock and flourishes vigorously. The statutory sector does not have the same ability, when the old growth has come to an end, to go underground and re-emerge elsewhere in a new form.
I pay tribute to the right hon. Member for Cardiff, South and Penarth for his hard work and enormous energy in forming the compact in Wales and the Partnership Council. Although the Wales Council for Voluntary Action represented a lot of demands from the voluntary sector, if there had not been a listening voice at the other end we would not have got as far as we have done. The partnership arrangement with the voluntary sector will be a monument in Wales to the right hon. Gentleman and a testament to his hard work.
The Partnership Council is part of the Welsh Assembly; it was enshrined in the Government of Wales Act 1998 that there should be a scheme between the voluntary sector in Wales and the National Assembly. That is unique in the United Kingdom. The Partnership Council puts the voluntary sector on an equal footing with local government and business, which businesses do not find so amenable, but we are working on that.
In Ceredigion, we are also working hard to prepare for objective 1—I mention in passing that we are waiting for matched funding for objective 1. The objective 1 forum has one third representation from the voluntary sector, one third from local government and one third from business. That has given the voluntary sector the profile that it deserves within the plans for objective 1;
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whether or not we accept all the figures quoted, it deserves it for its contribution to GDP. Some members of the farming community in Ceredigion told me that they are not sure whether the voluntary sector contributes anything to GDP, although the arguments advanced today repudiate that view. The voluntary sector has a great deal to do in helping the area move towards objective 1 status and encouraging the projects, especially training, that will result.
The voluntary sector has also made a huge contribution to the proposal for a children's commissioner in the Care Standards Bill, which recently had its Second Reading. The wide and in-depth participation of children and young people in discussing what should be the work of a children's commissioner strongly influenced Welsh Members when they considered the commissioner's role.
The Partnership Council, whose job is to implement the scheme, put out the voluntary sector scheme for consultation, which is still going on. That scheme contains several important elements, one of which is an agreement on the way in which the Government should consult the voluntary sector. Such agreements are not always followed, but people do their best; the compact on volunteering acknowledges its value and the manual on voluntary grants helps the voluntary sector to claim the relevant grants. It sets out the way in which that sector and the Government will work in partnership. It also has a brief view on community development, which I mention because it is the only part over which I have had any influence. The hon. Member for Aylesbury will see that these compacts include not only codification but a lot of other detail.
The council has a preponderance of voluntary sector members, including 21 sectional networks. I am pleased to say that for the first time that includes a structured sectoral representation from the black and ethnic minority in Wales. That is to be welcomed. The Partnership Council is a strong voice for the sector. It complements the activities of the other bodies such the Wales Council for Voluntary Action and the National Assembly.
I should like to say a few words about the role of the voluntary sector and volunteering in rural areas. It is important to plead the case for diversity and pluralisation in rural areas. There are an estimated 1,487 voluntary organisations in my constituency. That is rather precise for an estimate, but it takes the apportionment of other national bodies into account. What is more certain is that 700 local organisations are active in my constituency. With a population of about 70,000, that is roughly one organisation for every 100 people, which is a much higher ratio than one finds in urban areas.
In Cardiff, for example, there is one local organisation for every 250 people. In Rhondda Cynon Taff, another densely populated area, there is one organisation for every 240 people. That discrepancy underlines the different rural and urban needs. There is wide diversification and there are transport problems in getting and delivering services to local people. I have different organisations doing the same jobs in different towns and villages. In Aberystwyth, Lampeter and Cardigan, one organisation does the same job as another organisation, but they are separate. That might be seen by some as duplication.

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The voluntary sector is often accused of being too highly duplicated, although that accusation is never levelled at supermarkets. It delivers different projects for different people. We must bear that in mind, particularly in rural areas. We must deliver voluntary support close to the people. That sometimes means that one ends up with the same or similar organisations doing similar jobs. It certainly places enormous strain on local government funding and fund raising. I hope that the rural issue will be taken into account in Government policy when they consider the voluntary sector. Community transport, volunteer bureaux and the local CVS are essential for rural areas.
The national lottery has made a significant contribution in Wales. On the whole, the picture is mixed. The National Lottery Charities Board has been very successful in Wales. It has responded to the needs of Wales. Tribute should be paid to the previous chair of that board, Tom Jones, who made a huge effort to be responsive to the voluntary sector and in particular innovated the small grants scheme in Wales, which was then rolled out across the UK. Many voluntary organisations throughout the UK now have access through the small grants scheme to support and train their volunteers. They will be grateful for what was done in Wales. It was a successful innovation.
We are now finding problems, however. They are not just the problems of short-term funding that have already been described, but the problems of the declining funding from the National Lottery Charities Board, caused in part by the new opportunities fund that the Government introduced. It is a highly valued fund but it has shaded the line between lottery money and statutory funding. It needs to be monitored carefully to ensure that we do not use lottery money to replace what should properly be statutory funding. That promise was made by the previous Government and I have not heard this Government say that they want to break that promise. We must monitor that.
The introduction of that fund means that there is less money for other funds. I know that that means that there is more money for the schemes that it supports and that some of them are good, but it has caused some problems with the National Lottery Charities Board, which has been extremely successful in delivering locally in Wales. It was annoying—I will not put it more strongly than that—for many people in Wales and for volunteers in Wales when the National Lottery Charities Board announced that it gad less money to allocate in the next few years for projects in Wales at the same time as the millennium dome received more money.
Let us look towards the future. There is no doubt that times are changing in the voluntary sector. I used to be a community development manager, and I saw such a job advertised in the paper yesterday—not that I am looking for another job. I scanned the description to find out what the job entailed, only to fir d that it was a job on the web, managing on-line communities. It had nothing to do with what I suppose we would call real communities—it involved virtual communities. Globalisation and aspects of the internet will significantly change the way in which the voluntary sector works. The voluntary sector is also innovating in that respect, but I have no time to elaborate on that now.
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We must avoid introducing any compulsion in the voluntary sector. I support hon. Members' comments about the need to preserve the sector's independence, to protect independent management committees and to ensure that the majority of members of those committees are volunteers. We should not allow professionals to run voluntary bodies while volunteers are simply told what to do. We must ensure that volunteers participate in running the bodies for which they work.
I will finish with a thought from the recent visit to Canada of the Select Committee on Environmental Audit. My attention was drawn to a headline that called for the introduction of "compulsory volunteerism". I am sure that we would not recognise that in this country. I accept that many good ideas come from north America, but I think that the voluntary sector will reject any ideas of communitarianism or forcing people to volunteer, which are floating around on the outskirts.
Preserving the independence of the voluntary sector so that it can respond flexibly to society's needs is a key task that the Government must bear in mind in formulating all their policies. If the Government can preserve the sector's ability to be independent and to criticise Governments, as well as work with them, without being penalised, they will support the voluntary sector well.
4.47 pm
Mr. David Amess: I welcome the debate and I apologise for my sporadic attendance. It is not easy to operate in Committee and in Westminster Hall at the same time and I hope that hon. Members will be understanding. However, I may have to spoil the party. Presumably, the debate was initiated to celebrate national volunteering week, but I wonder whether it was sheer coincidence that the Labour leader was invited to address the Women's Institute with a speech that also concerned volunteering.
I do not see the rosy volunteering situation that the Minister described. Parliament is now organised in such a way that hon. Members are invited to receptions morning, noon and night. The attendance of a photographer is arranged, our photographs are sent to our local papers and we are given badges of the particular organisation to wear. Such arrangements are attractive to Members of Parliament. I am wearing the green "Full Stop" badge of the National Society for the Prevention of Cruelty to Children and I have about three more in my pocket.
I applaud all such initiatives. It is good for Members to be associated with voluntary organisations, but what are we doing to help them? One or two hon. Members mentioned the largesse that they enjoy, but they are certainly not enjoying it in my constituency. I volunteer with the Women's Royal Voluntary Service and Barnardos and I wish to use the debate as an opportunity to celebrate voluntary organisations in my constituency. They are finding it tough to survive.
Some hon. Members made an important point about the difficulty of attracting young people into voluntary work. I received an excellent briefing—I had not asked for it in advance—from the Central Council of Physical Recreation, which talks about "taxes" on volunteering in sport. It cites criminal record checks under the Polices

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Act 1997 as a great burden. The briefing singles out other burdens such as the Transport Bill, the uniform business rate, the Disability Discrimination Act 1995, the national minimum wage, the climate change levy and so forth. That unsolicited briefing, which focuses on young people, highlights the difficulties created by the Government's taxation policies. When Southend was under the control of the dreadful Liberal-Labour coalition, many of our voluntary organisations had their grants cut. Thank goodness, after the first Thursday in May, all the cuts were restored and voluntary organisations are being encouraged again.
We can all make speeches about how marvellous volunteers are and how much we are associated with them, but it is what we do that counts. Society under the present Government is facing such difficulties that, if it were not for voluntary organisations, it would be in a state of collapse. Many people out there simply do not understand what voluntary organisations are about. I shall never forget meeting someone at a football match who spoke about the St. John Ambulance service as if it were a paid organisation. Thank goodness, St. John Ambulance people were there and they helped with several incidents at the match, saving the taxpayer a great deal of money.
I am wearing the badge of the National Society for the Prevention of Cruelty to Children. Locally, it raised more than £50,000. It provided services for risk management of dangerous adults, helped abused children, worked with children and young people who demonstrated sexually abusive behaviour, helped families to understand why abuse happens and how it affects children, offered counselling and therapy for children recovering from abuse, and provided much needed help to prepare and support children and young people giving evidence in criminal proceedings. The NSPCC is doing all of that—it must save us huge amounts of money—but we take it for granted.
What encouragement are we giving the NSPCC? I am wearing its green badge, but I doubt whether that will go far. I am happy to work with the Government if they have any ideas about how to help that organisation. In my area, it manages a helpline for 88 abused children a week. Last year, it answered 2,134 calls. My local NSPCC branch, under Mrs. Betty Finch, should certainly be congratulated.
I am attached to the WRVS and spent Monday at Southend hospital. We all know about the meals-on-wheels service, but I wonder if we all appreciate that volunteers man retail outlets in the hospital entrance. I talked to the ladies about why they had become involved and I was deeply moved.
Many voluntary services are run by people who are involved with the particular problem that the organisation aims to help. We all understand that the Arthritic Association, for example, tends to use people who suffer from arthritis. However, the WRVS is a wonderful organisation of highly intelligent women. It made me so angry when, after a recent speech, people made disparaging remarks about the women in the WI, saying that they were good only for knitting and making jam—it is a pity that others cannot knit or make jam. To dismiss these ladies with such remarks just because they do not want to listen to politics is extremely distasteful.
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The WRVS has more than 115,000 members and needs more volunteers. On Monday, it told me that most members are in their 60s, 70s and 80s and asked where the youngsters were coming from. If the Minister has any ideas on how we might boost numbers in the WRVS, I should be delighted to work with him on that. It offers a wide range of care packages—more than 1,100 social clubs for the elderly, 323 trolley services in residential homes, 94 contact centres where children can meet absent parents in a safe environment, toy libraries, prison visit centres and books-on-wheels services. In Southend, the WRVS distributed more than 4 million meals on wheels last year, raised £50,000 for Southend General hospital and helped out when the aircraft was hijacked at Stansted.
As for the Women's Institute, we should be in no doubt about the fact that it did not invite the leader of the Labour party to address its members. He arranged it and it went down like a lead balloon.
Mr. Michael: The hon. Gentleman acknowledged that he has attended intermittently this afternoon. Does he realise how much like a lead balloon is his contribution? Up to now, the debate has consisted of people speaking from experience—not just placements, but long-term involvement with the voluntary sector and its crucial role in our lives. I suggest that he wind up his lead balloon.
Mr. Amess: I am sorry, but this Parliament is democratically elected and I am not going to be patronised by the right hon. Gentleman.
Mr. Michael: Yes, you are.
Mr. Amess: No, I am not going to accept the right hon. Gentleman's admonishment. I was sent here to represent my constituents and to share my views with others. The fact that the right hon. Gentleman does not like my message says more about him and the Labour party than it does about me and my contribution to the debate. We know how today's Labour party is run: it cannot stand an alternative point of view.
I feel so strongly because I find that many voluntary organisations are struggling and I want to know what the Government will do to help them. The Salvation Army in Southend is magnificent; it has two wonderful centres and an eventide home providing care for 34 elderly people. It raises a huge amount of money locally, for which I pay tribute.
Barnardos is a substantial organisation. It works with more than 47,000 children and young people each year and has 250,000 volunteers. We all know about its work with less fortunate children. In my constituency, about 350 fund-raising volunteers give up their time—it ranges from four hours a year to several days a week. They help with house-to-house charity collections, distribute and sell lottery tickets, and collect and bank envelopes. There are two Barnardos shops, which rely heavily on their 32 volunteers, who lend their assistance with everything from window-dressing to administrative work.
During my time as a Member of Parliament, I have been associated with three hospices: St. Luke's, Little Haven and Fair Haven. St. Luke's hospice is one of the

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most moving voluntary organisations that I have had the privilege to see. An extraordinary lady called Trudy Cox shared her dream with us. I walked away from our initial meeting thinking that I had heard it all before, but she sacrificed everything and her dream is still there today in the form of St. Luke's hospice. The Little Haven hospice in Southend, West serves children from a wide area of Essex, and the Fair Haven hospice is round the corner from where I live. It also looks after a huge number of people.
Sadly, because the hospice movement has funding difficulties, we are having to redouble our efforts. Indeed, my wife suggested that we set about raising extra funds for those two hospices and that is what we shall do during the summer.
The South East Essex Advocacy for Older People in my constituency is an independent citizen and crisis advocacy service for all those aged over 60 who live in south-east Essex. It has some 23 trained volunteers, who work on a one-to-one basis with individual elderly people with problems. Again, it had enormous problems of lack of funding and support from the previous council and I hope that we will be able to tackle those problems soon.
We also have Southend Mencap. Last week or the week before, there was a mental health lobby of the House, when our constituents shared their problems with us. Besides its paid staff, Southend Mencap has more than 125 local volunteers, who help at sports clubs for the learning disabled, drive minibuses, man shops, befriend disabled people, act as advocates, fund raise and carry out other services.
I have the honour to be the president of the Southend branch of the Royal Society for the Prevention of Cruelty to Animals, which is another excellent organisation. It helps people who love and care for animals and who witness all sorts of cruelty. There are more than 200 branches in this country, which are run by 16,000 active volunteers and 330,000 regular supporters. Without them, I dread to think of the suffering that animals would face.
Then there is the diabetes organisation, Diabetes UK. Yesterday, we were invited to a reception in the House and I make no criticism of that. The fact that Harry Secombe made the effort to be at that reception with hon. Members despite his health problems, shows how strongly he feels about that organisation. In my constituency, more than 40 members of the diabetes club help to serve and educate people who are diabetic or potentially diabetic.
The list is endless. We also have the Friends of Southend Hospital and Neighbourhood Watch—all sorts of voluntary organisations. I am the joint chairman of the all-party group on the Scout Association. Scouts and guides make a huge contribution to our national life and very concerned about the Criminal Records Bureau charges. They have told me that the Minister who is responding to the debate has suggested that,
providing free checks would be an unsustainable burden on the public purse.
The Scout Association's view is that.
If the costs are seen as unsustainable by Government, then it is hard to see how they could be sustainable by a charitable voluntary organisation.
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I stress that those are not my words but those of the Scout Association. If the Minister finds them offensive, he must argue with his hon. Friend the Member for Ealing, North (Mr. Pound), the joint chairman of the all-party group, who shares my views, the hon. Member for Corby (Mr. Hope), who was here earlier and the previous Speaker of the House of Commons, Lord Weatherill, who also feels strongly about the charges on voluntary organisations such as the scouts.
I am pleased that we have had this debate, because too often we—by that, I mean, "we"—pay lip service to the work of our voluntary organisations, which are under increasing strain to sustain their activities. I simply ask the Government to reflect on their approach to such organisations, because in my constituency I have seen no tangible benefit from Government funds. If the Minister can correct me, I shall be delighted to be corrected, but I hope that he and his colleagues will do all that they can to encourage as many people as possible to join voluntary organisations in my constituency and others.
5.04 pm
Mr. Boateng: We have had an excellent debate, with one exception. It must be said that the hon. Member for Southend, West (Mr. Amess) warned us that he intended to spoil the party, and he did. However, he did most damage to his own party. His comments were in no way representative of the tone employed by the hon. Member for Aylesbury (Mr. Lidington), who led for the Conservative party. Perhaps they were performing a Mr. Nice and Mr. Nasty routine—if so, they were true to character.
I was deeply disappointed by the speech of the hon. Member for Southend, West, which could have contained so much more. It consisted of a list of excellent organisations in his constituency, interspersed with bile and balefulness. His points could have been made without adopting that tone and he would have done better not to have bothered with the difficulties, as he described them, of traversing between the Committee Corridor and Westminster Hall. When he recognised that the game was up in his previous constituency, he had no difficulty traversing the short space between Basildon and Southend, West, for reasons that he has made balefully obvious. However, let us put the hon. Gentleman's speech to one side and concentrate on the subject and the other, excellent speeches made this afternoon.
The debate reflected not only the diversity of the sector, but the complexity of some of the challenges that it must meet. One of the most complex is core funding—as opposed to project funding—which was raised by the hon. Members for Aylesbury and for Taunton (Jackie Ballard) and with which my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) has had to wrestle. We must not lose sight of the importance of project funding, which enables partnerships to develop between central Government, local government and the voluntary sector. Those partnerships build on the capacity for innovation and risk taking that is central to the voluntary sector's contribution to the development of many policy areas, to which all right hon. and hon. Members referred this afternoon. We must not lose sight of the importance of that, and the importance to it of project funding.

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Section 64 funding of the Department of Health, with which I am familiar, is central to the effectiveness of that funding stream. It encourages new organisations and new ideas to enter the arena of public policy and practice development by funding research into, and evaluation of, innovative projects. We cannot afford to lose that, but at the same time it is undoubtedly true that the process that began and accelerated under the previous Administration—of central and local government backing away from core funding—has imposed considerable strains on the sector. That is because, while one can approach a variety of sources such as trusts and businesses as well as the Government for project funding, one cannot whip up the same degree of enthusiasm from business and other charitable sources in relation to core funding. That is the experience of the voluntary sector and it has created a problem that necessitates the Government revisiting the issue of core funding.
My right hon. Friend the Member for Cardiff, South and Penarth has been described as the "author" of the compact. I prefer to describe him as its grandfather. In his initial work in this area, he wisely required central Government and the voluntary sector to meet once a year to review the operation of the compact. He was absolutely right to do so. That gives everyone the opportunity to take stock as to where they are going, find out what the problems are, ascertain which ones have been overcome, and find out what messages the developing relationship in the compact has delivered.
That annual meeting took place a few weeks ago and I am happy to share with the Chamber that we agreed there that the time had come to revisit the issue of core funding, precisely for the reasons that right hon. and hon. Members touched on today. We shall have to get the balance right; we have not got it right at the moment. It is not easy, because resources are always limited, but we cannot allow the infrastructure of the voluntary sector to be degraded by an absence of core funding. If we do, we shall be defeating the very purposes that we are seeking to encourage and develop by project funding.
I welcome the developing consensus across the Chamber on this issue. We must build on that and develop it in the coming year. I share my right hon. Friend's hope that we shall have regular debates on the voluntary sector. This Chamber provides a good venue for that. I hope to be able to report some progress in this troubled but significant area a year hence, after the next revisiting of the compact.
We touched on several other issues that have been of concern to the sector. I intend to take up some of them with hon. Members in correspondence. However, it is right that I deal with the issue raised in connection with the Criminal Records Bureau now. It has given me, as well as others in government and the voluntary sector, considerable cause for reflection as to how best to get it right. We believe that we have done so, but I am able to reaffirm that before making any regulations prescribing such matters as fees to be charged by the bureau, we shall carry out the regulatory impact assessment mentioned earlier. It will be carried out in consultation with the relevant bodies, including representatives from voluntary organisations and the scouts and guides, and
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it will provide a thorough and up-to-date assessment of the risks, costs and benefits of our proposals. Many figures are flying around, but some of those that have been contributed to the debate by the voluntary sector are questionable. That assessment will give us a better idea of the costs of the various certificates.
The cost of the enhanced criminal record certificate is likely to be around £10 and the other certificates are likely to cost around £5 or £6. However, attaining the certificates will not be mandatory—organisations will decide on the need to check volunteers and grant-funding bodies will decide whether to reimburse that cost—and not every volunteer who works in a particular sector will need a certificate, or one of the level of the enhanced criminal record certificate. For example, someone who takes a troop of scouts or guides away for a residential camp is in a different position to a volunteer who works at a Wednesday night meeting in a church hall. Parents rightly have different expectations in that regard. I shall not try to second guess the decisions that the scout movement will come to about the levels of certificate that it will require of its volunteers, but we should not proceed on the basis that the enhanced criminal record certificate will always be required.
Mr. Lidington: I welcome the Minister's statement reaffirming that a full impact assessment will be carried out before regulations are laid. As part of that assessment, will he undertake to examine the definition of substantial unsupervised access? The way in which that notion is interpreted by voluntary organisations and their insurance companies will have a significant bearing on his point about the distinction between a person who accompanies a scout or guide group on a camp and someone who turns up at a meeting on a Wednesday night at which other adults are present. The same principle bites on the operation of Sunday schools.
Mr. Boateng: That is one of the issues that we shall need to thrash out with the voluntary sector and child protection organisations. We should not forget that the voluntary sector will benefit from the existence of the CRB, which has long called for precisely the measures that we are taking. It recognises the risks that are posed by those who have preyed on children and young people—my right hon. Friend the Member for Cardiff, South and Penarth and I had to deal with many such tragic cases in the Home Office. Such people use voluntary sector organisations as a cover for their activity. Their guile, evil and capacity for deceit beggars belief. Organisations that they have used as a cover and children and young people, who will be better protected, will benefit from the fact that we are making life more difficult for those people and making it easier to expose their activities.
No one should underestimate the extent to which we are responding to a widely perceived need. I am the first to recognise that, in doing so, we must work in a way that takes the voluntary sector with us and does not actively deter volunteers. The biggest deterrent to volunteers is not the fact that they might have to pay up to £10 for a certificate, but the fact that we now live in a society where this evil has taken such a root that people are afraid to volunteer for some forms of work with children and young people because they are afraid of what people may say about them. That is the depth to

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which our society has degenerated and we have to draw it back from that abyss. If that means adopting the CRB proposal, I think that that is a price well worth paying, as will the overwhelming majority of our fellow citizens, people who work in, and love, the voluntary movement and everyone in this Chamber.
This has been a good debate. I shall write to right hon. and hon. Members who have made specific points. Anyone who attended the debate, or reads our proceedings, will glean from it the richness and diversity of the sector and of the experience that can be gained from working within it as a volunteer, the extent to which it contributes—not only in terms of monetary
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value—towards our society and, above all, the way in which it binds together, in a way that promotes cohesion and sustainability, groups of individuals into the communities that make up society as a whole.
Volunteers make society stronger and healthier, which is why we celebrate their work here today. We also rededicate ourselves, and our institutions of Parliament and Government, to continuing to work alongside them towards the common objective of a strong, safe, sustainable and sustaining society.
Question put and agreed to.
Adjourned accordingly at twenty-three minutes past Five o'clock.

DEFENCE

  Laser Range-finders
  Mr. Hancock
  To ask the Secretary of State for Defence what the total cost to his Department was of the supply of 226 LH-40C hand-held laser range-finders to the Army; how many units have been purchased; which companies bid for this contract; if the bid by the Eloptro Division of Denel company was the lowest; and if he will make a statement. [124883]

  Dr. Moonie
  The total cost to the Department, including three years support, is in the region of £2 million, but the details are a matter of commercial confidentiality. Bids were received from four companies in November 1999: Eloptro, a division of Denel; Leica Geosystems Ltd.; Litton Laser Systems; and Simrad Optronics Ltd.

  Following a detailed technical evaluation including extensive trials of all candidate equipment only Eloptro provided a compliant tender and this, therefore, was the lowest acceptable bid. A contract for the supply and support of the 226 systems was awarded to Eloptro on 23 March 2000. The unsuccessful companies have been given the opportunity for a formal debrief and, while all have indicated that they wish to take up this offer, only Leica have done so to date.

  Type 45 Destroyers
  Mr. Keetch
  To ask the Secretary of State for Defence what are the planned in-service dates for follow-on Type 45 destroyers; and if he will make a statement. [124993]

  Dr. Moonie
  On current plans, we expect that the first Type 45 destroyer will enter service with the Royal Navy in 2007 and that the last will enter service in 2014, with progressive deliveries between these dates. The delivery programmes for the ships have yet to be negotiated.

  US Defence Trade Security Initiative
  Mr. Hancock
  To ask the Secretary of State for Defence what assessment he has made of the benefits of the United Kingdom being granted special status under the US International Traffic in Arms Regulations; and if he will make a statement. [125380]

  Mr. Hoon
  We welcome the announcement of the Defence Trade Security Initiative made by the US Government on 24 May 2000. The proposed reforms to US defence export control arrangements should reduce munitions licensing process times in general and simplify many licensing procedures, particularly for NATO countries, Japan and Australia. They represent a significant step towards enhancing alliance interoperability and preventing the widening of the technology gap.
  668W
  The initiative includes a proposal for an International Traffic in Arms Regulations exemption for the UK and other close allies. This would enhance the ability of UK firms to compete in the US market; to benefit from US Research and Development expenditure; and give access to some of the most advanced defence technologies in the world. US defence companies are, of course, free to compete in the UK market.

  We expect early discussions with the US to take this forward as part of the implementation of the UK/US Declaration of Principles.

  Maritime Mining System
  Mr. Hancock
  To ask the Secretary of State for Defence what role DERA played in securing the contract by BAe Systems to be the supplier to the Australian Defence Force of the Stone Fish MKIII Maritime Mining System; and if he will make a statement. [125435]

  Dr. Moonie
  This is a matter for the Chief Executive of the Defence Evaluation and Research Agency. I have asked the Chief Executive to write to the hon. Member.

  Letter from John Chisholm to Mr. Mike Hancock, dated 15 June 2000:
  I am replying to your parliamentary question about a contract secured by BAE Systems.
  I can confirm that DERA has had no role or involvement in the securing of a contract by BAE Systems to be the supplier to the Australian Defence Force of the Stone Fish MKIII Maritime Mining System.
  I hope this is helpful.

NORTHERN IRELAND

  Market Research
  Mr. MacKay
  To ask the Secretary of State for Northern Ireland how much his Department spent on opinion research in the financial year 1999–2000. [123049]

  Mr. Mandelson
  The Government are committed to consulting and involving the public to help inform policy formulation and the delivery of better quality public services. Both are an important part of the Modernising Government initiative.

  The Government only commission market or opinion research when it is justified by the needs of the policy or programme and is the most economical, efficient and effective way to achieve the purpose.

  During the financial year 1999–2000, the amount spent on opinion research was £658,521. This information is broken down as follows:

  £

  Department of Agriculture and Rural Development

  20,536

  Department of Culture, Arts and Leisure

  13,000

  Department of Education

  5,975

  Department of Environment

  16,590

  Department for Regional Development

  15,050

  Department of Enterprise, Trade and Investment

  39,695

  Department of Finance and Personnel

  23,000

  Department of Health, Social Services and PS

  20,000

  Department of Higher and Further Education, TE

  346,375

  669W

  £

  Department for Social Development

  56,315

  Office of the First Minister and Deputy First Minister

  11,000

  Northern Ireland Office

  90,985

  Responsibility in respect of research carried out by the Northern Ireland Departments has been devolved to the Northern Ireland Assembly and is no longer a matter for the Secretary of State for Northern Ireland.

  Mr. MacKay
  To ask the Secretary of State for Northern Ireland if he will list opinion research projects undertaken on behalf of the Department in the financial year 1999–2000 itemising(a) focus group research, (b) quantitative surveys and (c) other market research surveys, indicating in each case (i) when and (ii) where the results were published. [123050]

  Mr. Mandelson
  The information for the Northern Ireland Office and Northern Ireland Departments has been placed in the Library.

  Responsibility in respect of research carried out by the Northern Ireland Departments has been devolved to the Northern Ireland Assembly and is no longer a matter for the Secretary of State for Northern Ireland.

  Demilitarisation
  Dr. Godman
  To ask the Secretary of State for Northern Ireland if he will list the demilitarisation measures taken in the past year; and if he will make a statement. [123506]

  Mr. Ingram
  Listed are normalisation measures taken during 1999.24 to 26 January 1999—Vacation of Patrol Bases at Mullan Bridge, Roscor Bridge, Wattle Bridge, Clonratty Bridge, Gortmullan Bridge, Killyvilly and Annaghmartin.
  3 February 1999—Demolition of Aughnacloy Permanent Vehicle Check Point.
  8 February 1999—Demolition of V3 Permanent Vehicle Check Point (Hump).
  12 February 1999—Demolition of V4 Permanent Vehicle Check Point (Muff).
  26 February 1999—Demolition of V1 Permanent Vehicle Check Point (Letterkenny Road).
  21 May 1999—Demolition of Fort Whiterock completed.
  9 July 1999—Requisitioned land in Crossmaglen returned to the GAA.
  3 August 1999—Demolition of Gortmullan Patrol Base completed.
  5 September 1999—Vacation of Carrickfergus Base.
  31 December 1999—Closure of Castlereagh Holding Centre.

  In April 2000, the Belfast Roulement Battalion was withdrawn.

  The Royal Ulster Constabulary is also making increased use of soft-skinned and high profile liveried vehicles and beat patrols. Police officers increasingly wear fluorescent jackets and now patrol without military support in most parts of the Province.

  In light of the lowering of the overall threat following the recent statement by the IRA the Chief Constable announced on 9 May further steps which will be taken within weeks to normalise security.
  670W
  A further review of possible normalisation steps will be conducted in three months time taking account of the level of threat prevailing at the time and the circumstances on the ground.

  Laptops
  Mr. Keith Simpson
  To ask the Secretary of State for Northern Ireland how many laptop computers used by Ministers, officials and special advisers in his Department have been(a) lost and (b) stolen since May 1997. [123742]

  Mr. Mandelson
  The information requested is as follows:

  (a) None

  (b) Seven

  Forms
  Mrs. Lait
  To ask the Secretary of State for Northern Ireland what has been the net change in each year since May 1997 in the number of forms issued by his Department which(a) charities and (b) other voluntary organisations are required to complete. [123944]

  Mr. Ingram
  The answer to this question could be provided only at a disproportionate cost.

HEALTH

  Paramedics
  Mr. Swayne
  To ask the Secretary of State for Health what estimate he has made of the number of places on training courses for paramedics; and what plans he has to increase the number of places available. [122581]

  Ms Stuart
  There has been no central estimate of the number of places on training courses for paramedics as this training is managed directly by the 32 National Health Service ambulance service trusts around the country. We have made £21 million extra available per annum to support the ambulance services in meeting the national target of responding to 75 per cent. of all life threatening 999 calls within eight minutes. £18.5 million of this allocation is to provide additional staff, in particular paramedics, thereby increasing significantly the number of training places.

  Buprenorphine
  Dr. Iddon
  To ask the Secretary of State for Health when Subutex (buprenorphine) will be added to the list of drugs that can be dispensed using forms FP10(HP)(ad) and FP 10(MDA). [122899]

  Ms Stuart
  Ministers have agreed in principle to allow the prescription of buprenorphine (of which Subutex is a brand) on an instalment basis. We are currently consulting a range of organisations which could be affected by the proposal on how best to introduce it.

  Health Policies
  Mr. Peter Bottomley
  To ask the Secretary of State for Health if he will make a statement on the relative priorities accorded to mental and physical health in the Government's health policies. [125371]
  671W
  Mr. Hutton
  We have set out our priorities in "Modernising Health and Social Services: National Priorities Guidance 2000/01–2002/03" which include physical and mental health problems as priorities for the National Health Service and Social Services.

  NHS Consultation Process
  Mr. Peter Bottomley
  To ask the Secretary of State for Health (1) how many responses to his consultation on the future of the NHS made reference to mental health or to mental illness; [125369]

  (2) how many responses he received (a) in time and (b) out of time to his recent consultation on the future of the National Health Service; [125368]

  (3) when and in what way he expects to announce a summary of the responses to the recent questionnaire on the NHS; [125374]

  (4) how many responses to his consultation on the future of the NHS made reference to the medical needs and extra costs of patients aged over 85 years; [125370]

  (5) what way NHS mental health patients were included in the consultation on the future of the NHS; [125372]

  (6) if he will issue questionnaires to 12 million people relating to his top three priorities for mental health reform. [125367]

  Mr. Viggers
  To ask the Secretary of State for Health how many staff consultation papers, "Have Your Say on a Better NHS", were distributed to the consultees by 4 June; and how many were received back by the closing date of 5 June. [125771]

  Mr. Denham
  The consultation process included written consultation with key national organisations; telephone consultation and two seminars with patient groups; use of NHS Direct; and issues emerging from the regional consultation process.

  As part of the overall consultation strategy, in the week leading up to National Health Census day on 31 May 2000, 12 million consultation leaflets were made available at supermarkets, high street chemists and other NHS facilities. There were one million staff leaflets and 11 million public leaflets. It was also published on the worldwide web.

  For those who may have had difficulty reading the text or completing the form in these formats, the leaflet was also made available on tape with the facility to either record responses on the tape or by dictating over the telephone. There have been eight requests for the tape, none of which have used the telephone facility.

  The total cost of the design, printing and distribution of the leaflet was £475,487.

  200,960 leaflets have been received so far. In addition, 7,385 e-mails have been received. 1,663 letters have been received. NHS Direct has received 654 responses. In total, responses received so far are 210,662.

  Of the responses received and analysed to date, 1,975 made reference to mental health or mental illness. 3,707 made reference to care of the elderly. A review of a sample of early responses showed that suggestions related to the elderly did not mention specific threshold ages.
  672W
  We plan to make public a summary of responses when we have worked through the analysis in more detail. We do not have plans to issue a further questionnaire to 12 million on mental health priorities.

  Mr. Webb
  To ask the Secretary of State for Health how many survey forms were issued to NHS staff and patients; and how many were returned(a) by the initial closing date and (b) to date. [125797]

  Mr. Denham
  [holding answer 13 June 2000]Of the 12 million leaflets made available to staff and the public, 200,960 have been returned so far.

  The results of these submissions will be reported to the meeting of the modernisation action teams working on the national plan. All responses will be incorporated into developing the national plan.

  Advertising
  Mr. Loughton
  To ask the Secretary of State for Health how much has been spent by his Department on advertising in each year since May 1997. [125688]

  Ms Stuart
  [holding answer 12 June 2000]The figures for the annual spend on advertising for the Department for the financial years 1997–98 to 1999–2000 are shown in the table.

  Financial year

  Advertising expenditure (£ million)

  1997–98

  2.27

  1998–99

  8.63

  1999–2000

  14.83

  The principal increases since 1997–98 are in the following areas:

  1997–98

  1998–99

  1999–2000

  Blood donation

  0.60

  1.70

  10.22

  Nurse recruitment

  0.30

  4.90

  4.21

  NHS Direct

  0.12

  0.78

  1.20

  Smoking2

  0.00

  0.00

  6.18

  Winter campaign

  0.00

  0.00

  1.07

  1 The Department's spend on blood donation advertising reduced in 1999–2000 because most of this activity was funded direct by the National Blood Authority

  2 Prior to 1999–2000 advertising on smoking was undertaken by the Health Education Authority

  Digital Hearing Aids
  Mr. Todd
  To ask the Secretary of State for Health when digital hearing aids will be available through the NHS; and if he will make a statement. [125774]

  Mr. Hutton
  I refer my hon. Friend to the oral answer I gave my hon. Friend the Member for Wentworth (Mr. Healey) on 6 June 2000,Official Report, columns 143–44.

  Diabetes
  Mr. Singh
  To ask the Secretary of State for Health what steps his Department is taking to ensure early identification of people with diabetes. [125957]
  673W
  Mr. Denham
  We recognise the importance of detecting diabetes as early as possible. Ministers have asked the United Kingdom National Screening Committee, which advises us on all aspects of screening policy, to consider whether there is a case for the introduction of a targeted screening programme for Type 2 diabetes and, if so, how this could most effectively be achieved. The conclusions of the Committee will inform the work of the Expert Reference Group for the National Service Framework (NSF) for diabetes in England which we announced last year.

  CJD
  Helen Jones
  To ask the Secretary of State for Health when he will publish the eighth annual report of the National Creutzfeldt-Jakob Disease Surveillance Unit. [126745]

  Yvette Cooper
  The National Creutzfeldt-Jakob Disease Surveillance Unit's eighth annual report has been published today. Copies have been placed in the Library. The report documents the Unit's findings in relation to sporadic, familial, iatrogenic Creutzfeldt-Jakob disease, and also variant Creutzfeldt-Jakob disease, up to 31 December 1999.

  Intermediate Care
  Mr. Austin
  To ask the Secretary of State for Health if intermediate care services will be provided by(a) the NHS and (b) the private sector; and if he will make a statement. [126225]

  Mr. Hutton
  We remain committed to the modernisation of the National Health Service which will continue to provide a universal service, free at the point of use and available to all on the basis of clinical need. Development of intermediate care is a key part of the Government's programme to improve services for older people, including the National Service Framework. It can be achieved in a number of ways—by investing more in NHS hospitals, including giving new life to community hospitals, and by entering into new arrangements with the private sector.

  The whole system approach, which typifies intermediate care and is essential to its development, should recognise the contribution made by all partners in the health and social care system, including the independent sector. The same standards of clinical quality and effectiveness will apply to both NHS and non-NHS providers, and services should provide value for money.

  Mr. Austin
  To ask the Secretary of State for Health if he will publish details of the proposed new intermediate care arrangements and their impact on local authority services; and if he will make a statement. [126224]

  Mr. Hutton
  We shall announce detailed proposals on the introduction of new intermediate care services later this summer. Intermediate care involves a variety of different services in preventing inappropriate admissions to hospitals or long-term care and in providing active rehabilitation and support on discharge from hospital. Local authority services will have an important part to play in intermediate care. Our proposals will be influenced by the work of the modernisation action team on partnership, charged with ensuring that all parts of the health and social care, including local authority services, work together more efficiently.
  674W
  Mr. Austin
  To ask the Secretary of State for Health what his definition is of intermediate care. [126227]

  Mr. Hutton
  Intermediate care is a whole system approach to a range of multi-disciplinary, multi-agency services designed to promote independence by reducing avoidable hospital admission; facilitating timely discharge from hospital and promoting effective rehabilitation; and minimising premature or avoidable dependence on long-term care in institutional settings.

  Mr. Austin
  To ask the Secretary of State for Health what advice and guidance he has issued to(a) the NHS and (b) local authority social services regarding intermediate care since 1999. [126226]

  Mr. Hutton
  The Health Service Circular of 23 May issued jointly to local health and social care communities made it clear that the development of intermediate care was an integral part of winter planning. More detailed planning guidance is to be issued to health and social care communities in the summer.

  Diamorphine
  Mr. Flynn
  To ask the Secretary of State for Health what projects have been carried out to evaluate the efficacy of prescribing diamorphine to heroin addicts; and if he will make a statement. [125998]

  Ms Stuart
  The Department has not carried out any projects on the efficacy of prescribing diamorphine to heroin addicts, which is subject to the Misuse of Drugs Act (Supply to Addicts) Regulations 1997. The Department is funding a £2.4 million research initiative on drug misuse. Over the next four years this will deliver evidence to underpin our 10 year anti-drugs strategy. A major aim of this initiative is to improve knowledge on the effectiveness and cost-effectiveness of treatment and care procedures. The initiative includes a trial comparing the efficacy of substitute prescribing of injectable and liquid methadone.

  Vaccine Damage
  Dr. Whitehead
  To ask the Secretary of State for Health what arrangements exist to consider cases before vaccine damage tribunals of simultaneous administration of multiple vaccines which have led to vaccine damage to recipients. [125873]

  Mr. Bayley
  I have been asked to reply.

  The Appeals Service tribunals hear appeals in relation to vaccine damage. These tribunals are constituted of an independent legally qualified panel member and one or two independent specialist medically qualified panel members, all appointed by the Lord Chancellor. These arrangements apply to all cases involving the administration of one or more vaccinations against diseases specified in the Vaccine Damage Payment Act 1979.

  Parliamentary Questions
  Mr. Paterson
  To ask the Secretary of State for Health when he plans to reply to the questions tabled by the hon. Member for North Shropshire on 9 May. [125813]

  Ms Stuart
  I replied to 23 of the hon. Member's 29 questions on 12 and 13 June.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  GM Crops
  Ms Drown
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the GM crop test sites that are not on his Department's website by(a) type of crop and (b) county. [123916]

  Mr. Meacher
  The Department's website is updated regularly to include a list of all the sites which have been notified by consent holders for Part B research and development releases (www.environment.detr.gov.uk/acre/trials.htm).

  There is no requirement to notify the Department of releases of a GM crop which has a Europe wide Part C marketing consent for cultivation. However, the industry body SCIMAC has agreed to provide location details for the GM maize being grown in the Farm Scale Evaluations under a Part C consent. All Farm Scale Evaluations sites are listed at www.environment.detr.gov.uk/fse/location/index.htm.

  We have no information on any other small scale test sites for such crops with Part C consent as they do not have to be notified to the Department. Growing for any purpose other than small scale trials is precluded by the terms of the agreement with SCIMAC on the growing of GM crops finalised last November.

  Estate Action Programmes (Westminster)
  Ms Buck
  To ask the Secretary of State for the Environment, Transport and the Regions what was the total expenditure by his Department on each estate action programme in the borough of Westminster since 1993; and what this was as a percentage of the total cost of each programme. [125423]

  Ms Beverley Hughes
  The total expenditure for each of the estate action projects in Westminster since 1993 is as follows:

  £

  Mozart Estate

  Lisson Green

  1993–94

  179,000

  —

  1994–95

  1,500,000

  1,136,000

  1995–96

  1,384,000

  945,000

  1996–97

  2,180,000

  1,955,000

  1997–98

  3,000,600

  6,000,000

  1998–99

  3,200,000

  2,660,000

  1999–2000

  600,000

  1,701,400

  Total

  12,043,600

  14,397,400

  The total expenditure detailed above as a percentage of the total cost of programme is:

  Total cost of programmer

  Percentage of grant expenditure
  against total cost

  Mozart Estate

  37,636,000

  32

  Lisson Green

  63,031,000

  22.8

  Low Bridges
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions how many accidents arising from strikes on bridges recorded in the last two years have been(a) fatal, (b) minor and (c) serious; and what has been the cost in the last two years of road strikes on low bridges. [125587]

  Mr. Hill
  The number of injury accidents in Great Britain which involved a road vehicle striking the side or roof of any bridge are given in the following table for the two most recent years for which figures are available.

  Fatal

  Serious

  Slight

  1997

  9

  69

  264

  1998

  14

  67

  282

  Railtrack estimate that the annual cost of road strikes on low railway bridges is of the order of £10 million. This includes both the repair and delay costs, including those in damage-only accidents.

  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions what action the Government are taking in conjunction with(a) railway companies and (b) highway authorities to minimise damage to bridges caused by road vehicles striking low bridges. [125590]

  Mr. Hill
  Guidance has already been published on a range of measures to prevent bridge strikes, and regulations now require the height of the motor vehicle to be displayed in the cab, if the overall travelling height is in excess of three metres. The Department continues to chair the Bridge Strike Prevention Group which meets twice a year to discuss issues related to bridge strikes with the road transport industry, local authorities and bridge owners, to review trends and to encourage the adoption (and where appropriate the development) of new cost-effective measures to reduce the number and severity of bridge strikes.

  A436
  Mr. Nigel Jones
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what additional information he requires to enable him to approve funding to upgrade the A436 in Gloucestershire; [125540]

  (2) what factors he took into account in deciding not to fund Gloucestershire County Council's priority request to upgrade the A436 between Shipton Solers and Crickley Hill. [125539]

  Mr. Hill
  The Government Office for the South West wrote to Gloucestershire County Council on 16 December 1999 explaining why my Department was unable to accept the A436 Shipton Solers to Air Balloon scheme for support in the 2000–01 Local Transport Capital Settlement. The County Council has been advised to consider alternative solutions including looking at the feasibility of dealing with the safety issues by a combination of smaller scale schemes.

  Central London Journey Times
  Mr. MacShane
  To ask the Secretary of State for the Environment, Transport and the Regions what is the average speed of a journey through central London in daylight by(a) car, (b) bus and (c) bicycle. [124861]

  Mr. Hill
  [holding answer 9 June 2000]The average speeds recorded in the 1999 DETR door-to-door journey times survey in central London were:

  Miles per hour

  (a) Car

  3.4

  (b) Bus

  2.5

  (c) Bicycle

  5.4

  These are door-to-door journey times and so include an element of walking to and from bus stops, car parks etc. All journeys are made within the hours of 7am and 7pm.

  The full results of the survey are published in the DETR Transport Statistics Bulletin SB (00) 14, "Journey Times Survey, Inner and Central London: 1999", available in the House of Commons Library.

  Railways (Expenditure)
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions what estimate he has made of the increase in capacity on the railways that would result from additional expenditure of(a) £500 million per year and (b) £1 billion per year. [125548]

  Mr. Hill
  The effect of expenditure on capacity would obviously depend on the nature of the expenditure. I cannot anticipate the conclusions on railway capacity and expenditure which will be reflected in the 10-year Plan for Transport which my right hon. Friend will be publishing next month.

  Bus Accidents
  Dr. Gibson
  To ask the Secretary of State for the Environment, Transport and the Regions what statistics he collects about bus accidents involving loose wheels. [125737]

  Mr. Hill
  Currently, all Vehicle Examiners who receive a request from the police to inspect vehicles that have been involved in a road traffic accident are required to complete a comprehensive report to help determine whether defects on the vehicle caused or contributed to the reason for the accident or to the severity of any injuries. Most of the requests are for examinations of heavy vehicles. A copy of the report goes to the police while another is sent to the VI Vehicle Safety Branch in Bristol. The information in the report is entered into the Inspectorate's "accidents" database which contains details of any faults or defects found on the vehicles examined, for example, wheel loss or brake failure.

  Vehicle Safety Branch are currently responsible for managing the database, on behalf of DETR's Vehicle Standards and Engineering Division. Since 1991, when the database was last revised, there have been 122 reported incidents of wheel loss on public service or large
  678W
  passenger vehicles above 16 passenger seats capacity, and four reported incidents on mini-buses with between nine and 16 passenger seats.

  Mobile Phone Masts
  Miss McIntosh
  To ask the Secretary of State for the Environment, Transport and the Regions what representations he has received calling for change in planning regulations that govern the erection of mobile phone masts. [125877]

  Ms Beverley Hughes
  In the past year, we have received around 175 letters calling for changes in planning regulations that govern the erection of mobile phone masts.

  In addition, the report of the Independent Expert Group on Mobile Phones, published on 11 May, recommended that for all base stations, permitted development rights for their erection should be revoked and that the siting of all new base stations should be subject to the normal planning process.

  In its response to the report, issued on the same day and placed in the Libraries of both Houses, the Government said that they were minded to introduce a requirement for an application for full planning permission for all new telecommunications masts, but would need to consult widely before doing so, including on the principle and precise scope of any new arrangements.

  Road Maintenance
  Mr. McLoughlin
  To ask the Secretary of State for the Environment, Transport and the Regions what percentage of transport spending was on national road maintenance and highways maintenance in England in each of the last five years. [125811]

  Mr. Hill
  [holding answer 12 June 2000]The percentage of transport spending in England on national road maintenance and local road maintenance for the five years up to 1998–99 is given in the tale. Figures for 1999–2000 are not yet available.

  Percentage

  National road maintenance

  Local road maintenance

  1994–951

  8.3

  20.4

  1995–961

  6.5

  21.1

  1996–971

  6.7

  23.3

  1997–981

  7.6

  24.4

  1998–991

  9.3

  27.9

  1Outturn

  Road Deaths
  Mr. McLoughlin
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment his Department has made of the correlation between(a) speed, (b) alcohol consumption and (c) road conditions, and road deaths. [125812]

  Mr. Hill
  [holding answer 13 June 2000]The Department estimate that excess or inappropriate speed is a contributory factor in one in three road deaths.
  679W
  In 1998 one in seven fatalities occurred in an accident in which at least one driver or rider was over the blood alcohol limit.

  A study in 1978–81 estimated that road conditions contributed to one in 17 of all accidents. No separate figure is available for deaths.

  The Department will shortly begin a sample on the spot accident investigation which will provide further information on contributory factors. Some information will also emerge from a pilot scheme to collect information from police accident records.

  Playing Fields
  Mr. Chidgey
  To ask the Secretary of State for the Environment, Transport and the Regions when he plans to issue a new Planning Policy Guidance notice concerning playing fields. [125926]

  Ms Beverley Hughes
  I hope to publish a draft revision of Planning Policy Guidance note 17 (PPG17) on sport and recreation for consultation shortly. This will update the existing guidance on playing fields.

  Mr. Chidgey
  To ask the Secretary of State for the Environment, Transport and the Regions what is the total number of valid applications he has received for the sale of playing fields in each month since October 1998. [125927]

  Ms Beverley Hughes
  The Secretary of State's consent to the disposal of land by local authorities under their general powers is required only where they wish to do so at less than the best reasonably obtainable consideration, which is normally open market value Six applications for consent for the sale of playing fields have been received since October 1998.

  Home Ownership Schemes
  Mr. Chope
  To ask the Secretary of State for the Environment, Transport and the Regions (1) how many interest-free equity loans have been granted to date under the Homebuy Scheme to residents in(a) Christchurch, (b) East Dorset, (c) Bournemouth, (d) Poole and (e) the New Forest since the inception of the scheme; [125970]

  (2) how many households have been housed in England in each of the last five years under the Do-It-Yourself-Shared-Ownership Scheme; [125972]

  (3) how many interest-free equity loans have been granted to date under the Homebuy Scheme in England; and how many he expects to be granted in 2000–01; [125971]

  (4) how many residents in (a) Christchurch, (b) East Dorset, (c) Bournemouth, (d) Poole and (e) the New Forest have purchased homes under the Do-It-Yourself-Shared-Ownership Scheme in each of the last five years. [125973]

  Mr. Mullin
  The Homebuy scheme started in April 1999. Homebuy replaced the Do-It-Yourself-Shared-Ownership (DIYSO) scheme following the rationalisation of the low cost home ownership programme offered by registered social landlords and funded by the Housing Corporation.680W
  However, local authorities continue to have the option to fund DIYSO until March 2001 when the position will be reviewed.

  The total number of Homebuy loans granted in England to the end of May 2000 is 1,083. 1,334 such loans are planned for the year 2000–01. The table shows the number of Homebuy loans granted to residents in the local authority areas named.

  Number of Homebuy loans by local authority area

  Local authority

  1999–2000

  2000–011

  Total

  New Forest

  8

  1

  9

  Bournemouth

  7

  0

  7

  Christchurch

  2

  0

  2

  Poole

  4

  1

  5

  East Dorset

  3

  0

  3

  Total

  24

  2

  26

  1 1 April to 31 May 2000

  The total number of households housed in England in each of the last five years under the Do-It-Yourself-Shared-Ownership (DIYSO) Scheme is as follows:

  Total number of DIYSO units completed 1995–2000

  1995–96

  1996–97

  1997–98

  1998–99

  1999–2000

  Total

  Local authority funded

  312

  230

  252

  192

  226

  1,212

  Housing Corporation funded

  4,588

  2,435

  1,986

  1,472

  191

  10,672

  Grand total

  4,900

  2,665

  2,238

  1,664

  417

  11,884

  The following table shows the number of residents who have purchased homes under the DIYSO scheme in each of the last five years in the local authority areas shown.

  Annual DIYSO completions by local authority area for period 1995–2000

  Local authority

  1995–96

  1996–97

  1997–98

  1998–99

  1999–2000

  Total

  New Forest

  32

  29

  17

  23

  18

  119

  Bournemouth

  19

  9

  8

  11

  0

  47

  Christchurch

  13

  9

  2

  3

  0

  27

  Poole

  13

  16

  8

  9

  0

  46

  East Dorset

  7

  7

  7

  4

  0

  25

  Total

  84

  70

  42

  50

  18

  264

  Byker Heat Station
  Mr. Cousins
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 6 June 2000,Official Report, columns 195–96W, if (a) the Model allotments, (b) Moorside allotment and (c) Nun's Moor allotment have been subjected to unauthorised excavation for bottles and metal material since toxic ash from Byker Heat Station was deposited. [126007]
  681W
  Mr. Meacher
  Newcastle city council advise that they are not aware of any unauthorised excavations at the Model allotments or Moorside allotments. Nun's Moor allotment has experienced some small-scale unauthorised excavations, however these were not in the area of the ash paths.

  The Fenham Allotments, as opposed to the Fenham Model allotments, have experienced severe damage from unauthorised excavations for bottles. This site, however, has not received ash from the Byker Heat Station.

  Mr. Cousins
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 6 June 2000,Official Report, columns 195–96W, what prima facie failures of statutory duty of care under the Environmental Protection Act 1990 have occurred in the distribution of toxic ash from the Byker Heat Station to bridleways and allotments. [126008]

  Mr. Meacher
  The Environment Agency investigation, referred to by my hon. Friend the Parliamentary Under-Secretary of State in his answer of 6 June 2000,Official Report, columns 197–98W, into the deposit of ash at allotments and other sites in the Newcastle area, is continuing.

  The Agency investigation will establish whether the waste management controls under Part II of the Environmental Protection Act 1990 have been contravened, including any breaches of the statutory duty of care imposed under section 34 of the 1990 Act. If there is evidence of contravention, action will be taken in accordance with the Agency's published Enforcement policy.

  Flooding (Newcastle)
  Mr. Cousins
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 6 June 2000,Official Report, columns 197–98W, if he will list the flooding incidents at Jesmond Dene and Ouseburn that have occurred from 1 May to date; how many properties were so affected; and what assessment he has made of the impact the proposed sustainable urban drainage system from Newcastle Great Park would have had on flooding incidents. [126009]

  Mr. Meacher
  The Environment Agency's records indicate that since 1 May 2000 one domestic garage has flooded from the Ouseburn. The Environment Agency is aware of further surface water flooding within the Red House Farm estate and within Brunton Park, Gosforth. This flooding was caused by the drainage systems within these estates being unable to discharge into the Ouseburn when in flood. Although precise numbers are not available, the Environment Agency believes around eight properties on the Red House Farm estate were affected, along with a similar number on the Brunton Park estate.

  The Environment Agency believes, based on detailed modelling studies, that the development of the Newcastle Great Park will have no adverse impact in terms of flooding within the Ouseburn catchment. The use of Sustainable Urban Drainage techniques, in the form of large balancing ponds, will maintain water and discharge flow into the Ouseburn at a rate equivalent to the undeveloped site. The design criteria utilised will reduce flows from the development site in extreme
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  rainfall events. The development will also benefit from a sewerage system in which foul sewage and surface water will be dealt with separately.

  Transport Strategies (Lancaster)
  Mr. Dawson
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the potential impact of the Government's transport strategies and the development of industrial land on the local economy in Lancaster. [124599]

  Mr. Hill
  Such assessments should be included in the District Local Plan and Local Transport Plan, which are the responsibility of Lancaster city council and Lancaster county council respectively.

  Combined Heat and Power
  Mr. Pond
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on Government policy relating to combined heat and power projects. [124593]

  Mr. Meacher
  Combined heat and power is vital to helping us meet our Kyoto commitments. The Government are actively working towards a target of at least 10,000 megawatts by 2010, and will issue and consult on a new CHP Strategy for achieving the target. The Government have already announced that Good Quality CHP will be eligible for Climate Change Levy exemption, Enhanced Capital Allowances, and de-rating of electricity generating plant and machinery, from April next year. I announced the basis on which "Good Quality" would be assessed, following consultation, on 17 May.

  My right hon. Friend the Secretary of State for Trade and Industry, in his statement to the House on energy policy on 17 April 2000, Official Report, columns 697–99, reaffirmed the Government's strong support for CHP, and indicated that it would continue to expect developers to explore opportunities to use CHP, in considering notifications and applications under the Electricity and Energy Acts.

  The Government actively work to increase the use of CHP in their own property, other public organisations, industry and commerce. On 17 May I also launched the CHP Club, strengthening the information and advice provided by Government to existing, new and potential CHP users.

  Park Homes
  Mr. Robertson
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to bring the purchasing of park homes within the scope of the existing laws covering the purchase of houses and land; and if he will make a statement. [126093]

  Mr. Mullin
  My Department will publish the recommendations of the Park Homes Working Party in July, and we will announce our conclusions on them in due course. The report's recommendations include changes to the arrangements for the sale of park homes, but do not propose that park homes be brought within the scope of existing housing legislation.

  Construction Industry Advisory Group
  Mr. Syms
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what payment and expenses the Chairman of the construction industry advisory group, Movement for Innovation, receives; [126169]

  (2) what the term of office is of the Chairman of the construction industry advisory group, Movement for Innovation; [126170]

  (3) if he will review the appointment of the present Chairman of the construction industry advisory group, Movement for Innovation, taking account of his resignation as managing director of a building company. [126171]

  Mr. Raynsford
  The appointment and term of office of the Chairman of the Movement for Innovation Board are matters for the Board. He has never received any payment or expenses for his work as Chairman. The Movement for Innovation Board and their Chairman have played an important role in promoting radical change in the construction industry and have had a major impact in little more than 18 months. I applaud the very considerable contribution they have made.

  Second Homes (Norfolk)
  Dr. George Turner
  To ask the Secretary of State for the Environment, Transport and the Regions (1) if he will estimate for councils in Norfolk the reduction in revenue from council tax which arises from the 50 per cent. dispensation for second homes; [125109]

  (2) if he will estimate the reduction in revenue to the Norfolk Police Authority which arises from the 50 per cent. dispensation in council tax for second homes. [125108]

  Ms Beverley Hughes
  There should be no loss of revenue to Norfolk councils. If a local authority has a reduced tax base because it has dwellings subject to a discount or exemption (this includes second homes discounts), it will receive more grant from the Government.

  Water Industry (Consumer Representation)
  Tony Wright
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the future of consumer representation in the water industry. [124585]

  Mr. Mullin
  There are currently 10 Customer Service Committees operating in the interests of consumers in England and Wales as part of the Office of Water Services (OFWAT). The OWFAT National Consumer Council consists of the chairmen of each regional Customer Service Committee and speaks for water consumers at the national level.

  The Government have reviewed their policy on consumer representation in the regulated utilities. They published two consultation papers: "A Fair Deal for Consumers: Modernising the Framework for Utility Regulation" (March 1998); and the subsequent "Consumer Councils" (September 1998). The Government's policy was set out in the responses to these consultations published respectively in July 1998 and April 1999.
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  The proposals on consumer representation in the water industry, including the establishment of an independent Consumer Council for Water will require legislation. The Government will be consulting on specific policies in the forthcoming draft Water Bill.

  Energy Efficiency
  Angela Smith
  To ask the Secretary of State for the Environment, Transport and the Regions when he expects to publish proposals for changes to Part L of the Building Regulations, which deals with energy efficiency; and if he will make a statement. [126584]

  Mr. Raynsford
  A consultation on proposals for substantial changes to the energy conservation requirements in Part L of the Building Regulations has been published today. The consultation period will end on 29 September 2000. The Government have made clear their aim to do all they can to address the global problem of adverse climate change. This cannot be achieved by any one policy, and the contribution made by each separate initiative will be crucial to achieving our overall aim.

  Buildings produce about half of the total national CO2 emissions, and average building performance is poor by comparison with current best practice. If implemented, the proposals would yield significant improvements in the energy efficiency of new buildings and also in existing buildings when they are renovated. This would contribute directly to our vision of more sustainable construction set out in "Building a better quality of life". The draft proposals aim to contribute to the Government's climate change programme while keeping the Regulations technically sound, cost-effective and proportionate. Other improvements would also accrue for those who occupy buildings in terms of the opportunities for increased comfort and reduced energy costs.

  This consultation has been anticipated by all sectors of the construction industry and by others who have a desire to see standards of energy efficiency raised. We anticipate receiving comments on the proposals from all interested parties, and all such comments will be considered when drafting our final proposals for amendments. Participation by all interested parties will ensure that the eventual amendments reflect the broadest views of what can reasonably be achieved by the Building Regulations.

  Otterburn Training Area
  Mr. Beith
  To ask the Secretary of State for the Environment, Transport and the Regions when he received the report of the inspector with the revised plans for the Otterburn training area; and when he will make a decision on the proposals. [124578]

  Mr. Raynsford
  The Inspector's report on the re-opened public inquiry into the MOD proposals for Otterburn Training Area reached Government Office officials on 21 October 1999.

  The right hon. Member will be aware of the complex issues involved and the substantial amount of evidence to be considered. I am unable at this stage to give any indication as to when a decision is likely. However, the Secretary of State does appreciate the concern of those who feel that delays are creating uncertainty.

AGRICULTURE, FISHERIES AND FOOD

  Departmental Contracts
  Mr. Don Foster
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to her answer of 30 March 2000,Official Report, column 249W, concerning contracts, if she will list the companies concerned; and whether these contracts were subject to a competitive tendering process. [124815]

  Mr. Morley
  [holding answer 7 June 2000]Pursuant to my answer of 30 March 2000,Official Report, column 249W, the information required is as follows.

  The specific companies with the associated contract values are:

  Companies awarded contracts on a competitive basis

  £

  BAe

  84,300

  Douglas Clarke Projects

  5,000

  HEDRA Ltd.

  7,357

  KPMG

  5,000

  Rayfield Mills

  24,000

  Companies awarded contracts on a non-competitive basis

  £

  K. Bates

  43,489

  DERA

  44,308

  HVR Consultancy Services

  5,000

  PCMS

  124,011

  J. Watson Associates

  700

  Fishing Vessels (Satellite Monitoring Equipment)
  Mr. Mitchell
  To ask the Minister of Agriculture, Fisheries and Food (1) how many UK vessels are obliged under EU regulations to carry operational satellite monitoring equipment; and how many UK vessels comply; [125133]

  (2) how many UK vessels have satellite monitoring equipment on board which is not operational; and in which fleet segment these vessels are concentrated. [125134]

  Mr. Morley
  Some 430 UK fishing vessels over 24 metres overall length are required to carry satellite monitoring equipment. Our records, and those of the devolved administrations, show that all vessels are equipped. The vast majority of vessels are complying with the requirement to provide position reports at the required frequency. Those which are not submitting reports are mostly in the demersal segment. Some vessels have not submitted reports because they have recently been inactive due to lack of fishing opportunities and the number not complying is declining. Appropriate action is being taken against active vessels which are not yet fully compliant.

  Water Level Management Plans
  Mr. Brake
  To ask the Minister of Agriculture, Fisheries and Food how much grant in aid his Department 686W
  has provided for the implementation of water level management plans in (a) 1999–2000 and (b) 2000–01. [125779]

  Mr. Morley
  MAFF provides grant towards the cost of approved capital works undertaken by the Environment Agency, local authorities and Internal Drainage Boards, inter alia, to implement water level management plans. The amounts of grant paid in 1999–2000 and so far in 2000–01 are £47,000 and £1,000 respectively.

  Mr. Brake
  To ask the Minister of Agriculture, Fisheries and Food how many water level management plans have been adopted by the operating authority and agreed by English Nature. [125776]

  Mr. Morley
  There are 61 Special Protection Areas and Special Areas of Conservation with water level management plans (WLMPs) that have been fully agreed by English Nature, and a further 26 that have been agreed in principle. This means that there may need to be some modification to the plans prior to implementation.

  For those SSIs that are not SPAs or SACs, there are 130 WLMPs that have been fully agreed by English Nature, and a further 31 that have been agreed in principle.

  Mr. Brake
  To ask the Minister of Agriculture, Fisheries and Food how many water level management plans(a) have been completed and (b) are outstanding for (i) Special Protection Areas and Special Areas of Conservation and (ii) sites of special scientific interest; and if he will list their locations in each case. [125778]

  Mr. Morley:
  A Water Level Management Plan has been completed, at least in draft, for 112 sites that are designated or proposed Special Protection Areas, or candidate Special Areas of Conservation. These include a number of larger sites where more than one plan has been prepared to cover separate areas.

  There are a further 25 Special Protection Areas and Special Areas of Conservation where a Water Level Management Plan is required, but where English Nature has not yet received a draft plan, and are therefore considered to be outstanding.

  For those sites that are Sites of Special Scientific Interest but are not SPAs or SACs, there are 194 that are completed at least in draft.

  A further 123 SSSIs require a WLMP but have no plan prepared to date. The deadline for completing these plans is December 2000.

  Lists of all the above sites have been placed in the Libraries of the House.

  Mr. Brake
  To ask the Minister of Agriculture, Fisheries and Food what targets his Department has set for the completion of water level management plans for sites of special scientific interest which are also special protection areas or special areas of conservation. [125777]

  Mr. Morley
  The Government's High Level Targets for Flood and Coastal Defence document produced in November 1999 set, in partnership with English Nature, a target date of 30 March 2000 for completion of water level management plans for sites of special interest which are also special protection areas of conservation.

SOLICITOR-GENERAL

  Rape Statistics
  Mr. Gareth Thomas
  To ask the Solicitor-General how many cases of alleged rape were passed to the Crown Prosecution Service by the Police which were not proceeded with, together with the reasons for not proceeding, in each of the last five years for which statistics are available. [125787]

  The Solicitor-General
  The Crown Prosecution Service holds no central records on the outcome of particular offences. The information is held on individual case files, and could be recovered only by examining every relevant file in each CPS office. The costs of such an exercise would be prohibitive.

TREASURY

  Census
  Mr. Colman
  To ask the Chancellor of the Exchequer what decision has been made about whether to include a question about religious identity in the 2001 Census. [125875]

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

  Letter from Len Cook to Mr. Tony Colman, dated 15 June 2000:
  As the Director of the Office for National Statistics (ONS) I have been asked to reply to recent question asking if a decision has been made to include a religious identity question in the 2001 Census.
  A Bill to amend the Census Act 1920 to provide for particulars with respect to religion to be asked for in a census in England and Wales was approved in the House of Lords, on 28 March. In the course of its passage through the Lords, the Bill was amended to make any question on religion voluntary.
  After its passage through the Lords the Bill has hitherto failed to get an unopposed Second Reading in the House of Commons.
  The Government recognises the strength of the case for information on religion to be collected in the Census. The question will enhance data obtained from the ethnic group question and contribute to the Census providing data to help address the concerns and needs of all sections of the community.
  In the light of this, the Government has agreed to provide time within its own legislative programme to progress the Bill through its remaining stages. It will do all that it can so that the Census Act may be amended in time to allow the proposed religious question to be included in the 2001 Census in England and Wales.
  Subject to the Bill obtaining Royal Assent, the Government proposes to lay before both Houses of Parliament the necessary amendment to the Census Order providing for the question on religion to be asked in the 2001 Census in England and Wales.
  The Scottish Parliament has already approved legislation to amend the Act in Scotland where the Census is a devolved matter. Legislation in Northern Ireland already allows for a question in respect of religion to be asked in the Census.

  Fuel Duty
  Mr. Edward Davey
  To ask the Chancellor of the Exchequer what proportion of the revenue from fuel duty was raised in each country and region of the UK in each of the last five years. [125792]
  688W
  Mr. Timms
  Duty on hydrocarbon oil products is collected centrally and there is no direct information available to provide a geographical breakdown of the revenue raised.

  Figures for inland deliveries of fuel and oil by country are published in the Department of Trade and Industry's "Digest of UK Energy Statistics".

  Knowledge Economy
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer which organisations and individuals he has consulted while undertaking the cross-departmental review of the Knowledge Economy; in what form he has consulted them; on how many occasions he has met them; and if he will make a statement. [126005]

  Mr. Andrew Smith
  Informal consultations were held in confidence with a range of external organisations and individuals during the course of the review. The outcome of the review will be announced as part of the Government's new spending plans for 2001–02 to 2003–04.

  Spending Review
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer if the Treasury will require Departments to include environmental appraisals in their submissions to the Treasury on the spending review. [125977]

  Mr. Andrew Smith
  The guidance issued to Departments for the conduct of the Spending Review makes clear that evaluation of policy options should be carried out in accordance with the Treasury document "Appraisal and Evaluation in Central Government" (revised 1997) and by DETR's publication "Policy Appraisal and the Environment: Policy Guidance" (1998). Both of these stress the importance of environmental costs and benefits being considered in appraisals, even when these cannot be easily quantified.

  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer what training has been undertaken to assist staff of Government Departments to assess the implications of spending reviews for the Government's sustainable development objectives. [125978]

  Mr. Andrew Smith
  It is a matter for individual Departments to ensure the relevant staff are adequately trained in policy appraisal. Within the Treasury, economic appraisal is included in microeconomics training for staff. The Spending Review guidance issued to Departments included references to sources of guidance on policy appraisal. It also reminded Departments that advice on sustainable development, or sources of expertise on environmental considerations can be obtained from DETR's Sustainable Development Unit.

  In addition, the First Annual Report of the Green Ministers Committee included a commitment that all Departments would put in place strategies to raise awareness on sustainable development and general environmental issues.

  Community Banking
  Ms Glenda Jackson
  To ask the Chancellor of the Exchequer what consultations he has had on the expansion of community banking; and with whom. [124588]

  Miss Melanie Johnson
  On 16 November 1999 the Government published a report by Police Action Team 14 on ways to improve individual access to financial services, and by the Credit Unions Taskforce on ways in which banks and building societies could help credit unions to grow. Last month I met members of the All Party Group on Community Banking Services and will soon be meeting with the Association of British Credit Unions.

  Barnett Formula
  Mr. Cousins
  To ask the Chancellor of the Exchequer (1) what the expenditure per head was in(a) Scotland, (b) Wales, (c) England and (d) each Government Office region in England in each year since 1990 on (i) health and social services and (ii) education services covered by the Barnett formula; [126002]

  (2) what proportion of public expenditure in (a) England, (b) Scotland and (c) Wales was of the type covered by the Barnett formula in each year since 1990; and what expenditure per head in each country for that share of spending resulted; [126010]

  (3) what categories of expenditure in (a) England, (b) Scotland and (c) Wales were covered by the Barnett formula in each year since 1979; and what changes in those categories he has under review in the current spending review; [126003]

  (4) if he will publish the population-based spending allocation formula share for each year since 1979 for (a) England, (b) Wales and (c) Scotland; and what population share he proposes to adopt as the basis for spending allocations in the 2000 expenditure review. [126004]

  Mr. Andrew Smith
  Information on the coverage of the Barnett Formula since 1979 was published in 1997 in Annexe 1 of the Treasury Committee report on the Barnett formula. The current coverage was published last year by the Treasury in the Statement of Funding Policy. No decisions have been made yet on the outcome of the current spending review.

  The population-based spending allocation formula was set out in Annexe B of the Statement of Funding Policy and was also referred to in the above Treasury Committee report.

  Information which is available on public expenditure trends by country and region including expenditure per head is published in the analysis of identifiable total managed expenditure by country and region in Chapter 8 of Public Expenditure Statistical Analyses (Cm 4601).

  Dormant Accounts
  Mr. Flynn
  To ask the Chancellor of the Exchequer (1) if he will introduce legislation to compel banks and other institutions to search for claimants to accounts which have remained dormant for more than five years; [126174]
  690W
  (2) if he will introduce legislation to ensure that money in dormant accounts is not held by banks or other institutions for longer than 10 years. [126173]

  Miss Melanie Johnson
  We have no plans to do so.

INTERNALIONAL DEVELOPMENT

  Trade Barriers
  Mr. Alexander
  To ask the Secretary of State for International Development what plans the Government have to encourage other developed nations to lift trade barriers and quotas to help developing countries compete in the export market. [115921]

  Clare Short
  The Government have pressed the EU—which represents all member states in WTO negotiations—to seek, in the next Round of multilateral trade negotiations in the WTO, reduction of the barriers to agricultural and non-agricultural trade. We are also strongly committed to provide duty free access for essentially all products from the Least Developed Countries by 2005. We are pressing the Commission to bring forward proposals to fulfil this commitment and to exempt as few products as possible. Thereafter, we will press for all remaining barriers on imports from the Least Developed Countries to be removed as pledged by the Prime Minister in his speech at Mansion House on 22 November. We are urging other developed countries to match this commitment.

EDUCATION AND EMPLOYMENT

  Careers Service
  Mr. Willis
  To ask the Secretary of State for Education and Employment, pursuant to his answer of 5 May 2000,Official Report, column 218W, on the Careers Service, if he will produce a revised list of the Careers Service contractors holding (a) a Charter Mark, (b) an Investors in People award and (c) an International Standards Organisation registration. [126517]

  Mr. Wicks
  I refer the hon. Member to my reply of 5 June 2000,Official Report, columns 144–47W.

  PE Teachers
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Education and Employment what action he is taking to celebrate excellence among PE teachers; and if he will make a statement. [124681]

  Jacqui Smith
  [holding answer 5 June 2000]The Sports Strategy, which was published in April this year, explicitly recognises the contribution of inspirational PE teachers in enabling young people to develop physical skills, in promoting personal and social development and in laying foundations for sport and healthy exercise to become a lifelong habit. The Sport England awards, Sportsmark and Activemark, recognise good practice nationally in primary and secondary schools and celebrate the teachers responsible for attaining these very high standards, and I attended the recent Sportsmark national presentation. We have also introduced Advanced Skills Teachers, a grade which offers experienced, excellent
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  classroom teachers, including specialists in physical education, an enhanced pay scale, encouraging them to stay as front-line teachers rather than moving into management. We have also introduced this year new arrangements which give all good qualified teachers the opportunity to cross the threshold onto a new upper pay range.

  National Curriculum (International Dimension)
  Mr. Bercow
  To ask the Secretary of State for Education and Employment if he will make a statement on the contents of the international dimension to the revised National Curriculum, with particular reference to(a) values and (b) issues covered. [124747]

  Jacqui Smith
  The Government's approach to the international dimension in the National Curriculum is spelt out in the "Values, aims and purposes" section of the National Curriculum handbook:Education influences and reflects the values of society, and the kind of society we want to be. It is important, therefore, to recognise a broad set of common values and purposes that underpin the school curriculum and the work of schools.
  Foremost is a belief in education, at home and at school, as a route to the spiritual, moral, social, cultural, physical and mental development, and thus the well-being of the individual. Education is also a route to equality of opportunity for all, a healthy and just democracy, a productive economy, and sustainable development. Education should reflect the enduring values that contribute to these ends. These include valuing ourselves, our families and other relationships, the wider groups to which we belong, the diversity of our society and the environment in which we live. Education should also reaffirm our commitment to the virtues of truth, justice, honesty, trust and a sense of duty.
  At the same time, education must enable us to respond positively to the opportunities and challenges of the rapidly changing world in which we live and work. In particular, we need to be prepared to engage as individuals, parents, workers and citizens with economic, social and cultural change, including the continued globalisation of the economy and society, with new work and leisure patterns and with the rapid expansion of communication technologies.

  The Programmes of Study outline the issues, including those relating to the international dimension, covered in each subject area.

  Youth Parliament
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment (1) what part the Youth Parliament will play in the Government's citizenship programme; [125641]

  (2) what support his Department has given to the Youth Parliament in the form of (a) finance and (b) staff. [125640]

  Jacqui Smith
  [holding answer 13 June 2000]The Government welcome the setting up of a UK Youth Parliament (UKYP). The development of a UKYP fits with the Government's commitment to involve young people in all aspects of Government and to develop citizenship skills among young people—an essential element of education is citizenship and the teaching of democracy in schools. As the Department with the lead responsibility for the Connexions strategy and the development of citizenship through the National Curriculum, DfEE has a particular interest in supporting the work of the UKYP. For example, we recently agreed to a full-time member of staff from the Department being 692W
  seconded to the UKYP for 12 months. In addition, the Department has funded consultancy support for the group of young people and other representatives who make up the UKYP steering group, taking forward the development of the UKYP. And the training process for prospective young Members of the Youth Parliament, currently being developed, will include sessions on citizenship—the UKYP is in discussion with DfEE on the help that we will be able to provide for those sessions, which are scheduled to take place in late October. While DfEE and other Government Departments are helping in its development, the UKYP is independent of Government and political parties and will belong to the young people themselves. It is the young people who will ultimately decide how the UKYP will be run, what issues they want to debate and the part they wish to play in future citizenship developments.

  New Deal
  Mr. Allan
  To ask the Secretary of State for Education and Employment (1) how many people have joined the subsidised employment option of the New Deal since implementation, by unit of delivery; how many and what percentage of these(a) completed their programme before leaving the New Deal, (b) left their programme before completing it and (c) left at any stage for unknown destinations; [113555]

  (2) how many people have joined the Environmental Task Force option of the New Deal since implementation, by unit of delivery; how many and what percentage of these (a) completed their programme before leaving the New Deal, (b) left their programme before completing it and (c) left at any stage for unknown destinations; [113554]

  (3) how many people have joined the voluntary sector option of the New Deal since implementation, by unit of delivery; how many and what percentage of these (a) completed their programme before leaving the New Deal, (b) left their programme before completing it and (c) left at any stage for unknown destinations; [113556]

  (4) how many people have joined the full-time education and training option of the New Deal for 18 to 24-year-olds since implementation, by unit of delivery; how many and what percentage of these (a) completed their courses before leaving the New Deal, (b) left their courses before completing it and (c) left at any stage for unknown destinations; [113557]

  (5) pursuant to his answer to the hon. Member for Sheffield, Hallam of 27 March 2000, Official Report, column 40W, on the new deal for 18 to 24-year-olds, how many (a) 18 to 24-year-olds have left the New Deal for young people to jobs lasting less than 13 weeks and (b) 18 to 24-year-olds have left the full-time education and training option of the New Deal for young people to jobs lasting less than 13 weeks, broken down by unit of delivery; [117246]

  (6) if he will list by unit of delivery how many people joined the voluntary sector option of the New Deal for 18 to 24-year-olds between January 1998 and the end of July 1999; and how many of these (a) completed their course before leaving the New Deal and (b) left their course before completing the New Deal; [118220]

  693W

  (7) if he will list by unit of delivery how many people left the voluntary sector option of the New Deal for 18 to 24-year-olds between January 1998 and July 1999 for (a) destination unknown, (b) other known destination, (c) sustained unsubsidised employment, (d) jobs lasting less than 13 weeks and (e) other benefits; [118221]

  (8) how many people left the employment option of the New Deal for 18 to 24-year-olds, by unit of delivery, between January 1998 and July 1999 for (a) destination unknown, (b) another known destination, (c) sustained unsubsidised employment, (d) jobs lasting less than 13 weeks and (e) other benefits; [118493]

  (9) how many people joined the Employment option of the New Deal for 18 to 24-year-olds, by unit of delivery, between January 1998 and the end of July 1999; and how many of these (a) completed and (b) left their course before completing the New Deal; [118494]

  (10) how many people, by unit of delivery, left the Environmental Task Force option of the New Deal for young people aged 18 to 24 years for (a) unknown destination, (b) other known destination, (c) sustained unsubsidised employment, (d) jobs lasting less than 13 weeks and (e) other benefits; [118701]

  (11) how many people, by unit of delivery, joined the Environmental Task Force option of the New Deal for 18 to 24-year-olds between January 1998 and the end of July 1999; how many of these (a) completed their course before leaving the New Deal and (b) left their course before completing the New Deal; [118705]

  (12) when the hon. Member for Sheffield, Hallam will receive replies to his questions of 6 April, 7 April and 10 April. [123282]

  Ms Jowell
  [holding answer 3 April 2000]The information showing, by Unit of Delivery, cumulative data from the start of the New Deal to the end of March 2000, the latest date for which information is available, is contained in a number of tables, copies of which have been placed in the Libraries.

  The tables show:
  the number of starts to each of the four options
  the number of New Deal leavers who have taken part in each of
  the four options—and their destinations on leaving the New Deal.

  At a national level, this information is shown in the monthly Government Statistical Service New Deal Statistical First Release. Destinations on leaving New Deal are categorised as:
  sustained unsubsidised employment
  transfers to other benefits
  leavers to other known destinations
  JSA leavers to unknown destinations

  Young people who move on from the New Deal for jobs that last less than 13 weeks rejoin the programme immediately when they renew their claims for Jobseeker's Allowance. They cannot therefore be described as having left the New Deal.

  Of those who have left the New Deal for known destinations, having taken part in options, including leavers from the Follow Through stage of New Deal, 46 per cent. found work. We do not know the destination on leaving New Deal for 28 per cent. of those who have participated in options. People leaving
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  the New Deal are not required to tell us where they are going if they cease to claim benefits. In order to know as much as possible about the destinations of people leaving the New Deal the Government are conducting further surveys of those who leave the New Deal for unknown destinations. The results will be available later this year. So far surveys have shown that the pattern of actual destinations for those recorded as leaving the New Deal for unknown destinations is in line with the pattern among those whose destinations were known.

  Comprehensive information on whether young people left their options having completed them or before having done so is not collected in that form. The New Deal aims to help unemployed people to move as quickly as possible from welfare into employment. Many young people will leave their New Deal options before completing them because they have found jobs in the regular labour market and are no longer unemployed. Young people do not therefore need to complete their New Deal options in order to succeed in the programme.

TRADE AND INDUSTRY

  Broadcasting Industry (North-West)
  Mr. Woolas
  To ask the Secretary of State for Trade and Industry what assessment he has made of the role of the broadcasting industry in the economy of the north-west. [124597]

  Dr. Howells
  The broadcasting industry makes an important contribution to the economy of the north-west. The creative and media industries have been identified as identified as priority sectors by the north-west Development Agency.

  Manufacturing (East Midlands)
  Gillian Merron
  To ask the Secretary of State for Trade and Industry what assessment he has made of the performance of manufacturing industry in the east midlands region. [124598]

  Mr. Caborn
  Some sectors of manufacturing in the east midlands have continued to suffer, particularly in clothing and textiles and more traditional engineering. Other sectors, including those in higher technology, are faring much better. Overall manufacturing confidence remains significantly higher than for the same period last year.

  Directors' Pay
  Mr. Dobbin
  To ask the Secretary of State for Trade and Industry what measures he plans to introduce to increase shareholders' power in respect of setting directors' pay. [124600]

  Dr. Howells
  The Department of Trade and Industry published a consultation paper on directors' remuneration last year which put forward a number of proposals for improving disclosure of directors' remuneration and the board's accountability to shareholders. My right hon. Friend the Secretary of State for Trade and Industry will make an announcement shortly on the Government's response to the consultation.

  Steel Industry
  Mr. Campbell-Savours
  To ask the Secretary of State for Trade and Industry when he next intends to meet the directors of Corus to discuss rail production in Workington. [124601]

  Mr. Caborn
  My right hon. Friend the Secretary of State for Trade and Industry has met senior executives from Corus on several occasions to discuss a range of matters of interest to the steel industry. My Department maintains a regular dialogue with Corus and other companies as well as with other key organisations in the steel industry.

  Mr. Win Griffiths
  To ask the Secretary of State for Trade and Industry what recent representations he has received on steel-making in the United Kingdom. [124608]

  Mr. Caborn
  My right hon. Friend regularly receives representations on steel-making in the United Kingdom from a variety of sources. He has also held discussions recently with senior executives from the Corus Group plc and representatives from the Steel and Metals Union (ISTC) to discuss a range of issues relating to steel-making.

  Energy Policy
  Mr. Green
  To ask the Secretary of State for Trade and Industry what his policy is on electricity generation. [124603]

  Mr. Paterson
  To ask the Secretary of State for Trade and Industry if he will make a statement on the Government's energy policy. [124609]

  Mr. Gibb
  To ask the Secretary of State for Trade and Industry if he will make a statement on his energy policy. [124606]

  Mrs. Liddell
  Our policy is to ensure secure, diverse and sustainable supplies of energy at competitive prices.

  Ford
  Mr. Amess
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with Ford motor company concerning its future investment in the United Kingdom. [124604]

  Mr. Byers
  I have had frequent discussions with Ford over their recent review of European operations and its implications for the United Kingdom, particularly at Dagenham.

  We shall maintain this close contact as their future investment plans for the United Kingdom develop.

  Rover
  Mr. Loughton
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with the west midlands regional development agency regarding the future of the Rover Longbridge plant. [124607]

  Mr. Byers
  The Rover Longbridge plant is in private ownership. I have had no recent discussions with the West Midlands Regional Development Agency about the future of the Longbridge plant.

  Regional Venture Capital Funds
  Mr. Kidney
  To ask the Secretary of State for Trade and Industry what arrangements he has made for managing and distributing the funds for regional venture capital and innovation. [124612]

  Mr. Byers
  Arrangements are currently being put in place for the creation of Regional Venture Capital Funds with Government support based on bidding guidance published in December 1999. Lessons learned from this exercise will inform how the new money announced in the Budget will be managed in the English Regions.

  National Minimum Wage
  Shona Mclsaac
  To ask the Secretary of State for Trade and Industry what action has been taken against employers who pay below the national minimum wage. [124613]

  Dr. Howells
  The National Minimum Wage (NMW) Act 1998 contains a number of provisions relating to enforcement, both civil and criminal. To date, 155 enforcement notices have been issued which require employers to start paying the NMW and make good any past failure to pay the NMW. Two notices have so far required follow up action with a penalty notice fining the employer for each day of non-compliance with the enforcement notice.

  It is also a criminal offence to refuse or wilfully neglect to pay the NMW. So far it has not been necessary to take a criminal prosecution, though enforcement officers will do so in appropriate circumstances.

  British Trade International
  Ms Bridget Prentice
  To ask the Secretary of State for Trade and Industry if he will make a statement on the merger between the Invest in Britain Bureau and British Trade International. [124614]

  Mr. Caborn
  I refer my hon. Friend to the statement I gave to the House on 24 May 2000,Official Report, columns 522–23W.

  Miners' Compensation
  Mr. Bill O'Brien
  To ask the Secretary of State for Trade and Industry if he will make a statement on the number of compensation claims from retired miners that have been settled to date. [124615]

  Mrs. Liddell
  To date the Department has made payments in full or part settlement of claims totalling some £60.5 million to 21,500 respiratory disease claimants, and some £120 million to 25,300 Vibration White Finger claimants.

  Manufacturing
  Mr. Bill Michie
  To ask the Secretary of State for Trade and Industry what assessment he has made of the performance of manufacturing industry in the Yorkshire region in the past 12 months. [124616]

  Mr. Caborn
  The performance of manufacturing industry in the Yorkshire and the Humber Region is regularly assessed by a number of organisations. Most
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  recently a joint initiative has been launched by the regional development agency, Yorkshire Forward, and the CBI to gauge business activity in the region.

  The Government Office for Yorkshire and the Humber is in regular contact with local and regional partners about business matters in the region.

  Mr. Pike
  To ask the Secretary of State for Trade and Industry if he will undertake an assessment of the performance of manufacturing industry in Lancashire and the North West region. [124611]

  Mr. Byers
  Manufacturing industry is important to Lancashire and the North West. It accounts for 129,000 or 26 per cent. of jobs in Lancashire. All business performance is being continually assessed by markets operating in conditions of free and fair competition. This Government's first priority is to create and maintain the conditions of economic stability, which allow companies to plan ahead with confidence.

  Research and Development
  Ms Rosie Winterton
  To ask the Secretary of State for Trade and Industry what steps he is taking to promote research and development among UK companies. [124617]

  Mr. Caborn
  The Government are taking a number of significant steps to promote research and development among UK companies. Working closely with the Chancellor of the Exchequer, we have recently introduced an R&D tax credit for small and medium-sized companies which gives them 150 per cent. relief for the cost of staff and consumables used in R&D. The R&D tax credit will be supported by new Guidelines on R&D which will help companies of all sizes to benefit from Research and Development Allowances. We are also increasing the DTI Innovation Budget by some 20 per cent. over three years to nearly £230 million by 2001–02. This budget will fund a number of new and enlarged initiatives designed to drive forward a fundamental change in innovation performance in the UK. This includes for example the Smart scheme which supports R&D activities in private small and medium-sized companies and is being expanded and extended over the period 1999–2002, and the technology transfer scheme known as TCS, for which DTI is doubling its expenditure. Our aim is to improve the overall climate for investment in R&D and innovation. But the level of R&D investment by companies is for companies themselves to determine. DTI helps companies make an informed decision by providing a valuable source of information on UK and international R&D investment through the annual R&D Scoreboard.

  Unsolicited Faxes
  Mr. Hammond
  To ask the Secretary of State for Trade and Industry what assessment he has made of the effectiveness of the arrangements for preventing unsolicited fax messages. [124618]

  Dr. Howells
  The arrangements for avoiding unsolicited direct marketing faxes are contained in the Telecommunications (Data Protection and Privacy) Regulations 1999. These ban the sending of unsolicited direct marketing faxes to individual subscribers, and introduce an "opt-out" scheme—the Fax Preference Service—for corporate subscribers.
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  There is good evidence that the arrangements are delivering effective protection to subscribers from unwanted faxes. The number of complaints to Oftel about these faxes has fallen sharply since the Regulations came into force. Over the same period of time, the number of subscribers registered with the Fax Preference Service has risen from less than 15,000 to over 280,000.

  The Data Protection Commissioner's Office are responsible for enforcing the Regulations and will take action against those that they feel have wilfully or negligently breathed the Regulations. The Data Protection Commissioner has recently issued enforcement notices to two companies in relation to the sending of direct marketing faxes, and is considering enforcement actions against a number of others.

  Regional ITV Companies
  Mr. Healey
  To ask the Secretary of State for Trade and Industry if he will make a statement on the economic impact of regional ITV companies on their region. [124584]

  Dr. Howells
  As high technology companies employing people with valuable skills, ITV companies are likely to have a significant impact on the economies of the regions they are in.

  Pringle's Knitwear Factory
  Mr. Beith
  To ask the Secretary of State for Trade and Industry if he will make a statement about the Berwick Task Force following the closure of the Pringle's knitwear factory. [124610]

  Mr. Caborn
  The Task Force, set up after the announcement of the closure of the Pringles knitwear factory in Berwick has met on a number of occasions since July 1998, the latest meeting being held this week. A consultancy firm has been engaged to work with the Task Force and the local authority to help establish a comprehensive regeneration strategy for the town, and a bid for further Single Regeneration Budget funding is likely.

  Rats
  Ms Walley
  To ask the Secretary of State for Trade and Industry if he will make it his policy to collect figures on expenditure by(a) catering establishments, (b) farms and agricultural holdings, (c) water and sewerage companies, (d) other business and (e) local authorities of (i) treating rat infestations and (ii) remedying damage caused by rats. [113047]

  Ms Hewitt
  I have no plans to do so.

  Correspondence
  Mr. Donohoe
  To ask the Secretary of State for Trade and Industry when the hon. Member for Cunninghame, South will receive a reply to his letters of 16 December and 7 March, concerning Mr. James Murdoch, of Kilwinning. [125387]

  Mr. Alan Johnson
  I have replied to my hon. Friend today.

  Animal Testing
  Ms Atherton
  To ask the Secretary of State for Trade and Industry what plans the Government have to require cosmetic products imported into the United Kingdom which have been tested on animals to be labelled with this information; and if he will make a statement. [125952]

  Dr. Howells
  Under the current Cosmetic Products (Safety) Regulations 1996, any reference to testing on animals in the labelling of a cosmetic product must state clearly whether the tests carried out involved the cosmetic product itself or its ingredients. (However, if manufacturers market their products without any reference to animal testing, the regulations do not require them to alter that practice).

  The European Commission has proposed a 7th Amendment to the Cosmetics Directive, which aims to ban animal testing in the EU. One aspect of the proposed amendment will be that the Commission, in collaboration with member states, will produce guidelines to ensure that common criteria are applied to any claims relating to animal testing, and that such claims do not mislead the consumer.

  Inward Investment
  Mr. Chope
  To ask the Secretary of State for Trade and Industry what the current UK share is of internationally mobile projects with growth potential; and by how much he aims to increase this in 2000–01. [125968]

  Mr. Caborn
  The UK's share of inward investment stock reached a record figure of £244.1 billion at the end of 1999, an increase of 26 per cent. over the previous year. This is a larger share than for any other EU member state.

  The Government are fully committed to ensuring that the UK remains the No. 1 location in Europe for inward investment, including for projects with growth potential. We will continue to pursue economic policies which enhance the UK's attractions including: developing a skills base, provide flexible labour markets and a stable economy.

  Broadband Fixed Wireless Access
  Maria Eagle
  To ask the Secretary of State for Trade and Industry what arrangements he intends to make for the licensing of broadband fixed wireless access at 28 GHz. [126773]

  Ms Hewitt
  Following extensive consultation with interested parties, I intend to award by auction later this year licences for the provision of broadband fixed wireless access at 28 GHz. There will be three licences available in each of 11 English licence areas and in Scotland, Wales and Northern Ireland. Each licence will have forward and return channels of 112 MHz. A successful bidder will be able to hold just one licence in each licence area, but will be able to hold a licence in any number of licence areas. Licences will be for a term of 15 years.

  I will shortly be publishing draft Regulations to be made under section 3 of the Wireless Telegraphy Act 1998 to provide for this auction. The period for comments to be received concludes on 17 July. I hope to lay the Regulations before Parliament by the end of July. With
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  the draft Regulations I am also publishing for comment a draft of the Notice that I intend to issue under the Regulations. The Notice sets out the detailed arrangements for the auction and will include the date on which applications should be made. I am placing copies of the draft Regulations and the draft Notice in the Libraries of the House.

  Gas-fired Power Station, Avonmouth
  Dr. Naysmith
  To ask the Secretary of State for Trade and Industry when he will announce his decision on Northern Electric plc's proposal to build a gas-fired power station at Sevelco works, Avonmouth. [126774]

  Mrs. Liddell
  The proposal to build a new 180 MW gas-fired combined heat and power station at the Sevelco works, Avonmouth, has several potential benefits particularly those to the local area in terms of atmospheric pollution and the requirements of the Environment Agency for a pollution control arrangement. The Station being combined heat and power, albeit not fully meeting the criteria given in the Energy White Paper, the benefits are such that I have decided not to use my powers, under section 14(3) of the Energy Act 1976, to defer or halt this project. However, local planning and other clearances are still required under section 36 of the Electricity Act 1989.

  I have placed copies of this Press Notice and the decision letter in the Library of the House.

  Merchant Vessels
  Dr. Godman
  To ask the Secretary of State for Trade and Industry what was the total gross registered tonnage of merchant vessels constructed in United Kingdom shipyards in(a) 1990, (b) 1995 and (c) 1999. [124605]

  Mr. Caborn
  The information for merchant vessels completed in the United Kingdom is in the table.

  Merchant vessels completed in the United Kingdom

  Number

  Gross tonnage Number (thousand)

  1990

  28

  127

  1995

  24

  127

  1999

  13

  23

  Source:

  Lloyd's Register, World Fleet Statistics

  Textiles Industry
  Mr. Hoyle
  To ask the Secretary of State for Trade and Industry what assessment he has made of the prospects for future employment in the UK textiles industry. [124582]

  Mr. Byers
  I refer my hon. Friend to the oral answer given today to my hon. Friend the Member for Amber Valley (Judy Mallaber),Official Report, column 1097.

  World Trade Organisation
  Dr. Palmer
  To ask the Secretary of State for Trade and Industry if he will make a statement on the progress of World Trade Organisation negotiations since the Seattle meeting. [124590]
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  Mr. Caborn
  Since Seattle, the mandated negotiations on agriculture and on services have been launched. Consultations have also been conducted by the Director-General and the Chair of the General Council. The General Council meeting on 3–8 May included discussion on the progress of two areas of consultation. The first involved a package of confidence-building measures aimed at helping developing countries, including establishing an implementation review mechanism. Discussions on the second, on improving consultative and decision-making procedures, are continuing in Geneva.

PRIME MINISTER

  Strategic Communications Unit
  Mr. Peter Bottomley
  To ask the Prime Minister what controls there are on the Downing Street Strategic Communications Unit to prevent it furthering party purposes. [125728]

  The Prime Minister
  Staff in the Strategic Communications Unit are subject to the requirements of the "Civil Service Code" and "Guidance on the Work of the Government Information Service", which make clear that public resources must not be used for party political purposes. Ministers are also under a duty, set out in the "Ministerial Code", to uphold the political impartiality of the civil service, and not to ask civil servants to act in any way which would conflict with the "Civil Service Code".

  Government Annual Report
  Mr. David Atkinson
  To ask the Prime Minister when he expects to publish the Government's third annual report. [126217]

  The Prime Minister
  I refer the hon. Member to the answer I gave to his hon. Friend the Member for Ribble Valley (Mr. Evans) on 14 June 2000,Official Report, column 647W.

FOREIGN AND COMMONWEALTH AFFAIRS

  European Regulations and Directives
  Mr. Mitchell
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many regulations and directives were printed in the Official Journal of the European Communities, having effect for (a) 1970 to 1972, (b) 1973 to 1982, (c) 1983 to 1992 and (d) 1993 to 1999; and how many pages of the Journal were devoted to such publication in each of these periods. [125253]

  Mr. Vaz
  All regulations and directives are published in the Official Journal of the European Communities. Statistics on legislative instruments for a given year are available on the Celex database.

  Sierra Leone
  Mr. Hancock
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the US Administration in respect of their claim against the UN for the cost of their airlift operation in Sierra Leone. [125436]
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  Mr. Hain
  We have been informed by the United Nations Secretariat that they have not received a claim from the United States for the cost of their airlift operation in Sierra Leone.

  Turkey
  Mr. Reed
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent reports he has received of human rights abuses against the Christian population in Turkuey. [125760]

  Mr. Vaz
  We have received reports of alleged human rights abuses against Christians in Turkey. In December 1999, we received reports of police raids on Christian churches in Istanbul and Izmir, and, recently, of two Turkish Christians arrested in Izmir for distributing Christian literature. Officials from the British Embassy in Ankara have raised both these cases with the Turkish authorities. The trial of the two Christians arrested in Izmir was attended by a representative from our Consulate in Izmir and we were pleased to see both were acquitted in May and permission granted for the return of their material.

  Mr. Reed
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations(a) he and (b) his European counterparts have made to the Turkish authorities concerning the harassment of Christians in Turkey [125740]

  Mr. Vaz
  We have a long standing concern about the position of the Greek and Syrian Orthodox communities in Turkey. We continue to monitor closely the situation of minorities in Turkey and, where appropriate, to raise with Turkish authorities cases of human rights abuses against minorities. In December 1999, we received reports of police raids on Christian churches in Istanbul and Izmir, and, recently, of two Turkish Christians arrested in Izmir for distributing Christian literature. The trial of the two Christians arrested was attended by a representative from our Consulate in Izmir and we were pleased to see that both were acquitted in May.

  We know that other EU partners are also concerned about these issues at and we understand that they, too, have raised their concerns with the Turkish authorities.

  Mr. Reed
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to assist in the training of the Turkish police in human rights matters. [125761]

  Mr. Vaz
  There is currently a comprehensive police training project under way in Turkey. We have allocated £107,000 to this project which builds on police training workshops held last year. The objective is to increase dialogue on issues of interest to both the British and Turkish police by holding seminars on public order, anti-terrorism, custody and detention. The project focuses on policing methods that protect human rights and are in line with international human rights law. As part of this project, a group of Turkish policemen visited Britain in May to study British policing methods. Further training projects are planned with the Turkish police which are likely to focus on transparency and accountability.

  Study Visas
  Mr. Hancock
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to make it easier for foreign students to obtain visas to study in the UK. [125963]

  Mr. Vaz
  All our entry clearance posts abroad have been fully briefed on my right hon. Friend the Prime Minister's initiative to attract more overseas students to the United Kingdom, and reminded of the importance of ensuring that the entry clearance process is as straightforward and user-friendly as possible. With this in mind, we and the British Council have updated our guidance material for students. We are also working with the British Council in a number of key markets to help students who are qualified to come here to submit properly completed and fully documented visa applications. This makes processing their applications easier and in many cases does away with the need for the applicant to be interviewed.

  Interahamwe
  Ms Oona King
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent reports he has received regarding the identity of those responsible for training Interahamwe troops. [125961]

  Mr. Hain
  We have seen various reports alleging that the DRC government, and others in the region, have been training the Interahamwe. We have raised this issue with the countries concerned.

  International Criminal Court
  Mr. Gander
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he proposes to introduce legislation to ratify the Treaty signed in Rome on the International Criminal Court. [126220]

  Mr. Hain
  I refer the hon. and learned Member to the answer I gave my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) on 3 May 2000,Official Report, column 122W.

  Mercenaries
  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what his policy is regarding private military companies operating from the United Kingdom and dependent territories which are involved in the supply of mercenaries and related military services. [125280]

  Mr. Hain
  We condemn the recruitment, use, financing and training of mercenaries. We are committed to issuing a Green Paper on mercenary activity by November 2000. This will be a consultative document which will look at the options for further Government action in this area.

  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what his policy is regarding the International Convention against the Recruitment, Use, Financing and Training of Mercenaries; and if he will make a statement. [125310]

  Mr. Hain
  Her Majesty's Government have no plans to sign the 1989 International Convention on Mercenaries. We do not consider that it would be enforceable in the 704W
  UK courts. Although the Convention was adopted more than ten years ago, it has not yet attracted sufficient ratifications to enter into force.

  Sri Lanka
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his Commonwealth counterparts concerning a negotiated settlement to the conflict in Sri Lanka. [125814]

  Mr. Hain
  My right hon. Friend the Foreign Secretary and I have spoken to our Indian counterparts about the need for a political settlement in Sri Lanka. We told them that we recognised the importance of India's role in the search for peace. We have not yet held discussions with other Commonwealth partners.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with(a) his EU counterparts and (b) his UN counterparts concerning the implementation of an arms embargo on Sri Lanka. [125815]

  Mr. Hain
  None.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his UN counterparts concerning the sending of a human rights monitor to Sri Lanka. [125816]

  Mr. Hain
  The human rights situation in Sri Lanka was discussed at this year's UN Commission on Human Rights in Geneva. We monitor the situation carefully and maintain close and regular contact with international partners, including the UN and NGOs.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last discussed the issue of access by non-governmental organisations to facilitate aid distribution with the Government of Sri Lanka. [125817]

  Mr. Hain
  Our High Commission in Colombo last discussed these concerns, and the humanitarian situation in the Jaffna peninsula as a whole, on 30 May.

  United Nations
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his US counterparts concerning the payment of dues owed to the UN; and if he will make a statement. [125818]

  Mr. Hain
  There have been no discussions recently but, at ministerial level, the UK has long pressed for a resolution to the problem of US arrears to the UN. Though we have welcomed US agreement under the Helms-Biden legislation to pay a substantial portion of their arrears, the US will need to convince the UN membership of the case for accepting the conditions attached to the legislation. At the EU General Affairs Council on 20 March, Foreign Ministers reaffirmed their commitment to securing a comprehensive reform of UN finances to put them on a sound, sustainable and equitable basis, and emphasised that the EU could only consider a reordering of UN contributions which protected EU member states' financial interests.
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  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his UN counterparts concerning the establishment of a constitutional conference to discuss reform of the UN. [125819]

  Mr. Hain
  There have been no recent ministerial discussions on the question of a conference to discuss reform of the United Nations. However, the Government are committed to supporting the UN Secretary-General's efforts to modernise the UN, based on his 1997 package of reform recommendations. We look forward to a discussion on strengthening the UN at the Millennium Summit in September.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans the UK Government have to discuss UN reform at the UN Millennium Summit. [125820]

  Mr. Hain
  We look forward to a wide-ranging discussion of the role of the United Nations in the 21st century at the Millennium Summit in September. We agree with comments made by the UN Secretary-General in his Millennium Report that, among other things, the Summit should consider the need to make the organisation more effective, efficient and accessible to the world's peoples.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his UN counterparts regarding(a) the World Bank, (b) the IMF and (c) the WTO and their relationship with the Economic and Social Council of the UN. [125821]

  Mr. Hain
  Although this had not been discussed at ministerial level, the Government consider good relations between the United Nations, the international financial institutions and the WTO to be a high priority. We encourage and support the efforts of the Economic and Social Council and the World Bank and the IMF to strengthen their ties. The WTO is also involved in the UN's Financing for Development process in which the UK is playing an active role with our EU partners.

PRESIDENT OF THE COUNCIL

  Millennium Bug
  Mr. David Atkinson
  To ask the President of the Council if she will list examples of serious problems that have been reported in the UK, including those which arose as a result of problems abroad, arising from the Millennium Bug. [123293]

  Mrs. Beckett
  I have received no reports of serious problems in the UK caused by the century date change computer problem subsequent to my statement of 20 April 2000.

CULTURE, MEDIA AND SPORT

  English Heritage
  Mr. Dobson
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his answer of 24 May 2000,Official Report, column 560W, on English Heritage, (1) if
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  he will place in the Library the information requested, covering the period from 1990 to 1996, as soon as the information is readily collatable; [124404]

  (2) if he will place in the Library similar information to that requested in the original question relating to the English Heritage's advisory committees and panels for each year from 1990. [124457]

  Mr. Chris Smith
  [holding answer 14 June 2000]English Heritage is unable to provide details of grants made to advisory panel members as they have no part in the formal grant decision making process, and are therefore not required to make a declaration of their interests. The other details requested will be made available for placing in the Library as soon as English Heritage is able to collate the necessary information.

  Millennium Visitor Attractions
  Mr. Baker
  To ask the Secretary of State for Culture, Media and Sport what assessment his Department has made of the impact on(a) employment at, (b) profitability of and (c) other aspects of other individual tourist attractions in the United Kingdom, of the Millennium Experience exhibition at the Millennium Dome. [124947]

  Mr. Chris Smith
  [holding answer 8 June 2000]It is too early to make a detailed assessment of the impact of the many new lottery-assisted visitor attractions opening all around the UK to mark the millennium. However, the Millennium Commission is undertaking a large-scale Economic Impact Study of these projects. The British Tourist Authority (BTA) will also be analysing the impact of their international Millennium marketing Campaign "Britain—now is the time".

  Millennium Bridge
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport (1) what fees have been paid to safety consultants in relation to the Millennium Bridge(a) prior to its official opening and (b) subsequently; [126243]

  (2) if he will publish the contracts between the Millennium Bridge Trust and (a) the architects and (b) the builders of the Millennium Bridge; [126236]

  (3) what estimates he has made of the cost of work to ensure the safety of the Millennium Bridge; and if public funds will be made available; [126241]

  (4) if he will make a statement on the closure of the Millennium Bridge; [126240]

  (5) what studies were made of safety issues at the Millennium Bridge by the Health and Safety Executive prior to its opening; and what fees were paid by the Millennium Bridge Trust for this work; [126242]

  (6) what guarantees or indemnities were provided by (a) the architects and (b) the builders of the Millennium Bridge in relation to safety issues; [126237]

  (7) what estimate he has made of the level of resources the Millennium Commission has available; [126239]

  (8) when he expects is the Millennium Bridge to re-open to the public. [126238]

  707W
  Mr. Chris Smith
  These are matters for the Millennium Commission. I will write to the hon. Member in my capacity as Chairman of the Commission, and place copies of my reply in the Libraries of the House.

SOCIAL SECURITY

  Time Exchange Scheme
  Mrs. Gilroy
  To ask the Secretary of State for Social Security if participation in a Time Exchange Scheme would affect entitlement to benefits. [126848]

  Angela Eagle
  Our legal advice is that time credits derived from participation in a Time Exchange Scheme, such as Fair Shares, do not constitute earnings for income-related benefit purposes and therefore participation does not constitute remunerative work. Entitlement to those benefits would therefore be unaffected. Guidance to local decision-makers will be issued shortly.

  Pension (Mr. Ridler)
  Mr. Chope
  To ask the Secretary of State for Social Security on what date Mr. Ridler of Ferndown in the Christchurch constituency will he paid the additional pension to which he has been entitled since his retirement; and what additional interest and compensation will be payable. [125916]

  Mr. Rooker
  This is a matter for Alexis Cleveland, the Chief Executive of the Benefits Agency. She will write to the hon. Member.

  Letter from Alexis Cleveland to Mr. Christopher Chope, dated 14 June 2000:
  The Secretary Of State has asked me to respond to your recent Parliamentary Question asking on what date Mr Ridler of Ferndown in the Christchurch constituency will be paid the additional pension to which he has been entitled since his retirement; and what additional interest and compensation will be payable.
  As you will appreciate, individual customers' cases are confidential. I will therefore, write to you privately on this matter.

  Service Delivery
  Caroline Flint
  To ask the Secretary of State for Social Security in what ways his Department and its executive agencies deliver services to meet the needs of the public as consumers, with particular reference to families. [124643]

  Angela Eagle
  We are modernising the way the Department's services are delivered to provide a comprehensive, dedicated service, focused on the needs of our key client groups: pensioners, working age people and children. We have appointed a senior member of the Departmental Board as the consumer champion, responsible for giving consumers a voice at the heart of the Department.

  We are restructuring the Department to focus on our client groups: through a new pensions organisation focused on the needs of pensioners we will develop a modern and integrated service easily accessible from one point. We are bringing together the responsibilities of the Employment Service and part of the Benefits Agency to create a dedicated agency for people of working age. And
  708W
  we are working with the Inland Revenue to introduce the Integrated Child Credit from 2003 to bring together help for children provided through the tax and benefits system.

  We are also reforming the Child Support system to provide a simple, straightforward child maintenance system that is fair and which people can understand. In the meantime we are already taking action to improve the more commonly used forms of our service delivery, including:
  gathering client's views through consultation and evaluation, such as the Better Government for Older People Programme, to help design and improve the quality of our services to the public;
  making it easier for people to understand and resolve questions about benefit entitlement through the new decision making and appeals procedure;
  re-designing our benefit leaflets and departmental website to allow people to find the information they need more easily and to do more business with us electronically;
  providing a direct tele-claims service to pensioners so that we can take claims from Retirement Pension and deal with queries over the phone;
  offering one-to-one personal help under the New Deals and the ONE service to enable people to take up jobs and training opportunities open to them, already 306,476 people have found work through the New Deals—including nearly 51,000 lone parents through the New Deal for Lone Parents;
  extending opening hours of the Child Support Agency so that the public can contact us when it is convenient for them, increasing the use of the telephone to gather information and making more staff available to offer a face to face interview.

  Income Support
  Mr. Webb
  To ask the Secretary of State for Social Security if he will estimate the savings from extending the waiting period for income support mortgage interest payments from nine to 14 months. [125297]

  Mr. Bayley
  If the waiting period for mortgage interest payments was extended from 9 to 14 months, the estimated annual savings would be around £25 million per year, based on 1999 levels of mortgage interest payments. This estimate takes account of pensioners but not other special groups who do not have to serve the current waiting period.

  Mr. Webb
  To ask the Secretary of State for Social Security what assessment he has made of the effect of the nine months income support mortgage interest payments waiting period on the level of arrears and repossessions. [125299]

  Mr. Bayley
  No information is collected by the Department about the accrual of arrears or repossession activity in mortgages taken out by Income Support and income based Jobseeker's Allowance recipients. Benefit help for homeowners with housing costs is intended to provide reasonable protection to help secure the home. The mortgage lenders have agreed, under the Mortgage Code, to consider all cases of financial difficulty and mortgage arrears sympathetically and positively.

  Mr. Michael Jabez Foster
  To ask the Secretary of State for Social Security what estimate he has made of the number of single pensioners receiving income support who have income resources being taken into account of £73.45 or more per week. [125793]
  709W
  Mr. Bayley
  As at February 2000, there were 344,000 single pensioners receiving the Minimum Income Guarantee paid through Income Support who had income resources of £73.45 or more per week being taken into account.Notes:
  1. Figure is based on a 5 per cent. sample and is therefore subject to a degree of sampling error.
  2. Figure is rounded to the nearest hundred cases.
  Source:
  Income Support Statistics Quarterly Inquiry, February 2000.

  Mr. Michael Jabez Foster
  To ask the Secretary of State for Social Security what estimate he has made of the number of pensioner couples receiving Income Support who have income resources being taken into account of £114.95 or more per week. [125794]

  Mr. Bayley
  As at February 2000, there were 69,500 pensioner couples receiving the Minimum Income Guarantee paid through Income Support who had income resources of £114.95 or more per week being taken into account.Notes:
  1. Pensioners are defined as where the claimant is aged over 60 or over.
  2. Figure is based on a 5 per cent. sample and is therefore subject to a degree of sampling error.
  3. Figure is rounded to the nearest hundred cases.
  Source:
  Income Support Statistics Quarterly Enquiry, February 2000

  ONE Service
  Mr. Hancock
  To ask the Secretary of State for Social Security when, following the assessment of the first four ONE service pilots, changes will be made in the way that benefits are claimed. [125878]

  Angela Eagle
  The ONE pilots are planned to run until March 2002 and will be fully evaluated. No decision has yet been taken as to when the changes to the claiming process, being trialled within those pilots, may be more widely applied or the possibility of extending these arrangements beyond the pilot areas.

  Mr. Hancock
  To ask the Secretary of State for Social Security if he will publish the assessments that have been made of the first four pilot schemes for the ONE service; and if he will make a statement. [125444]

  Angela Eagle
  The ONE pilots are planned to run until March 2002 and are the subject of thorough evaluation. When robust and reliable research findings are available they will be published.

  Appeals
  Mr. Hancock
  To ask the Secretary of State for Social Security how many awards of each type of benefit were made or increased as a result of appeals in the year 1999–2000; what the cost to his Department will be of the making or increasing of those awards; how much the appeal process cost his Department in that year; and if he will make a statement. [125879]
  710W
  Angela Eagle
  The information is not available in the format requested and could be obtained only at disproportionate cost. Such information as is available is as follows.

  In the year ending September 1999 (the latest date available), of 262,971 appeals heard by the Appeals Service, 92,776 were found in the appellants favour.
  Notes:
  1. As figures for September 1999 are not due to be published until 22 June, the figures quoted are provisional and may be subject to revision.
  2. Appeals found in the appellants favour includes References revised in favour of the appellant.
  Source:
  100 per cent. download from the Appeals Service Generic Appeals Processing system.

  Estimated cost of processing appeals within the Department for the year 1999–2000

  £ million

  Estimated cost

  Appeals Services

  156.917

  Benefits Agency

  224.260

  Child Support Agency

  4.000

  1 This figure excludes the cost of the launch of the Appeals Service agency and the introduction of the Decision Making and Appeals changes.

  2 This figure reflects appeals processing within the district network and Disability and Caters Benefit Directorate only. Appeals costs for the Child Benefit Directorate and Pensions Overseas Directorate cannot be separately identified.

  A new system to streamline and modernise the appeals system has been introduced. This will lead to a faster and more efficient service. The Appeals Service has already made significant improvements to clear backlogs and reduce waiting times. My right hon. Friend the Secretary of State has set challenging targets to improve the service still further.

  Client Surveys
  Mr. Hancock
  To ask the Secretary of State for Social Security what changes have been made by his Department as a result of representative surveys of its clients carried out in 1998–99 and 1999–2000; and what the(a) costs and (b) savings from such changes will be in each of the next five years. [125876]

  Mr. Rooker
  Representative surveys of clients are only one of many sources of information and evidence the Department uses to develop, monitor and evaluate policies and their delivery. Survey findings do not contribute to the policy process in isolation but are used alongside other information such as management and administrative data. It is not possible, therefore, to say what changes have been made directly as a result of representative surveys of clients and to determine costs and savings arising.

  Benefit Fraud
  Mr. Fraser
  To ask the Secretary of State for Social Security (1) if he will make a statement on the role of the National Intelligence Unit in tackling benefit fraud in Dorset; [125724]

  (2) what recent discussions he has had with the Benefits Agency about tackling benefit fraud in Dorset. [125730]
  711W
  Mr. Rooker
  The purpose of the National Intelligence Unit (NIU) is to provide "information for action" or anti-fraud intelligence that facilitates better informed decision making at managerial and operational levels. The NIU is located over five sites and consists primarily of data collection sections and teams of analysts. Once analysed, all intelligence which can be used to help combat benefit fraud is referred to relevant sections of the Benefits Agency. No information is available on the role of the NIU in tackling benefit fraud in specific towns, cities or counties as the unit operates on a national level.
  Although we have held no recent discussions with the Benefits Agency about tackling benefit fraud specifically in Dorset, national policy on combating fraud applies throughout Great Britain. We set out the strategy for tackling fraud in the White Paper "Safeguarding Social Security" presented to Parliament in March 1999.

  The four key principles are; getting it right—benefit payments should be correct from day one; keeping it right—ensuring payments are adjusted as circumstances change; putting it right—detecting when payments go wrong and taking prompt action to correct them with appropriate penalties to prevent a recurrence; and making sure our strategy works—by monitoring progress, evaluating the strength of our defences and adjusting them in the light of experience.

  Mr. Webb
  To ask the Secretary of State for Social Security if he will estimate the value of additional detected fraud and overpayments if the National Fraud Initiative scheme was extended to all councils in the UK. [125283]

  Mr. Rooker
  The estimates requested are not available. However, we welcome the recently published National Fraud Initiative report which, like this Departments' Housing Benefit Matching Service, is a good example of what can be achieved by well targeted data matching.

  Child Support
  Mr. Hancock
  To ask the Secretary of State for Social Security in how many cases since 1 April the Benefits Agency has decided that a lone parent has good cause not to co-operate with the Child Support Agency in obtaining maintenance; what estimate he has made of the financial benefits which have accrued to(a) his Department, (b) claimants and (c) children affected; and if he will make a statement. [125440]

  Angela Eagle
  During April this year, the latest date for which information is available, it was accepted that 501 parents with care had good cause for not co-operating with the Child Support Agency. This compares with some 11,000 parents with care claiming Income Support or income-based Jobseeker's Allowance over the same period.

  The underlying purpose of the requirement to co-operate with the Child Support Agency where these benefits are in payment is to ensure that, wherever possible, parents and not the taxpayer take responsibility for supporting their children. The receipt of regular maintenance can also play an important part in helping to lift children out of poverty.

  Earnings Disregard
  Ms Buck
  To ask the Secretary of State for Social Security if he will estimate the(a) gross and (b) net costs of increasing the Housing Benefit/Council Tax Benefit earnings disregard by (i) £5, (ii) £10, (iii) £15 and (iv) £20 per week; and how many households would (1) benefit and (2) be taken off Housing Benefit/Council Tax Benefit as a result. [125575]

  Angela Eagle
  The information is in the table.

  No cases would be lifted out of Housing Benefit/Council Tax Benefit (CTB) as a result of these measures. In fact extra cases will become entitled to the benefits.

  Estimates of the costs of increasing earnings disregards in HB/CTB and the numbers gaining

  Number of cases benefiting

  Cost in 2000–01 (£ million)

  HB (thousand)

  CTB (thousand)

  £5

  75

  390

  350

  £10

  175

  400

  360

  £15

  250

  420

  380

  £20

  350

  450

  400

  Notes:

  1. The gross and net costs of increasing the Housing Benefit/Council Tax Benefit earnings disregard will be identical, since Housing Benefit and Council Tax Benefit are not taken into account in the calculation of other benefits.

  2. Estimates based on the 1997–98 Family Resources Survey and Housing Benefit Administrative data for May 1998.

  3. Costs are rounded to the nearest £5 million, gainers are rounded to the nearest 10,000 cases.

  4. The numbers benefiting are expressed in terms of benefit units rather than households. It is not possible to calculate the total number of households benefiting from the measures by summing the Housing Benefit and Council Tax Benefit gainers since some cases will gain in both benefits.

  5. The number of cases benefiting includes cases who float on to the benefits as a result of these measures.

  Tax Credits
  Ms Buck
  To ask the Secretary of State for Social Security how many households have been taken off(a) Housing Benefit and (b) Council Tax Benefit as a consequence of Working Families Tax Credit and Disabled Persons Tax Credit in (i) the UK and (ii) each region. [125415]

  Angela Eagle
  The information is not available in the format requested as the most recent available data for Housing Benefit and Council Tax Benefit relate to August 1999, which is prior to the introduction of the Working Families Tax Credit.

  However, we estimate that the introduction of Working Families Tax Credit will move about 90,000 claimants off Housing Benefit in Great Britain in 2000–01, with similar numbers moving off Council Tax Benefit.

  Estimates for the effects of the Working Families Tax Credit are based on the Family Resources Survey. This does not have an adequate sample size to produce corresponding estimates for Disabled Persons Tax Credit, since only a small number of Housing Benefit and Council Tax Benefit recipients also received Disability Working Allowance. The reduction in the number of

  713W
  recipients of Housing Benefit and Council Tax Benefit as a result of the introduction of the Disabled Persons Tax Credit is, however, likely to be small.

  Regional estimates of the effect of Working Families Tax Credit are not available owing to the small sample sizes in the Family Resources Survey when analysed at a regional level.

  Housing Benefit (Chelmsford)
  Mr. Burns
  To ask the Secretary of State for Social Security what the national guidelines are for the time a local authority should take to process a Housing Benefit application; and what is the average time it is taking in the Chelmsford local authority area. [126022]

  Angela Eagle
  Under regulation 76 of the Housing Benefit (General) Regulations 1987, where a local authority has received sufficient information to determine a claim, it must make the determination within 14 days of receipt of that information or as soon as reasonably practicable thereafter.

  Under the Best Value regime introduced from April 2000, local authorities are required to submit data on the average length of time taken to determine claims. Previously, information was collected on the percentage of claims determined within 14 days. Between 1 April 1998 and 31 March 1999, the latest period for which data are available, Chelmsford Borough Council determined 48 per cent. of all Housing Benefit claims within 14 days.

HOME DEPARTMENT

  Metropolitan Police
  Mrs. Gordon
  To ask the Secretary of State for the Home Department when he expects the Commissioner of Police of the Metropolis to publish full-year data for the performance of the Metropolitan police in relation to its policing plan for 1999–2000. [126743]

  Mr. Straw
  The Commissioner of Police of the Metropolis included performance data for the first 11 months of the last financial year, and projected performance in its final month, in his Policing and Performance Plan for 2000–01 which he published on 31 March, on the Metropolitan police website http://www.met.police.uk.

  The Commissioner of Police of the Metropolis tells me that he expects to publish a hard-copy version of the Plan on 21 June. This will include full-year performance data for 1999–2000. These data confirm, I understand, the provisional out-turns included in the version of the Plan published on 31 March.

  It may benefit right hon. and hon. Members, in particular those preparing to take part in the debate on the policing of London which, subject to the demands of business, we hope the House will be able to hold before the end of this month, to have early sight of the hard-copy version of the Plan. I am, therefore, today placing proof copies of the Plan in the Vote Office, and in the Library.

  Robbery
  Ms McCafferty
  To ask the Secretary of State for the Home Department what additional support he intends to provide to the police service for reducing robbery. [126776]

  Mr. Straw
  I am announcing today the allocation of £20 million additional resources for tackling robbery in the five metropolitan areas in which 70 per cent. of all robberies take place, and for which challenging targets have been set for the police forces concerned by their respective police authorities. The £20 million forms part of the £91 million which my right hon. Friend the Chancellor of the Exchequer allocated in the Budget for additional measures to support the delivery of crime reduction.

  The specific amounts being made available are:

  £ million

  Metropolitan police

  9.1

  West Midlands

  3.3

  Greater Manchester

  3.2

  West Yorkshire

  2.6

  Merseyside

  1.8

  The five forces will now be drawing up plans to achieve early reductions in robbery levels.

  Rural Policing
  Mr. Peter Bradley
  To ask the Secretary of State for the Home Department what additional support he intends to provide to the police service for addressing rural crime. [126777]

  Mr. Straw
  I am announcing today that £15 million of the £91 million for police modernisation will be used to meet the special needs of rural policing. We are discussing with the police service how this money is to be allocated to improve performance. In particular, we will be discussing a national standard response time for emergency calls in rural areas. Additional funding for future years will be considered as part of the Spending Review 2000 process.

  Hunting With Hounds
  Mr. Evans
  To ask the Secretary of State for the Home Department if he will estimate the additional police numbers that will be needed in rural areas to enforce legislation banning hunting with dogs. [126091]

  Mr. Charles Clarke
  We will be consulting with the police on the implications to them of the legislative options contained in the proposed Bill on hunting with dogs.

  Mr. Evans
  To ask the Secretary of State for the Home Department if he will estimate the cost of compensation(a) per person on average and (b) in total for loss of livelihood if hunting with dogs is made illegal. [126092]

  Mr. Mike O'Brien
  The consequences of the provisions of the proposed Bill on hunting with dogs will be considered as legislative options are drawn up.

  Police Pensions
  Mr. Flynn
  To ask the Secretary of State for the Home Department how many certificates to forfeit police pensions have been issued in the last 10 years. [125994]

  Mr. Charles Clarke
  The Secretary of State for the Home Department has issued 24 certificates to forfeit police pensions in the last 10 years.

  Mr. Flynn
  To ask the Secretary of State for the Home Department what specific offences have led to the issue of certificates to forfeit police pensions on the basis that the offence in question was determined to be liable to lead to serious loss of confidence in the public service during the last five years. [125993]

  Mr. Charles Clarke
  The following offences have led to the issue of certificates to forfeit police pensions on the basis that the offence in question was determined to be liable to lead to serious loss of confidence in the public service during the last five years:

  Attempting to pervert the course of justice

  Blackmail

  Conspiracy to commit misconduct in a public office

  Conspiracy to defraud a building society

  Conspiracy to pervert the course of justice

  Conspiracy to, and/or, supply of a controlled drug, Class B cannabis resin

  Corruption

  Deception

  Dishonesty

  Indecent assault

  Importation of controlled drugs

  Murder

  Perverting the course of justice/dangerous driving

  Theft

  Theft by deception

  Using a false instrument

  Drug Testing
  Mr. Flynn
  To ask the Secretary of State for the Home Department if he will list the drugs that he proposes to include in the mandatory drug testing for offenders under the provisions of the Criminal Justice and Court Services Bill. [125996]

  Mr. Charles Clarke
  Initially it is proposed to test specifically for heroin and crack/cocaine, which research has shown to have a particularly strong connection with acquisitive crime. The Bill provides for the Secretary of State to specify, by order, the Class A drugs applicable. Consideration will be given to including other Class A drugs in the testing programme if research evidence demonstrates a similar link to the commissioning of crime.

  Number and proportion of defendants tried and convicted at the Crown court for rape offences1 by Police Force Area, 1994–98

  Police Force Area

  Number tried

  Total convicted

  1994 Percentage convicted

  Number tried

  Total convicted

  1995 Percentage convicted

  Avon and Somerset

  22

  12

  55

  31

  15

  48

  Bedfordshire

  14

  3

  21

  8

  5

  63

  Cambridgeshire

  19

  4

  21

  17

  12

  71

  Cheshire

  14

  8

  57

  17

  10

  59

  Cleveland

  9

  5

  56

  17

  10

  59

  Cumbria

  5

  4

  80

  13

  7

  54

  Drugs Misuse
  Mr. Flynn
  To ask the Secretary of State for the Home Department when the Advisory Council for the Misuse of Drugs is expected to report on the Police Foundation's inquiry into the Misuse of Drugs Act 1971. [125995]

  Mr. Charles Clarke
  Further to the reply I gave my hon. Friend on 8 May 2000,Official Report, column 298W, I understand that the Advisory Council had a short discussion on the Police Foundation's Report at its meeting on 25 May. The Council noted that the Government had made it clear that they were not persuaded that the classification or overall legal framework for LSD, ecstasy or cannabis should be changed, but would be giving careful consideration to the other recommendations arising from the Police Foundation's Inquiry.

  The Council also noted that the United Kingdom Anti-Drugs Co-ordinator, Keith Hellawell, is to chair an inter-departmental working group to consider the other recommendations of the Police Foundation Inquiry's Report. I understand that the working group plans to provide a progress report to Ministers later this summer. It is not possible to speculate at this stage whether the consideration by the inter-departmental working group will lead the Government to seek the views of the Advisory Council on any of the recommendations being considered. However, under provisions in the misuse of drugs legislation, the Advisory Council would need to be consulted on any proposed amendments to the Misuse of Drugs Act 1971.

  No-smoking Policy
  Mr. Paul Marsden
  To ask the Secretary of State for the Home Department if he will make a statement on(a) the effectiveness of his Department's no-smoking policy and (b) the proportion of his Department's offices that do not allow smoking. [125152]

  Mr. Straw
  I am satisfied that my Department's policy, under which smoking in its main buildings in London, Croydon and Merseyside is only permitted in designated smoking rooms, is working satisfactorily. 99 per cent. of these offices do not allow smoking.

  Rape Statistics
  Mr. Gareth Thomas
  To ask the Secretary of State for the Home Department what the conviction rates were for rape(a) nationally and (b) in each Crown Prosecution Service area in England and Wales in each of the last five years for which statistics are available. [125789]

  Mr. Charles Clarke
  Rape is an indictable only offence. The available information, on defendants tried in the Crown court, is by Police Force Area and is given in the table.
  717W

  Number and proportion of defendants tried and convicted at the Crown court for rape offences1 by Police Force Area, 1994–98

  Police Force Area

  Number tried

  Total convicted

  1994 Percentage convicted

  Number tried

  Total convicted

  1995 Percentage convicted

  Derbyshire

  15

  5

  33

  20

  16

  80

  Devon and Cornwall

  13

  9

  69

  18

  12

  67

  Dorset

  13

  10

  77

  8

  3

  38

  Durham

  11

  7

  64

  17

  12

  71

  Essex

  14

  6

  43

  17

  10

  59

  Gloucestershire

  8

  3

  38

  8

  5

  63

  Greater Manchester

  72

  37

  51

  91

  47

  52

  Hampshire

  29

  11

  38

  20

  10

  50

  Hertfordshire

  6

  4

  67

  4

  3

  75

  Humberside

  5

  3

  60

  15

  11

  73

  Kent

  18

  9

  50

  29

  19

  66

  Lancashire

  20

  8

  40

  23

  14

  61

  Leicestershire

  4

  2

  50

  17

  4

  24

  Lincolnshire

  8

  2

  25

  10

  1

  10

  Merseyside

  29

  14

  48

  24

  15

  63

  Metropolitan police2

  214

  90

  42

  205

  94

  46

  Norfolk

  13

  3

  23

  9

  4

  44

  Northamptonshire

  9

  2

  22

  14

  6

  43

  Northumbria

  41

  22

  54

  50

  24

  48

  North Yorkshire

  13

  3

  23

  13

  8

  62

  Nottinghamshire

  26

  13

  50

  24

  7

  29

  South Yorkshire

  22

  13

  59

  19

  12

  63

  Staffordshire

  19

  12

  63

  20

  7

  35

  Suffolk

  12

  3

  25

  12

  7

  58

  Surrey

  4

  2

  50

  9

  4

  44

  Sussex

  11

  7

  64

  18

  6

  33

  Thames Valley

  10

  4

  40

  15

  5

  33

  Warwickshire

  3

  3

  100

  4

  2

  50

  West Mercia

  11

  5

  45

  8

  5

  63

  West Midlands

  62

  32

  52

  67

  35

  52

  West Yorkshire

  41

  21

  51

  46

  30

  65

  Wiltshire

  4

  0

  0

  13

  9

  69

  England

  863

  401

  46

  970

  506

  52

  Dyfed-Powys

  4

  3

  75

  4

  4

  100

  Gwent

  11

  7

  64

  2

  1

  50

  North Wales

  9

  4

  44

  22

  13

  59

  South Wales

  35

  20

  57

  46

  29

  63

  Wales

  59

  34

  58

  74

  47

  64

  England and Wales

  922

  435

  47

  1,044

  553

  53

  1996

  1997

  1998

  police Force Area

  Number tried

  Total convicted

  Percentage convicted

  Number tried

  Total convicted

  Percentage convicted

  Number tried

  Total convicted

  Percentage convicted

  Avon and Somerset

  23

  7

  30

  30

  10

  33

  35

  15

  43

  Bedfordshire

  13

  7

  54

  15

  6

  40

  16

  5

  31

  Cambridgeshire

  14

  6

  43

  13

  6

  46

  9

  3

  33

  Cheshire

  20

  10

  50

  19

  12

  63

  19

  12

  63

  Cleveland

  14

  9

  64

  14

  7

  50

  10

  5

  50

  Cumbria

  9

  5

  56

  4

  0

  0

  7

  5

  71

  Derbyshire

  22

  12

  55

  20

  9

  45

  14

  7

  50

  Devon and Cornwall

  16

  15

  94

  24

  13

  54

  39

  23

  59

  Dorset

  12

  7

  58

  10

  5

  50

  8

  4

  50

  Durham

  9

  5

  56

  12

  8

  67

  21

  9

  43

  Essex

  19

  11

  58

  30

  21

  70

  28

  14

  50

  Gloucestershire

  4

  2

  50

  8

  2

  25

  5

  2

  40

  Greater Manchester

  82

  33

  40

  85

  30

  35

  133

  54

  41

  Hampshire

  23

  8

  35

  45

  28

  62

  54

  23

  43

  Hertfordshire

  9

  8

  89

  17

  13

  76

  15

  8

  53

  Humberside

  22

  13

  59

  20

  11

  55

  20

  8

  40

  Kent

  26

  15

  58

  36

  16

  44

  32

  11

  34

  Lancashire

  21

  13

  62

  26

  14

  54

  38

  20

  53

  Leicestershire

  17

  9

  53

  22

  11

  50

  30

  18

  60

  Lincolnshire

  6

  4

  67

  13

  8

  62

  18

  8

  44

  Merseyside

  36

  17

  47

  38

  17

  45

  53

  20

  38

  Metropolitan police2

  250

  116

  46

  258

  115

  45

  299

  111

  37

  Norfolk

  8

  1

  13

  9

  2

  22

  12

  4

  33

  718W

  719W

  1996

  1997

  1998

  Police Force Area

  Number tried

  Total convicted

  Percentage convicted

  Number tried

  Total convicted

  Percentage convicted

  Number tried

  Total convicted

  Percentage convicted

  Northamptonshire

  6

  2

  33

  5

  4

  80

  16

  5

  31

  Northumbria

  50

  25

  50

  42

  26

  62

  64

  22

  34

  North Yorkshire

  15

  8

  53

  12

  4

  33

  14

  8

  57

  Nottinghamshire

  25

  14

  56

  28

  14

  50

  39

  19

  49

  South Yorkshire

  18

  10

  56

  26

  16

  62

  41

  13

  32

  Staffordshire

  23

  12

  52

  27

  13

  48

  20

  11

  55

  Suffolk

  9

  3

  33

  15

  6

  40

  19

  7

  37

  Surrey

  8

  5

  63

  7

  3

  43

  7

  4

  57

  Sussex

  15

  9

  60

  24

  15

  63

  23

  15

  65

  Thames Valley

  37

  16

  43

  42

  16

  38

  28

  9

  32

  Warwickshire

  6

  5

  83

  3

  1

  33

  5

  3

  60

  West Mercia

  13

  8

  62

  21

  13

  62

  24

  12

  50

  West Midlands

  71

  37

  52

  77

  38

  49

  95

  51

  54

  West Yorkshire

  63

  37

  59

  43

  26

  60

  84

  48

  57

  Wiltshire

  11

  7

  64

  11

  3

  27

  5

  3

  60

  England

  1,045

  531

  51

  1,151

  562

  49

  1,399

  619

  44

  Dyfed-Powys

  5

  4

  80

  9

  7

  78

  11

  4

  36

  Gwent

  20

  9

  45

  20

  13

  65

  18

  4

  22

  North Wales

  18

  7

  39

  14

  8

  57

  22

  11

  50

  South Wales

  37

  24

  65

  55

  25

  45

  6

  36

  53

  Wales

  80

  44

  55

  98

  53

  54

  119

  55

  46

  England and Wales

  1,125

  575

  51

  1,249

  615

  49

  1,518

  674

  44

  1 Rape offences cover rape, attempted rate and associated offences under the Mental Health Act 1959

  2 Including City of London

  Cross-examination (Sexual History)
  Mr. Gareth Thomas
  To ask the Secretary of State for the Home Department how many applications have been made under section 41 of the Youth Justice and Criminal Evidence Act 1999 to cross-examine a complainant as to previous sexual history; and how many such applications were successful. [125788]

  Mr. Charles Clarke
  These provisions are not yet in force. Rules of court are being prepared for the implementation of section 41, which have been the subject of recent consultation. The Government intend to implement these provisions as soon as these Rules are in place.

  Wrongful Convictions
  Mr. Cox
  To ask the Secretary of State for the Home Department how much financial compensation was paid in each of the last three years to people freed by courts in England and Wales for wrongful conviction for a criminal offence; and if he will make a statement. [125985]

  Mr. Charles Clarke
  The total amounts paid in compensation to people who have been wrongly convicted, or charged, for each of the last three financial years are as follows:

  Year

  Million

  1997–98

  6.652

  1998–99

  5.302

  1999–2000

  5.647

  In all cases, the Secretary of State decides whether in principle an applicant qualifies for compensation, but the amount of the award is determined by the independent assessor he has appointed.

  Child Contact Centres
  Mr. Alan Simpson
  To ask the Secretary of State for the Home Department what the annual expenditure is on child contact centres through probation partnerships. [125953]

  Mr. Boateng
  In 1998–99, the probation service spent a total of £1,106,299 on partnership projects relating to Family Court Welfare Work, £153,862 of which was devoted specifically to child contact centres.

  Internet Monitoring
  Mr. Cohen
  To ask the Secretary of State for the Home Department what institutions he plans will be involved in the monitoring of internet and e-mail communications; and if he will make a statement. [125668]

  Mr. Charles Clarke
  The Regulation of Investigatory Powers Bill does not provide for routine monitoring of any communications. Clause 24 of the Bill allows for the acquisition of communications data, which would include the addressing data but not the content of the communication, by:a police force;
  the National Criminal Intelligence Service;
  the National Crime Squad;
  the Commissioners of Customs and Excise and their departments; and
  any of the intelligence services (taken to mean the Security Service, the Secret Intelligence Service and Government Communications Headquarters).

  The Bill provides for this list to be added to by Order.

  We have included a number of oversight procedures to cover the collection of communications data. No authorising officer may authorise a notice unless obtaining the communications data is both necessary for certain specified purposes, and proportionate.
  721W
  In addition, the Bill places oversight of the use of this power under the remit of the Interception Commissioner. We intend for an audit team from the Commissioner's office to undertake periodic inspections of each body to ensure that the power is being used responsibly.

  Alcohol Licences (River Boats)
  Mr. Fearn
  To ask the Secretary of State for the Home Department how many Thames river boats operate open-ticket party events where alcohol is served; and how many open-ticket party events were held on Thames river boats in(a) 1999, (b) 1995 and (c) 1990. [125445]

  Mr. Mike O'Brien
  This information is not collected, and is not readily available.

  Fire Service
  Jackie Ballard
  To ask the Secretary of State for the Home Department (1) when he will end the consultation period on the document entitled, "The Future of Fire Service Control Rooms and Communication"; [125721]

  (2) if he will list the consultees in relation to the document entitled, "The Future of Fire Service Control Rooms and Communication". [125720]

  Mr. Mike O'Brien
  The management summary of the Fire Service Communications and Control Rooms Study was circulated to the Central Fire Brigades Advisory Council immediately prior to its meeting on 16 May 2000. The summary and the full report will be discussed at its meeting on 19 July. The Council is the statutory body appointed under section 29 of the Fire Services Act 1947 to advise the Secretary of State, on fire service matters. Current membership includes the following fire service representative bodies; the Local Government Association, the Chief and Assistant Chief Fire Officers' Association, the Fire Brigades Union and the Retained Firefighters' Union.

  Best Value authorities are required to carry out reviews of all their functions over a period of five years from April 2000. To help fire authorities make the most of opportunities for improved efficiency through greater collaboration, a common timetable has been set in the Local Government (Best Value) Performance Plans and Reviews Order 1999 (SI 1999 No. 3251) in respect of fire authorities for the review of particular functions, including communications and control in year one (2000–01). The aim of the above study is to provide advice for authorities on how best to meet their future mobile communications and control room requirements.

  Fire authorities in England and Wales have been invited to consider the findings of the study and to take these into account in conducting the Best Value reviews of their control and communications functions in accordance with SI 1999 No. 3251. The relevant fire service circular (No 8/2000) was issued on 10 May to fire authorities and brigades and to other bodies with an interest in fire service matters. A copy of the circular is in the Library.

  Gammahydroxybutyrate
  Mr. Ben Chapman
  To ask the Secretary of State for the Home Department if he will make a statement on the Metropolitan Police Service's programme of research into drug-assisted sexual assault, with particular reference to the classification of gammahydroxybutyrate. [126014]

  Mr. Charles Clarke
  This research is being carried out by the Metropolitan Police Service with funding from the Home Office under the Police Research Award Scheme.

  I understand that the report has not yet been released and is due to be launched by the Metropolitan Police Service on 21 June 2000.

CABINET OFFICE

  Anti-drugs Strategy
  Mr. Flynn
  To ask the Minister for the Cabinet Office what has been the total spending on anti-drugs strategies during each of the last 10 years; and what proportion in each of those years was spent on(a) drug enforcement measures and (b) rehabilitation. [125997]

  Mr. Ian McCartney
  The first UK drugs strategy "Tackling Drugs Together" was launched in May 1995 and allocated £8.8 million over three years to Drug Action Teams, £5.9 million on schools drug education for 1995–96, and £1 million in the same year for services for young people at an early stage of drug misuse. For the present strategy, "Tackling Drugs To Build A Better Britain", the 1998 Comprehensive Spending Review settlement provided an additional £217 million of resources for three years, of which £70.5 million (32.4 per cent.) was allocated for new treatment services in communities, and £60 million (27.6 per cent.) for treatment services in prisons. No extra resources were allocated for enforcement. The overall aim of the Government's present anti-drugs strategy is to shift the emphasis away from dealing with the consequences of the drugs problem towards positive investment in preventing and targeting it, and Government drug-related expenditure will reflect this over the length of the strategy.

  Public Sector Ombudsman
  Mr. Clapham
  To ask the Minister for the Cabinet Office if she will make a statement on the review of the Public Sector Ombudsman in England. [126311]

  Mr. Stringer
  As part of our programme of modernisation, the Government have reviewed the organisation and operation of the Public Sector Ombudsmen in England. Underlying this review was a recognition of the need to ease public access and improve efficiency in dealing with complaints across different sectors. The review was published on 13 April 2000,Official Report, column 241W.

  While the review was well received, it was always our intention to consult widely on the outcome of the review. We want to give as many people as possible the opportunity to comment on the review's recommendations

  723W
  which, if implemented in full, will radically reform the ombudsmen system in England. That is why we have today published a consultation paper inviting comments on the review and on any other aspect of the organisation or operation of the Public Sector Ombudsmen in England. Copies of the consultation paper have been placed in the Libraries of the House and in the Vote Office.

  The Government recognise and value the contribution made by everyone involved in the work of the ombudsmen. We also recognise the significant contribution made by the ombudsmen themselves in helping public bodies maintain and improve the standards of service they offer. The challenge now is to consider how to strengthen that contribution and ensure that all public bodies provide a first class service to all citizens.

  Better Government for Older People
  Mrs. Lawrence
  To ask the Minister for the Cabinet Office when the report of the Better Government for Older People programme will be published. [126312]

  Mr. Ian McCartney
  "All Our Futures", the report of the Better Government for Older People programme, is being published today. Copies are being placed in the Libraries of the House.

  The Government are committed to better policy making and more responsive public services as part of the "Modernising Government" agenda. The recommendations of the Better Government for Older People programme, a unique partnership between central and local government, the voluntary sector and the academic world, provide new evidence of how to combat age discrimination, better engage with older people, improve decision-making, better meet older people's needs and promote a strategic and joined-up approach to an ageing population. The Inter-Ministerial Group on Older People will now consider the recommendations carefully with a view to early action and a full response.

LORD CHANCELLOR'S DEPARTMENT

  Judges
  Mr. Woolas
  To ask the Parliamentary Secretary, Lord Chancellor's Department if the Lord Chancellor has completed the review of the guidance which is given to judges on outside activities and interests. [126775]

  Mr. Lock
  Yes. Copies of the revised guidance to be used in future have been placed in the Libraries of both Houses. The Lord Chancellor is satisfied that the substance of the existing guidance, which is long standing, remains basically sound. It is necessarily of a general kind, for application in individual circumstances. The Lord Chancellor is satisfied that it strikes an appropriate balance in discouraging activities or interests which may be seen to undermine judicial impartiality, or conflict with judicial office, without being unduly restrictive. He has at the same time made a number of detailed changes in the text and added a statement of general principles. The new guidance will be kept under review in the light of experience. The general guidance on outside activities and interests is separate from any question of conflict of interest arising in individual cases on which the Court of Appeal recently gave further authoritative guidance in its judgment in the case of Lockbail (UK) Ltd. v. Bayfield Properties Ltd.

  Child Contact Centres
  Mr. Alan Simpson
  To ask the Parliamentary Secretary, Lord Chancellor's Department what arrangements will be made for the funding of child contact centres after the Family Court Welfare Service is replaced by the Children and Family Court Advisory and Support Service. [125954]

  Jane Kennedy
  As part of the arrangements for establishing CAFCASS, funds, including partnership funding for contact centres will transfer from the probation service. The Criminal Justice and Court Services Bill provides for CAFCASS to have grant making powers to continue such work.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Birmingham): The LORD CHANCELLOR on the Woolsack.
The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before public business begins, I take the opportunity to inform the House that I am to address the Yorkshire Business Forum in Leeds tomorrow, Friday, 16th June, when the House will sit. Accordingly I trust that the House will grant me leave of absence.

Defence Evaluation and Research Agency
Lord Chalfont Lord Chalfont asked Her Majesty's Government:
What plans they have for the future of the Defence Evaluation and Research Agency (DERA).
The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean): My Lords, on 17th April we announced a revised proposal for a public private partnership for the Defence Evaluation and Research Agency, and published a consultation document. Our proposal would see around three-quarters of the current DERA organisation turned into a company. The remainder of DERA would be retained in the MoD. Formal consultation ended on 9th June. We are considering the responses and hope to make a further announcement before the Summer Recess.
Lord Chalfont: My Lords, I thank the Minister for that Answer. Given that DERA is one of the leading scientific and technological installations in the world, does she agree that this goes rather further than her reply might suggest? A host of questions arises from the plan to privatise three-quarters of DERA; I should like to ask the noble Baroness two.
First, how will the Government continue to benefit from the scientific and technological research of the privatised part of DERA, where obviously commercial success rather than national security will be the criterion upon which it will work? How has the United States reacted to this in the light of the close collaboration that we have with the Americans in these areas?
Secondly, what machinery will be established to maintain communications between the private and public sectors to ensure that there is full communication and exchange of ideas between the two sectors?
Baroness Symons of Vernham Dean: My Lords, as to the noble Lord's second point, we expect close communication between the public and private sectors. The bulk of new DERA's work will continue to come from the MoD for a very long time, and officials in both organisations will be working closely together. As to the benefits that may accrue to the public sector from privatisation, they may be achieved through some kind of "golden share", which the noble Lord will have seen mentioned in the consultation document. We shall develop our thinking on that in the light of the consultation which is taking place. So far as concerns the USA, I am happy to say that it seems broadly content with what Her Majesty's Government are now proposing.
Baroness Warwick of Undercliffe: My Lords, the proposals for the partial privatisation of DERA obviously have implications for its research base and thus for those universities which have significant research engagements with the MoD. Can the Minister give an assurance that there will be effective consultation with higher education to prevent unfortunate consequences—whether intended or unintended—on the conduct of research in the United Kingdom?
Baroness Symons of Vernham Dean: My Lords, I suspect that the noble Baroness knows that we have received a contribution from the Committee of Vice-Chancellors and Principals and from the Defence Scientific Advisory Board, as well as from many other academic groups. I can assure the noble Baroness that their comments will be taken fully into account. I should say to her—as I have to many others with an interest in this matter—that my door will stay open during this period. Should anyone wish to come and give supporting oral evidence to the written evidence they have already given, I shall be glad to see them—within reason.
Lord Burnham: My Lords, how will the Procurement Agency get impartial scientific advice after privatisation?
Baroness Symons of Vernham Dean: My Lords, that will be given through that part of DERA which will remain as part of the MoD. The noble Lord wall have noticed in the consultation document that approximately 900 individuals will be retained within the MoD part of DERA to give the impartial and objective advice that we all recognise will be absolutely vital in the post-privatisation period.
Viscount Waverley: My Lords, is the Minister sensitive to the need to ring-fence hitherto classified information? If so, where is the Minister determined to draw that line?
Baroness Symons of Vernham Dean: My Lords, it was, in part, the MoD's and Ministers' recognit ion of the importance of ring-fencing that led us to the second bout of consultation that we are currently

1753
undertaking. The most sensitive areas of DERA will stay entirely within the MoD. Porton Down, about 70 per cent of the Centre for Defence Analysis, the Defence Research Information Centre and the Defence Radiological Protection Service will all stay fully within the MoD.
Lord Gilbert: My Lords, my noble friend said that the Americans were broadly satisfied with what has been proposed. Does she accept that I should be much happier if she could tell the House that the Americans were completely satisfied with what has been proposed in the light of its criticality to our defence interests?
Baroness Symons of Vernham Dean: My Lords, I am always conscious of the fact that were Ito say that the Americans were completely satisfied one of your Lordships would inevitably pop up and say that he had had a conversation with someone who was not completely satisfied. I can tell the noble Lord that when I discussed this with the former Deputy Defence Secretary, John Hamre, and when I discussed it with the current Defence Secretary, Mr Rudy de Leon, both expressed themselves to be happy with the proposals; indeed, they were very positive. We have had an extremely helpful response from the United States at those official levels.
Lord Roper: My Lords, reference has been made to co-operation with the United States. In view of the growing importance of co-operation with our major European partners, can the Minister say what are the implications of the new hybrid DERA for that cooperation?
Baroness Symons of Vernham Dean: My Lords, in my discussions with my opposite numbers in Europe—with whom I have been having a series of bilateral discussions over the past two or three months—I made it a point to raise with them the proposals put forward by Her Majesty's Government for the future developments in DERA. Considerable interest has been expressed. I understand that today we received an official response from the Government of Germany, and we are expecting an official response from the Government of France. All in all, the proposals have been welcomed by our interlocutors. I do not foresee any "show-stoppers" coming from our colleagues in Europe.
Earl Attlee: My Lords, are the Government experiencing any delays in retaining staff at the retained DERA?
Baroness Symons of Vernham Dean: My Lords, I am unaware of any delays or difficulties in retaining staff in retained DERA. During this period of consultation there is bound to be an element of uncertainty, and staff interests must be treated with the utmost sensitivity. I fully recognise that many people are not quite certain on which side of the line they are likely to fall, or, indeed, may wish to be on the other side of the
1754
line than that designated for them. I hope that we will be able to have full consultations with both the trade unions and individuals who may have particular problems.

Men: Gender-related Problems
3.10 p.m.
Lord Northbourneasked Her Majesty's Government:
Whether they will appoint a Minister for men to address the gender-related problems of disadvantaged men.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords, the Government have no plans to do so. The Government believe in removing barriers to achievement wherever they exist. We are aware of the particular problems faced by disadvantaged men and are taking action to address them. For example, the New Deal has already helped over 300,000 young men who were in long-term unemployment. We have introduced the minimum wage and are helping families through the working families' tax credit. We are also carrying out a review of paternity and maternity leave to improve the work/ life balance for fathers and families.
Lord Northbourne: My Lords, I am grateful to the noble and learned Lord for that encouraging reply. I have always been confident that the Government's heart is in the right place, but there must be action. Is the noble and learned Lord aware that in the past 50 years the number of jobs in manufacturing industry has fallen from 5.7 million to 2.9 million, which radically affects the employment opportunities for men, and that today 1.5 million children live in families where no one is employed? Does the noble and learned Lord agree that the state education system has failed to motivate boys to a much greater extent than girls? Is he also aware that last year nearly five times as many boys than girls were found guilty or cautioned in respect of indictable offences, and that nearly twice as many boys were the subject of violent crime? Finally, is the Minister aware that three out of every four suicides in the United Kingdom are men? What action will the Government take to show that they care more about the 49 per cent of voters who are men?
Lord Falconer of Thoroton: My Lords, I am very well acquainted with the figures to which the noble Lord refers. At the heart of the problem of dealing with disadvantaged men and families is the need to provide work for as many people as possible. Since the Government came to power just under 1 million new jobs have been created. Youth unemployment is an incredibly important aspect of the problem to which the noble Lord refers. The New Deal for the under-25s has put on to work 400,000 people, of whom 72 per cent are men. The working families' tax credit is aimed at those who have not worked for a long time and

1755
benefit has encouraged them not to work. We are aware of the figures and are determined to provide opportunity for all, particularly in the labour market.
Lord Campbell of Croy: My Lords, is the noble and learned Lord aware that a few years ago it was reported that the Equal Opportunities Commission had nearly as many cases involving men as women? Can the Minister indicate whether that pattern has continued or been repeated?
Lord Falconer of Thoroton: My Lords, the law outlaws discrimination against both men and women. I would be very, very surprised if the activities of the EOC were directed much more towards men than women. However, I shall obtain the figures and write to the noble Lord.
Baroness Whitaker: My Lords, does my noble and learned friend agree that the aim of the Department for Education and Employment to reduce the number of children excluded from school, who by and large are boys, is likely to be the most effective initiative to socialise young men?
Lord Falconer of Thoroton: My Lords, I agree that to deal with exclusions from school is an incredibly important way to help young men. It is dealing with the problem right from the start that makes the difference, and as to that I entirely share the views of my noble friend.
Lord Addington: My Lords, does the Minister agree that one of the major problems here is the cultural shift away from traditional male-dominated types of employment that involve physical strength? The jobs which have replaced them tend to require academic skills or are of low status. Should we not concentrate on that cultural aspect which makes groups of traditionally working-class men very much less susceptible to the new job opportunities?
Lord Falconer of Thoroton: My Lords, I am not sure that the shift in jobs prejudices men to the extent that the noble Lord suggests. For example, virtually all the growth in computing occupations is filled by men. Although I agree that some consideration should be given to the issues raised by the noble Lord in relation to the new kinds of jobs, it is not all one way.
Baroness Young: My Lords, will the noble and learned Lord explain further how the Government are to deal with some very serious statistics that have been identified? Boys fall about 11 per cent behind girls at GCSEs, and they also fall behind at A-level. There is considerable evidence, as the noble Lord, Lord Northbourne, pointed out, that in families without fathers boys are seriously handicapped. It is not a question of money but of having a father in the home.
Lord Falconer of Thoroton: My Lords, we could not agree more with the impact and importance of the presence of a father to participate fully in the bringing
1756
up of children. The Home Office has made available a family support grant of £7 million over three years. Last year's theme was Boys, Young Men and Fathers and grants were given to a number of schemes. I give three examples: Families Need Fathers; Fathers Direct; and the YMCA's Dads and Lads project. All of those are designed to promote the role of the father in the family.
The Earl of Onslow: My Lords, if by chance the Government change their mind and appoint a Minister for men will they ensure that that individual, unlike the Minister for Women, can tell the difference between private and public education?
Lord Falconer of Thoroton: My Lords, that seems to have very little to do with the Question.

Hospices: Funding
3.16 p.m.
Baroness Lockwoodasked Her Majesty's Government:
What is their policy for funding hospices.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the funding of hospices is a matter for local decision. Successive guidance has made clear to the NHS its responsibilities for commissioning palliative care services to meet the assessed health needs of their local communities.
Baroness Lockwood: My Lords, I thank my noble friend for that Answer. Is he aware that, for example, in 1999–2000 in the Yorkshire group of the voluntary hospice movement there was a fall in NHS funding of hospices which varied between 1 and 5 per cent, depending on the particular health authority concerned? Is my noble friend also aware of growing concern in the hospice movement that there may be even greater variation once the responsibility for funding is transferred to primary care groups and trusts? Is it possible to have an earmarked percentage funding of all hospices across the board?
Lord Hunt of Kings Heath: My Lords, I am sure that all noble Lords accept that the work of hospices is invaluable to the country. At the moment the NHS provides about 31 per cent of the revenue funding of hospices. I accept that there is a variation in the funding of individual hospices which very much reflects both local circumstances and the individual funding positions of those hospices. I believe that the best way round such problems is for every health authority to develop a palliative care strategy which enables these kinds of debates to take place at local level. I am sure that as a result of those debates satisfactory conclusions can be reached between individual hospices, health authorities and primary care groups.
Lord Clement-Jones: My Lords, the noble Lord is well aware of the concern of Members of this House about the funding of hospices, particularly since the end of ring-fenced funding six years ago. He is also aware that many noble Lords do not believe that the health improvement programme will necessarily lead to the level of hospice funding that is required. In the debate on this subject on 1st March the Minister promised that the decision-making process of health authorities would be reviewed. Can the noble Lord tell the House what progress he is making in that respect?
Lord Hunt of Kings Heath: My Lords, we believe that the development by every health authority of a palliative care strategy, aligned with a health improvement programme, is the way to ensure an agreed programme of support at local level, where the particular needs of hospices can be discussed alongside the development of palliative care services within the NHS. Since that debate I understand that one-third of health authorities have not yet developed those strategies. We shall make absolutely clear to health authorities that we expect those strategies to be developed as soon as possible.
The Duke of Norfolk: My Lords, before I ask my question, I should mention that my wife founded a charity called Help the Hospices which provides a meeting place for hospices in London near King's Cross. It was opened by Her Majesty the Queen the other day. It also holds conferences and trains people in the hospice movement. My question relates to funding. In the voluntary sector only 30 per cent of the expenses are covered by the state. Does the Minister agree that it should be 40 or 50 per cent? As has been said, for children's hospices the figure is only 5 per cent. Again, that should be 40 or 50 per cent. The Government simply must contribute a greater sum to the hospice movement than they do now.
Lord Hunt of Kings Heath: My Lords, certainly I pay tribute to Help the Hospices because over the years it has done an invaluable job of work. I believe that it is difficult to say what the exact level of NHS support for hospices should be. As the noble Duke says, the current figure is 31 per cent. It is a matter on which decisions must be made locally. The situation at each hospice is different and is best discussed at local level between the health service and the hospice. The development of a palliative care strategy and agreement on a health improvement programme within each health authority area provide the best way forward in dealing with those issues.
Baroness Pitkeathley: My Lords, does my noble friend agree that, invaluable though the work of the hospice movement is, many people who are dying and the people who look after them would prefer that to take place in their own homes? Therefore, does he agree that we must consider also the support given in providing palliative care in a domiciliary setting?
Lord Hunt of Kings Heath: Yes, my Lords. I believe that that is absolutely right. There is no doubt that in
1758
recent years we have seen the development of many more community services, often based in existing hospices. Those of us who have met the hospice movement recently know that many hospices are keen to develop services in the community. I am sure that that is the way in which those services will develop in the future.
Baroness Masham of Ilton: My Lords, does the Minister agree that there are very few hospices for children? Because of that, parents, often with other children, must travel long distances. Can he help with the funding of the travelling expenses of those parents and perhaps encourage more hospices to be established locally?
Lord Hunt of Kings Heath: My Lords, I believe that a number of points arise here. With regard to the number of children's hospices, my view is that, as my noble friend Lady Pitkeathley suggested, we need to encourage the development of many more community-based services in order to avoid, if at all possible, the need to travel long distances. Because hospices are in the independent sector, decisions with regard to support for travel costs must rest with the arrangements of the individual organisations.
The Lord Bishop of Birmingham: My Lords, does the Minister agree that if there is insufficient support from public funds for hospices, which do an absolutely marvellous job, pressure is likely to fall back on the general wards of ordinary hospitals where people are, in point of experience, likely to die with less dignity and less support than in hospices?
Lord Hunt of Kings Heath: My Lords, I believe that the whole development of palliative care services needs to be seen as a partnership between the National Health Service and the independent sector. There is no doubt that the NHS has learned much from the independent sector about palliative care services and, of course, has developed many services within its own NHS hospitals. I should not want to underestimate the high quality work that is being done there. However, I certainly accept the substantive point that the NHS needs to provide support to the hospice movement. I believe that 31 per cent of revenue costs is a reasonable base line. However, at the end of the day those matters must be decided locally on the basis of an agreed palliative care strategy.

Euro 2000 Championships: Security
3.24 p.m.
Lord Faulkner of Worcesterasked Her Majesty's Government:
Whether they are satisfied with the security arrangements for English football supporters at the Euro 2000 championships.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, government agencies, the police and the Football Association have been working together since England qualified to ensure that our security preparations are comprehensive. The aim is to minimise the risk of significant disorder involving England supporters. A copy of the measures taken in preparation for Euro 2000 was placed in the Library of the House on 2nd June.
The Government were pleased to note that England's opening game involved no public order problems. The mayor of Eindhoven and the police commander praised England supporters and the degree of co-operation provided by the United Kingdom authorities and police teams operating in the host countries. No one can afford to be complacent in these matters, particularly as the high-risk England v. Germany match lies ahead.
Lord Faulkner of Worcester: My Lords, I thank the Minister for that reply. I am sure that he will want to take this opportunity to wish England well in our match against Germany on Saturday. However, is he not concerned that that game is to be played in a stadium which is wholly unsuitable for a match of this importance and which, had it been located in Great Britain, would not have received a safety certificate? Therefore, what representations have the Government made to have the match moved from Charleroi to another, more suitable location?
On the wider issue of crowd violence, is he aware that those of us who in the past have followed England abroad all too frequently have been sickened by the behaviour of a small number of so-called England supporters? Is he also aware that, for the life of us, we cannot understand why it is impossible for people who are known to the National Criminal Intelligence Service to be prevented from travelling abroad when they have a known record of crowd violence at home?
Lord Bassam of Brighton: My Lords, I believe that it is well known that the Government made representations concerning the choice and selection of venue. We certainly raised the question of the Charleroi stadium being used for the high-profile match with Germany. Ultimately, of course, rightly the decision must be made by the tournament organisers. We have tried to play a constructive role and have concentrated our efforts on doing all that we possibly can to ensure the maintenance of law and order during the tournament.
I agree entirely with my noble friend's final point. As noble Lords know, the Government were determined to do all that they could to strengthen and toughen the legislation which covers football hooliganism. Our original intention was to have far wider powers to confiscate passports from known and suspected hooligans in particular so that they could be prevented from travelling abroad. Sadly, we were prevented from extending the law in that way, not by our own ill-doings but by Members of the Opposition, who were determined to wreck the legislation when it passed
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through another place. No doubt we shall return to this issue when we have reflected fully on the way in which the legislation works currently and has worked during Euro 2000.
Lord Cope of Berkeley: My Lords, should not the Minister recall that, following the violence at the World Cup, two years ago during the passage of the Crime and Disorder Bill in 1998 this party proposed football behaviour orders which would have allowed the police to apply to magistrates for restrictions on hooligans who were likely to cause violence. At that time, the Home Secretary rejected the idea but said that the Government would consider it. A year ago, the relevant Minister said that they would do something, but still the Government have done nothing. So far as concerns the Private Member's Bill, that was not wrecked by Conservatives; indeed, it was a Conservative Bill.
Lord Bassam of Brighton: My Lords, I am extremely interested in and entertained by what the noble Lord says on the matter. It is indeed the case that the issue was raised some two years ago. When a government-supported Private Member's Bill was brought before another place and passed through this House. Messrs David Maclean, Eric Forth., Roger Gale and, I believe, Edward Leigh and Michael Fabricant, waving his passport, said that these were liberties which should not be taken away. I believe that David Maclean said that there would be European Court of Human Rights implications in the move to take away passports. I fail to understand why some Members of the Opposition appear to be more interested in the civil liberties and rights of known football hooligans than in the civil liberties and rights of those who want honourably to watch football matches in peace.
Lord Hoyle: My Lords, can my noble friend say whether the advice given to football supporters not to travel to games if they do not have a ticket is being heeded? If not, what is being done to reinforce that message?
Lord Bassam of Brighton: My Lords, we have been passing on that message. We have made a number of moves and given great support to the Football Association, the Football Supporters Association and to those other supporters' associations that are independent in order to discourage people from travelling to matches without tickets. The success of the police operation in Eindhoven over the weekend and on Monday bears testament to the active support that the police here have given.
The supporters who were in Eindhoven on Monday are to be congratulated on their good behaviour. I hope that that good behaviour extends to the next match against Germany, which I hope to enjoy myself. I shall watch carefully to ensure that the security arrangements for that match are thorough.
Lord Watson of Richmond: My Lords, given the, widespread, fervent hope in your Lordships' House

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that violence will be avoided in Euro 2000, does the Minister share the concern that is now publicly and widely expressed about television advertisements planned by Sega for the promotion of an online console game, in which supporters of the different teams shout abuse at each other and provoke violence? Does he share the concern of the Guardian, which referred to that television advertisement with the words, "This incendiary scenario", and can he do anything about it?
Lord Bassam of Brighton: My Lords, I shall study carefully what the noble Lord has said. I share some of his concerns about advertising of that nature and I shall look into the matter.

European Parliamentary Elections Bill [H.L.]
3.31 p.m.
The Lord Chancellor: My Lords, I beg to move that this Bill be now read a second time.
This is the second consolidation Bill that has been brought before your Lordships this Session. It consolidates the legislation on European parliamentary elections, at present to be found, principally, in the European Parliamentary Elections Acts of 1978, 1993 and 1999.
The Bill is pure consolidation. It does not change the law on European parliamentary elections and, therefore, it does not raise any of the issues on this subject which have been of such interest to your Lordships in the past two Sessions.
The Government support the important work of the Law Commission and parliamentary counsel in ensuring that legislation is easy to find and easy to follow. I commend the latest results of their work to your Lordships. If your Lordships are content to give this Bill a Second Reading, it will be referred to the Joint Committee on Consolidation Bills in the usual way. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
Lord Mackay of Ardbrecknish: My Lords, perhaps I may intervene briefly to welcome consolidation in this matter. When noble Lords dealt with the 1999 European Parliamentary Elections Bill, leaving aside the merits—I should really say the "demerits"—of the Bill, one problem was that we were constantly having to refer back to other pieces of legislation. I welcome the fact that the legislation is to be consolidated so that when we come to amend it, to get rid of what proved to be a totally disastrous system of election to the European Parliament, the amendments will be much easier to follow than they would have been without consolidation.
Lord Harris of Greenwich: My Lords, I said that the noble Lord, Lord Mackay of Ardbrecknish, would
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find it quite impossible to remain silent on this totally formal piece of parliamentary business. My comment does not relate to European legislation but to the Scotland Act on which the House had the good fortune to listen to the noble Lord, Lord Mackay, for many hours. Had it not been for the generosity of the Government and those sitting on these Benches, there would have been only one directly elected Member of the Scottish Parliament, a matter which he, no doubt, would like to recall when he makes his next speech on a consolidation Bill!
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Postal Services Bill
3.33 p.m.
The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Sainsbury of Turville.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Baroness Miller of Hendonmoved Amendment No. 69:
After Clause 67, insert the following new clause—
PUBLICATION OF PARTICULARS OF ACQUISITIONS AND DISPOSALS
(" .—(1) Where the Post Office company or any relevant subsidiary proposes to acquire or dispose of an undertaking or any interest in an undertaking and—

(a) the gross assets of that undertaking or attributable to that interest are equal to more than 10 per cent. of the gross assets of the Post Office company or the relevant subsidiary; or

(b) the turnover of that undertaking or attributable to that interest is equal to more than 10 per cent. of the turnover of the Post Office company or the relevant subsidiary; or

(c) the net profits of that undertaking or attributable to that interest are equal to more than 10 per cent. of the net profits of the Post Office company or the relevant subsidiary,

the Post Office company or the relevant subsidiary must as soon as practicable publish a notice in accordance with subsection (2).
(2) A notice under this subsection must be published in the London Gazette, the Edinburgh Gazette and the Belfast Gazette in such form as the Secretary of State may prescribe and must include—

(a) the name of the undertaking;

(b) a description of the business carried on by the undertaking and, where the transaction is an acquisition or disposal of an interest in the undertaking, a description of the business attributable to that interest;

(c) the effect of the transaction and, in particular, the benefits which the directors expect to accrue to the Post Office company or any relevant subsidiary;

1763

(d) the price (or the monetary value of any other consideration) to be paid or received by the Post Office company or any relevant subsidiary and, in the case of a disposal how the proceeds of the disposal are to be applied; and

(e) if any securities are to be issued as a result of the transaction, the nature and amount of those securities.

(3) In this section "gross assets" means total fixed assets and total current assets.").
The noble Baroness said: This amendment was debated at the very end of the previous session of the Committee stage. The debate came to an abrupt end because I was not satisfied with the answer from the Minister and I sought to test the opinion of the House. Unfortunately, the Government had not retained enough of their supporters to ensure a quorum and the House was counted out—
Lord Carter: Perhaps the noble Baroness can explain why two of her colleagues on the Back Benches, who had taken a keen interest in the Bill, did not vote on that occasion, even though they were in the Chamber?
Baroness Miller of Hendon: I am afraid I find that impossible to explain. It is quite possible that my noble friends were pleased for the House to be counted out. I know not; I am simply supposing.
I do not want to delay your Lordships by repeating everything that I said on that occasion. On re-reading the debate in Hansard, I am still utterly convinced that the principle that I was arguing was correct. That is that if the Post Office engaged in major acquisitions or disposals it should publish details at the earliest opportunity in the same way as though it was a company quoted on the Stock Exchange. I cannot see how that would put it at any disadvantage as the Minister suggested. Such details are published almost on a daily basis by ordinary plcs, if only to ensure that their shareholders are aware of what is going on before they make any decisions about buying or selling. The Government promised us openness in their dealings, and they are offering a regime whereby the public and Parliament will merely be presented with a fait accompli.
I have to tell your Lordships that certain information came to me late yesterday and I have not had a chance to verify it. I have already discussed this matter with the Minister. That information suggests that there is a cogent reason why the Government should have included this matter in the Bill themselves. I hope that the Minister will now agree that the principle is correct and, therefore, that: on Report he will put down a government amendment. I believe that it would be ridiculous to pass the Bill, in its present form and six months or a year down the line to have to bring it back to deal with this matter.
I await the Minister's response with considerable interest. I hope that he can assure me that he will be able to table an amendment at Report stage. As I told the Minister, if he feels unable to do that, I shall certainly table a re-drafted amendment myself. I accept that the amendment that I had tabled and
1764
which was drafted for me by someone who was briefing me on this matter, was rather wider than the Stock Exchange rules would require. If the Minister, on behalf of the Government, feels unable to deal with the matter I shall bring it back in a new form. I beg to move.
Lord Razzall: I assume that the answer to the question posed by the noble Baroness as to why she could not maintain the necessary quorum when the vote was taken last week was because she made the mistake of saying that this amendment was my idea, despite the fact that I happened to be out of the country. Indeed, it was a point that I made at Second Reading, as the noble Baroness kindly indicated. I agree with much of what was said in the previous debate. I also agree with the Minister's comment because the amendment, as drafted by the noble Baroness and as she has indicted, would go too far and would put the Post Office at more of a commercial disadvantage than I had intended when I made the point at Second Reading.I do not wish to detain the House and I look forward to hearing the Minister's comments.
Lord Skelmersdale: This issue appears to be a matter of timing. When we last debated this, the Minister pointed out that he was seeking to establish a level playing field with the rest of industry. I take the point and I readily understand it. None the less, as my noble friend has said, occasions do arise in a commercial situation, in particular towards the end of the process, when shareholders are informed. I see absolutely no reason why Parliament and others should not be informed at roughly the same point were a disposal, share exchange or other business move planned by the Post Office with the agreement of the Government.
Lord Sainsbury of Turville: I am sorry that the noble Baroness was not overly enthusiastic about my response when we last discussed this. However. I think that very little separates the noble Baroness and myself on this point, although we take a different view on the details.
The noble Baroness has said that the key issue here is transparency and I have no quarrel whatever with the notion that the Post Office company should be as transparent as any listed company in the kind of transactions that are described in the amendment.
Where I part company with the noble Baroness is on what those listing rules require. The listing rules require that a company, in certain circumstances, announces on acquisition, once the terms of such a transaction have been agreed. The amendment talks in terms of announcing details when the company proposes a transaction. As I said last week, no other commercial company would be required to publish its intentions to acquire or dispose of any undertaking in the way that would be required by this amendment.
In seeking to give the Post Office—and the future Post Office company—the greater commercial freedom that everyone agrees is necessary, we are endeavouring to transform the Post Office company

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into a commercial company, governed by normal company legislation. It is our intention that the Post Office should provide transparent information on completed acquisitions along the lines of the London Stock Exchange disclosure requirements. The Post Office is now doing so. I hope that this gives the kind of assurance that the noble Baroness seeks.
Perhaps I may make one further point very clear. If it appears that what we are proposing falls in any way short of the London Stock Exchange disclosure requirements, we shall certainly look at the issue again. I trust that this explanation gives sufficient comfort to enable the noble Baroness to withdraw her amendment.
Baroness Miller of Hendon: I have to say that I shall read yet again the remarks made by the Minister. I am not sure if what he has stated in fact guarantees that the Government will table an amendment on Report. He referred to a point that was mentioned on the last occasion; namely, that the Government expect the Post Office to be transparent and to release information according to the rules of the London Stock Exchange. But the Bill does not require that.
So far as concerns this side of the House, it is essential that this provision is written into the Bill. Perhaps the Minister did not hear what I said in my earlier remarks. I said that the amendment I have tabled today is not the amendment that I would bring back at the next stage. This amendment is rather wider than the London Stock Exchange rules. If it is necessary for me to return to this matter, I shall bring back an amendment that reflects exactly those rules so that a level playing field is established, not only for the Post Office but also for any other company that wishes to compete in this area.
I hope that the Minister will bring back a government amendment on Report, but I shall ensure that I have an amendment prepared. While not wishing to sound in any way threatening—I would not dream of doing such a thing—I shall have my amendment ready. At the appropriate time—
Lord Skelmersdale: Before my noble friend withdraws her amendment, the Minister has said that at the moment the Post Office abides by the Stock Exchange rules as a matter of form. However, is not that a voluntary action? Does the Minister agree that the Post Office should be made to do that by law? Given that, I wish only for more power to my noble friend's elbow.
Baroness Miller of Hendon: My noble friend has stated in a clearer form exactly what I was trying to say. The difference between what the Post Office may do according to custom and practice or on advice and what it would have to do according to the law are two quite different things. On that basis, I shall withdraw the amendment.
Amendment, by leave, withdrawn.
3.45 p.m.
Clause 68 [Loans by the Secretary of State to the Post Office company and its subsidiaries]:
Baroness Miller of Hendonmoved Amendment No. 70:
Page 42, line 32, after ("rates") insert ("(being not less than the commercial rates generally payable in the financial markets at the time of making the loans)").
The noble Baroness said: This is a short and simple amendment that seeks to carry into law what the Government have already stated in their White Paper. For that reason, I believe it to be a very important amendment.
The White Paper recognised that retained earnings would be insufficient to finance new investment. There would therefore be two means of borrowing open to the Post Office. First, up to £75 million a year for the next five years from the Government with minimal ministerial approval being required. Secondly, for anything in excess of £75 million per annum, the Government have promised,
"a fast track, but rigorous, Ministerial approval process".
to be completed within 28 days so long as it poses no undue risk to the taxpayer. Here I detect the ability for a ministerial get-out—a large loophole—but that is not what I intend to discuss today.
The Government have argued that this additional larger-scale funding should come from the National Loans Fund, not from the commercial markets. In the White Paper the Government argued that, even though borrowing from the commercial markets would impose additional disciplines, the markets would regard the borrowing as being underwritten by the Government. Although the Government believe that borrowing from the National Loans Fund,
"will be more cost-effective for the taxpayer"
they conceded that,
"in order to ensure that the Post Office competes fairly with other postal operators in the private sector: and to reinforce commercial disciplines, the Post Office will borrow at a rate which is broadly comparable to the rate it would be charged in the market without an … explicit guarantee".
The terms of borrowing were discussed at some length in Committee in the other place. The Minister for Competition reasserted that:
"Borrowing from the National Loans Fund will be at commercial rates to ensure fair competition with private sector companies. There will be no hidden advantage for any of the subsidiaries".
Later in the same debate the Minister reiterated that:
"We will set a commercial rate through the National Loans Fund".
From the White Paper onwards, including all that was said in the other place, it is absolutely clear that the Government want the borrowing to take place at commercial rates. However, although the Government have stated that, the Bill says something else. Clause 68(2) provides that:
"interest shall be paid on loans … at such rates as the Secretary of State may, with the approval of the Treasury, direct".

1767
Here there is no mention at all of the unsubsidised commercial rate that was referred to elsewhere, only such rates as,
"the Secretary of State may, with the approval of the Treasury, direct".
The amendment that I ask the Government to accept today simply puts into the Bill what the Government have on numerous occasions promised Parliament that they would do. I beg to move.
Lord Sainsbury of Turville: As the noble Baroness said, the Government set out very clearly their policy on lending to the Post Office in the White Paper. In order to ensure that the Post Office and its subsidiaries compete fairly with other operators in the private sector, and to reinforce commercial disciplines, they will he required to borrow from the National Loans Fund at a rate which is broadly comparable to the rate that would apply in the market.
The Government are currently taking independent advice on the appropriate credit rating that would apply to the Post Office without an explicit or implicit government guarantee and on the appropriate borrowing rates. The rate will be applied in accordance with the provisions of Section 5 of the National Loans Act 1968 which gives the Treasury the power to set a commercial rate for sums lent from the National Loans Fund. We shall continue to take advice on the appropriate rate to set as necessary in the future and to make the necessary adjustments in the light of market changes.
The rate of interest set by a lender for a commercial company seeking to borrow would depend on the credit rating of the organisation, the exact nature of the borrowing proposal, the current situation in the market and the size and duration of the loan. We intend to replicate that commercial approach and to take these factors into account when determining the appropriate commercial rate for Post Office borrowing.
Therefore, we are already giving effect to the intent of the amendment of the noble Baroness, as we are following commercial practice in order to ensure that neither the taxpayer nor the Post Office's competitors are disadvantaged. At the same time, there is a case here for some flexibility to be available in situations where non-commercial considerations, or social considerations, could be envisaged. In such cases, we would need flexibility. That is why we are not putting this provision on the face of the Bill. However, I hope that it have reassured the noble Baroness that our existing policy achieves her desired intent. In those circumstances, I ask the noble Baroness to withdraw her amendment.
Viscount Goschen: I wonder whether the Minister could expand on the requirement for flexibility that he identified and used as his defence against putting my noble friend's specific provisions in the Bill. I trust that he will accept that having a commercialised, government-owned company such as the one that we are discussing raises a number of concerns among potential competitors because it seems that this
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company is to be given an unfair, state-sponsored advantage, which may cause real competitive difficulties. Does the Minister accept that that is a byproduct of the approach that this Government have pursued on the matter?
What real comfort can be given to potential competitors that the Government will not pursue the easy option and let the Post Office borrow in these circumstances on favourable rates, with an implicit government guarantee that will not be available to competitors?
Lord Sainsbury of Turville: I do not accept that there are reasons why other operators in this field feel concern about the matter. We have made our policy absolutely crystal clear from the beginning of the process; and, indeed, right throughout it. t have reiterated that policy and said that that is the basis upon which this will be done. I see no reason why there should be concern about the policy. I believe that a degree of flexibility is required in such an organisation.
Viscount Goschen: I apologise to the Committee for taking a moment or two longer on the matter. Can the Minister explain what circumstances he has in mind where such flexibility would need to be given in order to allow the Post Office to borrow on more favourable terms than those which would otherwise be available within the commercial markets? My noble friend's amendment would put what the Minister has expressed as his intention very clearly on the face of the Bill. Noble Lords on this side of the Committee would like to know under exactly what circumstances the noble Lord would need to be flexible. He has his policy, and my noble friend merely wishes to write that on the face of the Bill. The noble Lord said that competitors should not have concerns in this respect, but we need to know why not.
Lord Sainsbury of Turville: I have two points to make in response to the noble Viscount. There are obvious areas where one could envisage such a need; for example, a social issue—and we shall be dealing with that in a moment on the question of support for the network. However, if reassurance is required on the matter, I can assure noble Lords that any favourable rates would be constrained as a state aid in these circumstances according to the European situation. Therefore, such flexibility could only be used in very limited circumstances.
Baroness Miller of Hendon: I have to tell the Minister that I am not at all satisfied with his reply. The bottom line here is the fact that the noble Lord has said on numerous occasions in this Chamber—indeed, this has also been said in the other place—that such borrowing will be conducted on commercial rates. However, he has also said that we cannot put such provision in the Bill because we must have some flexibility. Quite frankly, the noble Lord's explanation as to what that might mean is similarly unsatisfactory.
Although I accept that there may have to be the opportunity for subsidies, which I believe we will deal with under Clause 102, we on this side of the

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Committee would point out that that is because of certain actions that the Government are taking. But, if that has to happen, there is no reason why loans should not be secured on commercial rates. The Bill is supposed not only to safeguard the universal service obligation but also to bring forward competition.
I do not see why competitors should have to borrow on different rates—and that situation could arise if the Minister invokes this flexibility provision. Clause 68(2) very clearly refers to,
"such rates as the Secretary of State may, with the approval of the Treasury, direct".
We do not believe that to be correct. I wish to test the opinion of the Committee.
3.54 p.m.
On Question, Whether the said amendment (No. 70) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 139.

Division No. 1

CONTENTS

Allenby of Megiddo, V.

Lyell, L.

Anelay of St Johns. B.

McConnell, L.

Astor of Hever, L.

Macfarlane of Bearsden, L.

Attlee,E.

Mackay of Ardbrecknish, L.

Blatch,B.

Marlesford, L.

Brabazon of Tara, L.

Mayhew of Twysden, L.

Bridges, L.

Miller of Hendon.B.

Brougham and Vaux, L.

Molyneaux of Killead, L.

Bumham, L. [Teller]

Monro of Langholm, L.

Buscombe, B.

Monson, L.

Butterworth. L.

Mowbray and Stourton. L.

Byford, B.

Moynihan, L.

Campbell of Alloway, L.

Murton of Lindisfarne, L.

Camegy of Lour, B.

Northbrook, L.

Coe,L.

Northesk. E.

Cope of Berkeley, L.

Norton of Louth, L.

Courtown, E.

O'Cathain, B.

Cox, B.

Onslow, E.

Craig of Radley, L.

Oxfuird,V.

Cranborne, V.

Park of Monmouth, B.

Dean of Harptree, L.

Plummerof St. Marylebone, L

Dealing, L.

Rees, L.

Denham, L.

Renton, L.

Dixon-Smith, L.

Roberts of Conwy, L.

Elles. B.

St John of Fawsley, L.

Elton, L.

Seccombe, B.

Fookes, B.

Selborne, E.

Gardner of Parkes, B.

Simon of Glaisdale, L.

Geddes, L.

Skelmersdale, L.

Glenarthur, L.

Soulsby of Swaffham Prior, L.

Glentoran, L.

Goschen, V.

Strathclyde, L.

Hayhoe, L.

Swinfen, L.

Henley, L.[Teller]

Tenby, V.

Higgins, L.

Thomas of Gwydir, L.

Hooper, B.

Trefgarne, L.

Howe. E.

Vivian, L.

Jenkin of Roding,L.

Wade of Chorlton,L.

Jopling, L.

Walton of Detchant, L.

Kingsland, L.

Weatherill,L.

Kirkham. L.

Wilcox, B.

Knight of CoUingtree, B.

Windlesham, L.

Luke, L.

Young, B.

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NOT-CONTENTS

Acton, L.

Hunt of Chesterton, L.

Addington. L.

Hunt of Kings Heath, L.

Ahmed, L.

Irvine of Lairg, L.(Lord Clumcellor)

Alderdice, L.

Alli, L.

Jay of Paddington. B. (Lord Privy Seat)

Amos, B.

Andrews, B.

Jeger, B.

Archer of Sandwell, L.

Jenkins of Putney, L.

Ashley of Stoke, L.

King of West Bromwich, L.

Ashton of Upholland, B.

Laird, L.

Bach, L.

Lea of Crondall, L.

Barker, B.

Levy.L.

Bassam of Brighton, L.

Lipsey, L.

Berkeley, L.

Lockwood, B.

Bernstein of Craigweil, L.

Macdonald of Tradeston, L.

Billingham, B.

Mclntosh of Haringey, L.

Borrie, L.

Mclntosh of Hudnall, B.

Bradshaw, L.

MacKenzie of Culkein. L.

Brennan, L.

Mackenzie of Framwellgate, L

Brooke of Alverthorpe, L.

McNally, L.

Brookman, L.

Marsh, L.

Bruce of Donington, L.

Massey of Darwen, B.

Burlison, L.

Milner of Leeds. L.

Carlile of Berriew, L.

Mishcon, L.

Carter, L.[Teller]

Mitchell, L.

Christopher, L.

Newby, L.

Clarke of Hampstead, L.

Northover, B.

Cledwyn of Penrhos, L.

Oakeshott of Seagrove Bay, L.

Clement-Jones, L.

Patel of Blackburn, L.

Clinton-Davis, L.

Peston, L.

Cocks of Hartcliffe, L.

Phillips of Sudbury.L.

David, B.

Pitkeathley, B.

Davies of Coity, L.

Plant of Highfield, L.

Davies of Oldham, L.

Ponsonby of Shulbrede, L.

Desai, L.

Prys-Davies, L.

Donoughue, L.

Ramsay of Cartvale, B. [Teller]

Dormand of Easington, L.

Randall of St. Budeaux, L.

Dubs, L.

Razzall. L.

Elder, L.

Rea, L.

Evans of Parkside, L.

Redesdale, L.

Evans of Watford, L.

RendellofBabergh.B.

Ezra, L.

Rennard, L.

Falconer of Thoroton, L.

Richard, L.

Falkland, V.

Rodgers of Quarry Bank, L.

Farrington of Ribbleton, B.

Roper. L.

Russell, E.

Faulkner of Worcester, L.

Sainsbury of Turville. L.

Filkin, L.

Scotland of Asthal, B.

Gale, B.

Serota. B.

Geraint, L.

Sharman, L.

Gibson of Market Rasen, B.

Shore of Stepney, L.

Gilbert, L.

Simon, V.

Goldsmith, L.

Smith of Gilmorehill, B.

Goodhart, L.

Stone of Blackheath, L.

Gould of Pottemewton, B.

Strabolgj, L.

Graham of Edmonton, L.

Symons of Vernham Dean, B.

Greaves, L.

Taylor of Blackburn, L.

Grenfell, L.

Thornton, B.

Hardy of Wath,L.

Tomlinson, L.

Harris of Greenwich, L.

Tordoff.L.

Harris of Haringey, L.

Turner of Camden, B.

Harris of Richmond, B.

Uddin, B.

Harrison, L.

Warner, L.

Hayman, B.

Warwick of Undercliffe, B.

Healey, L.

Watson of Richmond, L.

Hilton of Eggardon, B.

Whitaker, B.

Hollis of Heigham, B.

Whitty, L.

Howells of St. Davids, B.

Wilkins, B.

Howie of Troon, L.

Williams of Elvel,L.

Hoyle, L.

Williams of Mostyn, L.

Hughes of Woodside,L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.5 p.m.
Clause 68 agreed to.
Clause 69 agreed to.
Clause 70 [Extinguishment of certain liabilities]:
Lord Sainsbury of Turvillemoved Amendment No. 71:
Page 44, line 12, leave out ("this section") and insert ("subsection (1), (2) or (5)").
The noble Lord said: This is a minor tidying-up amendment to make it clear that there is no requirement for the Secretary of State to obtain the consent of the Treasury before he consults with the Post Office company—and its subsidiaries, as appropriate —about the exercise of his powers under the clause to extinguish the liabilities of the Post Office company or its subsidiaries. Clause 70 is intended to facilitate the restructuring of the Post Office company's balance sheet on 1st April 2002, as announced in the White Paper.
The requirement for Treasury consent in the clause is there to ensure that the department with the responsibility for the management of public finances gives its consent before any action is taken which might have an effect on the public purse. The amendment ensures that it is only the extinguishment of any liabilities under subsections (1) and (2) and the repeal of the whole clause under subsection (5) which require Treasury consent and not the preceding consultation with the Post Office company. I beg to move.
On Question, amendment agreed to.
Clause 70, as amended, agreed to.
Clause 71 [Limit on loans and other arrangements with government]:
Lord Dearingmoved Amendment No. 72:
Page 44, line 33, leave out paragraph (f).
The noble Lord said: In moving my maiden amendment I shall not presume to divide the Committee on this great matter. Nevertheless, I shall seek to persuade the Minister.
The paragraph that the amendment would delete has the effect, as I understand it, that the equity that the Government put into the new company shall count against the limits on the Government's financial arrangements set out in subsection (1). My concern, which I am sure many Members of the Committee, if not all, will share, is that when the company is created it should be one that will emerge in the liberalised postal market of Europe as one of the main successful players. If we are to achieve that, and if the Post Office is to enter into partnership agreements with other players, it must do so from a position of negotiating strength, and to that end it will need a strong balance sheet.
I asked the Government whether they would look at this issue when they decided the balance sheet, and I obtained assurances from the noble Lord which I welcomed. Perhaps I owe him an apology for pushing
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the matter again today. But on rereading the White Paper and what I interpret the Government had to say, and in view of the recent announcements by the commission on its intentions to reduce the monopoly far more than the Government had intended, I thought that we had a new situation and that we ought to think about it.
As I understand it, the White Paper said that the Government were minded to pull out of the Post Office balance sheet the £1.8 billion of retained earnings which have been invested in the National Loans Fund or other government assets over the years and to deprive the Post Office of the income of 107 million a year that derives from those investments.
If that were to happen, then it follows that the balance sheet of this Post Office company, which is going into a much more competitive world, will be much weaker than the present balance sheet. The main British competitor in that market would be correspondingly weakened and, in my view, we should be doing the national interest a disservice.
The world in which the Post Office will be operating will be an increasingly competitive one. There will be growing competition from the new technologies. Twelve years ago, when I was chairman, I was already apprehensive about the long-term implications to the post of new technology. It can only be a matter of time before it begins to impact.
The new technology is disturbing the operations of the post offices and sub-post offices. We expressed concern at Second Reading about the intentions of the Department of Social Security to pay people's pensions through the banks. I read that it places one third of Counters business at risk. It is a serious competitive issue. But the competitive issue I have in mind in the light of the aspirations of the Commission relates to the core postal business.
The Post Office said in a public statement on 30th May that if the Commission has its way—that is, it reduces the monopoly to 50 grams compared with the Government's intention of 150 grams (the present weight is 350 grams)—then the Royal Mail would lose all its profit. If, at the same time, we are weakening the balance and taking away an income of £107 million., how will the Post Office compete effectively? How will it enter into negotiation with collaborative businesses from a base of strength? FedEx has a capitalisation of £7 billion; UPS has a capitalisation of £45 billion. I remember from my days in the Post office that the Dutch Post Office was a particularly entrepreneurial, strong, competitive organisation. Now it has acquired TNT it is doubly strong.
The postal market of Europe will be highly competitive. In a few years there will be only three or four major players. My concern is that Britain should have one of those major players. Directly relevant to that is the strength of the balance sheet. I am sure that the Government will take a forward-looking view rather than looking to the past; that they will want to ensure that the Post Office is strong and that they will want to take into account the implications of the Commission's proposals and thus what may happen to the Counters

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business. I hope that they will reflect on whether it is right to withdraw that £1.8 billion or, if they must withdraw some, will only withdraw that element of it which they have said it would be right to take as dividends in the future; that is, 40 per cent, perhaps abated by the 20 per cent that has already been taken.
That is my main point of substance. Of course, the amendment seeks to omit the paragraph. Perhaps that is a touch optimistic. But if we want this to be a strong balance sheet, we should not count against that limit the initial capitalisation of the Post Office in setting up the company and regard that limiting sum as available for subsequent injections.
I cannot compete in knowledge with the Minister on balance sheet structuring. I am an amateur. But I have a certain amount of Treasury experience. One can liken the Treasury in mythology to the dragon Fafner. But where is the Siegfried who can outface the dragon once it has taken the reserves of the Post Office? The dragon defends the public sector borrowing requirements against all Siegfrieds. So have a care in sacrificing the Post Office.
If the Treasury dragon were the only one, terrified though I am of its powers, I would be less anxious. But I am aware that the UPS has appealed to the Commission in relation to what it alleges to be unfair support from the German Government to the Bundespost. It will be vigilant about any new capital that the Government puts in. So if they wish to serve the national interest well, they will take care to ensure that the balance sheet of the new company is a strong one. We hope that they will be prepared to learn from Europe and be much as the French Government are as Europeans; that is, concerned at all costs to serve their national interest. In our case, that is the British interest.
4.15 p.m.
Lord Sainsbury of Turville: I know that the noble Lord, Lord Dearing, wants the Post Office company to emerge from the current reform process in a strong position to recapture the commercial ground it has lost in past years and with the ability to become one of the most successful postal operators in Europe. I agree that we need to look forward to the situation in the future, rather than backwards to the history of the Post Office in the past.
The noble Lord also expressed his concern during the Second Reading debate that whether or not the Post Office company is able to be successful in the new environment will depend very much on the framework within which it will operate. That is correct.
As I said when I repeated a Statement to the House in December 1998, and the Government restated in the White Paper in July 1999, the Post Office company's balance sheet will be restructured by 1st April 2002 in order to place the company on a more commercial footing, and one where it can be better benchmarked against its competitors. We have had preliminary discussions with our advisers about the issues involved with the restructuring and agreed a preliminary
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workplan. I emphasise, however, that no decisions have been taken at this early stage as we intend to consider all the issues thoroughly and to hold discussions with the Post Office before reaching any final conclusion.
We will also need to consider how the development of the Post Office's business between now and the deadline for restructuring on 1st April 2002 might affect the final decisions about the shape of the balance sheet. I therefore cannot speculate at this stage on what the final outcome might be. But we understand that the Post Office company must be equipped to develop its business if it is to provide the postal services that will be needed by its customers. That may well involve forging new alliances and commercial partnerships with those having complementary skills.
So we are fully aware of, and committed to, the need for the Post Office company to have a fair commercial balance sheet which gives it both the incentive to perform and the financial scope to enhance its business. In those circumstances, some might ask why we intend to deprive the Post Office company of previously earned assets as part of the restructuring exercise. But, as I said earlier, we intend to put the Post Office company on a more normal commercial footing. In a normal business, money that the Post Office has put into gilts and other deposits with the National Loans Fund would have been paid to the owner as dividends, rather than being allowed to accumulate on the balance sheet. The Post Office company will therefore cease to hold, and have access to the interest from, the present level of accumulated EFL surpluses as part of the exercise to restructure the balance sheet. The business will then operate and report on the same basis as a private sector one. But as I have already said, no decisions have been taken at this early stage.
Under the policy of allowing the Post Office greater commercial freedom, we have already put in place the new financial regime which will provide the opportunity for the Post Office to fund its commercial development, allowing the Post Office to retain more of its profits; to have automatic access to £75 million each year to fund growth investments and to borrow larger sums to fund growth investments providinv, the proposals are consistent with the strategic plan, commercially robust and pose no undue risk to the taxpayer. These provisions already provide the Post Office with the springboard to move towards its goal of becoming a world-class distribution company.
There should also be no anxiety about whether the current ceiling on the financial arrangements with government would be sufficient to allow the Post Office company to make a major acquisition. The figure of £5,000 million is a sensible limit, based on a commonly used formula for the present time and the foreseeable future. But we have built flexibility into the clause by providing that the limit may be increased by an order approved in draft for the House of Commons, should this prove necessary in the future. Such an increase would depend on whether it was considered at the time that the Post Office company could sustain a higher limit. I cannot speculate at this stage as to what

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such a limit might be or the circumstances in which the Post Office company might request the increase. It is worth remembering that not all transactions may be funded by cash but that exchanges of equity might be used to cement alliances.
Perhaps it would be helpful to explain the nature of the purpose of the provision that the noble Lord is seeking to delete. For the purposes of calculating the amount of the outstanding indebtedness to government, Clause 71(2)(f) provides that:
"sums paid or treated as paid by or on behalf of the Treasury or the Secretary of State in respect of the issue of securities in pursuance of section 63 of this Act or the acquisition of securities in pursuance of section 64 of this Act",
shall count towards the limit.
Any money required by the Secretary of State or the Treasury to acquire securities or the rights to subscribe to securities will be provided by Parliament. Under company law, the company has a liability to repay the face value of a security to its holder in a similar way to its liability to repay a loan. So in the same way as a loan from the National Loans Fund to the Post Office company or any of its subsidiaries will count in the overall calculation of indebtedness to government, any public money invested in securities of the Post Office company or its subsidiaries will also count in the overall calculation of indebtedness to government, as the face value of the security is effectively repayable to the Government.
However, in the light of the noble Lord's amendment, we are considering whether to bring forward an amendment to modify Clause 71(2)(f) so that sums paid or treated as paid in respect of securities which have been disposed of under Clause 67 do not continue to count against the limit. It would seem wrong in such circumstances that such sums should continue to count against the limit after they have been disposed of and value obtained for them.
I should also like to look further at the interaction between the clause and the shareholders' funds. We need to ensure that there is a limit on the debt owed to government while still allowing the Post Office company sufficient scope for borrowing to develop its business. We will double-check to see whether these provisions are entirely satisfactory.
I hope that that gives the noble Lord some comfort. I hope that I have reassured him that our intention for the restructuring of the balance sheet is to place the Post Office company on a firm but fair commercial footing, and that we have already put in place provisions for the Post Office company to be able to develop its business and to achieve its strategic objectives. I hope that the noble Lord will continue to want to withdraw his amendment.
Lord Skelmersdale: Before the noble Lord, Lord Dearing, rises, perhaps I may say that I am absolutely amazed by the Minister's answer. I said rather cheekily on Second Reading that I had the habit of privately marking his speeches. I shall not bore the House with the mark that I have given the one we have just heard, but he made the most extraordinary comment. He said
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that the balance sheet would be restructured, as we all know, by 2002. He then said that no decisions had been taken at this early stage. "No decisions" presumably means no decisions. Why then are the Government boxing themselves in by including anything at this stage in subsection (2)? Why are they not reserving their position and doing so by order when they believe it to be necessary much later in the process?
Viscount Goschen: Further to the points made by my noble friend Lord Skelmersdale, the Minister explained briefly where the figure of the £5 billion came from. He said that it was the result of a commonly used formula. Perhaps the Minister would let the Committee know, in slightly more detail, where the £5 billion comes from, because I believe that without that it is very difficult to interpret the degree to which subsection (2)(f) is important and what percentage of the total that might comprise.
Lord Dearing: I owe the Committee an apology. Before speaking I should have declared an it serest as a Post Office pensioner. I now do so. In thanking the Minister—and I do so most sincerely because I welcome his agreement to look at a couple of points — I should like to ask him not to give an answer now but to reflect on whether a private sector company, such as one he knows well, would have distributed that £1.8 billion or whether it is more normally the custom of such companies to retain perhaps 60 per cent—a goodly percentage—of the surpluses for future investment; and, believe me, the Post Office will need to make major investments.
Baroness Miller of Hendon: Before the noble Lord withdraws his amendment, will the Minister answer the question that my noble friend Lord Goshen asked a few moments ago?
Lord Sainsbury of Turville: I should be delighted to do so. Let me first of all deal with the point that the noble Lord, Lord Dearing, made about the payment of dividends. Except in the case of a private company, most of those sums of money would have been paid out as a dividend. But clearly some of it would have been retained for the purposes of investment. I do not think that that is in dispute between us. That is why a careful decision has to be made about where the line is drawn on this issue.
I turn to the question of how we arrived at the figure of £5,000 million as the current limit on the total indebtedness to the Government. We sought advice from our financial advisers, Deloitte & Touche, as to an appropriate figure for the limit on the total indebtedness to the Government. I think that one will find that a conventional indebtedness restriction imposed by the articles of association of nearly all public companies is a multiple of their adjusted share capital and reserves. Typically, large companies have multiples of between 1.75 and 2.5 times that baseline.
The report and accounts of the Post Office for the year ended March 1999 shows that there were reserves of approximately £4,300 million, including holdings of

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National Loans Fund deposits and gilts of about £2,500 million. In advance of any detailed decisions on the agreed restructuring of the Post Office company's balance sheet, we took it as a reasonable assumption that the balance sheet would have neither investments nor debt at the time of its reconstruction. This would imply shareholders' funds of about £2,000 million, assuming no further revaluation of assets. Taking the usual multiple of 2 to 2.5 times shareholders' funds produces a range on the indebtedness limitation of £4,000 million to £5,000 million. We have taken the top end of that range for the purposes of the Bill.
Lord Skelmersdale: The Minister was generous in answering my noble friend. I did actually ask him why subsection (2) was needed at all.
Lord Sainsbury of Turville: It is a matter of common prudence that there should be restrictions on this process, even if there is considerable room within those restrictions. We cannot have a situation where there is no limitation on the amount of money that could be put into the Post Office. That would seem to me to show a complete lack of regard for financial control from the Government.
Lord Skelmersdale: I did not make myself clear the first time. Given that the restructuring is not going to be completed and the Government will not have made a decision until the spring of 2002, why are they boxing themselves in now; why do they not reserve the power to themselves to do this by order at a later stage when they do know what they are doing?
Lord Sainsbury of Turville: It seems to me sensible. Again and again in this Chamber, the issue has been raised that certain parameters should be put around these issues. This is a clear and sensible parameter in view of the general situation. Within those general parameters there is scope to have a series of different combinations of debt and equity in the balance sheet. At one and the same time, that provides flexibility in the light of what we might want to do at a particular moment and keeps parliamentary control over the total sum involved.
In answer to the noble Lord's amendment, I have agreed to look at the matter again in order to ensure that the interaction between the clause he highlighted and the overall figure made sense in the total picture.
Lord Skelmersdale: As far as we can tell at the moment.
Lord Sainsbury of Turville: Within the sensible parameters that we have laid down.
Lord Dearing: Duly impressed by the sensible parameters, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause 71 agreed to.
4.30 p.m.
Clauses 72 to 81 agreed to.
Schedule 4 [Transfer to the Post Office company: tax]:
Lord Sainsbury of Turvillemoved Amendment No. 73:
Page 82, line 5, at end insert—
(" Value added tax
The Post Office company shall, on and after the appointed day, be treated for all purposes of value added tax as if it were the same person as the Post Office.").
The noble Lord said: In moving Amendment No. 73, I shall speak also to Amendments Nos. 128, 133 and 134. They relate to tax provisions, in particular value added tax. The purpose of the tax provisions is to ensure that the transfer of properties, rights and liabilities from the Post Office to the Post Office company under Clause 62 are tax neutral. This means that under the provisions, the Post Office company will not receive any tax disadvantage as a result of the transfer or any tax advantage.
Amendment No. 73 is a deeming provision which has the effect that, on or after the appointed day mentioned in Clause 62, the Post Office company will be treated for all purposes of value added tax as if it were the same person as the Post Office. This will mean, for example, that no charges will arise from changes to the Post Office's VAT group.
Amendment No. 133 amends the references to the "Post Office" in the Value Added Tax Regulations 1995 to the "Post Office company". Amendment No. 128 means that any amendment made to subordinate legislation by virtue of Schedule 8 to the Bill, such as the amendment to the VAT regulations 1995, does not prejudice the ability to make future changes to that subordinate legislation under existing powers
Amendment No. 134 relates to rural rate relief for post offices under the Local Government and Rating Act 1997 that applies to Scotland. This amendment substitutes references to the Post Office and the Post Office Act 1953 which are used to define a post office qualifying for rural rate relief with,
"a universal service provider (within the meaning of the Postal Services Act 2000) and in connection with the provision of a universal postal service (within the meaning of that Act)".
The amendments should ensure that existing post offices operated by the Post Office continue to be eligible for rural rate relief after the transfer to the Post Office company. Furthermore, a post office established by any universal service provider would also qualify for relief.
Equivalent amendments to the Local Government Finance Act 1988 for England and Wales and the Rates (Northern Ireland) Order 1977 in respect of Northern Ireland have been included in the Bill at Schedule 8. I beg to move.
Lord Skelmersdale: In the light of my interest in statutory instruments, perhaps I may ask a question on Amendment No. 128. I am not sure how the grouping

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arose, because that amendment is erratic as it concerns money while the rest concern the Government's ability to amend with an amending order any statutory instrument comprised in Schedule 8.
I was somewhat confused because I cannot see in Schedule 8 a single statutory instrument that is done away with. I can see all kinds of enactments which are changed by virtue of Schedule 8, but with the exception of the Rates (Northern Ireland) Order, which is the equivalent of a Northern Ireland Act of Parliament, I can see nothing. Can the Minister help me out?
Lord Sainsbury of Turville: Amendment No. 128 means that any amendment made to subordinate legislation by virtue of Schedule 8 to the Bill, such as the amendments to the VAT regulations 1995, does not prejudice the ability 10 make future changes to that subordinate legislation under existing powers. Therefore, it refers to an amendment, of which Schedule 8 almost entirely comprises.
Lord Skelmersdale: Given what the Minister and I have said, and given the fact that at any point any amending order can be made to a previous order, why is the amendment necessary? I do not understand.
Lord Sainsbury of Turville: It is necessary in order to ensure that the ability to make future changes is not prejudiced. It is limited in that way.
Lord Skelmersdale: Why should it prejudice? I do not understand.
Lord Sainsbury of Turville: Perhaps I may take that point away and write to the noble Lord about it or return to it at the Report stage.
Lord Skelmersdale: I am grateful.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Clause 82 agreed to.
Clause 83 [Interfering with the mail: postal operators]:
Lord Sainsbury of Turvillemoved Amendments Nos. 74 and 75:
Page 49, line 39, after ("or") insert—
("(b) intentionally opens").
Page 49, line 39, at end insert—
("(1A) Subsection (1) does not apply to the delaying or opening of a postal packet or the opening of a mail-bag under the authority of—

(a) this Act or any other enactment (including, in particular, in pursuance of a warrant issued under any other enactment), or

(b) any directly applicable Community provision.

(1B) Subsection (1) does not apply to the delaying or opening of a postal packet in accordance with any terms and conditions applicable to its transmission by post.
(1C) Subsection (1) does not apply to the delaying of a postal packet as a result of industrial action in contemplation or furtherance of a trade dispute.
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(1D) In subsection (1C) "trade dispute" has the meaning given by section 244 of the Trade Union and Labour Relations (Consolidation) Act 1992 or Article 127 of the Trade Union and Labour Relations (Northern Ireland) Order 1995, and the reference to industrial action shall be construed in accordance with that Act or (as the case may be) that Order.").
On Question, amendments agreed to.
Clause 83, as amended, agreed to.
Clause 84 [Interfering with the mail: general]:
Lord Sainsbury of Turvillemoved Amendments Nos. 76 to 78:
Page 50, line 5, after ("or") insert—
("(b) intentionally opens").
Page 50, line 5, at end insert—
("( ) Subsections (1A) to (1D) of section 83 apply to subsection (1) above as they apply to subsection (1) of that section.").
Page 50, line 8, at end insert—
("( ) Subsections (1A) and (1B) of section 83 (so far as they relate to the opening of postal packets) apply to subsection (2) above as they apply to subsection (1) of that section.")
On Question, amendments agreed to.
Clause 84, as amended, agreed to.
Baroness Miller of Hendonmoved Amendment No. 79:
After Clause 84, insert the following new clause—
DEFINITION OF "REASONABLE EXCUSE"
(" . In sections 83 and 84 "reasonable excuse" includes intentionally delaying or opening a postal packet in the course of its transmission by post—

(a) pursuant to a request from any constable or the Commissioners of Customs and Excise, or

(b) if a person reasonably suspects that the postal packet contains goods which may be illegal."

The noble Baroness said: An identical amendment to this was tabled before the Committee of the other place by my honourable friend the Member for South West Hertfordshire.
The Minister for Competition indicated that he accepted that this Bill might need further clarification as to what constituted reasonable excuse, but as he considered that the drafting of this particular amendment needed some improvement my honourable friend withdrew it against the Minister's promise to consider the issue carefully with a view to making amendments on Report. On Report and at Third Reading the Minister said that he would have been delighted to have come to Report stage 'with the required amendment because we need one. He then apologised for not having the amendment ready at that stage. He said that they would do so in another place.
Before the Government tabled their long-awaited amendments, (Amendments Nos. 74 and 76) which were agreed to a few moments ago, the Bill provided no guidance as to what would constitute a reasonable excuse. I agree that the Government's amendments that we have just dealt with do go a long way towards meeting our concerns and adopting the constructive amendment put down by my honourable friend in the other place. However, I feel that our amendment improves and clarifies the Bill still further.

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Due to the technical nature of the provisions of Amendment No. 75, commercial operators may still not be entirely clear what would be the scope of their responsibilities and powers. What would they do if they thought that a packet contained, for example, a bomb or drugs or pornographic material? The current provision could lead to considerable uncertainty until the matter came before a court, which is clearly undesirable.
The proposed amendment would provide additional guidance as to what might be a reasonable excuse without limiting the court's power to extend the definition. The amendment would reduce the risk to some slight extent that a postal operator's actions, however well intentioned, might be considered unlawful.
I hope that the Government will accept my amendment as a constructive addition to the very necessary provision that they brought forward and added to the Bill, at our suggestion, much earlier during its passage. I beg to move.
4.45 p.m.
Lord Sainsbury of Turville: I understand that in the other place an amendment similar to this sparked a useful discussion over these clauses. The Government promised to bring forward amendments to clarify what would be a "reasonable excuse" for the purposes of Clauses 83 and 84 and they have now done so. These are Amendments Nos. 74 to 78 and they have already been approved. They take care of the position of any constable or the Commissioners of Customs and Excise that are mentioned in this amendment.
However, we do not believe that it would be right to allow specific exclusion from committing an offence to persons generally, whether engaged in the business of a postal operator or not, who open postal packets because they suspect they contain goods which are illegal. There is already provision in Clause 105 for a postal operator to detain and open a postal packet if he knows or reasonably suspects that it is being sent in contravention of Clause 85 of the Bill, which would cover many illegal goods. As regards the public generally, I am not saying that there may not be cases where suspicion that the packet contains illegal goods would be regarded as a reasonable excuse for opening a packet, but it would depend on the circumstances of the individual case. This is already provided for in Clauses 83 and 84. However, this amendment would provide an easy defence to anyone who wished to open a postal packet. It would be difficult to prove that a person did not have a suspicion if that is what they claimed. The public has a right to expect that their postal packets will only be opened by responsible authorities or in exceptional circumstances. This amendment would threaten that. I therefore ask the noble Baroness, Lady Miller, to withdraw the amendment.
Baroness Miller of Hendon: I beg leave to withdraw my amendment.
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Amendment, by leave, withdrawn.
Clauses 85 and 86 agreed to.
Clause 87 [Prohibition on misleading descriptions]:
Baroness Miller of Hendonmoved Amendment No. 80:
Page 51, line 23, at end insert (", or
(c) the words "Post Office" or any words, letters or marks which signify or imply or may reasonably lead the public to believe that any house or place is a post office operated by or with the sanction of the company nominated by the Secretary of State pursuant to section 62").
The noble Baroness said: In moving the amendment, I speak also to Amendment No. 81.
The system whereby the King's letters to his subjects were carried by relays of couriers was instituted as long ago as the 15th century. It was first organised on a regular basis in 1510, when Sir Brian Tuke was appointed as "Master of the King's Post". Please note the phrase "The King's Post".
In 1591 regulations were published confining the right to carry mail to authorised persons only. This developed into a monopoly in 1609 when it was decreed that only persons directly authorised by the Postmaster General could carry or deliver letters. The Postal Act 1635 confirmed the monopoly in 1609.
I interject here to say that I very much enjoyed doing the research and finding out so much more about the Post Office, when I decided to put down these amendments.
As a result of proposals put forward by Thomas Witherings, then the postmaster in charge of letters sent abroad, this royal postal service was made available to the public and a Post Office for Inland Letters was established.
Thomas Witherings organised a system of routes providing a weekly schedule for the larger cities, and twice weekly to Edinburgh.
"Common carriers" were still permitted to convey letters on routes not covered by the royal system. That monopoly of 1609 has existed until this present day, although it has been eroded in the past.
In 1660 the General Letter Office was established and later became the General Post Office, or the GPO. That event was celebrated by a special issue of stamps in 1960.
The ancient title of "Postmaster General", a high sounding but lowly ministerial office, was abolished in 1969. The office of Postmaster General was replaced by the Minister of Posts and Communications, whose functions were in turn transferred to the Secretary of State at the DTI. No doubt that is why the Minister is sitting opposite dealing with this Bill today.
Going back to the Act of 1660—or even the proclamation of 1635, or even earlier, to the 15th century—the Post Office must be regarded as one of the earliest, if not the earliest, government agency. At some stage during the 340 years since the 1660 Act—and I am very sorry to tell you that my researches have not discovered when—the service became known as

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"The Royal Mail", and, apart from using that name, the General Post Office was permitted to use the Crown and Royal Cypher.
The Post Office Act 1969, which was one of the many affecting the Post Office over the centuries, was the one which established the existing public corporation which this Bill will be replacing with the new plc.
The reason why I have troubled your Lordships with this long history is this: the 1969 Act was preceded by the inevitable White Paper. The White Paper contained the same provisions about the continued use of the words "Royal Mail". the Crown and the Royal Cypher, and the depiction of the Queen's head on postage stamps as appears at the end of the current White Paper.
The purpose of Amendment No. 80, is to ensure that the ancient title of "Post Office" should only be used by the new plc to be established under Section 62 of this Bill. It cannot be right that any new universal postal provider authorised by this Bill should attempt to describe itself as "the Post Office" or even "a post office" and thereby mislead the public into believing that they are the Post Office—the successor to 340 years of trading by the current Post Office and its predecessors.
Although the words prohibited by subsection (1) of Section 87 are the same as in previous legislation, they do not cover the situation that has never existed during all the centuries about which I have spoken. There were no other universal service providers apart from the General Post Office. But now there may very well be.
This amendment is intended to ensure that whatever happens to any new commercial universal providers or licensees, nobody will be able to confuse it with the new plc, the successor to a long line of public corporations.
Several times during the course of this Bill in the earlier stages I talked about a level playing field and the need to ensure that others coming into this marketplace have the opportunity of it being a level playing field and talking about competition. But the fact remains that the Post Office is the Post Office; and I think in this particular regard it needs to ensure that it is the only body that can use that name.
Throughout the entire world there is only one post office per country. Whatever any new competitor may choose to call itself, and any of its public offices, there is and can be only one Post Office.
Amendment No. 81 creates three new offences in addition to those contained in subsection (4). I have to say in passing that the scale of penalty contained in the current subsection (5) is derisory considering the vast amounts of money involved and the size of businesses that may be committing the offences. Offences under Clause 84 carry penalties at level 5. Perhaps the Minister will tell us the reason for the distinction so that we can consider that before the next stage of the Bill.
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The three new offences are separate and distinct. The first prohibits the use of the words "Royal Mail" and/or the Royal Cypher without the consent of Her Majesty. It will be recalled that in the White Paper from which I have just quoted it was necessary for Her Majesty to give her express consent for the present Post Office corporation when it was created in 1969 to continue to use the words and devices. She has just graciously agreed that the privileges shall be granted to the new plc. I am certain that the Minister will tell us that the prohibition is unnecessary because it is already not lawful, for some reason or other, to do so. I do not need to say that "I suspect" the noble Lord will tell me that although I always hope that by using that phrase it might persuade the Minister to reply using a word other than "unnecessary".
However, when we realise that overseas corporations may be involved in the provision of postal services, and when we see recent events of Internet piracy, I do not think that it is unreasonable to spell out a specific offence in relation to postal services without a potential offender having to scour the statute books to find out that his actions may be unlawful. Whether or not it is necessary, spelling out a specific offence can do no harm.
The second offence involves the prohibition of any universal postal provider other than the new Post Office plc issuing postage stamps. The White Paper says:
"A depiction of [Her Majesty's] head should continue to appear on all stamps issued by the Royal Mail".
I am sure that I shall be accused of being unduly suspicious, but I want the Bill to make it clear that no one except the new plc, the successor to the Royal Mail, will issue any postage stamps. Collecting postage stamps has been a world-wide hobby, I imagine from close to 6th June 1840 when the first adhesive stamps were issued. It is now a considerable source of funds to post offices, and hence governments around the world issue large numbers of stamps to collectors. Those are stamps for which the post office concerned never has to deliver a service because the expensive slips of paper are forever put away in albums.
However, more and more, national post offices are taking advantage of this source of funds by issuing new commemorative stamps to celebrate events of often considerable inconsequence; or on themes such as flowers, animals and so on. Some countries derive a large part of their national income from these issues. Our own Post Office is not immune from this practice, or that of changing colours at frequent intervals. All of that is bad enough, but it is by now a well established method of raising funds.
The subsection prevents any universal provider, other than the Post Office corporation from issuing postage stamps to collect its fees in advance. It will debase British stamps out of all recognition and turn us, philatelically speaking, into—it is a slight exaggeration—another banana republic.
There is another even more important reason. On 1st July 1878 what is now known as the Universal Postal Union was established by treaty. It provides for

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a uniform framework of rules and procedures for the exchange of international mails. This includes a basic consideration such as which post office has what share of the stamp paid for in which country. There is no need for me to go into details of a complex commercial arrangement. It is sufficient to say that the arrangement is between the official post offices—that is, the agencies—of sovereign states. It does not include courier services. I do not say that in any derogatory sense because there are world-class services whose efficiency matches some national post offices, and may be better. I cannot imagine what the post office of, let us say, Albania might want to do when faced with an envelope franked by an ordinary commercial concern.
That brings me to the final offence created by the amendment. The monarch's effigy currently appears on every postage stamp and will continue to do so after the passing of the Bill. This country is unique throughout the world as being the country which invented the postage stamp. The name of the country does not appear on our stamps. The monarch's effigy is the sole indication that this country is the country of origin. Are we to lose that privilege because some commercial company decides to issue its own stamps? Alternatively, is the monarch's effigy to go on as a kind of royal endorsement to what, after all, will be nothing but an advertisement for a commercial concern?
I have taken some time on the amendments because I believe that despite the Government's foresight, on which I congratulate them, in discussing these matters with Her Majesty, there is a serious omission in the Bill in the Government's failure to deal with what are practical aspects of the Government's plan drastically to re-organise a major and vital public service.
I believe that these amendments do no more than strengthen the Bill and help produce greater clarity, close potential loopholes and help to secure objectives which I believe both sides of the Chamber desire to achieve for the new post office. I beg to move.
Lord Dearing: I feel utterly ashamed not to have proposed the amendments myself. The Minister must accept them!
Lord Sainsbury of Turville: I have a more limited goal in not using the word "unnecessary" in my reply.
I thank the noble Baroness for her interesting historical digression. When I sat on the Post Office committee of review in 1978 I was sent by a friend a list of all the previous Post Office inquiries which even at that stage stretched back over the centuries. I learned then that whenever one talks about the Post Office one is in a long tradition of discussion on these issues. I also learned that the issue of stamps is extremely important to many people in this country.
I fully understand the desire of the noble Baroness to protect the certain words, marks and effigies used by the Post Office, in particular in relation to the Crown. The Government considered, in consultation with the
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Post Office, whether it was necessary to provide specific protection in the Bill and concluded that it was not.
The Government reached this conclusion on the grounds that the Post Office advised that it was content that its name was broadly protected as a trade mark. Similarly, the words "Royal Mail" are a registered trade mark of the Post Office. The Lord Chamberlain's Office advised that the Crown and Royal Cypher are protected under Section 99 of the Trade Marks Act; and the Queen's effigy, as it appears on stamps and, indeed, on coins, is protected by Crown copyright. We do not, therefore, believe that it is necessary to include the offence relating to the use of the words "Post Office" and "Royal Mail" or the Crown, Royal Cypher or the Queen's effigy in the Bill.
With regard to the proposed offence relating to the issuing of adhesive postage stamps, label for payment or prepayment for any postal services, the Government do not believe that these are appropriate. We believe that it is unlikely that other postal operators would wish to issue stamps or other methods of prepayment but if they so wished we would not want to inhibit competition by interfering in their commercial decision to do so. The noble Baroness has spoken constantly throughout these debates about competition and level playing fields. Those principles, with which we agree, should be applied here as well.
If another postal operator were to issue stamps as a method of pre-payment for its own services these would, of course, need to be distinguished from the Post Office's stamps, or those of any other operator. This would clearly be in everyone's interest. It would be at the Queen's discretion as to whether such operators could use her image.
As far as concerns the Universal Postal Union, the stamps of other postal operators would not be recognised for the purposes of the UPU unless and until negotiation had been completed for such recognition. Changes around the world in postal markets will inevitably have repercussions for the UPU versus generally recognised postal services provided by a single postal authority in each country. If the concern of the noble Baroness is about the possible forgery or passing off by one operator of its stamps as that of another, this, of course, would be subject to various criminal offences in the Forgery and Counterfeiting Act 1981. As regards the penalties, these would be level 3 which is, I think, £1,000. I think that, given the range of offences under this particular clause, that is not unreasonable.
I hope that the noble Baroness will be prepared to withdraw her amendment.
5.00 p.m.
Baroness Miller of Hendon: My Lords, the Minister can be satisfied that I will withdraw my amendment. I suppose that I should be satisfied that he did not use the word "unnecessary", and I thank him very much for that.

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However, I am very disappointed by what he said. I have to say that I was even more disappointed when he said that he had consulted with the Post Office and the Post Office did not see any need for the amendments that I am proposing. I am very grateful to the noble Lord, Lord Dearing, with his great experience in the Post Office, for saying that he wished he had proposed those amendments.
I did divide the House earlier on and I lost quite heavily. I shall want to consider these matters and, if necessary, bring them back at Report stage.
I will not waste any more of your Lordships' time. I beg leave to withdraw that amendment.
Amendment, by leave, withdrawn.
[Amendment No.81 not moved.]
Clause 87 agreed to.
Clause 88 agreed to.
Clause 89 [Schemes as to terms and conditions for provision of a universal postal service]
Lord Sainsbury of Turvillemoved Amendment No. 82:
Page 52, line 34, at end insert ("(so far as not otherwise agreed)").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 110, 111, 112, 130A,, 131, 134, 135, 137 and 147. These amendments make provision for postal and money orders issued or handled by the Post Office company. They translate into the Bill the provisions that presently apply to the postal and money orders in the Post Office Acts of 1953 and 1969. The Government believe that it is appropriate to include these provisions in the Bill. There have been provisions in law covering these orders for over 100 years.
While the use of these orders has declined in recent years, postal orders in particular remain an important method of payment by post for members of the public who do not have bank accounts. The amendments protect the Post Office company and bankers by limiting liability in certain circumstances. They allow the Post Office company to make schemes in relation to postal and money orders, make provisions for the recoupment of losses and money orders wrongly paid to bankers and set out the treatment of special money orders issued by the Post Office company under an arrangement with a foreign government or postal administration.
A number of minor amendments to the Bill are necessary as a result of the insertion of the postal and money order clauses. These amendments—Nos. 121, 124, 145, 127 and 147— deal with matters such as adding new expressions to the list of expressions in the Bill and adding the new clauses to the provision on the commencement.
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I hope the noble Lords will accept these amendments that the Government believe are important to the continuation of a unique service to those members of society who do not have hank accounts and wish to transmit money through the postal system safely. I beg to move.
On Question, amendment agreed to.
Lord Sainsbury of Turvillemoved Amendment No. 83.
Page 53. line 17, after ("concerned") insert ("and in England and Wales and Northern Ireland may be so recovered").
On Question, amendment agreed to.
Clause 89, as amended, agreed to.
Clause 90 [Exclusion of liability]:
Lord Sainsbury of Turvillemoved Amendment No. 84:
Page 53, line 21, after ("lie") insert ("or, in Scotland, be competent").
On Question, amendment agreed to.
Clause 90, as amended, agreed to.
Clauses 91 to 93, as amended, agreed to.
Lord Sainsbury of Turvillemoved Amendment No. 85:
After Clause 93, insert the following new clause—
POWER TO REQUIRE CARRIAGE OF MAIL-BAGS BY SHIP OR AIRCRAFT
(".—(1) A universal service provider may, far any purpose in connection with the provision of a universal postal service, require by notice the owner or operator of a relevant ship or aircraft to carry mail-bags in the ship or aircraft.
(2) In subsection (1) "relevant ship or aircraft" means any ship or aircraft which carries on regular communications between two places in the United Kingdom, one of which is not readily accessible by road.
(3) The remuneration for any services provided in pursuance of this section shall he determined—

(a) by agreement between the universal service provider and the owner or operator concerned, or

(b) in the absence of agreement, by the Transport Tribunal or, where both places between which the ship or aircraft carries on regular communications are in Northern Ireland, by the Department for Regional Development in Northern Ireland.").

The noble Lord said: This clause replaces provisions in the Post Office Act 1953 and enables a universal service provider to require the owner or operator of a ship or aircraft to carry mailbags in connection with the provision of the universal service. It also provides for an appeal mechanism where the remuneration for providing such a service cannot be agreed. The clause proposed updates the provisions in the Act of 1953 so that they apply to universal service providers and apply only in those areas where such provision is still thought to be justified, that is, where ships and aircraft are operating to places not readily accessible by road. On some air and sea routes there may be a single provider.

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Unless the prices charged to universal service providers are reasonable, this will put up the cost of delivering postal packets to remote areas and could threaten the maintenance of the universal service at a uniform tariff. If remuneration cannot be agreed, the appeal body is the Transport Tribunal, except in relation to journeys taking place wholly in Northern Ireland where the Transport Tribunal has no jurisdiction, so separate amendments have to be made. I beg to move.
On Question, amendment agreed to.
Clause 94 agreed to.
Schedule 5 [Acquisition of land]:
Lord Sainsbury of Turvillemoved Amendment No. 86:
Page 82. line 44. at end insert—
("( ) Section 114(1) does not apply to an order of the Secretary of State under this paragraph.").
The noble Lord said: The purpose of Amendment No. 86 is to make it clear that the vesting order of the Secretary of State referred to in paragraph 3 of Schedule 5 is not a statutory instrument. Without this amendment the order would be caught by Clause 114(1) of the Bill which states that order-making powers in the Bill are exercisable by statutory instrument.
Amendment No. 87 is a minor drafting amendment that deletes paragraph 20 of Schedule 5 to the Bill. This paragraph was intended to modify paragraph 12 of Part III of the First Schedule to the Acquisition of Land (Authorisation Procedure) (Scotland Act) 1947 which sets out the requirement for special parliamentary procedure, and other special provisions, in the case of acquisition of certain descriptions of land.
We understand that paragraph 12 was repealed by the Ancient Monuments and Archaeological Areas Act 1979 and therefore the modification in paragraph 20 of Schedule 5 is superfluous. I beg to move.
On Question, amendment agreed to.
Schedule 5, as amended, agreed to.
Schedule 6 agreed to.
Clause 95 [Inviolability of mails]:
Lord Sainsbury of Turvillemoved Amendment No. 88:
Page 55. line 31, leave out subsections (1) to (3).
On Question, amendment agreed to.
Clause 95, as amended, agreed to.
Clauses 96 to 99 agreed to.
Clause 100 [Directions in interests of national security etc.]:
Lord Sainsbury of Turvillemoved Amendment No. 89:
Page 59, line 21, leave out subsection (2) and insert—
("(2) Directions under subsection (1) may, in particular, require the Commission—

(a) to do or not to do a particular thing, or

(b) to secure that a particular thing is done or not done.").

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The noble Lord said: I beg to move Amendment No. 89 and in doing so I should like to speak to Amendment No. 90. These are technical amendments. Amendment No. 89 brings subsection (2) in line with subsection (4). This amendment clarifies the width of the power at subsection (2) and ensures consistency.
Amendment No. 90 amends Clause 100(6). It clarifies the fact that the references in subsection (6) to a particular licence holder do not include a reference to a description of licence holders.
On Question, amendment agreed to.
Lord Sainsbury of Turvillemoved Amendment No. 90:
Page 59. line 36, after ("generally") insert ("or any description of licence holders)").
On Question, amendment agreed to.
Clause 100, as amended, agreed to.
Clause 101 [Power to ensure compliance with the Postal Services Directive]:
Baroness Miller of Hendonmoved Amendment No. 91:
Page 60, line 29. leave out ("may") and insert ("shall").
The noble Baroness said: I should like to speak to Amendments Nos. 91 and 92 together. Clause 101 gives the Secretary of State the power to ensure compliance with the Postal Services Directive of the EU. The directive is another interference with what should be an entirely domestic matter: namely, an independent state's postal service.
International postal services have, almost since the invention of the postage stamp, been controlled by international agreements between individual post offices forming the Universal Postal Union, an organisation whose existence in Britain has been promoted several times by the issue of commemorative stamps dedicated to it. However, we now have to live with the directive. This group of amendments is designed to ensure compliance with our obligations under the directive.
Amendment No. 91 alters "may" to "shall", and this is to remove a sort of double-whammy in subsection (2). This refers to provisions that the Secretary of State,
"considers appropriate to ensure that the obligation under the directive is or will be complied with".
Once the Secretary of State has made the decision that the directive is not being complied with, clearly he is under a duty to ensure that it is. That is why we say that he "shall", not "may", make an order. If he does not want to make an order then he should not make the decision in the first place that the directive is not being complied with or that a particular course of action is appropriate to remedy a breach.
Amendment No. 92 is designed to correct a piece of overkill in the Bill. As provided at present, an order made under subsection (2) by the Secretary of State applies to,
"any postal operator or operators".

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I repeat, "any postal operator", and not merely one working within the licensed area. A postal operator is rather unhelpfully defined in Clause 117(1) as,
"a person who provides postal services".
So what are postal services? The same subsection means,
"the conveying of postal packets from one place to another by post",
and the incidental services of receiving and delivering such packets. To complete the circle, a postal packet means a letter, parcel, packet or other article that is transmissible by post.
The ability to provide postal services is not limited to those licensed under Clause 6. Under Clause 7 there are exceptions: 18 of them, including the two all-important ones where the cost or the weight is outside the limits provided for in Clause 7(1). The other 16 are of varying importance or relevance to this amendment. Clearly, personal delivery by the sender is not a postal service. However, some of the 16, and certainly those not requiring a licence because they are outside the price or weight limits, are nevertheless postal services.
With that long preamble, I should like to explain that our object is to ensure that the Secretary of State cannot make orders which are outside the licensed area, even if the unlicensed person is legitimately running what is a postal service within the convoluted and circumlocutory definition contained in this Bill. I believe that this is an intrusion and an attempt by the state to control businesses which, by definition, are falling outside this Bill. The amendment restricts the power to make an order simply to universal service providers. I beg to move.
5.15 p.m.
Lord Sainsbury of Turville: Clause 101 provides a power for the Secretary of State to ensure compliance with the EU postal services directive. The purpose of this power is to ensure that the Government can always meet their obligations in particular in the event that the reserved area is removed and with it the ability to impose the universal service obligation and related requirements through licensed conditions.
It is, as I hope is well understood, an emergency power and not a power on which the provision of a universal postal service is intended to rely. The Government place an enormous weight on the value of the universal service obligation. It is the primary duty of the commission to ensure that it is delivered as set out in Clause 3. The intention is that it will do so through the licensing regime, in particular by imposing as a condition of licence on one or more operators a requirement to provide a universal service or part of such a service. It is also intended that the requirements on universal service providers, such as quality of service standards, regulatory accounts, complaints and compensation schemes, will all be imposed and enforced through the licensing regime; and the Bill is built on this foundation.
One reason why Clause 101 contains a power and not a duty to make an order is that the power can either be used in conjunction with the licensing scheme or
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when it has been suspended. If a licensing regime has been suspended there would be two options available to the Secretary of State to try to ensure that the community obligation is fulfilled. The first would be to use the Clause 101 power. The second would be to remove the suspension of the licensing regime.
Perhaps I could refer to that point again, because it is absolutely central to the argument. One of the reasons why Clause 101 contains a power and not a duty to make an order is that the power can either be used in conjunction with the licensing scheme or when it has been suspended. If the licensing regime has been suspended there are then two options available to the Secretary of State to try to ensure that the community obligation is fulfilled. The first would be to use the Clause 101 power; the second would be to remove the suspension of the licensing regime. The effect of this amendment would be that as soon as the conditions in Clause 101 were met the Secretary of State would be forced to use the Clause l01 power, without having the alternative option of seeing whether the removal of the suspension of the licensing regime would have the desired effect.
The effect of Amendment No. 92 would be to provide that an order requiring a postal operator to provide a specified postal service to ensure compliance with the postal services directive is limited in scope only to those operators who are already designated as universal service providers or, if not, are licensed postal operators. This would have the effect of fettering the discretion of the Secretary of State in respect of which postal operators might be required to provide such postal service as might be required by an order under Clause 101. It would not allow the Secretary of State to decide on the basis of the facts at the time which postal operator or operators should be required to provide the necessary postal services to ensure that the United Kingdom continues to meet its EU obligations and the public continue to benefit from a universal postal service.
Instead, the Secretary of State's discretion would be fettered by a decision taken now against a background and a market which are unlikely to be relevant in years to come.
Ideally, of course, the Government will never need to use these powers. If they were to be used, the expectation must be that a requirement under subsection (3)(b) for a postal operator to provide specified services will, if at all possible, be placed upon an existing universal service provider. But we cannot rule out entirely the possibility that there might be circumstances where the universal service provider cannot, for whatever reason, be relied upon to continue to provide the universal postal service—for example, through insolvency—and where the Government would have to look elsewhere to ensure the provision of such services.
The proposed amendment would provide as an alternative a licensed special operator who is not also a universal service provider. But this alternative is flawed. It is possible that the order-making power under Clause 101 would be used after a licensed area

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has been suspended. With no licensed area, there would be no licensed operators on whom to place any requirement to provide postal services. Even if the powers were to be used while there was still a licensing regime in place, we cannot be certain either that there would be any licensees at the time, or that those who held licences—which might be for very small niches within the reserved area—were capable of delivering a universal postal service.
The amendment might work in the near future, where we have at least some idea of what this fast-changing market might look like. We cannot know whether it would work in 10 or more years' time, when the market and the players within it may have changed beyond recognition.
This amendment would unnecessarily restrict the scope of the order-making power, with the effect that, in some circumstances, the Government could no longer guarantee the universal postal service or that other obligations under the directive are met. This would be extremely unfortunate, given the huge value that everyone places on the universal postal service. We cannot afford to put that in jeopardy. In the light of that explanation, I hope that the noble Baroness will withdraw the amendments.
Baroness Miller of Hendon: Perhaps I may begin by apologising to the Minister. My Deputy Chief Whip was whispering something in my ear when the Minister came to a critical part of his reply. He repeated that part of his reply, and I am glad that he did.
I have listened very carefully to what the noble Lord said. There is no way that I would wish to put in jeopardy the universal service provision. I shall take the matter away and consider it carefully. I think that at this stage I probably accept what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 92 not moved.]
Baroness Miller of Hendonmoved Amendment No. 93:
Page 60, line 45, at end insert—
("(f) require a universal service provider to keep separate accounts of each of the postal services which may not be provided unless he is a licence holder under Part II and any other postal services, and that the accounts for any other postal services clearly distinguish between services which are part of a universal postal service and which are not,
(g) prohibit cross-subsidies by a universal service provider between the postal services which may not be provided unless he is a licence holder under Part II and any other postal services which are not part of a universal postal service").
The noble Baroness said: I consider Amendment No. 93 to be very important. The purpose of the amendment is to give the opportunity for the Secretary of State to impose an obligation for all licensees who require a universal service provider to provide transparent accounts and to prohibit cross-subsidies. I beg the Committee's pardon. It is for the Post Office; not for the licensees. I read my notes wrongly.
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The White Paper emphasised the importance of transparent accounting and limiting cross-subsidies to a level necessary for the preservation of essential services. It states:
"the Regulator will need to ensure that the necessary accounting transparency is in place to give credible assurance that there is no cross-subsidy from the business units operating in the monopoly area to those competing in other market sectors".
The point was expanded later—I abbreviate slightly—where it states:
"The Regulator will ensure that … any … body licensed … to operate a full public postal service … does not act in any way anti-competitively".
"In particular the regulator will ensure that any cross-subsidy from the monopoly area to competitive activities is the minimum required…to ensure the continued provision of services required by the universal service obligation [USO] and the uniform public tariff".
The White Paper made clear that until the regulator was established the responsibility for ensuring transparent accounting and monitoring cross-subsidies rested with the Government. The 12th report of the Select Committee on Trade and Industry reached a similar conclusion. It states:
"There has for some years been understandable resentment among the Post Office's commercial competitors in the parcels business at the way in which Parcelforce has been kept afloat by loans from the Post Office".
A no less important matter for consideration is the fact that transparency and limitation of cross-subsidies is also a central theme of the European postal services directive. Recital 28 states:
"separate accounts for the different reserved and non-reserved services are necessary…to ensure that cross-subsidies…do not adversely affect the competitive conditions in [the non-reserved area]".
Article 14 of the directive contains an express requirement to keep separate accounts and to allocate costs to each of the reserved and non-reserved services.
The amendment will ensure that the Bill gives appropriate weight to the directive, to the select committee report, and, in particular, to the Government's stated policy as set out in the White Paper—all of which require that competition should be fair and that cross-subsidies should only be permitted where they are necessary to maintain the universal postal service obligation.
The Minister for Competitiveness told the committee in the other place that the Government had "considerable sympathy" with the aims of a similar amendment tabled by my honourable friends. He said that he believed that the Bill already made provision to achieve these aims and suggested that the Companies Act 1989 and various pieces of legislation prohibiting anti-competitive practices achieved the desired effect.
The short answer is that the amendment seeks to enhance the provisions in the Bill and in the other legislation. One could describe it as "belt and braces". The amendment makes clear in a single place—without anyone having to hunt through the statute book—what is required to comply with this important topic.

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To anticipate another possible objection, I hope that the Minister will not suggest that the objective of the amendment will be met by conditions in the licence. Subject to what already appears in the Bill, and what may later be included by amendments that we intend to bring forward, the regulator has a discretion as to the contents of the licence. Indeed, there is no requirement that every licence should be identical.
It is true that under Clause 101(2) the Secretary of State can intervene if he is dissatisfied with the arrangements, but the Government are seeking only permissive powers. It cannot be right that the Government's obligations to comply with the directive—and, indeed, with their own stated policy in the White Paper—as well as with the will of Parliament, as expressed in the select committee report, should be put into effect at the discretion of the regulator. It should be in the Bill. It has been said several times that they want transparency and no cross-subsidy, and that should be in the Bill. It is fundamental. Creating competition for the Post Office, but ensuring that that competition is fair and complies with our Community obligations, is fundamental. That is why I began by saying that this is a very important amendment.
The amendment ensures transparency; I hope that the Minister will be able to meet me on it. I beg to move.
Viscount Goschen: I support my noble friend's amendments. These amendments cut to the heart of the Bill. Throughout the discussions at Second Reading and during two days in Committee, a great deal has centred on the ability to generate fair competition for the Post Office, for the universal service provider, but to ensure that no competitive edge is gained by the provision of the universal service than would otherwise be the case.
In order to give the regulatory authorities the information they require to ensure that this happens, my noble friend has hit upon extraordinarily powerful arguments for insisting that these basic provisions should be put on the face of the Bill. They would be in line with our European obligations. It is extraordinarily important to include such a provision on the face of the Bill in order to achieve the comfort required by bodies that might he competitors of the universal service provider in the non-reserved areas. I support the position adopted by my noble friend.
5.30 p.m.
Lord Sainsbury of Turville: I must say again that there is no substantial difference between the noble Baroness and myself on this matter. We too believe that there should be transparency and that any movement in the accounts should be clear to anyone involved. The amendment seeks to ensure two things: first, that the universal service provider keeps transparent regulatory accounts; secondly, that anticompetitive cross-subsidies from the reserve to the non-reserved areas are prohibited. They are exactly the aims with which the Government have sympathy. The regulatory framework established by provisions within the Bill already provides for both.
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The amendment would have no practical effect unless and until the order-making powers in Clause 101 were used. Given that these powers are intended to be used only in very limited circumstances—in effect they are emergency powers and not ones on which the provision of universal postal services are intended to rely—it is unlikely that they will be triggered in the near future, if ever. Unless the noble Baroness wishes only to ensure regulatory accounts and prevent undue cross-subsidy at some as yet unknown point in future, this amendment will achieve nothing. (I seek to avoid using words which are regarded as provocative.)
This amendment is not appropriate in respect of the order-making power itself. The two issues highlighted in the amendment are already subsumed within the general powers of Clause 86(2). That clause provides that the Secretary of State may by order make such provision as he considers appropriate to ensure that the obligation is complied with. We have already made provision for the concerns that lie behind the amendment. To ensure that there is a level playing field and the Post Office company does not abuse its dominant position, or otherwise act in an anticompetitive manner, including illegal cross-subsidy from reserved to competitive services, under the Bill we are establishing—
Baroness Miller of Hendon: I apologise for interrupting the Minister. I believe that the noble Lord said that under Clause 86(2) the Secretary of State could make absolutely certain that there was transparency. I do not find that provision in the clause. It may be that the noble Lord has referred to the wrong provision.
Lord Sainsbury of Turville: I believe that under Clause 86 the Secretary of State has general power to make such provision as he thinks is appropriate. I shall check it in case I have given the wrong reference.
It is anticipated that the Post Office will be granted a licence that will take effect from, in this case, the first day of the new licensing regime. Such a licence would be agreed between the Post Office company and the postal services commission. I stress that it would have to include provisions that satisfied the detailed requirements of the EU postal services directive. It may be that this is where a difference of opinion arises. There is a statutory duty to follow the EU directive which requires that that information is produced.
I am informed that the correct reference is Clause 101(2).
A draft outline licence for the Post Office was placed in the Library of the House on Friday 11 th February 2000. This document illustrates the kind of terms and conditions that the Government expect to see in the Post Office company's licence. One such condition (at paragraph 9 on page 4 of the outline licence), as required by the EU directive, is that the Post Office company keeps separate accounts within its internal accounting system for each of the activities carried out within the reserved area on the one hand and its activities outside the reserved area on the other. Furthermore, accounts for the non-reserved area must

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distinguish between activities that are part of the universal service and those which are not. That will enable the commission to ensure that there is no undue cross-subsidy from monopoly to competitive markets.
It is also intended that it shall be a condition of the Post Office company's licence that it competes within the law and does not abuse its dominant position, enter into anti-competitive agreements or use anti-competitive means either to enter new markets or to consolidate its position within existing markets. The Post Office company will also, like any other postal operator, licensed or not, be subject to general competition rules. The proposed licence covers this area. If there is any concern about this matter among other postal operators, there is in any event a requirement for this to be done under the EU directive.
Finally, if one is to make a further provision of this kind—which I believe the Committee agrees is unnecessary in the circumstances—this is not the way to do it, because the provision will come into effect only by way of an emergency power. Therefore, the amendment is not appropriate and I ask the noble Baroness to withdraw it.
Baroness Miller of Hendon: I have great difficulty in accepting the response of the Minister. I made the point very strongly that this fell within the EU directive and that the Bill should comply with it. I also said that it was in the White Paper and that the 12th report of the Select Committee on Trade and Industry had come to the same conclusion. All I say is that it should also be in the Bill. I very much hoped that the Minister would not say that it was for the regulator to put it into the licence. Perhaps at Report stage we may make suggestions as to what should go into the licence. However, at this stage what goes into the licence is within the discretion of the regulator.
I would have been satisfied had the Minister been able to show me a reference in the Bill to the transparency of accounts. The Minister corrected an earlier mistake, which I understand; it is always difficult to find the right references. The Minister quoted Clause 101(2) which provides that,
"The Secretary of State may by order make such provision as he considers appropriate",
and so on. In Amendments Nos. 91 and 92 I sought to change "may" to "shall". I did not succeed because the Minister regarded it as unnecessary.
Therefore, the Secretary of State may not in the event need to do anything, and the regulator may not put it in the licence. The White Paper and European directive say that it should be, and the Minister relies on that. The fact remains that it is still not in the Bill.
Lord Sainsbury of Turville: I hope I have made it clear that all of this is covered by the EU directive, which also requires the national regulator to make certain that the universal service provider meets the requirements of the directive. This is not a matter that is within the discretion of the Secretary of State. The Secretary of State has power to require it, and the EU
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directive means that he has no choice. In any event, we have already shown it in the licence. This is not a matter of choice; it is a requirement.
Baroness Miller of Hendon: I would be very grateful if the Minister could give me the relevant reference in the EU directive. If the Minister is correct I am amazed that I am being lobbied so much by competitors who come into the market and tell me that there has never been any transparency in this matter and there is no provision that there should be. They do not believe that the directive covers it. If the directive dealt with it there would be no need for the amendment, in which case I would be in agreement with the Minister. The Minister began by saying that there was very little difference between us. If that is correct—I doubt whether this matter is covered because I am being pressurised by people who want to ensure that there is transparency—what is the difficulty in accepting this amendment?
Lord Sainsbury of Turville: I do not have to hand the exact reference in the European directive, and perhaps I may write to the noble Baroness and provide it. Clearly, this is a fundamental point. I do not want any misunderstanding among other postal operators: this is how we shall proceed, because there is no choice in the matter.
Baroness Miller of Hendon: I believe that a note has just come from the Box.
Lord Sainsbury of Turville: I am now able to give the reference with even greater speed. Articles 14 and 22 make provision exactly for this point. Therefore, I hope that that answers the noble Baroness.
Baroness Miller of Hendon: I must say to the Minister that he was saved by the bell. I had intended to divide on this point and had mentioned the fact to my Chief Whip. I had hoped that the noble Lord, Lord Razzall, would ask the Liberal Democrats to support me on this matter because, as he claimed earlier, it was he who pointed out during discussion on Amendment No. 69 that there should be clear transparency vis à vis acquisitions by the Post Office. He claimed the credit for that today, and I was intending to claim the credit on this point. As I took on board what he said and moved the amendment, I hoped that he would also support me and ask the Liberal Democrats to do so.
A few hours ago we lost a Division because the Liberal Democrats did not vote with us. That made the difference between winning and losing. It would have been nice if they had supported me on the matter of transparency, which I believed was very dear to their hearts. Therefore, I believe that not only the Minister but the noble Lord, Lord Razzall, was saved by the bell as now he does not have to advise his colleagues one way or the other whether to support or go against transparency.
I make it absolutely clear to the Minister that I shall ensure that those who urged me down this course take note of the particular conditions in the European

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directive to which he referred. If they are not satisfied, I shall certainly bring the matter back. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 101 agreed to.
Clause 102 [Subsidy for public post offices]:
5.45 pm
Baroness Miller of Hendonmoved Amendment No. 94:
Page 61, line 8, leave out ("may") and insert ("shall").
The noble Baroness said: In moving Amendment No. 94, I shall speak also to Amendments Nos. 95, 96, 98, 99, 100 and 102. My noble friend Lady Byford will speak to Amendment No. 97, to which my name and that of my noble friend Lord Northbrook have been added.
My amendments are probing amendments because the Government were not able to give an explanation to the other place of some of the provisions of this clause. Perhaps that is understandable to the extent that this clause, which covers the important—indeed, fundamental—subject of subsidies to the Post Office to enable it to continue to provide vital social services to many small communities, was introduced in the other place only at the last minute at 'Third Reading.
That was despite the fact that throughout the entire passage of the Bill and, indeed, during the debate on the White Paper which preceded it, honourable Members on all sides in the other place expressed serious concern about the effects that the Bill would have both on the universal postal service and on communities which experienced transport problems, lack of banking facilities or where the only shop (the village store), also serving as the post office, depended on that custom for its viability. It is not only village stores that will be affected but also small local shops in suburban parades which must compete with nearby giant supermarkets and often can do so only because customers come in to collect their pensions, and so on.
The so-called new Clause 1, which is now Clause 102, shows every sign of having been cobbled together hastily, partially to placate the other place where objections were raised to the absence of subsidy provisions. Certainly the aim also is to try to head off objections from your Lordships, who undoubtedly will not be willing to be fobbed off with provisions which may truly be described as an "Emmental cheese" because it is so full of holes.
At Second Reading, I expressed concerns about a number of mysterious provisions in the clause. No answer came from the Minister then and no answer has come since. Since Second Reading, no amendments have been tabled by the Government to clarify matters. Therefore, we must assume that the Government are content with the meaningless provisions that the clause contains, as drafted at present. I believe that that simply will not do for this very important provision. Absolute clarity is required. The public and sub-postmasters, whose businesses otherwise may be wantonly destroyed by the
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Government's action in taking away their earnings from paying pensions and social security allowances, must clearly know at least the basis of the help that the Government will give, or suggest that they may give, by way of compensating subsidies.
The clause as drawn at present is simply full of holes. Even at this advanced stage, we do not know whether the subsidy will be permanent or temporary, what will trigger the payments, how much they will be, or whether they will be more or less than the Treasury is trying to save by taking away, on their own figures, £400 million a year from the income of all the post offices by phasing out payments of benefits from across their counters. We do not even know whether all post offices will qualify and, if not, which will do so. We do not know who will be the arbiter of who will receive what, how much they will receive and how they will receive it.
We would prefer the whole clause and the need for subsidies to be unnecessary. However, they are necessary because the Government have decided to press ahead with the scheme for automatic credit transfer, whether or not the public want it and whether or not they have access to cash facilities. If the Government are to put at risk people's investments and businesses, valued in total at £2 billion, or at the least deprive local communities of a vital facility, then compensation is required and, in this case, it is in the form of a subsidy. We do not want to see people's businesses in effect confiscated by the state, which wants to grab £400 million a year. That is not the way that things are done; certainly that is not the way that things should be done.
With that explanatory preamble, perhaps I may now go through the amendments in sequence in order to indicate to the Minister where we require both clarification and, indeed, some sort of commitment from the Government. We want to know what it means and what is to happen.
Amendment No. 94 alters the word "may" to "shall". If the subsidy provisions are purely permissive, the entire clause is a meaningless piece of window-dressing. After the Bill is passed, that may be the last that anyone hears or sees of those subsidies. I say that particularly in the light of proposed subsection (6), which gives the Treasury an absolute veto over the whole scheme. The reason for my later amendment, Amendment No. 101, to this clause is to delete that veto.
Amendment No. 95 provides that one of the purposes of the subsidy is to have regard to the social needs of the local post offices and to ensure that those needs are given priority over commercial considerations. We do not want to hear that a village post office is not to be provided with a subsidy because it is not profitable. I remind the Committee that there is ample precedent in the form of subsidies paid to train and, more especially, bus services on otherwise unprofitable routes. If a sub-post office should t urn out to be unprofitable and is to be ruined completely, then the subsidy is called for.
Amendments Nos. 96 and 98 are simply paving amendments for Amendment No. 99. That amendment adds a new paragraph, (5)(a), and

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prohibits the payment of the subsidy to a bank or building society. If we are to have subsidies to save sub-post offices, they should be the only organisations that receive those subsidies. Part of the problem is caused by the withdrawal of banking and cash facilities from small localities by banks and building societies.
A potential problem is also caused by the same commercial concerns demanding the payment of fees or charges from pensioners or receivers of benefits who collect their own money. It would be iniquitous if money which was needed to facilitate the continued existence of a sub-post office were diverted to the giant banks. It cannot be right for the Government to take £400 million a year from small businesses in the form of sub-post offices and hand that over to the banks. The subsidies are intended for the benefit of sub-post offices and this amendment is to ensure that that is where the subsidy goes.
Amendment No. 100 adds another new subsection. Subsection (2) refers to:
"the person deciding whether to make the payments"—
that is the subsidy. Subsection (3) refers to payments:
"made by the Secretary of State or by another person".
It is not clear whether that other person is the same one as referred to in subsection (2) or yet another person.
In subsection (5)(b) there is reference to,
"the person concerned".
Who is that? What is this vague clause taking about? Who are these people? More important, despite the fact that several noble Lords asked the Minister who was this person—whether it is one person or two people—during Second Reading, there was no answer from him. I wonder why the Government are being so coy about specifying who is this mysterious person. Is it one person, two people, three people or even four people? I asked that at Second Reading and we still do not know.
Until the Government clarify the position to your Lordships' satisfaction, we believe that there should be certain essential constraints. We believe that the payment of subsidies must remain in the hands of the Government. However, if they want power to delegate such decisions so that they can divert any criticism of the application of subsidies from their good selves, that should go to the commission. At least the commission can be regarded as non-political and impartial.
Paragraphs (a), (b) and (c) of this new subsection expressly exclude from the power to distribute the subsidy to local authorities members of local authorities or candidates for local government and trade associations and trade unions. So long as the Government have failed to describe the circumstances under which a subsidy will be paid and by whom, it is essential that there should be payment only when it is impossible for it to be of local political advantage or for the benefit of a pressure group.
At Second Reading I mentioned that, and I said that no one should think that I am unduly suspicious or see politics lurking behind every single amendment that is
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tabled. The fact remains that if the subsidy is to be handed to a local council to pay to any sub-post office in their area where they believe that a subsidy is required, I would bet that it would be given to a Labour council just before a local election. I am sure that noble Lords opposite will understand why I feel that that should never be allowed to happen. In any case, that should not happen. It is not a matter for local councils. If there is a need for this subsidy, the Government must have responsibility for it and take the flak in relation to handing it out and when deciding the rules.
The Government have had ample time to clarify all the mysteries surrounding this clause and to ensure that when they promise a subsidy it is one that they or the Treasury cannot weasel out of as soon as the ink is dry on the Bill, the Bill is passed and there are no longer hundreds of thousands of sub-post offices collecting names and handing them in at Downing Street or somewhere else. The subsidy clause came in rather quickly. Now it is all over and matters have gone quiet. We do not want to hear that the Bill is simply passed. I await the Government's response to our anxieties over this clause, which we believe is essential to preserve the entire system of local sub-post offices. I beg to move.
Baroness Byford: I rise to support the case put forward by my noble friend Lady Miller. I am not sure how the Minister will respond—whether he will be coy or whether the Government still do not know. I apologise to your Lordships that I shall take some time over this item because the crux of the matter is how people claim and receive benefits. I have been through this exercise on the Child Support, Pensions and Social Security Bill and I still have no answers. I believe that the Government do not know the answer. I hope noble Lords will understand why I shall take my time to go through this yet again.
The purpose of my amendment is to establish a method of payment and the practicalities for people who live either in rural areas or in urban areas. I want to try to flush out how people will receive payment, what the cost will be and when and how this will happen.
Perhaps I can begin at the beginning. In this country some 2 million people are still "unbanked". When I raised this matter on 16th May during the debate on the Child Support, Pensions and Social Security Bill, the noble Baroness, Lady Hollis of Heigham, commented that she was not happy that I used the term "switch card" and that they may well come forward with a bank card. In a letter she stated that the precise means of doing so will be a matter for the Post Office and banks and that they expect available options to include withdrawing money through a bank card. That is a start.
My question to the Minister—there will be several—is, if that is so and we move to a bank card system, how will that differ from what the previous Government had started and which this Government abandoned? How will it save money, if it is being reinstalled? Who will pay for the new bank card? Will it be cheaper than

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the previous system? Will the Department of Social Security be expected to pick up the bill, or will the Post Office pick it up?
We know that there are some 2 million people who are "unbanked". The Government have indicated that they will finance a scheme to give them banking facilities. If that is so, how will the Government do that? What do the Government believe will be the cost and who will bear it? Will it be the Department of Social Security or the Post Office? If the banks have to bear it, the potential cost to them of opening and operating such social bank accounts is an interesting point. Whether or not we expect them to make a profit from such accounts, there would be a loss.
I have received letters from banks and it has been agreed by them that an average balance of around £1,000 a year will be needed to make any bank account profitable. Many of these accounts will not contain that sort of amount. We certainly need to have some indication from the Government as to how and who will cost the scheme.
I believe that the Minister will say that the Government still do not know. We have been waiting for the PIU report that was supposed to be with us at Easter. Easter has come and gone, May has come and gone and we are half way through June and the report is still not with us. I am told that there are great matters in the report, but I and many other noble Lords are anxious that if we are not careful, not only this Bill, but also the Child Support, Pensions and Social Security Bill will pass through the House without us having answers to these basic questions. It is extremely important that we have answers.
On top of that, today I received the CAB social policy bulletin for June 2000. The Skipton CAB has carried out research which showed that its clients were experiencing real difficulty in gaining access to bank accounts, and were anxious about ATM usage, particularly in rural areas. The bulletin said:
"A survey of all banks and building societies in the Craven District area aimed to find out what facilities were on offer and what checks were made before a bank account could be opened. Few of the 21 banks and building society branches surveyed seemed to be able or willing to offer any facility to clients experiencing financial problems or who had a default recorded".
If that is true, and if the banks are not keen to give people banking "streams" without back-up, who will?
The Alliance & Leicester Bank has also written to me as, I believe, I mentioned at Second Reading. That bank is concerned about the impact of withdrawing the current system of the Giro. The Select Committee report on the Rural White Paper, dated 3rd May 2000, stated on page 18 that the committee feared that the loss implications of withdrawing the current benefit payment system would result in some more losses of post offices, particularly rural post offices.
I believe that banks are entitled to refuse banking services to certain clients; a point I made when I referred to the letter from the CAB. However, the Government wish to see universal coverage. If the Government forbid banks to charge "unbanked" people for using banking facilities, who will pay for it?
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Having referred to the PIU, I shall now move on to the speech made recently by the Prime Minister at the Women's Institute meeting. I am sure that it is a fact now well known to noble Lords that that speech was received with a certain coolness. However, it contained a very important section. The Prime Minister stated:
"You have a strong campaign on rural post offices".
That is indeed the case.
"I want you to preserve them too. This month we publish plans that will allow people to carry on taking out pensions and benefits in cash; and that will protect rural Post Offices and offer them a new lease of life. Be under no illusion: over the years more people will choose to have their money paid into their hank accounts all around the world, postal services are going to be revolutionised by new technology and the growth of the internet. So we can give rural post offices a future."
He went on to say:
"I would fail in my duty to you, if I don't also say it has to be a future allied to future reality".
I do not think that anyone would deny that. I should hate it if Members of this House thought that I was someone with a negative view, one who felt that things should remain as they are. However, changing from one system to another without knowing what the new system will be and what it will cost is important and needs to be thought through.
We spoke of this problem during our deliberations on another Bill. We were told then that the ACT transactions to be introduced will cost only 1p per transaction, as compared with order books, which cost 48p. It has also been stated that benefit payments made using ACT will reduce fraud. I shall probably not argue about that because I have no reason to suspect that that would not be so. However, I suggest that the Government's comparative exercise as regards ACT has not given a true result, or at least not a full one. The figure of 1 p per transaction quoted by the Department of Social Security is what it will need to pay rather than a calculation of the full cost, whereas the cost of the order book reflects the full costs involved.
Research carried out by the banks estimates that it will cost £350 million a year to establish and run a social banking system that will pay all benefits into bank accounts. That is a very different figure from that of 1p which is being bandied about so freely and is the reason why I keep posing such questions. For a successful introduction of ACT, the Government need to be realistic about the actual costs involved.
I should like to raise one or two other points. Each week 20 million benefit claims are made at post offices. Over the course of a year, those claims attract some £50 billion in cash payments, distributed via 712 million transactions. As I have said, research carried out by the banks has shown that the establishment of ACT will cost £350 million, while the Government continue to quote 1p per transaction. If an additional £50 billion in cash is to be paid out via the banking system to benefit claimants, then in addition to the 1p cost per electronic transfer from the Benefits agency to a claimant's bank account, surely other costs will arise; namely, the cost of physically moving £50 billion in cash to millions of bank accounts and to post

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offices. Furthermore, the cost of setting up new bank accounts for claimants must be taken into account, as well as the cost of running bank accounts to be used for paying benefits. For example, a cost is incurred every time a plastic card is used at an ATM.
I apologise that I have had to speak at length. However, noble Lords will understand my concerns in this area. If rural post offices and some of our more remote urban and suburban post offices do not survive, the reason for their demise will be because of the withdrawal of the payment of benefits via sub-post offices. Given that, the Government's wish to ensure that each recipient will still be able to visit a post office will need to be looked at in a different light.
I have posed several questions in my contribution. First, I do not believe that we have received a full answer as regards the full cost of implementation. It may be that the Minister will tell me that it is still too early to tell. Secondly—this point was also raised by my noble friend Lady Miller—we must address the question of the subsidy. The amendment was introduced only during the later stages of the Bill's progress through another place. It has been suggested that some of the proposed subsidies could be paid through local authorities. However, I understand that sub postmasters are concerned about that for the simple reason that one local authority may take a quite different view from another. From a practical point of view, I should like the Minister to comment on this. It is not a good idea to implement all kinds of different systems when the aim is to achieve universal coverage.
On the last occasion that we discussed the matter of ensuring that payments reach claimants, the noble Earl, Lord Russell, said that he was happy with the assurances given by the Minister. However, those assurances will be valid only if claimants retain access to a post office. If I have over-egged the pudding here, I apologise. This matter is posing a dilemma for those who need to examine the hard reality of how claimants are to receive their payments. I raised these matters during our debates on the Child Support, Pensions and Social Security Bill and I have raised them again today. That is because it appears that the buck is passing between two departments. It is now time for the Minister to clarify one or two of these very important points.
6 p.m.
Lord Clarke of Hampstead: I shall again declare my interest as a former Post Office worker and as a former official of the Union of Post Officer Workers. I am grateful to those sitting opposite for having put down these amendments. They have given the Committee an opportunity to examine the whole question of subsidies.
It is common knowledge that the idea of providing subsidies came only as a late add-on during the deliberations in another place because the plans for the transfer of benefit payments to ACTs were ill judged. Those plans had not been thought through and the subsidies were introduced as a reaction to that.
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Perhaps I may say at the beginning of my remarks that I do not believe that subsidies will provide the answer to the long-term future of sub-post offices and post office counters in either urban or rural areas. The salvation of the counter network will come through the provision of more business, better competitiveness that will attract new business and a climate that will enable those small businesses to stand on their own feet. We must recognise that the proposals for subsidies have been introduced to compensate for the loss of payments that would accrue from the transfer of cash payments to automatic credit transfers.
The Government's intention to enable the possible use of subsidies was first indicated only as late as February of this year. The Secretary of State for Industry stated that:
"the Government will consider very closely the need to include a provision that would enable a subsidy to be provided where it is appropriate to do so".— [Official Report, Commons, 15/2/00; col. 805.]
That statement in itself begs a number of questions.
Like many others, I had expected that an amendment would be introduced during the Committee stage in another place, but no amendment was forthcoming. Instead, on 12th April the Secretary of State announced that,
"we will table a new clause to the Postal Services Bill when it is debated on Report. It will enable me to set up a financial scheme to ensure that essential services can still be delivered through a nationwide network of local post offices".—[0fficia/ Report, Commons, 12/4'00: col. 385.]
Clause 102 has now been introduced. The clause does not make it clear how subsidies are to operate and when they will be considered necessary. If we must have subsidies, then the most straightforward method of providing them would be through direct payments from the central government, authorised by the Secretary of State in consultation with the Treasury.
Clause 102 enables the Secretary of State to make such payments to assist in the provision of post offices and the services provided as he sees fit. These payments can also be restricted to post offices of a "particular description". I am most anxious to know what the criteria of a "particular description" would be. It seems likely that the Government will have to consider any criterion for access to postal services that is recommended by the PIU.
However, both previous speakers mentioned that we have been waiting with bated breath for the report of the PIU which was promised when this matter first came before this Chamber. The noble Baroness, Lady Byford, drew attention to the fact that we are still waiting. Perhaps we shall get another rabbit out of the hat, as happened in the other place when the whole question of subsidies was revealed. But if we have had to wait all this time just to see what the future of the counter network will be, it is a poor performance by the Performance and Innovation Unit. We expect the report to talk about the social and environmental guidance emanating from this Bill relating to the number, or percentage, of people living within an area to be served by a post office, otherwise, I see no clear indication regarding what will happen.

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We talk about local authorities, but there is already a precedent for local authorities to become involved. Section 97 of the Telecommunications Act 1984 quite clearly states:
"Where a local authority consider that it would be for the benefit of the whole of any part of there area …the authority may undertake to pay … [an] operator any loss he may sustain by reason of the provision or continued provision of those facilities".
It is unlikely that most local councils will be able to find the funds to do so. In fact, as a former local councillor I find it offensive for central government to pass over the responsibility to put something right that it created in the first place—namely, taking away the cash payment, thereby making it necessary to find the money to subsidise the post offices—and then say to local government, "You have to do it". That seems to me to be incomprehensible, if not less than straightforward.
I should like to say much more but both previous speakers covered a whole range of issues about sub-post offices. I completely agree that we should not be paying subsidies to banks or building societies, which are actually putting extra pressure on the whole system. I hope that my noble friend the Minister will be able to give us some answers, as well as an indication of where we are going on this question of subsidies. As I said at the beginning of my remarks, subsidies are not the answer: more business in our post offices is. The future of the network would be much more secure if the Post Office were allowed to get on and promote its business.
Lord Skelmersdale: I do not envy the Minister because, of course, the cat is out of the bag as far as concerns the delay in the publication of the PIU report. As my noble friend Lady Byford made clear, at the annual conference of the Women's Institute last week the Prime Minister certainly gave the impression not only that the report and an accompanying announcement would be made later this month but also that he would make the announcement himself. That rather queers the pitch, if I may so describe it, of the Minister at this moment.
None the less, the questions asked by the noble Lord., Lord Clarke, and by my noble friends Lady Byford and Lady Miller are absolutely right. Before the end of the proceedings on this Bill, we all need to be satisfied, wherever we sit in the House, that the Government have come forward with the right answer in Clause 102. We also need to know how the wretched system will work.
6.15 p.m.
Lord Sainsbury of Turville: Not for the first time in this House, or in the other place, the important issue of whether financial systems can be provided for the support of public post offices is under discussion. Clause 102 is an extremely important clause. It will enable the Secretary of State to set up a financial scheme for the purpose of supporting public post offices. As the Secretary of State said in another place on 12th April, this power is a safeguard which is intended to keep open the option of financial assistance.
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Perhaps I may stress again that this is an enabling clause; it is not a scheme. Therefore, to ask that all the details should be laid out now is to miss the point. In such a piece of legislation it is sensible to include the power. But that is not the same as saying that a scheme will be brought in tomorrow to cover the provisions in the clause.
I should like to deal, first, with the whole question of the loss of income from post offices by the switch to ACT, which will take place between 2003 and 2005. It will not happen tomorrow. Therefore, it may prove to be necessary to take such action in the future; it may not be right to take it now. That is why we have introduced this enabling clause and not a scheme.
I agree with the noble Lord, Lord Clarke of Hampstead, that long-term subsidies are not the answer. However, we must try to ensure that the Post Office company will be able to develop alternative revenue streams. That is why we are equipping 40,000 counter positions in 18,500 post offices with computer equipment to modernise the network at a cost of almost £500 million. This will give the Post Office the ability to offer an improved service and a wider range of services. For example, we have already seen more banks seeking to offer services through post offices.
Perhaps I may also deal with an issue that has frequently arisen in this Chamber; namely, how benefits will be paid in the future. Again, this will take place in the year 2003, not tomorrow. I believe that we have made it absolutely clear that people on benefits will be able to receive them in cash from post offices without any additional payments. That situation is clear. With the systems that we are putting in place, it is not difficult to imagine many ways of how that could be done.
If you believe in the future of the Post Office, as I do, you cannot continue to argue the case that the current system of payment, which is totally antiquated, should be the way forward. It is not surprising—
Baroness Byford: I apologise for interrupling the Minister, but I do not believe that any of us has made that suggestion today. To be honest, I do not think that anyone said that we wished the current system to continue. I just wanted to put the record straight. I am sure that the Minister was about to deal with it, but what we want to know is the actual cost involved. We have received no real answer in that respect. We are told that it will cost one penny, but I do not believe that that is the full truth.
Lord Sainsbury of Turville: Some noble Lords have implied throughout this debate that there is a choice as regards not going ahead with the new system and that we could somehow retain the current one. Some people seem to believe that that is a sensible way forward. However, if we believe in the future of a Post Office as a modern system providing a service to customers, we should ensure that such systems are properly automated in line with other computer-based systems that exist today. It should not surprise anyone that such systems are likely to be cheaper than the current systems, which are essentially paper based.

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The calculations available show £500 million in savings in reduced administrative costs, compared to paper-based systems, before taking into account the £140 million savings through reduced instances of fraud and theft of order books and giros.
Without having checked all those figures myself, I have to say that I do not find that at all surprising. In this modern age when every other kind of business is going over to this kind of system and saving large sums of money, I do not think that it is right to go on arguing for the retention of an old system. Similarly, I do not think it right to continue to raise concerns by implying that we cannot issue cash through this method just as we do through any other system.
I hope that I have not misunderstood the noble Baroness, but she asked how we would get cash to post offices for this purpose. But that is exactly what we have to do today. I cannot see that there is a difference in having to get cash to the post office, compared with the other systems. Post offices have always had to use large amounts of cash to make benefit payments, and this is not generated by their own system.
However, the Government recognise the real concerns of many people throughout the country about continued local access to postal services, particularly in rural areas, but also, and importantly, in some of our inner cities. The clause provides an additional safeguard allowing the Secretary of State to provide financial assistance if it proves necessary to do so. That clearly underlines the Government's commitment to a nationwide network of post offices.
I turn to Amendment No. 94. We have made it quite clear that the clause as it stands will enable the Secretary of State to make a scheme to support public post offices. Again, as we have repeatedly made clear, this will enable financial assistance to be given if necessary. The noble Baroness's amendment assumes that a subsidy is needed. I do not share her pessimism about the current situation, although we should be prepared for the future. We are giving the Post Office the commercial freedom that it needs. We are modernising and creating opportunities. The Government are committed to ensuring that post offices are equipped and redesigned to face the future and are thereby able to continue to play their role as an essential part of the country's fabric.
As I have said, the Government's aim was to provide an enabling power for the Secretary of State to make a scheme. If financial assistance proves necessary, then as a matter of fact, commercial considerations are likely to take second place, particularly if it is a particular service which is to be subsidised. A service can be subsidised under the clause only if the person making the payments considers that the provision of the service through post offices assists in the provision of the post offices themselves. It may well be the case that without the subsidy the service concerned would not otherwise be provided on a commercial basis through post offices or indeed other outlets within the vicinity.
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However, commercial considerations will be important, since one of the ways in which we shall determine the level of assistance needed is to look at the cost at which the service could be provided on a commercial basis. I fear that the noble Baroness's amendment amounts to an invitation to write a blank cheque now for a scheme.
As I have said, we value post offices greatly and have taken steps to support the network. If a scheme is necessary, it will be because certain wider public policies cannot be delivered by commercial means alone.
I hope that the noble Baroness will consider withdrawing the amendment.
I appreciate the strength of feeling in the Committee and more widely about the recent wave of withdrawals of bank branches from small communities. However, I do not believe that the noble Baroness's amendment on this point is the correct reaction.
Clause 102 provides for payment for services that support public post offices. This may involve asking commercial bodies to do something that is inherently uncommercial for them, and the Government may wish to provide assistance for that purpose. More specifically, an amendment such as we have before us might prevent payments to the Post Office company itself, since it is planning a universal bank which will play a potentially important role in combating social exclusion. There are many other businesses that may have banking connections, and we would not want to rule them out either.
Similarly, it might be sensible to ask a financial institution to have a hand in running a scheme, although it would be the Government's general intent to appoint a government agency or similar body to act as the "person" deciding to make payments. In such circumstances, it might be reasonable to pay fees in respect of work done by a bank or building society.
Therefore, while I accept the intentions behind the amendment, I must ask the noble Baroness to withdraw it.
Similarly, I would hope that Amendment No. 97, in the name of the noble Baroness, Lady Byford, will be withdrawn. My principal difficulty with it is that it is based on the supposition that there will be a single scheme for the provision of financial assistance to public post offices. In fact, there may be a number of schemes targeted at certain types of post office. For example, the Post Office presently has around six types of contract with different classes of sub-postmaster, and we might want schemes that were tailored to those arrangements. We might want to offer different support in rural areas from that in inner cities, or have special schemes aimed at delivering certain other services through post offices.
That is not to underestimate the importance of benefit payment to post offices or the wider concerns about the network. As I have said repeatedly, the Government are committed to the national network of post offices.

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The amendment would unnecessarily fetter the discretion within the Bill. Any scheme will have to come before Parliament for approval by affirmative resolution, and there will therefore be plenty of opportunity to comment on the merits or demerits of a specific scheme. I would therefore ask the noble Baroness to withdraw the amendment.
I turn to Amendment No. 100, which would appear to constrain the scheme before the Secretary of State even has a chance to present one for the approval of the House of Lords. The Opposition have tried to suggest that without these controls the scheme could be used for political purposes, with greater assistance being given to areas with strong Labour representation. As my right honourable friend the Secretary of State assured another place, there is no suggestion whatever that this would happen or should happen. The Government's only interest is to enable a scheme to be put forward for the support of public post offices.
As I have said, any scheme will require the approval of both Houses. There is no question of the Secretary of State being able to sneak through an unsuitable scheme.
We want to ensure that a suitable body would provide the assistance. I turn now to that issue. It could be the commission, as the noble Baroness, Lady Miller of Hendon, suggested, but it might be more economical and make more sense for a body with experience of administering this type of scheme, such as the Countryside Agency, to do so. Clearly, it will depend on the type of scheme that is needed.
Against that background, I find it rather extraordinary that delivery through local authorities would be ruled out, even if that were the most suitable means. Furthermore, local authorities are already involved in giving financial assistance to post offices through a scheme which, although enhanced and made more generous by the present government, was instituted by the previous administration. I am, of course, referring to the village shop rate relief scheme, which provides a sole general trade store and/or post office in a settlement of fewer than 3,000 inhabitants with 50 per cent mandatory rate relief. Local authorities also have discretionary powers to top up that relief to 100 per cent. They also have the discretionary power to grant up to 100 per cent relief to any other rural business in the settlement which is important to the community.
If the amendment was designed to probe the Government's intentions, I can assure the Committee that we would want to deliver any scheme in the most targeted way possible. That might involve a national body, since, after all, we are talking about a national network. However, I would not rule out regional or local bodies assisting in the administration of a particular scheme or schemes.
With regard to this amendment, I end on a technical point. The amendment suggests that any person who administers a scheme should be appointed by the commission. It is our intention that the person to administer the scheme should be named in an order
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placed before Parliament, and therefore approved by the House of Lords and another place. If we were to follow the amendment, that oversight would appear to be removed from Parliament and delegated to the commission.
I should like briefly to touch on some of the other points raised by the noble Baroness, Lady Byford, although I have tried to deal with them generally in terms of the question of cost. We inherited a scheme, the benefit payment card, from the previous government's plans. That was a magnetic strip card, an integral part of the Horizon project, which was running three years behind schedule and hugely over budget. We have put the project back on track by removing the outdated technology and complexity of the benefit payment card. ACT is an established, convenient and fraud-resistant method of payment, and all post offices will be equipped with the Horizon platform by this time next year. In that way we can significantly improve the cost structure of what the post offices are doing.
I hope that that broadly deals with the issue of concern to the noble Baroness, Lady Miller, as to how the system will work and whether the costs can be reduced in the way suggested. The main point on which this Committee must deliberate is that this is an enabling power and that the parameters laid down constrain it in an appropriate way. Any scheme will have to come back to the House for affirmative resolution. At this point we are not putting forward any specific scheme; this is simply an enabling clause. On that basis the amendments are not appropriate and I hope that the noble Baroness will feel able to withdraw her amendment.
Noble Lords: Hear, hear!
6.30 p.m.
Baroness Miller of Hendon: I know that the Minister is too experienced to take it personally when I say to him that his response was totally unsatisfactory. He said that he did not want subsidies; that we should have more confidence in the Post Office; that it will prosper and will not need subsidies. But there should be no suggestion that his noble friend Lord Clarke, my noble friend Lady Byford or myself welcome the idea of subsidies; we do not. If the Government were not introducing ACT at this time, there would be no need whatever for these amendments. So none of us welcomes the idea of subsidies.
However, we said that if there was a power to introduce a subsidy, then that power should not be so full of holes that it has no value whatever. Why did the Government feel it necessary to introduce the new clause at Third Reading in the other place, which subsequently became Clause 102? Why was it not in the original Bill?
Lord Sainsbury of Turville: I rise simply to make the point that the noble Baroness, Lady Byford, said that no one on the other side of the Chamber was suggesting that ACT should not be brought in. The noble Baroness, Lady Miller, is saying that the

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Government should not have brought in ACT; that that is the cause of these difficulties. That is a fundamental mistake and there is no alternative.
Baroness Miller of Hendon: I believe that the introduction of ACT at the critical time of the changeover of the Post Office to a plc with one shareholder and so forth, causes great difficulties for the sub-post offices. The sub-postmasters have made that known in their petitions, in their meetings, and in their lobbying briefs which Members of the Committee on all sides of the Chamber have received.
My question is: why did the Government feel it necessary to introduce this permissive clause at such a late stage? Why was it not part of the original Bill? I suggest that the reason the Government came up with this clause is that the sub-postmasters decided that ACT was extraordinarily dangerous for their businesses and that there needed to be a subsidy of some kind. The clause is a response to the petition in Westminster Hall and to all the lobbying that took place.
But does that response mean anything? Clearly not. The Minister began by saying that it was an enabling power. In fact, once the Bill is passed, I suggest that we shall hear no more about this clause. The Minister said that the Government had had no thoughts about a subsidy; that they did not intend to introduce one; and that the enabling power exists in case the need for a subsidy should ever arise. But once the Bill is passed, it is passed. The clause can sit there and never ever be used.
We feel that that situation is totally unacceptable. My noble friend Lady Byford spoke extremely well to her amendment. The general feeling is that we need some sort of clarification. The Minister was unable to identify "the person" in the clause. Is it one person, two persons, any person, that person or this person? I know not. The fact that the provision is so vague that the Government know not either, nor agree with us that the "person" should in fact be the Crown, leads me to the conclusion that this power will never be used.
Let us hope that the power is not necessary. However, if such a clause has to be included in the Bill, it should mean something. This clause means nothing. While the Minister spoke so well and we heard Members of the Committee on his side call out "Hear,!head", I hope that he will not be upset when I say that his response was totally unsatisfactory. I could use other words to describe what I think. I felt that what he said was not worth saying. It meant nothing.
It may be that our amendments are not as perfect as they should be. That is possible. I cannot pretend that my amendments are always right. I hope they are, but it may be that they are not. However, it would have been helpful if the Minister had said that something could be done. We could then take his words away and think about them. But there is nothing to be done. This clause has been inserted into this Bill purely to placate the sub-postmasters and mistresses who fear that they will lose their businesses, otherwise it would have formed part of the original Bill.
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Our amendments sought to strengthen the provision in some way or other by saying that, if necessary,
"The Secretary of State shall".
The Minister's response is that, if necessary,
"The Secretary of State may".
We suggested that "the person" should not be a Chancellor of the Exchequer; we all know what they can do when they have the power.
My noble friend tried to find out how much the scheme will cost. All we know is the amount that sub-postmasters say they will lose. And we have no idea what sort of money will be available for the subsidies if they prove to be necessary.
We have sat for a long time and, with regret, I shall not divide the Committee on this amendment.
Noble Lords: Oh!
Baroness Miller of Hendon: Not because I do not want to, but I fear that at this stage I may lose and there is too much money at stake for sub-postmasters for me to jocularly say, "I shall test the opinion of the Committee". I feel that we may be doing enormous damage to those who have invested their lives in sub-post offices throughout the country. Rural areas have enough problems with lack of transport and all those other difficulties mentioned by my noble friend.
My concluding speech has been rather long. That may be why Members of the Committee opposite felt it necessary to laugh when I said that I did not intend to divide the Committee. But I want the message to go out loud and clear to sub-postmasters throughout the country that we tried and fought for them, as did some Members opposite. Unfortunately the Government turned us down. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 95 and 96 not moved.]
Baroness Byfordmoved Amendment No. 97:
Page 61, line 31, at end insert—
("( ) A scheme under this section must provide for payments under the scheme to be made subject to conditions specified in or determined under the scheme enabling payments of any benefit to which section 5 of the Social Security Administration Act 1992 applies to be made at a public post office to which the scheme applies—

(a) in cash:

(b) in a manner which ensures the identification of the recipient: and

(c) to a designated proxy of the recipient.").

The noble Baroness said: I thank the Minister for his comments. Like my noble friend Lady Miller, I find much of what he had to say merely a repetition of the arguments and not an answer to some of my specific points. I shall go away and read Hansard carefully. I hope that between now and the next stage we will obtain more information.
There is no difference between my noble friend and myself. At no stage did I indicate that we felt that the method of payment of benefit should continue as it

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was. What the Minister picked up on was the fact that I was trying clearly to identify the cost of the scheme. There has been no answer at all to that.
Perhaps I may make one or two further points. Like my noble friend, I was somewhat concerned— I am happy it is recorded —that Members of the Committee opposite found it funny that we pursued this matter to the depths that we have. I suggest that some of them, especially the noble Lord, Lord Clarke of Hampstead, have been valiant in trying to put forward the practical reasons for chasing this matter. There is no point in having a wonderful Post Office, which can do so many things, if the one thing it needs to do, but cannot, is enable people to draw their money from its many branches. I shall not repeat my arguments.
I hate to say it, but I accept that some post offices closed during our time in government. However, the increase in closures has been frightening this past year. Those noble Lords who jest about it need to look at the figures; I gather that there were about 500 this past year.
Those people who run sub-post offices do not do so for the good of their health; they are small individual businesspeople. The Government are supposed to be joined-up thinkers and are supposed to be for individual and small businesses. They are not helping small businesses. Indecision is really the reason for the amendment. My noble friend touched on that.
I went to the rally at the Central Methodist Hall, which was packed. Earlier that morning some of those attending had delivered what was considered to be the biggest petition (3,125,000 plus signatures) relating to the concern being expressed by people with regard to sub-post offices, those who run them and those who actually use them. That is no jesting matter. That is actually very serious.
I shall not press the noble Lord further. I had hoped that he would have given better answers to my questions. As I said earlier, I am not against moving forward and neither are the people who run the sub-post offices. However, they run small businesses; they need to plan for the future. They do not look to subsidy, but perhaps because of what the Government are doing they will need some form of subsidy. We return to where we started; that is, waiting for a report which has been in gestation for longer than I think noble Lords would wish. I should be glad of a response to my remarks before deciding what to do with my amendment, Amendment No. 97.
I believe that the Minister mentioned that the way in which payments might be organised, not necessarily be through the sub-post-offices, but might—
Lord Carter: I know that the noble Baroness feels very strongly about the issue and I understand that. However, I believe that she is not actually moving her amendment. Is that correct?
Baroness Byford: I have not decided yet.
Lord Carter: Have we reached this amendment on the Marshalled List? Is the noble Baroness moving her amendment?
Lord Skelmersdale: Perhaps I can help the Chief Whip and my noble friend Lady Byford. I agree with
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the Chief Whip that my noble friend has now spoken for so long that she really has to move her amendment in order to withdraw it at the conclusion of her remarks. Clearly, she has not come to the end of them, and I suggest that the Committee let her get on with it.
Baroness Byford: I am sorry; I thought I had moved it at the beginning.
Lord Carter: In asking the noble Baroness to move her amendment that does not mean that she has to vote on it.
Baroness Byford: I apologise to the Committee and particularly to the Chief Whip. I am speaking to the amendment, which I have moved. With hindsight, I apologise. I am 10 minutes too late in what l should have done.
I should be grateful if the Minister could answer my question. In response to the earlier debate, he indicated that it might not be the Post Office which organises welfare benefit payments, but that it might be the commission or the Countryside Agency. Could the Minister tell me whether there have been any contact or negotiations with that agency? I beg to move.
Lord Sainsbury of Turville: There are two issues involved. One is the subsidy issue. I hope I have made clear that, if we have a subsidy scheme, it has not been decided who it would be. Therefore, there have been no discussions with the various bodies. As there are alternative bodies, it might not be sensible at this point to say that it would be done through the commission.
Baroness Byford: I thank the Minister for that response. Could I ask him why he particularly mentioned the Countryside Agency?
Lord Sainsbury of Turville: I was simply trying to illustrate the kind of body which might be considered in these circumstances, given their experience. That is not the same as saying, "We have had discussions". It simply illustrates that at this stage there are a range of bodies, and the Countryside Agency is one of them.
Baroness Byford: I thank the Minister for his response. I clearly do not want to take up any rnore of the Committee's time. I thank the noble Lord, Lord Clarke, for his contribution to our discussions. It does not remove my commitment to what I believe is causing many people great concern. I shall look at Hansard very carefully. I hope that, in the meantime, the Government—if not the Minister, perhaps the noble Baroness, Lady Hollis—will provide more answers to our questions before the next stage. With those comments, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 98 to 101 not moved.]
Clause 102 agreed to.
6.45 p.m.
Lord Sainsbury of Turvillemoved Amendment No. 102:
After Clause 102, insert the following new clause—
INVIOLABILITY OF MAILS
(" . — (1) Subsection (2) applies to—

(a) a postal packet,

(b) anything contained in a postal packet, and

(c) a mail-bag containing a postal packet,

which is not the property of the Crown but which is in the course of transmission by post.
(2) Anything to which this subsection applies shall have the same immunity from—

(a) examination, or seizure or detention, under a relevant power conferred by virtue of this Act or any other enactment,

(b) seizure under distress or in execution,

(c) in Scotland, any diligence, and

(d) retention by virtue of a lien,

as it would have if it were the property of the Crown.
(3) In subsection (2) "relevant power" means any power other than—

(a) a power conferred by section 47 so far as it is exercised for any purpose connected with the investigation of an offence under section 6 or any proceedings for such an offence,

(b) a power conferred under section 49,

(c) a power conferred by an enactment relating to customs or excise in its application, by virtue of section 103 or any regulations made under that section, to goods contained in postal packets, or

(d) a power conferred by section 104 or 105.

(4) The Secretary of State may by order modify subsection (3).").
On Question, amendment agreed to.
Clause 103 [Application of customs and excise enactments to certain postal packets]:
Lord Sainsbury of Turvillemoved Amendment No. 103:
Page 62, line 20, leave out ("other country") and insert ("country or territory outside the United Kingdom").
The noble Lord said: This group of amendments includes a number of minor drafting amendments to the Bill; the extension of certain provisions in the Bill to the Isle of Man and the Channel Islands; and an amendment to enactments and repeals of existing legislation. I beg to move.
On Question, amendment agreed to.
Baroness Miller of Hendonmoved Amendment No. 104:
Page 62, line 25, at end insert—
("( ) Nothing in this section or any of the enactments referred to in subsection (1) shall be taken to authorise the imposition of any obligation upon a particular postal operator or class of postal operators in a manner which—

(a) imposes an undue financial or administrative burden on that postal operator or class of postal operators; or

(b) otherwise distorts competition in the provision of postal services.").

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The noble Baroness said: This is a short probing amendment. I hope that the Minister is able to give me some information because it is a very important matter. Its purpose is to elicit from the Government a clear commitment that when applying any Customs legislation the Customs and Excise will provide a level playing field among postal operators, either providers of a universal postal service or licensees. There has to be a guarantee that competition will not be distorted, either accidentally, or deliberately by selectively imposing controls and regulations on certain operators or certain classes of operators.
No VAT is paid on postage by the sender of mail. VAT is paid by the courier services on their charges for domestic and EU movements, although international movements are free of VAT. I am not advocating the charging of VAT on postage, or the reduction of VAT levied on the courier companies, even if any of them become licensees or universal postal service providers. That is something that they have hitherto had to contend with and have none the less been able to compete with the Post Office. However, there is what the industry itself describes without exaggeration as a potential disaster looming in the United Kingdom parcel industry.
With effect from July— just over a year away from now—Customs and Excise intend to introduce a new electronic export system, which will completely change how parcel operators will be required to work. At present, they are using a paper-based system. Shipments are keyed into a computer and shipping manifests are then printed out. These printed manifests are presented to Customs at the export airport. Customs scan the manifests, select anything that they want to examine, and allow the rest to go on their way. Then within 14 days the shipping company has to provide a detailed schedule for schedulef for all shipments valued valued at more than £600.
The drastic change that Customs are proposing is that all shipments will have to be declared pre-shipment to the Government's computer. There is also a proposal for the declaration to include an eight-digit tariff code. That is not to be mandatory— at least, not for the moment— but Customs and Excise have said that without it the clearance of shipments may be delayed to allow for manual scrutiny of the data. Therefore, in order to obtain quick clearance— or, putting it another way, to avoid the delay of shipments— highly skilled staff will be required to select the correct code for each item out of thousands of possible codes and to import them on to the forms. I should tell the Minister that I was faxed such a form and believe that it would be a nightmare to deal with it all properly.
It involves every item that is being exported. The encoding will in any case delay dispatch and mean that very late pick-up from customers will become impractical, resulting in a much poorer service. In addition, a message will have to be sent for every shipment when the goods arrive at the airport, followed by a later one when the goods have gone on. And, as though that is not enough, a full declaration has to follow, with details of high-value shipments.

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The industry claims that this massive increase in red tape will be catastrophic, first, on the ground of cost. Each declaration will cost approximately 20p per item. That is because, in order to comply with the demands of Customs and Excise, carriers will need to create an export brokerage department to make the entries and to include the tariff codes. Secondly, no shipments will be able to move from warehouse to airport, or from airport onwards, until positive clearance has been received from the Customs computer. Keying in that information will take a considerable amount of time, thus delaying all the traffic and necessitating an earlier pick-up.
The four major operators in this field estimate that to implement and operate the new system will cost them no less than £5 million a year. And that is without counting the cost of lost business if the carriers have to pick up earlier in the day and the delay while all the data is entered on to the computers.
The industry provides a vital service in the form of guaranteed deliveries of time-sensitive material—for example, material dispatched from the United Kingdom to reach destinations in the USA the next morning by the start of their working day. The point is that this procedure, with all the risks of delay, does not now and will not in the future apply to the Post Office or to Parcelforce. In other words, the Bill, which is to create competition, will be anti-competitive in this area.
The dice are being deliberately loaded against the independent operators. The excess cost and delay will inevitably fall on our exporters to the detriment of the economy. Furthermore, some of the smaller operators will have to go out of business because of the cost, the problem of recruiting skilled staff and the disproportionate management burden that the new system will impose upon them.
It is difficult to see to what end the requirement is directed, except to enable Customs and Excise to claim that they have modernised—and that seems to be an in-word. During our debates on the Bill we have spoken of competition and I know that Members of the Committee will accept that we have done our best to protect the Post Office in those areas in which it should be protected. The previous amendment showed that most clearly. However, the other side of the coin is to make it competitive for other operators to come in, and to benefit the Post Office, too, so that they can compete with postal companies across the world. But with obligations on one side and not on the other, that is difficult.
I cannot see that the provision would produce an extra penny in revenue or detect one extra restricted export. Customs and Excise have recently stated that under the new system there will be no more examinations than under the current system of spot checks. Customs and Excise will continue to depend on what the dispatching company tells them its customers have told it. The fact is that at the moment the Post Office enjoys exemption from these declarations, or a more favourable regime in relation to them. And it will continue to do so. It is being given
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an unfair advantage; that is, a reduction in costs and the possibility of avoiding delay which the present independent operators will have to put up with.
The amendment, which I have described as probing, requires a specific answer to the specific problems that I have outlined. I and the industry, which is vital to our export trade, await to hear what the Government will do to prevent it being severely harmed for no other purpose, it would seem, than to facilitate the administrative procedures of the Customs and Excise. Perhaps the Minister will explain that and why the requirement should not apply to everyone or to no one. I beg to move.
Lord Borrie: The noble Baroness, Lady Miller of Hendon, has made a powerful case which needs an answer. I naturally prick up my ears when I hear the phrase "distortion of competition" and there appears to be a legitimate concern. However, because both the noble Baroness and I are so keen to hear the answer, I shall not stand further in the way of the Committee hearing the Minister's response.
Lord Sainsbury of Turville: Customs have no wish to impose undue financial or administrative burdens on anyone or distort competition. However, it must be recognised that the nature of the business and the type of traffic of a particular postal operator in the future may be very different from traditional postal traffic as currently handled by the Royal Mail and Parcelforce. For example, a good proportion of international postal packages are gifts between family members where delivery is not usually time critical. There is a big difference between this and regular commercial traffic paying a premium rate for speedy delivery.
Operators might well be upset if Customs decided to treat the two types of traffic in exactly the same way. Customs must have the freedom to vary the arrangements to meet the needs of the traffic and to deal with the different risks posed.
This is an international issue. A study by the World Customs Organisation, the Universal Postal Union and the International Express Carriers Conference is currently being undertaken to compare the procedures for postal and express carrier traffic. We need to await the outcome of that study.
Furthermore, it is not at all clear that there is unfair treatment and that a competitive advantage is being given to the Post Office. Express parcel operators have a major advantage in terms of speed of clearance. Their packages are cleared automatically unless Customs decide to examine particular items. Customs clearance is nearly always achieved within one hour. At postal depots dealing with Post Office mail, clearance of chargeable packages normally takes several hours and can take up to two or three days.
However, the subject is one of importance and we would not want to be unfair. Perhaps, therefore, I may take these detailed points away, discuss them with the Customs and Excise and write to the noble Baroness as soon as possible.
The Earl of Caithness: Before my noble friend withdraws her amendment, will the Minister take his

1821
answer a little further? He said that a report is being prepared and that we should await the outcome. When is the outcome due? If it is after the passing of the Bill, perhaps we should get on with the report now.
Lord Sainsbury of Turville: I cannot give a time. The work is being undertaken, but I was not suggesting that it would provide the answer. I was saying merely that it is an international problem and that there are differences between the two classes of business. For that reason, I believe that we should treat them differently. Whether the treatment given was fair was the issue I took away from the comments of the noble Baroness, Lady Miller, and it is that about which I shall speak to Customs and Excise: as to whether the current system appears to be fair.
Baroness Miller of Hendon: I thank the noble Lord, Lord Borrie, for his support of my amendment, and the support of my noble friend, requiring an answer from the review which is taking place. I am grateful for the answer and am satisfied that the noble Lord will take it up with Customs and Excise to find out why this is happening. It is to be hoped that that will resolve the problem. If not, of course, I can bring the matter back. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sainsbury of Turvillemoved Amendment No. 105:
Page 62, line 29, after ("concerned") insert ("and in England and Wales and Northern Ireland may be so recovered").
On Question, amendment agreed to.
Clause 103, as amended, agreed to.
Clause 104 agreed to.
Clause 105 [Conditions of transit of postal packets]:
Lord Bachmoved Amendments Nos. 106 to 109:
Page 63, line 27, leave out ("if necessary,").
Page 63, line 27, leave out ("in the post office").
Page 63, line 29, at end insert—
("( ) destroy or otherwise dispose of the packet.").
Page 63, line 29, at end insert—
("( ) Subsection (1) is without prejudice to any other powers which the postal operator may have in relation to the packet (whether under the terms and conditions applicable to its transmission by post or otherwise).").
On Question, amendments agreed to.
Clause 105, as amended, agreed to.
Clauses 106 to 108 agreed to.
Lord Bachmoved Amendments Nos. 110 to 112.
After Clause 108, insert the following new clause—
("Postal and money orders
EXCLUSION OF LIABILITY IN RELATION TO POSTAL AND MONEY ORDERS
— (1) No proceedings shall lie or, in Scotland, be competent against the Post Office company for any loss or damage as a result of—

(a) a refusal by the Post Office company to pay a postal or money order which has been issued by it or a foreign postal administration, or

(b) a delay by the Post Office company in paying any such order.

(2) Where a postal or money order issued by the Post Office company is presented for payment in the United Kingdom by a banker to whom it has been delivered for collection, payment of the order to the banker discharges it.
(3) Where a relevant uncrossed order issued by the Post Office company is presented for payment in the United Kingdom otherwise than by a banker to whom it has been delivered for collection, payment of the order to the person by whom it is presented discharges it.
(4) A postal or money order issued by the Post Office company is discharged by the payment of the order outside the United Kingdom in accordance with arrangements made by the Post Office company in that regard.
(5) Where a postal or money order issued by a foreign postal administration is paid by the Post Office company to a banker to whom it has been delivered for collection on behalf of a person other than the true owner of the order, the Post Office company shall not be liable to the true owner of the order by reason of having paid it to the banker.
(6) Where a relevant uncrossed order issued by a foreign postal administration is presented to the Post Office company for payment otherwise than by a banker to whom it has been delivered for collection or the true owner of the order, payment of the order by the Post Office company to the person presenting it shall not make the Post Office company liable to the true owner of the order.
(7) Any person acting as a banker in the United Kingdom who, in collecting in that capacity for any principal, has received payment from the Post Office company in respect of any postal order, or any document purporting to be a postal order, shall not incur liability to anyone except the principal by reason of having received the payment or having held or presented the order or document for payment.
(8) Subsection (7) does not relieve any principal for whom any such order or document has been so held or presented of any liability in respect of his possession of the order or document or of the proceeds of the order or document.
(9) In this section "relevant uncrossed order" means—

(a) an uncrossed postal or money order which—

(i) is expressed to be payable to a person specified or described in the order, and

(ii) is signed by or on behalf' of that person or purports to be so signed, or

(b) an uncrossed postal order which is not expressed to be payable to a person specified or described in the order.

(10) In this section and section (Recoupment of losses on wrongly paid money orders) "banker" includes a body which carries on the business of banking.").

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After Clause 108, insert the following new clause—
SCHEMES IN RELATION TO POSTAL AND MONEY ORDERS
("— (1) The Post Office company shall not issue postal or money orders otherwise than in accordance with a scheme under this section.
(2) The Post Office company may make a scheme under this section in relation to—

(a) the issue by it of postal or money orders,

(b) other services provided by it in connection with postal or money orders (whether orders issued by it or otherwise).

(3) A scheme under this section is a scheme for determining any or all of the following (so far as not otherwise agreed) —

(a) the charges which are to be imposed in respect of the services concerned,

(b) the other terms and conditions which are to be applicable to the services concerned, and

(c) procedures for dealing with the complaints of persons who use the services concerned.

(4) A scheme under this section may, in particular—

(a) adopt such system for the determination of the charges and other terms and conditions as the Post Office company considers appropriate (including determining them itself subject to any conditions and limitations provided for in the scheme),

(b) provide for the non-payment by the Post Office company after t he end of a specified period, except on satisfaction of specified conditions, of a postal or money order issued by that company or a foreign postal administration,

(c) specify the manner in which, time and place at which and person by whom the charges are to be paid.

(5) No provision may be made in any scheme under this section—

(a) for limiting the liability of the Post Office company for loss or damage, or

(b) for amending the rules of law relating to evidence.

(6) A scheme under this section shall come into force on such day as is specified in the scheme; but no day earlier than the day after that on which the scheme has been published in the London, Edinburgh and Belfast Gazettes shall be so specified.
(7) A scheme under this section may—

(a) make different provision for different cases or classes of case determined by, or in accordance with, the provisions of the scheme,

(b) modify any previous scheme made under this section.

(8) Any charge payable by virtue of this section may be recovered by the Post Office company and in England and Wales and Northern Ireland may be so recovered as a civil debt due to it.
(9) The production of a copy of any of the Gazettes mentioned in subsection (6) which purports to contain a scheme under this section shall be conclusive evidence in all legal proceedings of that scheme.
(10) The Secretary of State may by order modify this section.")
After Clause 108, insert the following new clause—
RECOUPM ENT OF LOSSES ON WRONGLY PAID MONEY ORDERS
("— (1) Subsection (2) applies where—

(a) a money order issued by the Post Office company or a foreign postal administration has been delivered for collection to a banker, and

(b) the Post Office company has paid the order to the banker when it should not have done so.

(2) The sum paid may be deducted from sums subsequently falling to be paid by the Post Office company to the banker by way of payment of money orders so issued which have been delivered to the banker for collection.").
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On Question, amendments agreed to.
[Amendment No. 113 had been withdrawn from the Marshalled List.]
Lord Bachmoved Amendment 113A:
After Clause 108, insert the following new clause—
SPECIAL ARRANGEMENTS WITH OTHER COUNTRIES OR TERRITORIES
("— (1) References in sections (Exclusion of liability in relation to postal and money orders) (other than subsection (4)). (Schemes in relation to postal and money orders) and (Recoupment of losses on wrongly paid money orders) to money orders issued by the Post Office company shall be construed as including references to special money orders issued by that company.
(2) For the purposes of subsection (1) special money orders are orders for the payment of money in the United Kingdom which are issued by the Post Office company in pursuance of an arrangement made with a government or postal administration of any other country or territory for the transmission, by means of orders for the payment of money, of sums of money through post offices under the charge of the Post Office company and the postal administration of the other country or territory.
(3) The reference in section (Schemes in relation to postal and money orders)(2)(b) to money orders shall be construed as including a reference to orders for the payment of money issued in pursuance of an arrangement of the kind mentioned in subsection (2) above by the postal administration of the other country or territory.").
On Question, amendment agreed to.
Clauses 109 and 110 agreed to.
Lord Sainsbury of Turvillemoved Amendment No. 114:
After Clause 110, insert the following new clause—
RECORDS OF THE FORMER POSTMASTER GENERAL'S DEPARTMENT
("— (l) The Secretary of State may by order vest in the Post Office company such records of the department of the Postmaster General as—

(a) belong to Her Majesty in right of Her Majesty's Government in the United Kingdom, and

(b) are specified in or described by- the order.

(2) The Secretary of State may give such directions to the Post Office company as he considers appropriate for ensuring that any records so transferred to the Post Office company are available to the Crown for inspection and copying.").
The noble Lord said: In moving Amendment No. 114, I speak also to Amendment No. 129. The new clause will recreate a power similar to that in Section 75(2) of the Post Office Act 1969 to enable the Secretary of State by order to vest in the Post Office company the property in the pre-1969 records of the Postmaster General and to give directions to the Post Office company in respect of making those records available to the Crown for inspection and copying. The order-making power in Section 75(2) of the 1969 Act has never been exercised, and so the vesting of the pre-1969 records remains an outstanding matter from the 1969 Act. As the Secretary of State would wish to consult before exercising such power, its provision is being carried forward in the Bill in order to preserve the Government's current position under the existing legislation.

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The second amendment will bring both the new Consumer Council for Postal Services and the Post Office company within the scope of the Public Records Act 1958 when those bodies come into existence. It carries forward existing policy whereby the Post Office corporation and the Post Officer Users' National Council are subject to the provisions of the Public Records Act. I beg to move.
On Question, amendment agreed to.
Clause 111 agreed to.
Schedule 7 [Disclosure of information]:
Lord Bachmoved Amendments Nos. 115 to 117:
Page 91, line 6, after ("State") insert (", the Treasury")
Page 93. leave out line 8.
Page 93, line 12, at end insert—
("( ) Sub-paragraph (1) is without prejudice to any other exception to paragraph 1(2).").
On Question, amendments agreed to.
Schedule 7, as amended, agreed to.
Clauses 112 and 113 agreed to.
Clause 114 [Orders and regulations]:
Lord Bachmoved Amendments Nos. 118 to 124:
Page 67, line 16, leave out ("or 101") and insert (", 101 or 121").
Page 67, line 20, leave out ("or").
Page 67, line 20, after (" 93") insert ("or (Inviolability of mails)(4)").
Page 67, line 20, after (" 93") insert ("or (Schemes in relation to postal and money orders)(10)").
Page 67, line 23, leave out subsection (5).
Page 67, line 32, after (" 101") insert (", (Inviolability of mails)(4)").
Page 67, line 34, after (" 102") insert (", (Schemes in relation to postal and money orders)(10)").
On Question, amendments agreed to.
Clause 114, as amended, agreed to.
Clauses 115 and 116 agreed.
Clause 117 [Interpretation]:
Lord Bachmoved Amendments Nos. 125 and 126.
Page 68, line 13, at end insert—
(""body" includes an unincorporated association,")
Page 69, line 13, after ("collecting") insert (", sorting").
On Question, amendments agreed to.
Clause 117, as amended, agreed to.
Clause 118 [Index of defined expressions]:
Lord Bachmoved Amendment No. 127:
Page 70, line 19, at end insert—
("Body Section 117(1)")
On Question, amendment agreed to.
Clause 118, as amended, agreed to.
Clause 119 [General amendments and repeals]:
Lord Bachmoved Amendment No. 128:
Page 71, line 24, at end insert—
("( ) Any amendment by that Schedule of an enactment comprised in subordinate legislation is without prejudice to any power to make further subordinate legislation modifying the amended enactment.").
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On Question, amendment agreed to.
Clause 119, as amended, agreed to.
Schedule 8 [Amendments of enactments]:
Lord Bach: I now wish to move Amendments Nos. 129 to 135.
Lord Skelmersdale: The noble Lord is a little previous and over-eager because one of those amendments stands in my name. Although we debated it earlier, the Government certainly do not want to accept it. Perhaps the Minister would like to rephrase his words.
Lord Bach: I thought it was worth a try!
Lord Bach moved Amendments Nos. 129 and 130:
Page 93, line 24, at end insert—
("Public Records Act 1958 (c.51)
.In Schedule 1 to the Public Records Act 1958 (definition of public records), in Part II of the Table which is at the end of paragraph 3, there shall be inserted at the appropriate places—
"Consumer Council for Postal Services"
"Post Office company (within the meaning of Part IV of the Postal Services Act 2000)."").
Page 93, line 29, at end insert—
(". In that Schedule to that Act the reference to the Postal Services Commission shall be construed as a reference to the Commission established by section 1 of this Act.").
On Question, amendments agreed to.
[Amendment No. 131 not moved.]
Lord Bachmoved Amendments Nos. 132 to 135:
Page 94, line 12, at end insert—
(". In Part II of Schedule 1 to the Act of 1975 the reference to the Postal Services Commission shall be construed as a reference to the Commission established by section 1 of this Act.").
Page 95, line 25, at end insert—
("Value Added Tax Regulations 1995 (S.1.1995/2518)
. In regulation 2 of the Value Added Tax Regulations 1995 (interpretation) in the definition of "datapost packet" —`

(a) for the words "the Post Office" there shall be substituted "the Post Office company",

(b) after "a post office" there shall be inserted "of the Post Office company", and

(c) after "United Kingdom", where it appears for the fifth time, there shall be inserted "by that company".").

Page 95, line 41, at end insert—
("Local Government and Rating Act 1997 (c.29)
. In Schedule 2 to the Local Government and Rating Act 1997, in paragraph 3(4)(a) (relief from non-domestic rates for rural post offices) for the words from "the Post Office" to "1953)" there shall be substituted "a universal service provider (within the meaning of the Postal Services Act 2000) and in connection with the provision of a universal postal service (within the meaning of that Act)".").
Page 95, line 41, at end insert—
("Postal Services Regulations 1999 (S.I. 1999/2107)
. In Regulation 2(1) of the Postal Services Regulations 1999 (designation of Secretary of State and Postal Services Commission as national regulatory authorities for the postal sector in the United Kingdom) the reference to the Postal Services Commission shall be construed as a reference to the Commission established by section 1 of this Act.").

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On Question, amendments agreed to.
Schedule 8, as amended, agreed to.
Schedule 9 [Repeals and revocations]:
Lord Bachmoved Amendments Nos. 135A to 138:
Page 96, line 3, at end insert—

("10 & 11 Geo.5 c. 75.

Official Secrets Act 1920.

Section 5.")

Page 96, column 3, leave out lines 4 to 13 and insert ("The whole Act.").
Page 96, leave out lines 14 to 18.
Page 96, line 18, at end insert—

("1967 c.13.

Parliamentary the Commissioner Act 1967

In schedule 2, the entries relating to the Post Office Users' Council for Northern Ireland, the Post Office Users' Council for Scotland, the Post Office Users' Council for Wales and the Post Office Users' National Council.")

On Question, amendments agreed to.
7.15 p.m.
Lord Skelmersdalemoved Amendment No. 139:
Page 96, line 22, column 3, leave out ("Sections 6 to") and insert—.
(" Section 6.
Section ")
The noble Lord said: I had hoped that I would not have to move the amendment, having been persuaded by the Government Chief Whip. However, in discussion on the matter earlier, I failed to pick up a point to which I should have known the answer. Since the Minister is going to write to me, rather than waste time today, perhaps he will reply to this point in the same letter.
The point in question is that Section 6(4) of the Post Office Act 1969, which is repealed by Schedule 9, authorises Schedule 1 to the 1969 Act. It is all very well to repeal the authorising section but the schedule will be a rogue animal on the statute book. Should not it be removed too? I beg to move.
Lord Sainsbury of Turville: I shall be happy to write to the noble Lord on this technical point.
Lord Skelmersdale: I thank the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bachmoved Amendments Nos. 140 to 143:
Page 96, line 32, column 3, leave out ("Section 74(2).") and insert—
("Sections 69 to 75.
Sections 80 and 81.")
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Page 96, line 33, column 3, at end insert —
("Section 87.")
Page 96, line 35, column 3, at end insert—
("Schedules 1 to 3.")
Page 96, line 47, column 3, leave out ("Postal Services") and insert ("Post Office").
On Question, amendments agreed to.
[Amendment No. 144 not moved.]
Lord Bachmoved Amendments Nos. 145 and 146:
Page 97, column 3, leave out lines 46 to 50 and insert—
("In Regulation 1(3), the definitions of "the 1969 Act" and "the 1981 Act". Regulation 2(2) and (3).")
Page 97, line 52, column 3, leave out ("Regulation 4.") and insert ("Regulations 4 to 6.").
On Question, amendments agreed to.
Schedule 9, as amended, agreed to.
Clauses 120 and 121 agreed to.
Clause 122 [Commencement]:
Lord Bachmoved Amendment No. 147:
Page 71, line 43, leave out (" 108") and insert ("(Special arrangements with other countries or territories)").
On Question, amendment agreed to.
Clause 122, as amended, agreed to.
Clause 123 [Short title and extent]:
Lord Sainsbury of Turvillemoved Amendment No. 148:
Page 72, line 6, at end insert—
("(4) Sections 119(l) and 121 and this section, together with sections 114 and 117 so far as they relate to those provisions, extend to the Isle of Man and the Channel Islands (in addition to any provisions of this Act which so extend by virtue of subsection (2) above).").
On Question, amendment agreed to.
Clause 123, as amended, agreed to.
House resumed: Bill reported with amendments.
Lord Carter: My Lords, I am sure noble Lords are aware that my noble friend Lord McIntosh of Haringey is to move the Second Reading of the Television Licences (Disclosure of Information) Bill. As I speak my noble friend is in the Moses Room. He is capable of many things, as we know, but being in two places at once is not one of them. I think that it has been understood that we shall adjourn for pleasure for 10 minutes, until 7.25, so that the business in the Moses Room can be completed. We shall then continue with business in the Chamber. I beg to move that the House do adjourn during pleasure.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.15 to 7.25 p.m.]

Television Licences (Disclosure of Information) Bill
7.25 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time.
The Government are introducing free television licences for people aged 75 years or over from 1st November 2000 to help a section of the community, many of whom depend on television as their main source of information and entertainment. Older pensioners are more likely to be in poor health or socially isolated. They are also more likely to be on low incomes.
This initiative will free over 3 million households from the need to budget for their television licence fee, currently £104 for a colour television licence.
The process for claiming a free licence is not, and cannot be, as simple as might at first appear. Many over-75s do not have the necessary documentation to prove entitlement to the concession. The concession is intended to apply to people aged 75 or over for their principal residence. The structure of the scheme needs to incorporate precautions to limit the concession to those for whom it is intended and to safeguard public funds. The arrangement needs to be as simple and as streamlined as possible to minimise administrative costs and to avoid unnecessary burdens on genuine claimants.
The most efficient way to operate this concession is for the Department of Social Security and, in Northern Ireland, the Department for Social Development, to make available to the BBC certain limited information about people who are, or will shortly become, eligible for the concession. The information also needs to be made available to third parties providing services to the BBC in connection with the issue of television licences. This information will be used to set up a database, against which the BBC can check applications for free licences, short-term licences, and refunds on unexpired licences. This Bill is required to authorise the disclosure of such information. Clause 1 will give the Secretary of State— in practice, the Department of Social Security— and, in Northern Ireland, the Department for Social Development, the legal authority to supply information of prescribed kinds to the BBC.
The information that can be provided to the BBC must be prescribed by order. Under Clause 6, any order will be subject to the negative resolution procedure, offering the opportunity for parliamentary scrutiny of any proposals.
The Government intend to prescribe only a narrow range of information which can be supplied to the BBC; namely, the age, date of birth, address and national insurance number of persons aged 74 or over. An order will also enable the DSS and the Department for Social Development to disclose to the BBC the fact that a person has died.
Clause 6 enables different provision to be made for different cases. This provides for flexibility and precision in the making of orders.
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We understand concerns about the data protection and privacy implications of disclosing information of this kind to an outside body for purposes other than those for which it was originally obtained. The question of the security of the information is, we believe, fully addressed by the safeguards built into the Bill, to which I shall come shortly.
The Government have considered whether the Bill complies with the European Convention on Human Rights and, in particular, Article 8 which relates to privacy. Our legal advice is that the disclosure of the kind of information which we propose the DSS should supply to the BBC may not engage a person's rights under Article 8 because such basic information is not an interference in a person's private life for the purposes of the convention. But even if the rights enshrined in Article 8 were affected, we believe that what we propose would be justifiable under Article 8(2) as a proportionate response to a legitimate aim; namely, to set up an efficient but not unduly burdensome system of administration that provides the necessary protection against issuing free licences in response to mistaken or fraudulent applications.
If the BBC had to operate this concession without the information we propose: first, every claimant would have to produce documentary proof of age, in addition to a completed application form, and as we know, many would be unable to do so, and would have to obtain the documentation before they could apply; and secondly, claimants would have to reapply each year, as the BBC would have no other means of knowing they were still alive and at the same or any other address.
Without the proposed information, the concession would also need to be policed more actively. We know from complaints about the existing enforcement arrangements that many people would regard that as unacceptably intrusive. In addition, without this information, the concession would be much more difficult and expensive to administer. We have been informed by the BBC that the concession could not be implemented on 1st November, as proposed, without the proposed information.
Requiring the BBC to clear claims with the DSS and the Department for Social Development has been suggested as a possible solution but is not, in our view, a realistic option. It would still require primary legislation since the verification process itself would entail the disclosure of information. It would involve considerable duplication of effort and cost by the BBC and government departments; and it would delay the processing of claims, by requiring applications to be handled several times over instead of just once.
The Government accept the need to ensure that information of this kind is used only for the purposes for which it has been provided. Under Clause 2, the information may be used only in connection with television licences for which no fee is payable or for reduced-fee licences. The reference to reduced-fee licences provides flexibility in case further concessionary schemes are introduced. The Bill does

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not allow the BBC to use the information to administer any scheme, existing or new, unless an order is made designating the scheme.
Clause 3 of the Bill protects the information supplied to the BBC by creating an offence of disclosing such information without lawful authority. An offence can be committed by any recipient of the information—for example, the BBC or one of its contractors—or anyone who works, or has worked, for such a recipient. The offence extends to companies, including the BBC, to past as well as present employees, and to staff working under other arrangements, such as self-employed people engaged on a consultancy basis.
The maximum penalty, on indictment, is imprisonment for up to two years and an unlimited fine, or both.
Clause 4 of the Bill was introduced by the Government in another place, in response to concerns that the offence of unlawful disclosure, as originally formulated, did not extend to company directors. The Government considered the matter and concluded that it was right to strengthen the protection afforded to sensitive information of this kind and that this could be achieved if there was a possibility of personal criminal liability for directors.
Clause 4 therefore provides that, if an offence by a body corporate is shown to have been committed with the consent or connivance of an officer, or to be attributable to any neglect on his or her part, that person as well as the company is guilty of the offence and so liable to be prosecuted. This will bring the treatment of company directors, in cases of unlawful disclosure, into line with the provisions of the Social Security Administration Act 1992 in relation to DSS contractors.
This Bill will enable the application procedure for a free television licence to be greatly simplified and will benefit both the over-75s and the taxpayer. TV Licensing will send out details of the concession to all households over the coming months, inviting anyone who is over 75 to apply for the concession. Claimants will simply complete and return the form. Applications will be checked against the information to be provided to the BBC under the provisions of this Bill. It will be possible to issue a free licence on the basis of such an application in most cases, with no further effort on the part of the applicant. Additional information will need to be sought only if there is a discrepancy between the information provided in the application form and that held by the BBC. I commend the Bill to the House.
Moved, That the Bill be now read a second time.— (Lord McIntosh of Haringey).
7.34 p.m.
Baroness Anelay of St Johns: My Lords, I must admit that on this side of the House we are beginning to wonder whether the noble Lord, Lord McIntosh of Haringey, can do just about anything in this world. We have finally found out that there is one thing he cannot do; that is, to he in two places at one time. Earlier this evening, the House was asked to submit to an
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innovative procedure by which the Sitting was suspended for 10 minutes to enable the noble Lord to reach this Chamber from the Moses Room. I am delighted to see him here, but I should be all the more delighted if in future government business was so ordered that it did not put such a strain on him by necessitating his presence in two places at once. However, I have particular reason to be grateful to the Minister to which I shall come in a few moments.
First, I shall respond to the Government's Bill and I shall then explain the reasons why I have sponsored the Private Member's Bill on the Order Paper. The two Bills are being given a concurrent Second Reading this evening for the convenience of the House, although the House may consider that that is less convenient when it appreciates that it will mean that I give a longer speech this evening than I have ever yet given in my three-and-a-half years as a Member of this House. I hasten to add that it will still be shorter than the speeches of many other noble Lords. Two in one does not quite go this evening. But I assure the House that the practice will save time overall and enable the House to debate the Private Member's Bill which covers issues which are closely intertwined with the Government's Bill.
After the debate on the Government's Bill is concluded, I shall then formally move the Second Reading of my Bill but then, with relief, speak no further to it today.
At this stage, I thank the Public Bill Office for working at break-neck speed to write my Bill so that it could be debated today. I thank also the Minister for suggesting this procedure as a possibility and for allowing time for it.
I deal first with the Government's Bill. As the Minister has outlined, it is about the conveyance of information. It gives legality to the plan to allow the BBC to have access to some social security information which is held on every single person throughout the country aged 74 and over. Indeed, the BBC can hold that information on its own database. The Government have decided that that is the system that they want to use to police the concession given to all 75 year-olds so that they may have free TV licences.
In Committee, we shall need to examine how that system will operate to try to make sure that it is as fair and effective as possible. Indeed, the question is whether it is, as the Minister described it this evening, the most efficient system.
Our view is simply that the decision to provide all 75 year-olds with a free TV licence will be welcome to every beneficiary, particularly in the light of the minuscule 75 pence per week increase in the basic state pension which was announced in this year's budget. Of course, we believe that it is laudable to help 75 year-olds but there are better ways of doing it. In another place, my right honourable friend William Hague has outlined the ways in which that should be done. We should leave people with the freedom to make their own choices about how they spend their money provided that they are given a solid, reliable income as their basic pension. There are other times at which it would be right to go into the detail of that.

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The reality is that this Bill will pass and will do so at a time when the basic pension has not been greatly improved. The scheme will operate until the next election at least, so we should try to make sure that it operates in as fair a manner as possible.
But the government order passed this March introduced free licences for those who are 75 and over and, in doing so, made the system even more complex and introduced even more anomalies than had previously existed, anomalies which I hope to remove with the terms of my own Bill with which I shall deal shortly.
Clause 1 of the Government's Bill outlines the kind of information which may be disclosed to the BBC. It is important to note that until now, information on the national insurance database has been made available only to national and local government bodies who are concerned with administering benefits, crime prevention and justice. That is a departure from what has happened before. There is concern about privacy and data protection and the implications of disclosure to an outside body of this information, however reputable the body may be, as the BBC is, of course. But that information is held by government departments for social security purposes.
Concern has been expressed, in particular, about the way in which previously protected information may in future be made available not only to the BBC but, as Clause 1(2) states,
"any person providing the BBC with services in connection with television licences".
I listened with great care to what the noble Lord the Minister said tonight in explanation of that.
It is a wide definition. It clearly means that commercial companies will have access to sensitive information. They need it: indeed the noble Lord said that without this information the BBC simply could not act by the 1st November and get the scheme up and running. That in itself is not an argument for the scheme as it is. The date is a political decision by the Government. One should not simply accept a scheme because of the date having been put in as the start of the scheme. The definition is so wide in referring to providing the BBC's services. Anybody can do that: presumably it even includes the post office counter clerk who physically hands over the licence to the 75 year-old who benefits under this scheme.
The amount of information that may be disclosed brings another concern, because at one and the same time the Government say that Clause 2 places strict limits on the purposes for which the BBC and its contractors are able to make use of the information. Then it goes on in Clauses 5 and 6 to extend the reasons why the information should be passed on to the BBC. I believe that we shall need to explore that further in Committee.
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Clause 3 sets out several measures which are designed to safeguard the security of information that may be disclosed to the BBC and its contractors. After all, in the wrong hands that information could be used to set up benefit fraud and it is important to control that use of information.
In another place, my honourable friend John Greenway identified a problem that the Government have not yet resolved in this Bill; namely, what should happen if there should be accidental disclosure of information simply because an electronic transfer had reached the wrong destination. On another matter regarding Clauses 3 and 4, I was pleased to see that the Government have amended the Bill in another place with a new Clause 4 which extends the offences to include the liability of directors. However, that clause was only introduced at the last minute on Third Reading. It was therefore not possible for the clause to be given as detailed consideration in another place as it would have received at Committee stage.
In that debate my right honourable friend Douglas Hogg raised an interesting point with regard to the word "neglect" in Clause 4(b). I believe we shall need to look further at that in Committee.
The Bill is brief but it introduces a scheme which is complex to operate and may be confusing to many people. It represents a significant departure from the existing licensing arrangements and an unprecedented and unique use of social security information. I look forward to more detailed consideration of the Government's Bill at Committee stage.
Turning to my own Private Member's Bill, which addresses the issue of television licence fees and concessions, I am very much aware that existing licence fee concessions are, by general consent, both unsatisfactory and arbitrary. No party can take any credit at all for improving them. All parties, in some measure, have made the situation more difficult. I am grateful to Abbeyfield and Age Concern—organisations which have great experience of providing accommodation for elderly people—for their helpful briefings on the rules governing concessions, and for highlighting some of the inequities within the system. It was as a result of listening to their expert advice that I was convinced that I should sponsor a Private Member's Bill.
My Bill tries to do two things. First, it attempts to rectify the anomalies introduced this year by the Government and, secondly, to highlight the inequity of other closely related anomalies in the concessions system. The Government's order that went through in March this year raised the cost of the TV licence fee and, at the same time, made two substantive changes to the concession system. First, the television licence fee concession to those in sheltered accommodation was extended so that it would cover all those over 60, instead of discriminating between men and women of pensionable age. Secondly, it provided for free licences for every household in which a person of 75 and over lives.

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I will address first the question of the concessions to those in sheltered accommodation. In another place the Minister for Broadcasting, Janet Anderson, stated that:
"we have removed one small anomaly in situations in which entitlement to the concession is based on housing provision—namely, in the sheltered housing scheme. Previously, strictly speaking, men over 60 in such a development would have threatened the concession for everyone in that development. We have now said that in future the qualifying age for both men and women in such housing will be 60".—[Official Report, Commons, 10/4/00; col.156.]
Of course that should have been a most welcome procedure which everyone should have applauded—but not quite. While that was a perfectly truthful statement by the Minister, it is not the whole picture. Indeed the order can in practice remove from those over 60 who are currently in sheltered accommodation the right to concessions in certain narrowly defined circumstances. In other words, they will lose the concession they are already receiving. I accept of course that the Government had absolutely no intention of causing that to happen I have always matte that clear. The changes that were introduced by the Government were intended to make the system more certain and above all, I believe, to save the BBC from being taken to court for exercising their discretion in what some might have said was an incorrect manner. However, I believe that most would have accepted it was in a useful manner.
I was advised by the TV licensing organisation, who are agents of the BBC, that as a result of the Government's order, if a man aged between the magic ages of 60 and 65—in other words between 60 and 64—lives in sheltered accommodation and also works for 15 or more hours a week, the fact that he works for those hours means that he can no longer be regarded as retired. That, in turn, means that the terms of the order disqualify everybody else in that accommodation from holding a concessionary licence. It just wipes out their right. The BBC can no longer exercise a discretion and people who currently get concessions will lose them.
Are there likely to be cases like this? Yes, most certainly. We are talking about sheltered accommodation, where residents may well enter that accommodation before they are no longer able to work but they want the reassurance and benefits of sheltered accommodation for the future. There are indeed several "good practice" employers like B&Q and Sainsbury's Homebase, who actively recruit older workers. It is therefore possible, nay probable, that the scenario I have described could occur. As soon as I was aware of the problem I alerted the noble Lord the Minister. Unfortunately it was only the day before the debate in this House, and subsequently the Government have taken no further action.
Clause 1(3) of my Bill would make sure that in sheltered accommodation of any kind people who are currently entitled to concessionary TV licences will not lose that right should a man aged 60 to 64, who works 15 hours or more a week, come to live in that sheltered accommodation. I should, however, confess here that
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there was a misprint in Clause 1 (3)(a). It should read "1(b)(i), 1(b)(ii)". Mistakes can creep in everywhere it seems!
The second issue addressed by my Bill is the cost of the TV licence when the television is in a communal room of residential and sheltered accommodation—a TV that is used only by the residents there. I turn first to the situation in sheltered accommodation where there are people aged 75 and above: just that particular group. The Government's introduction of the free TV licence for people who are aged 75 and over with TVs in their own household has highlighted an inequity.
From 1st November this year, if I were aged 75 or over I could have a television licence in my own room in sheltered accommodation, but I cannot have a free TV licence in the common room. It can only be used by me if I am aged 75 or over and everybody else is 75 and over. Are there likely to be such cases? Yes, there are. After all, changes in our life expectancy and quality of life at an advanced age means that in these days it is very common that in sheltered accommodation one finds people who are well over the age of 75. Indeed, Abbeyfield tell me that the average age of residents in their houses is 85.
Abbeyfield is the largest provider of very sheltered accommodation in the voluntary sector. They have around 600 societies in the United Kingdom as whole, managed by about 1,500 volunteers. Almost 600 of the society's houses have residents who are all over the age of 75. That means nearly 9,000 people will be adversely affected in Abbeyfield accommodation alone. In addition, I am told by Methodist Homes that they have about 900 people who will be adversely affected; and Housing 21 will have about 16,000 people affected. That is a minimum, of the people I know about, of some 26,000 who will be adversely affected.
As the law stands now, it is possible to imagine two friends over the age of 75 living next door to one another. One lives in her daughter's house where there are grandchildren, and the other lives next door in an Abbeyfield house. The first friend, the one living in her daughter's house, gets a free TV licence for herself, her daughter, her son-in-law, her children, her grandchildren, her great grandchildren, and all her visitors to come along and watch the television anywhere in the house. The second friend, the one next door in the Abbeyfield house, can have a free TV licence only if she restricts her viewing to the TV in her own room. That really is very odd.
When I tabled a Written Question on this matter, the Government's response was that the change proposed by my Bill would simply introduce yet another anomaly into the system. But at least my anomaly would be for the benefit of the vast majority of people aged 75 and over, whereas the Government's anomaly means that none of them has the benefit.
I appreciate that the situation with regard to common rooms used only by residents raises many anomalies. I have tried to deal with another such anomaly in Clause 1(2), which provides that the TV used in a common room should qualify for a concessionary licence; that would be enjoyed by a

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wider group of people than only those over 75. It seems generally very odd that people who are in residential care can have concessions for TVs in their own rooms, but not in a common room that only they use.
As one always says about Private Members' Bills—one is always right to do so—the wording in my Bill may not be felicitous. That is not due to any fault on the part of the Public Bill Office, but I may not have properly expressed my wishes in the first place. It may be beyond my wit to frame an effective Bill, but I hope that it is not beyond the combined wit of the parliamentary section of the DCMS, Ministers and their advisers to draft a good Bill.
I hope that the Minister will accept the underlying principles of my Bill and agree that the system should be amended where it is humanly possible to make it more fair.
7.51 p.m.
Baroness O'Cathain: My Lords, the proposal to issue free TV licences to those aged 75 and over from 1st November 2000 has, in truth, lost a little of the gilt which surrounded it when it was first announced. One could suggest that most of us are somewhat gullible when little gifts are given by government and are initially grateful for any crumbs from the Treasury table. However, when the munificence of the Treasury towards the elderly of the country was shown up for what it was—namely, a sop to draw attention away from the downright insulting increase of 75p per week on the basic pension, a point referred to by my noble friend—the cynical antennae of many of us were immediately switched on.
This is a shame, in effect, as, first, it does nothing at all to lessen the public's view of the pusillanimity of politicians; and, secondly, it puts people like me even more on my guard when I see a Bill entitled "Television Licences (Disclosure of Information) Bill". Would I be completely wrong if I had a suspicion that here was another issue masquerading as a cover for yet more unpalatable items to emerge in time?
Let me say, firmly, that I am by nature totally unfazed by requests for information from government departments; I am slightly more fazed when such requests are couched in unintelligible English and are contained in forms many pages long; I freak out. Indeed, I am a strong and very keen supporter of the suggestion that we should have a national identity card, but I am suspicious of this piece of legislation.
Reading through the Bill and the Explanatory Notes, I felt completely bemused by the complexity of the information required and the extent of the process necessary to get it. In these days of electronic data transfer, surely there must be a way whereby the submission of just one piece of data—namely, one's national insurance number—could achieve the objective of discovering whether an individual was or was not eligible for a free television licence. There must be a software programme somewhere which could produce this information from the national insurance records. I am sure that the Minister will tell me why
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this is not possible, but it appears to me that at every turn we try to make life a lot more complicated than it needs to be and open more opportunities for fraud.
The unwelcome development of a suspicious mind where heretofore all was innocence and light has led me to cogitate on what possible reason there could be for so much information, in addition to the national insurance number, being placed in the hands of the BBC or the organisation subcontracted to the BBC for the purposes of collecting the licence fee. I hope that I may not have stumbled on a genuine move to erode the principle that the licence fee funds public service broadcasting in this country.
I agree that the granting of free TV licences to those aged 75 and over—a segment of the population which probably has little alternative entertainment—can be viewed as a good thing. But there are many other segments of the population which could have almost equal claims to such a gift from the Treasury—single mothers, young disabled, youth unemployed, people suffering from agoraphobia, people who have incipient claustrophobia; the list is endless. All such people could produce a genuine, well-argued case stating that TV is the only form of entertainment and education they enjoy. This would be the thin end of the wedge, which could do away with the funding by the licence fee principle. I hope that I am wrong.
Sadly, however, in his opening speech the Minister made me feel that I may not be wrong. When he was describing the meaning behind the clauses he indicated that the inclusion of the words in Clause 2,
"for which no fee is payable or reduced-fee licences",
could cover further situations where there may be free TV licences.
The noble Lord referred to people of 75 and over as being in the sector where more people are in poor health or socially isolated. If people who are in poor health or socially isolated are to be regarded as candidates for free TV licences—as we all know, there are people in poor health and socially isolated in all areas of the population—as I said, this could be the thin end of the wedge which could do away with the principle of funding public broadcasting by the licence fee. Is this being set in motion?
Turning to my noble friend's Bill, I do so admire the punctilious nature of the immensely hard work that she conducts on every bit of legislation that she takes on board. Yet again she has discovered a flaw in the proposed legislation and, to me, it makes eminent sense to support her Bill. I hope that the Minister will agree with her and iron out the wrinkles in the proposed legislation.
7.56 p.m.
Baroness Fookes: My Lords, I shall not detain the House long because, between them, my two noble friends have covered many of the points I wish to raise.

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Turning, first, to the Government's Bill, I understand that, given the policy they have adopted, they need some practical means of ensuring that the right people get the concession. However, I have reservations about extending this principle to something other than criminal or other matters. It is widening the disclosure of information and I want to be convinced that this is the only way that it can be done.
My main concern is the principle of having free television licences for people of 75 and over because, however attractive this may look—and it looks very seductive at first glance—it is the wrong way of bringing benefits to pensioners. I believe firmly that people should be given as great a choice as possible, which means giving them money rather than a particular benefit of which they may or may not be able to make use.
I agree that these days most people have a television, but what of the minority who do not, for whatever reason? Would they not welcome the equivalent in money of £104 a year? For those who do not have a television set, £2 a week in money would have been very welcome. It illustrates the point I am trying to make: that this is not the right route to go down. In my past experience of dealing with constituents, nothing makes people more aggravated and annoyed than a concession which all cannot enjoy or where anomalies arise.
That brings me to my noble friend's Bill. I applaud her for seeking to bring some sense into the anomalies that exist, but, when one goes down this route, anomalies are likely to arise One is reminded of the Hydra in Greek legend. The Hydra was a creature with many heads. As fast as one head was cut off three sprang up in its place. I believe that that is the kind of scenario which will result from the introduction by the Government of this set of concessions. That was clearly illustrated by the introduction of an order which contained a mistake in its wording. What was intended to be a concession made matters far worse, which my noble friend now seeks to put right. That was wonderfully illustrated by my noble friend.
Those in sheltered accommodation aged over 75 can have a free television licence for televisions in their rooms but not in the communal room. That is an absurdity. I hope that the Government are prepared to look favourably on my noble friend's Private Member's Bill; or, if not, at least to take it on board in their own legislation. It is unfair to continue in this way. In short, I believe that the Government have made a serious mistake in introducing a major concession which leads to administrative cost and anomalies. I hope that the Government do not go further down that road.
In conclusion, I ask the Minister one question. Apart from the cost to the Government of this concession, how much will it cost administratively on the basis of the Bill that they have introduced? Is that cost likely to remain the same or could it increase? I give my noble friend's Bill a warm welcome, but I am less happy about the Bill introduced by the Government.
8.1 p.m.
Viscount Falkland: My Lords, as has been said by the noble Baronesses who have spoken, offering the over-75s the opportunity to have a free television licence is an attractive idea. Why it should be introduced at this stage is a mystery, because there are other things in our national life which are as urgent. The noble Baroness, Lady O'Cathain, said that there were several other classes of people who might well benefit from a similar concession. I agree. However, this is the idea that has been arrived at.
As I understood the observations of the Secretary of State in the other place, it is necessary to guard against the possibility of multiple licences being sought by persons who are relatives of the old age pensioner, or the man next door, the window cleaner and so on. Therefore, some means must be found to limit fraud, as far as possible, in providing these concessionary licences. The Bill gives the BBC the right to apply to the Department of Social Security for certain information. On the face of it, the information is fairly basic and does not pose a danger to society by way of the release of information which should be held confidential. However, this may well be the thin end of the wedge.
The procedures for claiming the free licence appear to be simple enough. However, one is concerned that a good number of people do not understand their right to claim. Often the literature and publications which go out are not easy to comprehend, even for those who are used to reading a lot of material. Perhaps the Minister can tell us something about the Government's plans to promote proper information for the benefit for those who qualify for this concession. For some years the Campaign for Plain English has pointed out, effectively and very amusingly, the convoluted nature of some of the information that is provided. I hope that that is not necessary here.
I am not as sanguine as the Secretary of State who believes it is unlikely that there will be any significant fraud. I am not necessarily a suspicious person, but. I believe that there will be attempts at fraud, as there always are when benefits are available. I know not whether there will be widespread copying or forging of these documents. I hope that the Government have carefully thought out all the possible methods by which this benefit can be abused. The principles seem right to us and we do not question the good will behind them.
The noble Baroness, Lady O'Cathain, referred to the insignificant rise in the old age pension. I do not follow her down that road. However, as I understand it—it is not my subject—the increase of 75p is linked to the cost of living index and there is no room for generosity in that area. The noble Baroness appears to ridicule my remarks. If I am wrong, I shall be put right. It is an insignificant amount, but if that is the way it is calculated so be it. If the Conservatives get in at the next election, perhaps they will change it. We on these Benches regard that as an unlikely scenario. However, I am a betting man and if anyone tells me otherwise I shall have a wager on it.

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The noble Baroness, Lady Anelay, highlighted two anomalies in this area. In the words of the noble Baroness, Lady Fookes, both seem to be absurdities. If they cannot be corrected, I hope that the Minister will be able to tell us what the complications are. I say nothing further on that.
On the face of it, the cost—£350 million-odd, not counting any fraud and the policing of it—seems to be very high. I believe that there is widespread evasion of the payment of the television licence fee. I wonder whether with these procedures the Government have at the back of their mind better ways to limit the number of people who evade that payment. From my own observations—the Minister should not feel obliged to deal with this matter—the detector vans remind me of my military service. In those days, one had vehicles made of wood which looked like tanks. A good number of these vans, which appear to have only one casual occupant, perambulate about. I wonder whether they really do anything or simply alarm people so that they scurry to the Post Office for a TV licence. If so, how many people scurry to the Post Office, and what is the cost of the operation? Is it cost effective? That is purely a personal observation and perhaps I fantasise.
I have nothing further to say. I am happy for those who will enjoy this benefit and hope that it does not lead to any unforeseen problems or troubles.
8.9 p.m.
Lord Luke: My Lords, this has been a most interesting debate. As my noble friend Lady Anelay said, we on these Benches believe that pensioners would prefer to have monetary concessions integrated into their state pension so that all pensioners would benefit from any spare money that the Chancellor has available. However, as it stands, we support the TV licence concession for those aged over 75 and I support my noble friend's Private Member's Bill for the reasons that she gave.
The concession does nothing for those who receive a pension but who are aged under 75. The question also arises of households which include a 75 year-old but which do not have a TV set. Effectively, the free TV licence is a £104 per year additional benefit for owning a TV set. That benefit is of course conferred on anyone who lives in a household which includes a 75 year-old, whatever their means or age. What about those who live in an area where the analogue signal cannot be received?
The noble Baroness, Lady Jeger, asked the Government in a Written Question on 25th May last (WA 107) whether they would pay those pensioners who do not have a TV set the equivalent of the cost of a licence. On that occasion, the Minister replied that the purpose of the concession is to assist access to television and not to provide a cash benefit. Does not the Minister agree that those pensioners may feel aggrieved that they are some £ 100-odd a year worse off than their neighbours as a result of this scheme?
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The scheme holds many implications for the BBC. My noble friend Lady O'Cathain made plain her suspicions that it seems to imply that the taxpayer is taking a direct financial stake in the BBC. As the Government determine each year whether or not to continue funding the scheme, that means that nearly 15 per cent of the BBC's income will come to depend on government goodwill. That, in its turn, unsettles the BBC's unique funding mechanism.
Of course, if the benefit were to be extended to households which included a 65 year-old—here I must state a small personal interest in such a possibility!—then the taxpayer would take a direct interest in more than one-third of the total BBC funding. As my noble friend Lady O'Cathain said, it could go even further.
Can the Minister assure us that the stake taken in the BBC will not lead to interference in the way that programmes are made or to a change in the editorial independence of the corporation? Of course, it is natural for the BBC to welcome the scheme as it not only guarantees income from 3 million viewers without having to chase up non-payers (provided, of course, the Government pay up), it also underpins the system of holding a licence before anyone can view a TV or video.
It would be wrong not to give great consideration to the cost of the scheme. Estimates seem to vary. At Second Reading in another place the Minister, Janet Anderson, stated that the costs could be higher than in earlier estimates. Of course, the costs are bound to depend on the number of beneficiaries. When can we expect to receive indications of that number and, therefore, the subsequent definitive cost estimates?
The Bill is short, but it introduces a scheme which appears to be complex to operate and which therefore may be confusing to many people. For example, the measure will require 75 year-olds to opt into the scheme. They will not receive the benefit automatically. They will still have to apply for a TV licence, even though they will not have to pay for it.
Therefore, we need to hear what steps the Government are taking to ensure a proper understanding of the measure among those whom it is intended to benefit. For example, how will the Government ensure that eligible pensioners do not confuse free licences with no licences? And will the Minister confirm that pensioners aged 75 and over who have a TV and no licence will still be liable to prosecution for a criminal offence and therefore subject to fine?
What discussions have the Government had with the TV licensing authority about its policy on this matter and, indeed, what discussions have they had with the Magistrates' Association? Will people who fail to apply for a licence be treated differently from those who refuse to apply after having been advised of the procedure? Indeed, will they be subject to fine and,

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if they refuse to pay, to prison? That seems to be the implication of the statement made by the Minister, Janet Anderson, again at Second Reading in another place:
"the Government are not in the business of sending 80-year-olds to prison because they were perhaps confused about the rules".— [Official Report, Commons, 10/6/00; col. 154.]
Therefore, if they know the rules but do not want to apply for a free licence, will they be punished?
We all want to do the best that we can for our pensioners, who so patently have earned their rewards, though, as my noble friend Lady Fookes said, this is not really the best way to help them. However, as I and my noble friend Lady Anelay said, in the circumstances, we shall certainly support the measure as it stands.
I look forward to hearing the Minister respond to the debate. It must be his umpteenth speech today and his last. I congratulate him on his stamina.
8.16 p.m.
Lord McIntosh of Haringey: My Lords, I am grateful to all noble Lords who have taken part in this short debate. Perhaps I may be allowed to say that on behalf of the noble Baroness, Lady Anelay, too.
I should like, first, to respond to the issues raised by her Bill and then to say something about the debate on the government Bill. I begin by congratulating the noble Baroness on her eloquent advocacy of her Bill, and pay tribute to the way in which she has approached it and to the advice that she has received from Abbeyfield and Age Concern. I have an interest in Abbeyfield. I am president of one of its societies and I have a step-mother-in-law who is aged 96 and in an Abbeyfield extra-care home. That gives me some knowledge of one or two of the issues raised in the Bill.
The starting point must be that the accommodation for residential care concessionary television licence scheme is full of anomalies. It has been full of anomalies right from the beginning. It generates complaints from residents in sheltered accommodation which fails to qualify, from managers of that accommodation, and from elderly and disabled people in mainstream accommodation who feel that they are equally deserving of special treatment. The scheme has been reviewed on several occasions since it was first introduced in the 1960s. A number of changes have been made to it to try to address those anomalies, but none of them has been successful.
The most recent review was that undertaken last year by the independent review panel on the future funding of the BBC, chaired by Gavyn Davies and commissioned by the Secretary of State for Culture, Media and Sport. The panel considered the structure of the scheme and whether a suitable alternative might be found. In its report, which it published last July, the panel recommended that the current scheme should be retained as no superior alternative funded from the licence fee could be found. The Government accepted that recommendation. However, we made one minor change to the regulations which govern the scheme in order to bring the qualifying age for men and women
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into line at 60, whereas previously the regulations referred to "pensionable age", so that women could qualify from the age of 60 but men were eligible only from the age of 65.
Most of the difficulties of the scheme stem from the fact that the entitlement depends on the accommodation occupied and the way in which it is provided or managed, rather than on the circumstances of the individual. That means that the rules which govern the scheme are often arbitrary or unfair. In our view, our introduction of half-price television licences for registered blind people from 1st April this year and of free television licences for people aged 75 or over from 1st November target concessions where they are needed.
Over 3 million households will benefit from free licences for the over-75s, compared with about 650,000 beneficiaries of the current concessionary scheme. The rationale for these concessions is well understood both by claimants and by the general public. Many of those receiving a free licence from 1st November are likely to be people who narrowly fail to qualify for the £5 concessionary licence.
The noble Baroness's Bill would make a number of changes to the concessionary scheme. The £5 concessionary licence is currently available only for television sets installed in the private accommodation of people living in residential homes or qualifying sheltered housing. The Bill aims to extend the concession to cover TV sets installed in communal rooms in qualifying accommodation, provided they are intended for use solely by residents. If all the residents are aged 75 or over, the Bill would provide a free television licence to cover any sets installed in communal areas.
That concession would benefit housing managers rather than residents because housing managers pay the licence fee for the communal set. Some managers may pass on the benefit to residents via a reduction in their charges, but there will be no requirement to do so. Those changes would represent an additional concession for accommodation where the residents already qualify for a concessionary licence. They would not help housing schemes which fail to qualify, to which the great majority of complaints about the concessionary scheme relate.
The provision that, in order to qualify for the concession, communal rooms must be intended for u se solely by residents may also cause problems. Anyone who has been to one of these homes knows that visitors kneel or sit by the side of their elderly relatives. That cannot be avoided and visitors cannot be excluded in order to secure entitlement to the concession. The requirement for all residents to be over 7.5 would present difficulties. A single resident below that age would disqualify the scheme. Would it provide a perverse incentive to exclude someone from admission to the home because they were under 75 and the home would lose the licence? I do not believe so, but that is still an anomaly.

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The Bill also seeks to ensure that people over 75 who currently qualify for the £5 licence get a free television licence for their private rooms. Of course, they will do so under the Government's Bill.
Clause 1(3) of the noble Baroness's Bill would extend the concessionary scheme to sheltered housing schemes which included male residents aged 60 to 64 who continue to be employed. The noble Baroness, Lady Anelay, has explained that this provision is intended to address an anomaly created by the extension of the concessionary scheme to men aged between 60 and 64.
The requirement for residents to be retired has long been a part of the regulations. It applies not only to men aged between 60 and 64 but also to other residents in sheltered housing schemes. Therefore, the effect of this provision would be to create a situation where sheltered housing schemes could qualify for the concession if they included male residents aged 60 to 64 who continued to work but not if they included a woman aged 60 or over who continued to work, nor a man aged 65 or over who continued to work.
I am sorry to have been critical about the detail. Of course, the Government are strictly neutral on Private Members' Bills and we shall not seek to obstruct the Bill's passage in any way. But we are not persuaded that the Bill would improve the scheme or resolve what we acknowledge are major anomalies. In defence of the Bill, over the years a number of able and eminent people have turned their minds to how the concessionary scheme may be improved, most recently by the Gavyn Davies review. But they have been unable to identify any improvements which would make the scheme generally acceptable, and I am afraid this Bill is no exception.
I now turn to the points raised on the Government's Bill and I shall seek to address those as succinctly as I reasonably can. First, I recognise the sincerity of the noble Baronesses, Lady O'Cathain, Lady Fookes and Lady Anelay, who have expressed reservations about the fundamental policy behind it— the over-75 licence concession. I recognise the sincerity and I understand the arguments that they use. As they are Members of the Opposition, I shall simply say that the Members of the Opposition in another place, although willing to wound, were not prepared to strike, in the sense that they were not willing for anybody to go to their constituencies and say, "Your Conservative MP voted against free television licences for the over-75s". That has been the limit of the disagreement on the issues of policy.
I have not heard, even from the noble Lord, Lord Luke, who was the only noble Lord to address the issue, any serious suggestion that there are alternative ways of achieving that policy other than that proposed in the Bill. Fears have been expressed, and I shall try to address them as best as I can, but nobody has suggested a better alternative. In my opening speech I hope that I indicated why we came to the conclusion that this is the best way of dealing with the matter.
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I shall turn now to the points raised by the noble Baroness, Lady Anelay, on Clause 1(2) relating to BBC subcontractors. I can give her a full assurance on that. The regime proposed for BBC subcontractors is exactly the same as that used by the DSS, which for many years has used subcontractors to process the data in question. That has been done under the social security administration legislation, the most recent Act being in 1992. At the same time, the BBC does not have a diverse group of contractors carrying out the work; it has a tightly knit group coming under the heading of TV licensing, with four companies that join together to provide those services. I have no reason to suppose that there have been significant breaches of confidence in the use of contractors, and I have no reason to suppose that there will be for the BBC. Incidentally, Post Office counter clerks will not have access to any confidential data.
The noble Baroness, Lady Anelay, referred to the problem raised by Mr Greenway in another place about the dangers of accidental disclosure of information. Of course, we are sympathetic. If one is reckless or just stupid one can easily release information by accident, particularly with electronic communications in place. The noble Baroness may have read Philip Roth's latest novel in which one of the characters produces on her PC a lonely hearts advertisement that she intends to send to a lonely hearts contact club and by accident she presses the "Send all" button and the information is sent to all her colleagues in her university department. Such things can happen.
As regards personal information, we have the same protection in this Bill as in Section 123 of the Social Security Administration Act 1992, which makes it an offence to release personal information. It gives a defence in that the person charged with the offence has to prove that the disclosure was made in the reasonable, even mistaken, belief that he or she was making the disclosure with lawful authority, or that the information was already public. I do not know whether that reassures the noble Baroness. I am not sure that it entirely reassures me, because I do not believe that this is a problem to which there is any easy answer.
The noble Baroness raised the point on the new Clause 4 about defining the directors' duty to include whether neglect can be attributed to them. We do not believe that it is possible in every circumstance in legislation to define what a director must do. That must be a matter for the courts to apply. It is a well-precedented provision that we do not believe has caused any difficulty in the past. In this particular case we believe that it should be clear to directors that their organisation must put in place systems to prevent unlawful disclosure if they are not to risk mistakes that could lead to prosecution. Of course, if there are any amendments on that point in Committee, we shall listen carefully to them, as we always do.
The noble Baroness, Lady O'Cathain, said that this Bill had raised her cynical antennae. I do not think of the noble Baroness as cynical; I think of her as an exponent of the highest scepticism—except, of course,

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in religion. I do not believe that her fears are justified here. The additional information required other than a person's national insurance number is only that which is absolutely essential for administrative purposes: name, address and date of birth. I do not think it would be possible to require less than that.
Both the noble Baroness and the noble Lord, Lord Luke, expressed concern about the licence fee principle. I should have thought that that point had already been answered fully when we set up the inquiry into BBC funding led by Gavyn Davies and published its report in July last year. We also published our response which makes it clear that, for the foreseeable future, we are dedicated to maintaining the principle of funding the BBC via the licence fee. I do not believe that any erosion of the licence fee funding principle will take place once 15 per cent of the funds come from the taxpayer. That is because no additional powers have been put in place for the Government to influence the amount of money that goes to the BBC. The Government have no control over the quantity of money that is taken from the taxpayer through concessionary licences for over 75 year-olds. That money will, as always, go directly to the BBC.
As regards the commitment to public sector broadcasting, I hope that the noble Lord, Lord Luke, will be reassured by the fact that the BBC charter is still in effect. It has been extended on a number of occasions. Although eventually there must be a review of the charter, nothing that this Government have done could give rise to any suspicion that we are in any way damaging the independence of the BBC.
The noble Baroness, Lady Fookes, asked about the costs of setting up and maintaining this concession. Costs in terms of the amount taxpayers will have to pay for the replacement of paid licence fees are roughly £340 million per year. In terms of administration, in 2001 the costs will amount to around to £24.3 million; a great deal of that sum will form the set-up costs. The figure will reduce in succeeding years to around £10 million per year. In terms of the amount of tax collected, that sum will not be particularly significant.
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The noble Viscount, Lord Falkland, and the noble Lord, Lord Luke, asked about our plans for promotion. In my opening speech, I told the House that a mailshot will be sent to every household within the next few months, well before 1st November—including to all Members of this House. If, as I hope, the mailshot is properly designed, it will make clear not only who is entitled but how that entitlement is to be exercised.
The noble Viscount, Lord Falkland, asked about the rate of television licence fee evasion. My understanding is that 95 per cent of all licence fees are paid. I do not think that it is a significant issue as regards the granting of this concession.
I apologise to the House if I have missed any questions. I shall read in Hansard what has been said during our debate and write to noble Lords if that, is necessary. I am grateful that no objections in principle have been expressed as regards the government Bill, or to the way—other than on points of detail which will be dealt with in Committee—in which the Government have implemented the necessary procedure to give effect to free television licences for those aged 75 and over. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Wireless Telegraphy (Television Licence Fees) Bill [H.L.]
8.34 p.m.
Baroness Anelay of St Johns: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.— (Baroness Anelay of St Johns.)
On Question, Bill read a second time, and committed to a Committee of the Whole House.
House adjourned at twenty-five minutes before nine o'clock.

Official Report of the Grand Committee on the Insolvency Bill [H.L.]
Thursday, 15th June 2000.
The Committee met at Four of the clock.
[The Deputy Chairman of Committees (Lord Ampthill) in the Chair.]
The Deputy Chairman of Committees (Lord Ampthill): Before I put the Question that the Title be postponed, it may be helpful to remind your Lordships of the procedure for today's Committee stage. Except in one important respect, our proceedings will be exactly as in a normal Committee of the Whole House. We shall go through the Bill clause by clause; noble Lords will speak standing; all noble Lords are free to attend and participate; and the proceedings will be recorded in Hansard. The one difference is that the House has agreed that there shall be no Divisions in a Grand Committee. Any issue on which agreement cannot be reached should be considered again at Report stage, when, if necessary, a Division may be called. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.
I should explain what will happen if there is a Division in the Chamber while we are sitting. This Committee will adjourn as soon as the Division Bells are rung and then resume after 10 minutes.
Title postponed.
Clause 1 agreed to.
Schedule 1 [Moratorium where directors propose voluntary arrangement]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 1:
Page 10, line 5, leave out ("Part I of").
The noble Lord said: Paragraph 1 of Schedule 1 to the Bill provides for the Insolvency Act 1986 to be amended in accordance with Part I of the schedule. Members of the Committee will have observed that Schedule 1 is not divided into parts; therefore, the amendment removes the words "Part of". I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved. Amendment No. 2:
Page 10, line 8, leave out ("apply for") and insert ("take steps to obtain").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 3 and 4. The directors of an eligible company are to be able to obtain a moratorium by filing the required documents at the court. That is provided for in paragraph 8 of Schedule A1 to the Bill. The directors do not, of course, have a free hand. Before they can obtain a
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moratorium, they need a nominee to say that he thinks a successful rescue is likely to result. One of the documents filed will need to be the nominee's "consent to act". However, paragraphs 2 and 3 of Schedule 1 and paragraph 6 of Schedule A1 currently say that the directors can "apply for" a moratorium. That might be taken as implying that an application to court is necessary and that the application will then have to he determined in some way by the court before a moratorium can be obtained. To avoid the possibility of these paragraphs being interpreted in that way, we propose that they be amended to make it clear that no application to court is necessary to obtain a moratorium. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 3 and 4:
Page 10. line 20, leave out ("apply for") and insert ("take steps to obtain").
Page 12, line 4, leave out ("propose to apply for") and insert ("wish to obtain").
On Question, amendments agreed to.
Baroness Buscombemoved Amendment No. 5:
Page 12. line 16, after ("arrangement") insert;"(with or without modifications)").
The noble Baroness said: In moving Amendment No. 5, I wish to speak also to Amendments Nos. 6. 24, 28, 67, 84 and 86. Paragraph 6(2)(a) of the new Schedule A1 inserted by paragraph 4 of Schedule 1 to the Bill provides for the nominee to submit a statement to the directors as regards his opinion on, among other things, whether or not the proposed voluntary arrangement has a reasonable prospect of being approved and implemented.
It is, however, open to the creditors meeting to approve the proposed voluntary arrangement with modifications. Paragraph 6(2)(a) does not refer to any possible modifications that might be proposed by the creditors. On one view, the nominee in forming his opinion should not take into account such modifications. This point is made good if one looks at paragraph 22(1)(a) and 23(2)(a)(i), which refer only to modifications under paragraph 29(7), which are modifications for which the directors intend to seek the approval of the meeting. It appears to be intended that the nominee can have regard to only those modifications proposed by the director and only if he has received notice of them. He must therefore ignore all other possible modifications. That, we believe, imposes far too strict a test.
In essence, the nominee has to form a view on whether the proposed moratorium has a reasonable prospect of being approved and implemented. He might form that view that it needs only minor modifications and might be confident that in that case it has a reasonable prospect of being approved and implemented.
Paragraph 6 does not permit him to have regard to those minor changes, so he cannot submit the statement. In other places in the Bill he is entitled to certain specific modifications. At first sight this might

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appear to be a pure drafting point, but by looking at paragraph 22(1)(a) and 23(2)(a)(i) one sees that he is entitled to have regard to some modifications, and therefore by saying some, it automatically means not all. We believe that this conflict would easily be cured by adding, where appropriate, a number of "with or without modifications".
With all due deference, it appears to us that perhaps in certain areas the drafting has been done by different individuals. I beg to move.
Lord McIntosh of Haringey: These amendments would mean that the nominee would be required to consider not only the proposed voluntary arrangement as it stands before him at the point of time at which he is required to consider it, whether in relation to a company or an individual, but also the proposed voluntary arrangement in the light of any modifications which might possibly be made to it.
We consider that the nominee should look at the proposed individual or proposed company voluntary arrangement as he understands it will be put to the creditors and, if applicable, to shareholders. The Bill, as drafted, already makes provision for the nominee to consider the proposal as amended by any modification notified to him by the directors. We would not want him to consider it as it might conceivably be modified.
The directors might never be prepared to agree to further modifications, in which case the meetings would be unlikely to approve and implement the voluntary arrangement. We would not want the company to, say, be able to obtain a moratorium in such circumstances as it would be entirely inappropriate. Indeed, it would undermine the necessary confidence of the nominee that the moratorium was justified. The amendments would also place an unreasonable burden on nominees, who would be obliged to make decisions on the basis of what inevitably would be conjecture.
It is very unusual for a voluntary arrangement to be prepared before the moratorium starts without the proposed nominee being a party to its drafting. I understand the desire of the noble Baroness, Lady Buscombe, for more flexibility, but I think that amendments of this kind would lead to the risk that moratoriums were put forward before they had been properly thought out and agreed.
Baroness Buscombe: I thank the Minister for his response to the amendments, although I cannot agree with what he has said. I shall want to read his words carefully in Hansard. It appears to be intended that the nominee can have regard only to those modifications proposed by the directors, and only if he has received notice. We believe that that is too strict. We do not think that we are being too flexible by making the suggested changes. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
4.15 p.m.
Baroness Buscombe Baroness Buscombe moved Amendment No. 7:
Page 13, line 12. leave out ("either of those meetings") insert ("the meeting of the creditors").
The noble Baroness said: Paragraph 8(3) of new Schedule Al provides for the moratorium to end if either the meeting of the company or the meeting of its creditors has not first met before the end of the specified period. If no one turns up to the meeting of the company it may be said that the meeting has not been held. The moratorium will therefore end at the end of the specified period. However, paragraph 34 of the new Schedule Al makes it clear that if the meeting of the company and the meeting of the creditors come to different decisions, the decision of the meeting of the creditors is to take effect subject to an application to the court by a member of the company. We entirely agree with that provision. Once a company's financial affairs are such that a moratorium is appropriate, the views of creditors must be paramount.
The possibility of members not turning up to the meeting of the company and bringing the moratorium to an end in accordance with paragraph 8(3) is, therefore, we believe, inconsistent with the principle that the creditors' views are paramount. If creditors' views are paramount surely it is wrong for the moratorium to end just because members do not turn up. It is even conceivable that members might decide not to bother to hold a meeting and so destroy any prospect of a moratorium. They may ask why they should bother to attend, and quite often members are simply not interested; they say "There is nothing in it for us so why bother?". That does happen in practice. Indeed, it is possible, and does happen, that one might have to go so far as to offer something to them in order for them to turn up, something which otherwise would go to the creditors. I beg to move.
Lord McIntosh of Haringey: I am grateful to the noble Baroness, Lady Buscombe, for her explanation of the amendment. It seems to me to devalue the role of the company's shareholders, who, after all, will remain as the company's owners if the rescue is successful, in deliberations about whether or not a moratorium should be extended beyond the initial period of 28 days. We are talking about the extension of the moratorium and not the original setting-up of the moratorium.
We take the view that any decision to extend a moratorium should be considered by both the company and its creditors. The question at issue is that of agreement of a proposal which is presumably, and has to be, a proposal by the company's directors for a voluntary arrangement. I invite the noble Baroness, Lady Buscombe, not to lose sight of the fact that the Bill does not introduce a new voluntary arrangement procedure. The arrangement will still be under Section 1 of the Insolvency Act. It will still be the one for a composition in satisfaction of the company's debts or a scheme of arrangement of its affairs. It will still be a proposal made,
"to the company and its creditors".

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That is why paragraph 8(3) provides for the moratorium to end automatically if either of the meetings summoned under paragraph 27—that is, either the company or the creditors' meeting—has not met within 28 days of the start of the moratorium. They do not have to be concluded but both must have been held in order for the moratorium not to come—
Baroness Buscombe: It may be helpful to interrupt the Minister now, because the last thing we want to do is destroy the possibility of a moratorium. That is not what we are seeking here. What we seek is a situation whereby the creditors do not lose out because the members have not had a meeting. The shareholders' position has already been devalued, in which case we believe the creditors' position should be paramount, and that loss of position would occur, in our view, if the members do not have a meeting and therefore the moratorium comes to an end.
Lord McIntosh of Haringey: The moratorium had already started because we are talking about extension, are we not? The moratorium had already started and for it to be in force by the end of the 28 days—in other words, not to have collapsed—both the members and the creditors must have had meetings, and they have to agree this will happen. A nominee has to be appointed and if necessary a successor supervisor must have been appointed; so the moratorium is in action at this stage.
These amendments are not about starting a moratorium but the extension of the moratorium. I do not know whether that is what is intended. I hope it is. We are saying that an extension of a moratorium has to be considered both by the company and its creditors. If it is not agreed by the company, for whatever reason, either by it not having a meeting or not turning up to one, it should not be extended and then one has to go into insolvency procedures. It could not be continued on the opinion only of the creditors; that would make no sense. The nominee could not continue with it or have any confidence that it had a reasonable prospect of success if the directors of the company have not had a meeting and responded.
Baroness Buscombe: Surely then the creditors might lose out of this voluntary arrangement because of the apathy of the members.
Lord McIntosh of Haringey: If the directors are not willing to go on with a moratorium under any circumstances, whatever the reason, it has to come to an end. The nominee has to be satisfied that there is a reasonable prospect of success. Clearly, if the directors have no confidence, there is no reasonable prospect of success, the moratorium has to come to an end and the company has to be declared insolvent. The moratorium has failed and it does not matter exactly how it is brought to an end, whether by the creditors or by the company. But both sides have to be in agreement for it to be extended.
Baroness Buscombe: I thank the Minister. It has been worthwhile having this debate. Again, I shall read
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with great care in Hansard what he has said and perhaps return to the point on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Buscombe Baroness Buscombe moved Amendment No. 8:
Page 13, line 37, leave out ("petitioning").
The noble Baroness said: In moving Amendment No. 8, I shall speak also to Amendment No. 9. Paragraph 10 of the new Schedule 1A provides for the nominee to advertise and notify the Registrar of Companies, the company itself and any petitioning creditor of the moratorium. In our view, all the creditors of the company should be informed of the moratorium, if only so that they know not to bother to take any of the steps referred to in paragraph 12.
In essence, let us suppose that an existing creditor is not paid and presents a winding-up order provision and then suddenly realises that what he has done is in breach of paragraph 12. What would happen if a debentureholder or a landlord takes proceedings for possession of the lease, or a sheriff wants to go in and levy distress, or the Inland Revenue wants to move? We believe that the provision is unworkable in its present form.
It is of paramount importance that all the creditors of the company should be informed so that they can act accordingly, in which case they would not be in breach of paragraph 12. I beg to move.
Lord McIntosh of Haringey: We are mirroring exactly, or certainly as far as applicable, the procedures that apply to the notification of an Administration and Winding Up Order under the 1986 Insolvency Rules. In those cases, at the outset, as we intend here, the commencement of the procedure is advertised and also notified to the Registrar of Companies so that the information is available on the company's public record, and then creditors are made aware of the start of the procedure when they are individually notified of the meeting of creditors. We do not see why notice in moratorium cases should he any different. We can see why all creditors, of whose claim the nominee is aware, should be made aware of the moratorium, but the moratorium is only 28 days and the nominee will be contacting all the credit ors very soon after it comes into force to notify them of the meeting of creditors, to consider the proposal for a voluntary arrangement. They will obviously learn of the moratorium at that early stage.
To have to notify them twice in a short space of time would involve unnecessary expense. I cannot see what advantage would be gained from it. The moratorium procedure is a low-cost one, or it will not work at all. Although, strictly speaking, there is a possible interval in time between the notification which these amendments would provide and the notification of the meeting, it is a very short gap which does not justify departing from the procedure I have already described in regard to a winding-up order. In any case, if a creditor tries to do something forbidden by the moratorium, someone from the company will tell him or her when they try to do it. The same type of

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provision exists as regards administration. In those cases, where a creditor tries to take action, the administrator informs him or her of the moratorium. The amendments are not wrong but they are just out of keeping with what already happens and they do not bring any significant benefit.
Baroness Buscombe: I thank the Minister for his response to the amendment. I accept much of what he has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]
Lord Kingslandmoved Amendment No. 10:
Page 14, line 9, at end insert (", without the consent of the nominee or the leave of the court and subject (where the court gives leave) to such terms as the court may impose").
The noble Lord said: New Schedule Al sets out the effects of a moratorium under Section 1A of the Insolvency Act 1986. In general terms, it prevents third parties from enforcing their rights against the company during the period when the moratorium is in force.
Paragraph 12 of New Schedule Al deals with the effects of the moratorium which substantially interfere with the rights of creditors. An administration order, of course, has similar effects. As the Minister is well aware, however, there is an important distinction. The moratorium which comes into effect in the case of an administration order is subject to the court's control within five days of the presentation of the petition. The moratorium under paragraph 12, by contrast, comes into effect on the authority of a person who is likely to have substantially less experience than an insolvency practitioner and perhaps less testing qualifications.
At the very least, the creditor must be entitled to apply to the court to take one or more of the steps referred to in paragraph 12, and not just in those instances where reference is made to the leave of the court. To save unnecessary applications to the court, the consent of the nominee should suffice as well. I beg to move.
Lord McIntosh of Haringey: The purpose of paragraph 12 of Schedule A1, as the noble Lord, Lord Kingsland, rightly says, is to provide protection from legal action for a company which is subject to a moratorium. In particular, there is a general ban on other insolvency-related procedures being commenced during the period of the moratorium.
If the court—or the nominee, for that matter—were able to grant leave to permit another insolvency procedure to be commenced during the moratorium, which would be the effect of these amendments, the situation would arise where two conflicting insolvency procedures could be on foot at the same time—one, a company voluntary arrangement moratorium and the other, a liquidation. Those procedures would have competing and conflicting purposes and that would not be a situation we would want to allow. The objective of a moratorium is to give the company the opportunity to put a rescue plan to its creditors.
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We should not lose sight of the fact that the initial moratorium is very short. Any other co-existing or supplanting insolvency procedure would thwart that rescue attempt. For that reason we do not consider that the court should be able to permit other insolvency procedures to be commenced during a moratorium. The only exceptions to that principle should be where a petition is presented by the Secretary of State or the Bank of England in the limited circumstances specified in paragraph 12(5) of Schedule A1.
Clearly, where the nominee considers insolvency proceedings are appropriate, he can no longer be of the opinion that the voluntary arrangement has a reasonable prospect of being approved and implemented. It seems self-evident that he will have to withdraw his consent under paragraph 23 and bring the moratorium to an immediate end.
If a creditor considers another form of insolvency procedure appropriate he should tell the nominee who, if suitable, could withdraw his consent to act and, in that way too, bring the moratorium to an end. The meeting of the company's creditors would also provide the creditor with an opportunity to express his concerns and vote against any extension of the moratorium or approval of the proposed voluntary arrangement.
We do not consider it appropriate for the nominee to be allowed to authorise a breach of the statutory moratorium in respect of paragraph 12(1)(f)—that is,leave to enforce security—or paragraph 12(1) (g)— that is, leave to take proceedings. These are matters which, in our view, the court should decide.
The situation is rather different, however, in relation to the calling or requisitioning of a company meeting. The members of a company may need to meet in order to satisfy certain obligations under the Companies Act. That is why we have made provision for a nominee to consent to such a meeting under paragraph 12(1)(b) or for the court to give leave for such a meeting.
I am sorry that we are not able to support these amendments.
4.30 p.m.
Lord Kingsland: I thank the Minister for his brisk reply. Perhaps I should say that he seems to exaggerate the problem of two separate winding-up procedures. If a winding-up order is made, the moratorium would come to an end. There would then only be one insolvency procedure—that of liquidation.
Lord McIntosh of Haringey: That is why in those circumstances, we do not need the amendment. The other circumstances that I have outlined would bring the moratorium to an end. The moratorium comes to an end, most obviously, if the nominee loses confidence in it. It can, however, come to an end if the creditors' meeting votes against it and the nominee loses confidence in it—if a significant shareholder indicates his objection to its continuation. If it comes to an end, naturally liquidation proceedings would

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then be appropriate. If people are agreed—if the shareholders, where appropriate, the company and the creditors are agreed—by votes in both meetings that the moratorium should continue, it seems somehow wrong that there should be the alternative, destructive procedure starting in the middle of a moratorium. It is after all, rather a short moratorium.
Lord Kingsland: The noble Lord has, possibly, made my point for me; but I shall look carefully in Hansard to see whether or not that assessment is correct. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. II not moved.]
Lord Kingslandmoved Amendment No. 12:
Page 14, leave out line 19.
The noble Lord said: There is another important difference between the moratorium in paragraph 12 and that which arises when an administration petition is presented; it relates to the position of a debentureholder. As noble Lords are by now aware, under paragraph 12 it is proposed that in some instances a third party can enforce its rights against a company if it obtains the consent of the nominee or the leave of the court.
The leave of the court can, of course, be granted on terms. For example, a landlord who wants to take proceedings to forfeit a lease can apply for the leave of the court. If he does, the court may give him leave and may impose terms, such as ordering that he can only take proceedings for forfeiture if the company does not pay the rent during the moratorium. Such an order would prevent a landlord from taking advantage of the past indebtedness but would give him priority during the course of the moratorium.
In contrast, some third parties are not given the right to apply to the court for leave to enforce their rights. An example of this is a debentureholder who wishes to appoint an administrative receiver. Thus, there are two classes of rights: those which can be enforced with the leave of the court and those which cannot be enforced even with that leave. Rights that can be enforced with the leave of the court include calling or requisitioning a meeting of the company, taking steps to enforce security over the company's property, repossessing goods in the company's possession under any hire purchase agreement, commencing or continuing proceedings, execution or other legal process and levying distress against the company or its property.
By contrast, the other rights referred to in the paragraph cannot be enforced at all, even with the leave of the court: no petition can be presented to wind up the company; no resolution may be passed or order made for the winding-up of the company; no petition for an administration order may be presented; and no administrative receiver of the company may be appointed. However meritorious the claim, those rights cannot be enforced.
It is difficult to see any policy reasons for the distinction between the two classes. The distinction is also unreal if one considers the position of a
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debentureholder with a debenture containing fixed and floating charges. A debentureholder will be able to enforce the fixed charges in the debenture with the leave of the court, but will not be entitled to appoint an administrative receiver under the floating charge. Why should that be the position?
The position is particularly odd as regards a debentureholder who wants to appoint an administrative receiver under the floating charge. That is because the approval of the voluntary arrangement brings the moratorium to an end and the voluntary arrangement cannot prevent the debentureholder from appointing an administrative receiver. It seems extraordinary that a debentureholder can appoint an administrative receiver if a voluntary arrangement is approved but cannot do so before it is approved while there is a chance that it might be.
This strange situation is even more baffling when compared with the administration order procedure. Under Section 10 of the Insolvency Act 1986, there is a limited moratorium during the period beginning with the presentation of a petition for an administration order and ending with the making of an order or the dismissal of the petition. The hearing of the petition is usually within five days. During that relatively short period, there is a limited moratorium; however, it does not prevent the presentation of a petition for the winding-up of a company or for the appointment of an administrative receiver. A debentureholder has an absolute right to appoint an administrative receiver and, if he exercises that right, the court cannot make an administration order.
Effectively, the debentureholder has a veto on an administration order being granted. So far as concerns a creditor who presents a winding-up petition, he is entitled to be represented at the hearing for an administration order and can argue against an administration order. Those rights are abrogated by paragraph 12 without the protection of the court; neither the debentureholder nor the creditor who wishes to present a winding-up petition has any right to apply to the court for leave to appoint an administrative receiver or present a winding-up petition. That is manifestly undesirable.
As a general rule, company directors will, understandably, go to almost any lengths to avoid a winding-up order. If paragraph 12 is accepted in its present form, a petitiosn can be prevented from being presented, simply by a nominee's recommendation under the provision in paragraph 7, however strong the grounds for a winding-up petition may be.
Similar considerations apply with respect to the appointment of an administrative receiver. Today, one has to apply for an injunction restraining the debentureholder from appointing an administrative receiver, usually with little chance of success. In future, all one will need to do is to find an insolvency practitioner and get him to obtain a moratorium under paragraph 7, and that will prevent the debentureholder from appointing an administrative receiver. The scope for abuse is immense.

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As I understand it, the Government's first response to this argument is to say that it would be unacceptable to have two insolvency procedures of the same kind; but if a winding-up order is made—and I have made this point already in another context—the moratorium would come to an end. There would be only one insolvency procedure thereafter, and that would be liquidation.
The Government also say that a creditor could apply to the court to challenge the nominee's decision not to withdraw his consent; but the test is likely to be stiff. It would probably be necessary to show, in these circumstances, that the nominee's decision is manifestly unreasonable, or based on a failure to consider relevant matters, or the consideration of irrelevant matters. That could be a formidable obstacle to surmount. Why should he have to negotiate simply to present a winding-up petition or appoint an administrative receiver?
We have reflected on further amendments to this paragraph. The aim of the moratorium is the approval of the proposed voluntary arrangement under paragraph 29. It prevents creditors breaking rank. Sub-paragraph (4) of paragraph 29 prevents a meeting of members or creditors approving any proposal or modification which affects the right of a secure creditor to enforce the security, except with his concurrence.
The approval of the voluntary arrangement which the moratorium was intended to facilitate will allow secure creditors to enforce their security. However, the effect of the moratorium in paragraph 12 is to prevent secure creditors from doing so. On the one hand that seems to us to be wrong; because success in the shape of approval of the voluntary arrangement is the result of allowing a secure creditor to enforce his security, which is a mark of failure. It is therefore in the interests of unsecured creditors not to approve the voluntary arrangement in order to prevent a secure creditor from enforcing his security.
On the other hand, it may be desirable to forestall the secure creditors while negotiations are conducted with them with a view to their concurring in the voluntary arrangement. Furthermore, if they are secured they should be protected during the period of the moratorium and are unlikely to suffer much prejudice.
The Minister will no doubt be relieved to hear that, on balance, we prefer the moratorium to prevent secure creditors enforcing their security except as regards debenture holders with power to appoint administrative receivers. As I have already explained, they fall into a different category because such debentureholder security usually extends to assets that can be easily disposed of during the course of a moratorium. Accordingly, we do not propose any amendment other than this. I beg to move.
Lord McIntosh of Haringey: Indeed, the noble Lord, Lord Kingsland, ended by answering his own case very effectively; he led his troops up the hill and down
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again. This is the same argument as applied to the previous group of amendments. The only successful outcome of a moratorium is that everybody is satisfied that the business carries on and that the directors are left in charge of the business and everyone, including the debentureholders, the floating charge holders, are satisfied with whatever arrangement is agreed to. That is the only way in which a moratorium can be successful.
If that is to happen, one cannot have two procedures going on at the same time. That is the fundamental argument. The amendment would reduce the benefit for a company of obtaining a moratorium. Our intention is to give the company's management a short breathing-space in which to put a rescue plan to all its creditors. The amendment could make that pointless. The amendment would mean that would be nothing to stop a floating charge holder from appointing an administrative receiver during the moratorium. That would almost certainly be disastrous for any rescue attempt.
Lord Kingsland: With the leave of the court?
4.45 p.m.
Lord McIntosh: I will come on to the point about the leave of the court. If that happened, with or without the leave of the court, the receiver would be in charge of the assets of the company—that is what happens with receivership. He would assume control of all the company's assets and he would then presumably proceed, as receivers do, to dispose of them with a view to repaying the moneys due to the floating chargeholder, the debentureholder. We cannot see why a debentureholder should be the only creditor whose actions should not be stayed by the moratorium. If we are serious about giving companies the necessary short breathing place to put a rescue plan to all its creditors, then we have to reject this amendment. If not, the legislation, frankly, becomes a "dead letter". This could easily be a wrecking amendment.
We have provided that a company is only able to obtain a moratorium if the nominee is of the view that the directors' proposal for a voluntary arrangement has a reasonable prospect of being approved and implemented and also that the company is likely to have sufficient funds to enable it to carry on its business during the moratorium. Thus, any company that obtains a moratorium should stand a reasonable prospect of being able to agree and implement a rescue plan with its creditors. With the other safeguards in the Bill, that should give sufficient comfort to the creditors for the duration of the moratorium. If the debentureholder makes it clear to the nominee that the debentureholder, the floating chargeholder, is determined to go ahead and appoint a receiver and assume control of the assets of the company, I do not see how any nominee could have the necessary confidence that the proposal has a reasonable prospect of being approved and implemented.

CWH 13
In any case, the moratorium will be of a maximum period of 28 days and there are limitations on it being extended. We intend to allow secured creditors—which include the floating chargeholder—to vote for the full amount of their claims on any proposal for an extension of the moratorium beyond that initial period. So they will be able to have their say on whether or not the moratorium should be extended by any period up to a further two months.
If this amendment were to be accepted it could give rise to two conflicting and competing insolvency procedures at the same time; that is, the moratorium and the administrative receivership. In view of what I have said about control of assets, it would effectively wreck the moratorium.
If any creditor, and that includes a creditor who holds a floating charge, felt that a rescue via a moratorium would not work for some reason, he should express his concerns to the nominee. The purpose of that is to persuade the nominee that he must withdraw his consent to act and so bring the moratorium to an end. Under paragraph 23 of Schedule A1, the nominee is obliged to withdraw his consent to act if he forms the view that the proposed voluntary arrangement does not have a reasonable prospect of being approved or implemented or the company will not have sufficient funds to carry on its business throughout the moratorium.
The floating chargeholder may, perhaps, make it plain that he fully intends to appoint an administrative receiver the moment the moratorium comes to an end, and that may in itself affect the viability of the voluntary arrangement, which in turn may cause the nominee to withdraw his consent and end the moratorium. However, in the event that the nominee declined to withdraw his consent to act and the floating chargeholder was dissatisfied with that decision, application could still be made to the court under paragraph 24 to challenge that decision. Among other things, the court could bring the moratorium to an end and then the appointment of an administrative receiver could go ahead. We would expect any floating charge holder, who viewed a moratorium as pointless as he fully intends to appoint an administrative receiver, to approach the nominee to make that point. Because of his potential ability to wreck the implementation of an approved voluntary arrangement, it may well be that the nominee will feel the need to approach such chargeholders at an early stage to sound out their views on the proposed rescue attempt.
Lord Kingsland: I certainly could not have made my point at any greater length; but I might possibly have made it with greater clarity. Nevertheless, from the way in which the Minister has responded to me it is clear that he has understood what I am seeking.
Lord McIntosh of Haringey: Did the noble Lord, Lord Kingsland, say that I have understood, or have not understood?
Lord Kingsland: I said that the noble Lord had understood. It is not rare for the Minister to
CWH 14
understand me; he has become very used to having to understand me in the course of the Finance Bill and the Utilities Bill, and he is becoming even more practised with the Insolvency Bill. The Minister was concerned about the destructive effect that accepting my amendment might have on the moratorium; but would that not equally apply to the forfeiture of a le…ise in the case of a landlord? A landlord is entitled to move in under the forfeiture rules in a manner which would totally destroy the moratorium. So why does he have a special privilege but not the debentureholder?
Lord McIntosh of Haringey: The noble Lord has tabled amendments on the forfeiture of lease, and I am very happy to debate them.
Lord Kingsland: I am sure the Minister has amendments and—
Lord McIntosh of Haringey: No, the noble Lord has amendments.
Lord Kingsland: We have amendments but I am asking the Minister that question in relation to the basis upon which he argued against my amendment in this instance.
Lord McIntosh of Haringey: I am willing to stand up and make the case about landlords and forfeiture of lease when we are debating an amendment on that point. I have listened to the lengthy exposition of the noble Lord, Lord Kingsland. I do understand the amendments correctly, and he has acknowledged that, but they would wreck the moratorium.
Lord Kingsland: Let us suppose that I accept that proposition. It is also true in those circumstances that full forfeiture would wreck the moratorium.
Lord McIntosh of Haringey: I accept that.
Lord Kingsland: The noble Lord has just advanced another argument.
Lord McIntosh of Haringey: To which I shall respond when we reach that amendment.
Lord Kingsland: The Minister will have the pleasure of responding to my noble friend Lady Buscombe, because it will be my noble friend and not I who will be advancing the amendment. Meanwhile, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendment No. 13 not moved.]
Baroness Buscombe Baroness Buscombe moved Amendment No. 14:
Page 14, line 27, after ("property") insert ("and no lease of the company may be forfeited").
The noble Baroness said: In moving Amendment No. 14 I wish to speak also to Amendments Nos. 82 and 110. We are focusing here on what might be described as a long-standing omission or mistake in the Insolvency Act 1986. I refer to the ability of the landlord to effect peaceable entry during the period of a moratorium. We are very grateful for the discussions

CWH 15
which we had with the Minister on this point following Second Reading. However, we continue to believe that there are insufficient reasons for the Government not to treat peaceable re-entry in exactly the same way as other proceedings. That said, were these amendments accepted they would be inconsistent with similar provisions in the Insolvency Act, and so would not of themselves cure the inconsistency.
We believe that this point must be carefully considered, as we discussed with the Minister. It cannot be ignored. We are therefore particularly interested to hear what the Minister has to say. On that basis we may or may not consider returning to the point on Report. I beg to move.
Lord McIntosh of Haringey: This is clearly a very important matter. We discussed it between the Second Reading and the Committee stage and I acknowledged clearly enough that we take this very seriously indeed. Perhaps I may start by marking the distinction between forfeiture of a lease, a floating charge and an administrative receiver. If a landlord forfeits the lease then the company loses the lease. That may or may not be critical to its ability to do business. Some businesses can continue, particularly in this electronic age, without having a lease. They could retreat to the back bedroom. However, if a floating chargeholder appoints an administrative receiver then the company loses control of all of its assets and there is no possibility of it carrying on or making a rescue attempt.
Having made that distinction between the debentureholder and the landlord, we recognise the importance that this issue may have in determining whether or not a successful rescue is achieved. We can understand the need to bring forward these amendments and we are grateful to have the opportunity to debate them. There are, of course, implications for bankruptcy cases as well. This is potentially a very complex and controversial area, which needs careful consideration before we legislate. That is why we did not put it into this Bill. This is a very modest Bill about a moratorium rather than a review of the whole of insolvency legislation. It is also why the joint DTI/Treasury review of company rescue mechanisms was specifically asked to consider the area separately—some months ago—which it has done done.
It could be argued that there is no need to legislate to prevent landlords from effecting peaceable re-entry as steps can be taken to prevent that happening. For example, a landlord cannot effect peaceable re-entry if there is someone present at the premises at the time who opposes the re-entry. However, that may well involve incurring costs the company can ill afford. Additionally, a landlord who wishes to forfeit a lease by way of peaceable re-entry, other than for arrears of rent, must issue a notice under Section 146 of the Law of Property Act. A tenant then has the right to apply to the court for relief from forfeiture. As we understand it, relief is usually granted where the breaches are capable of remedy within a reasonable period.
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However, that could also involve costs that the company cannot afford. Forfeiture is not a means of recovering outstanding rent but a longstanding right designed to allow a landlord to protect his interests in the property where there has been some act or omission on the part of the tenant. Furtermore, while other creditors can decline to offer further credit during a moratorium, if a landlord is unable to exercise his right to forfeiture where rent is not forthcoming he becomes an unwilling and involuntary creditor—though clearly he would not be alone in that respect. For instance, owners of leased assets are currently unable to take action under their agreements without the leave of the court while a moratorium is in existence.
However, we recognise that, where exercised, this self-help remedy can deprive a company of its trading premises and, in certain circumstances, wreck its business. Consultation on this particular matter is, however, important. The noble Baroness, Lady Buscombe, in her comments on consultation at Second Reading, suggests that she recognises that. Since Second Reading, therefore, we have put in hand a brief consultation on the point. We have requested views on the proposals that landlords should not be able to effect peaceable entry without consent or the leave of the court, while a company or individual is subject to a statutory moratorium in the context of an insolvency procedure.
The closing date for responses to this brief consultation process is 7th July. We intend that the matter will be determined in the context of the passage of this Bill through Parliament. By this I mean that it is unlikely to be in this House but we will reach a conclusion on it before the Bill leaves another place. I hope that will reassure the Opposition that we have taken seriously the views that were expressed at Second Reading and that this amendment would not be appropriate at this stage.
Baroness Buscombe: I thank the Minister for his comments. This is extremely good news. It is a complex and controversial issue which deserves serious consideration. We take a number of the points that he has made—particularly, for example, in relation to costs that would probably be incurred by landlords—and obviously want to read with great care what the Minister had to say.
The consultation itself is important. We are delighted to hear that there is now in place a consultation with the industry so that it has an opportunity perhaps to offer ideas for a resolution to this. We note his remarks and therefore have pleasure in withdrawing the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 15 and 16 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 17:
Page 14, line 48. at end insert—
(" .—(1) This paragraph applies where there is an uncrystallised floating charge on the property of a company for which a moratorium is in force.
(2) If the conditions for the holder of the charge to give a notice having the effect mentioned in sub-paragraph (4) are met at any time, the notice may not be given at that time but may instead be given as soon as practicable after the moratorium has come to an end.
(3) If any other event occurs at any time which (apart from this sub-paragraph) would have the effect mentioned in subparagraph (4), then—

(a) the event shall not have the effect in question at that time, but

(b) if notice of the event is given to the company by the holder of the charge as soon as is practicable after the moratorium has come to an end, the event is to be treated as if it had occurred when the notice was given.

(4) The effect referred to in sub-paragraphs (2) and (3) is—

(a) causing the crystallisation of the floating charge, or

(b) causing the imposition, by virtue of provision in the instrument creating the charge, of any restriction on the disposal of any property of the company.

(5) Application may not be made for leave under paragraph 12(1)1f) or (g) with a view to obtaining—

(a) the crystallisation of the floating charge, or

(b) the imposition, by virtue of provision in the instrument creating the charge, of any restriction on the disposal of any property of the company.").

The noble Lord said: The concept of a floating charge, as I have been calling it—a debenture as the noble Lord, Lord Kingsland, has been calling it—is well known in this country, particularly to those who have needed to obtain financial support for their companies. Indeed, it is worse than that. Having run my own company for 30 years I am very familiar with the floating charge and, indeed, very familiar with personal guarantees, which go much further than the floating charge.
As the name suggests, the floating charge is a form of security which does not attach to a particular asset. It covers, like the Sword of Damocles, assets not subject to a fixed charge. Generally, it attaches itself only to those assets, or "crystallises". as it is usually called, when some specific event or events occur. What these events are is usually set out in the legal documents creating the charge. A consequence—and a very desirable one at that—of the charge floating is that the company is free to deal with the assets without constantly having to refer back to the chargeholder.
However, on Second Reading I referred to our concern that without this amendment the stay of creditors' rights contained in the Bill would not be fully effective against possible action by the holder of a floating charge. The intention is that we have an effective stay on creditors' rights and so give the company the breathing space it needs to put its rescue plan to creditors. We have therefore brought forward this amendment so as to prevent a floating charge from crystallising, or restrictions being imposed upon the company's ability to dispose of charged property during a moratorium. This leaves the company able to deal with its assets during the moratorium in the same way as it could before the moratorium was obtained. That is because if we permitted either of those events to occur during a moratorium it would be likely to result in a virtual paralysis for the company. To dispose of any goods covered by the charge if either of those events had occurred would need the consent of
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the chargeholder or the permission of the court under paragraph 19. That clearly would be impractical in a trading situation and make any rescue attempt very difficult to achieve, if not an impossibility.
However, we have also provided that the charge may crystallise, or restrictions be imposed on the disposal of assets, once the moratorium ends —if that is what the floating chargeholder wishes. The reason is that the secured creditor's rights are only stayed during a moratorium and they should be reinstated as soon as the moratorium ends. That will be achieved by the chargeholder issuing a notice to that effect once a moratorium has come to an end. That will mean that the floating chargeholder will still be able to rely on an event which occurred during the moratorium, so as to crystallise their charge or impose restrictions. Without such a provision, in certain circumstances such an opportunity might otherwise be lost—for example, where crystallisation is to be based on an event which cannot be repeated, such as the resignation of a specific individual.
This approach is consistent with the impact of a moratorium on the treatment of other creditors who are generally prohibited from taking action against the company—other than with the leave of the court—for the period that a moratorium is in force, and whose rights are restored once a moratorium ends, subject to their not being bound by an approved voluntary arrangement. A stay on creditors' rights is fundamental. Without it, the directors will not have the necessary short breathing space within which to put the rescue plan to creditors.
Members of the Committee will note the symmetry of my amendment with those which were moved by the noble Lord, Lord Kingsland, in an earlier group. I beg to move.
On Question, amendment agreed to.
Lord Kingslandmoved Amendment No. 18:
Page 14, leave out lines 49 to 51 and insert—
("13.—(1) Any security granted by the company at a lime when a moratorium is in force in relation to the company is invalid except for the extent of the aggregate of—

(a) the amount of any money paid, or the value of goods or services supplied, to the company at the same time as, or after, the security is granted, which is, and is intended to be, secured by the security, and

(b) the amount of such interest (if any) as is payable on the amount falling within paragraph (a) in pursuance of any agreement under which the money was so paid or the goods or services were so supplied.

(2) For the purposes of sub-paragraph (1)(a), the value of any goods or services supplied is the amount in money which at the time they were supplied could reasonably have been expected to be obtained for supplying the goods or services in the ordinary course of business and on the same terms (apart from the consideration) as those on which they were supplied to the company.").
The noble Lord said: Paragraph 13 of the new Schedule A1 provides that any security granted during the period of the moratorium can be enforced only if, at the time it was granted, there were reasonable grounds for believing that it would benefit the company. That provision will make it extremely

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difficult to raise finance during the moratorium. Its validity would depend on whether there were reasonable grounds for believing that the security would benefit the company, and that is too demanding a criterion.
Instead, we suggest that the Bill imitates the provisions of Section 245 of the 1986 Act, which avoids floating charges created within a specified period before a company goes into liquidation. Such charges are invalid, save with respect to fresh money or the value of new goods and services provided after the security was granted. That test would, in our view, be a workable one. I beg to move.
The Deputy Chairman of Committees: I remind the Committee that this amendment pre-empts Amendments Nos. 19 and 20.
5 p.m.
Lord Sharman: I would like to speak to Amendments Nos. 19 and 20 which stand in my name. As the noble Lord, Lord Kingsland, has already explained, there are concerns, which I share, about the ability to raise finance during the period of the moratorium, were paragraph 13 to remain unamended.
Amendment No. 19 effectively creates some sort of safe haven, albeit a small one, for a funder who acts in good faith in dealing with the nominee who, in his opinion, is taking the right action in accepting the security.
Amendment No. 20 seeks to clarify the issue hut, of course, it is difficult, even in my judgment, for security to benefit an entity; it is the transaction which gives rise to the granting of security that should be the test in terms of benefiting the entity.
For the reasons outlined by the noble Lord, Lord Kingsland, the paragraph does need amendment. My own view is that it could be simply amended as I have set out in these proposals.
Lord McIntosh of Haringey: I propose to speak to the three amendments together. I apologise for not having grouped them together when we first sent out the groupings list yesterday.
We can see that Amendment No. 18 would guarantee the enforceability of a charge taken where new moneys are advanced or goods or services are supplied on credit during a moratorium; that is clearly its intention. It is possible, however, that giving security for an existing debt may be necessary in order to, say, secure future essential supplies during the moratorium. This would not be covered by the amendment, but it would be for the benefit of the company.
The amendment would not ensure that the security could only be enforceable if there were reasonable grounds for believing—at the time the security was taken—that it would benefit the company. I remind the Committee that the phrase "for the benefit of the company"—I am not sure whether the noble Lord,
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Lord Kingsland, thinks that it is not clear enough or not important enough, but in any case he does not think it is sufficient—is absolutely critical to this part of the Bill. This pre-condition of benefit is essential. The position of the company's other creditors should not be prejudiced by the company giving new security over its assets to a supplier of new credit where no benefit will flow, as it is likely to reduce the amount of money available for them all. If a plausible case were put to a bank for credit and the directors went off on holiday with the money, clearly that is not an acceptable use of the moratorium, and the other creditors would have a right to feel aggrieved.
The company's "free" assets, which would be available to pay its unsecured creditors, may be depleted to no advantage. And that is why we have provided that security can only be enforced if there were reasonable grounds, when it was granted, for believing that it would benefit the company. We appreciate that this throws the onus on the creditor to satisfy himself, before taking security, that he will be able to enforce it if it is necessary to do so. But this should ensure the desired effect as no one is likely to lend on the basis of security unless there is a clear benefit to the company.
We can also see how this amendment might enable the company to obtain funding during a moratorium. But in certain instances we do not consider that what is proposed would be appropriate, for the reasons I have given, as equity to the other creditors. We consider it vital that security should only be enforceable where a benefit would flow to the company. We remain of the view that we need to consult fully on the issue of funding before we can find an effective solution to this complex and difficult problem. We should not overlook the fact that before entering the moratorium the nominee would need to have given his opinion that the company is likely to have sufficient funds to enable it to carry on its business during the short moratorium period.
As for Amendments No. 19 and 20, we consider it appropriate that the onus should be on a potential lender to satisfy himself, before he takes new security from a company during a moratorium, that he will be able to enforce it if necessary. By placing the onus on the creditor this should produce the desired effect as no one is likely to lend on the basis of security unless there is a clear benefit to the company; in effect, as if he had read the Bill or the rules which will be publicised if and when the Bill is enacted.
We consider it undesirable for the nominee to be involved, particularly as, no doubt, lenders would want to satisfy themselves that their security will be enforceable if they need to take action to recover their debt by realising their security. We see that the granting of the security and the transaction leading to it is inextricably linked, so there is no real need to distinguish between the two as the noble Lord, Lord Sharman, suggested. Thus, alas, we are not able to accept these amendments.
Lord Kingsland: Perhaps I could just say to the Minister that the merits of our amendments are that,

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in so far as these things can be specific and measurable, they are unlikely to lead to an excess of ex post litigation. By contrast, the Minister's criterion is exceedingly vague and open to many interpretations and, therefore, likely to lead to prolonged disputes in the courts long after the company has been wound up.
I urge the noble Lord to reflect on what the opposition have said about this matter; and hope that he will come back at Report stage absolutely convinced that we are right. Meanwhile I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos.19 and 20 not moved.]
Lord Sharmanmoved Amendment No. 21:
Page 15. line 31, at end insert—
("and for the purposes of this paragraph, "hire purchase agreement" shall not include conditional sale agreements, chattel leasing agreements or retention of title agreements").
The noble Lord said: As I speak to move this amendment standing in my name, it is to help me understand what I saw as a potential conflict between the definitions of what constituted a, hire purchase agreement. By virtue of paragraph 1 of Schedule A1 a retention of title clause comes within the definition of a hire purchase agreement. In paragraph 16(2)(a) we also refer to a hire purchase agreement, or a conditional sale agreement. However, the hire purchase agreement is defined in paragraph 1 as including a condition of sale agreement as well as a chattel leasing agreement and retention of title agreement. It is not clear to me whether paragraph 16(2)(a) is intended to encompass the latter two types of agreement. If it is then I believe it needs to be specific, and if it is not then perhaps some further clarification would be useful. I beg to move.
Lord McIntosh of Haringey: I think I can answer the question simply. The current wording in paragraph 16 follows that used in the corresponding provision in Section 360 of the Insolvency Act 1986, with an extended definition of hire purchase agreement to include conditional sale agreements, chattel leasing agreements and retention of title agreements. The extended definition of hire purchase is to be found in paragraph 1 of Schedule 1A, and of course is the same as that which the noble Lord uses in the amendment.
The offence of obtaining credit in paragraph 16 is explicitly extended by paragraph 16(2) to include,
"where goods are bailed (in Scotland. Hired)…or…agreed to be sold"
under the two types of agreement specifically referred to; namely, hire purchase for goods being bailed and conditional sale agreements for goods agreed to be sold. As it is not generally apt to refer to bailment in the context of a conditional sale agreement, it is necessary to make separate reference to the circumstances in which the goods are agreed to be sold under this type of agreement in order that this provision will have the effect we intend. Moreover, goods supplied under a chattel leasing or retention of title agreement will not be caught by paragraph
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16(2)(a) for the same reason. The paragraph as drafted is beastly complicated but it is necessary to ensure that prosecution can be undertaken in appropriate circumstances.
Perhaps the noble Lord, Lord Sharman, will allow me, while I am still in the mode of hire-purchase agreements, to say something about his Amendment No. 23 which I know he has not yet moved but which concerns the same issue.
A company that has entered a moratorium may have goods that are subject to hire-purchase, conditional sale, chattel leasing or retention of title agreements. Under paragraph 19, during the moratorium the company is able to deal with these goods within the terms of the relevant agreements because the company is, of course, carrying on business as usual. Paragraph 19 also provides that a company may dispose of goods, which are the subject of such agreements, provided certain conditions are first satisfied.
If we agree to Amendment No. 23 it would mean that the company's ability to dispose of goods under conditional sale, chattel leasing or retention of title agreements would be restricted to the company's ability to dispose of them under the terms of the relevant agreements. This would be, in our view, unduly restrictive, as the company may need to dispose of such goods in order to raise funds or reduce overheads. It might be a perfectly proper business decision. However, the rights of the holder of security, or the owner, as the case may be, are protected by subparagraphs (4) and (6).
I hope that that anticipates the arguments that the noble Lord, Lord Sharman, was going to use about Amendment No. 23 and I hope that what I have said about Amendment No. 21 will persuade him that our view is correct.
Lord Sharman: I agree entirely with the noble Lord when he says that the drafting of this is difficult to understand but, having heard his explanation, I wish to reflect on it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Baroness Buscombemoved Amendment No. 22:
Page 16, line 8, at end insert—
("(4) A disposal of the company's property to any person other than a person who is connected with the company shall not be avoided only on the ground that sub-paragraph (1)(a) was not satisfied, but any officer of the company who authorises or permitted the contravention, without reasonable excuse, is liable to indemnify the company for any loss or damage resulting from the disposal.").
The noble Baroness said: Paragraph 17 of the new Schedule A1 restricts a company from disposing of its property unless there are reasonable grounds for believing that the disposal would benefit the company and the disposal is approved by the moratorium committee or, where there is no such committee, by the nominee. It is not clear whether or not any such

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disposal is avoided if it should turn out that the grounds for believing that the disposal would benefit the company were not reasonable.
That must be clarified, we believe, because it is not acceptable for any disposal to someone who is not connected with the company to be avoided at a subsequent date. That would have a substantial effect on the price to be paid. Both the company and the purchaser would be prejudiced. The company would get a lower price for its property and the purchaser would obtain property which might subsequently be claimed back by the company. That would be particularly unacceptable for any purchaser because such a purchaser should not be put on enquiry as to the grounds for the belief that the disposal would benefit the company, particularly if approved by the moratorium committee or the nominee.
The point is that, as the Bill is currently drafted, when forming an agreement with a third party and entering into a contract with him where there has been a moratorium, the contract is going to be of dubious validity, unless there are reasonable grounds for believing that their disposal would benefit the company. What sort of a contractual restriction is that? Why should a third party be interested in or concerned with whether the transaction is going to be for the benefit of the company? We do not believe that this is realistic. Moreover, if there is a risk of the contract being avoided, why would a person enter into it in the first place? He would surely go elsewhere. I beg to move.
Lord McIntosh of Haringey: I apologise to the noble Baroness, Lady Buscombe, for having my attention distracted.
Baroness Buscombe: Would the noble Lord like me to repeat that?
5.15 p.m.
Lord McIntosh of Haringey: I hope the noble Baroness will forgive me on the basis that I am going to make a friendly response to the amendment. We recognise the concern that if disposal were made contrary to paragraph 17 of Schedule A1, they could be invalid and unenforceable. We have concluded that this is right. We see that it would be damaging to rescue attempts if third parties were reluctant to deal with a company which is in a moratorium because of doubts about whether the contract would be enforceable against the company. We agree that this issue must be addressed in the Bill. Unfortunately, the amendment does not fully achieve what is required.
The amendment also seeks to make officers liable to indemnify the company for any loss or damage they cause to it by permitting, or authorising, a disposal which is contrary to paragraph 17 of Schedule A 1. Paragraph 38 of Schedule A1 provides that the court can make such order as it thinks fit when the actions of the directors are challenged. Such an order may require a director to indemnify the company where it
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had suffered a loss because he had caused the company to make a prohibited disposal. The Bill already deals with that particular point.
The amendment would still leave a third party needing to satisfy himself as to whether the proposed transaction is in the ordinary course of the company's business, and if not, whether the appropriate consent has been obtained from the nominee or committee under paragraph 17(1)(b). These difficulties may still make third parties wary of dealing with the company. In my view the proposed Amendment No. 22 would not fully deal with the issue which concerns us all regarding the effect of paragraph 17 on third parties. However, we will be bringing forward amendments as soon as we can—and I am not promising that it will be at Report stage—to make it clear that contracts entered into in breach of paragraph 17 will be enforceable by third parties against the company.
Baroness Buscombe: I thank the Minister for his very helpful response. We look forward to seeing the amendments when they are drafted. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 23 and 24 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 25:
Page 18, leave out lines 3 to 5.
The noble Lord said: Paragraph 22 of the new Schedule AI imposes an obligation on the nominee to monitor the company's affairs during the moratorium. He has to believe that the proposed voluntary arrangement has a reasonable prospect of being approved or implemented; and that the company will have sufficient funds available to it during the remainder of the moratorium to enable it to carry on business. If he does not hold that opinion he must withdraw his consent to act in accordance with paragraph 23.
Paragraph 22(3) provides that, in forming his opinion, he is entitled to rely on the information submitted to him by the directors under subparagraph (2),
"unless he has reason to doubt its accuracy".
This provision is similar to the provision in paragraph 6(3).
In our view, during the course of the moratorium a nominee should be under a duty to verify the information submitted to him by the directors from independent sources. When a company's financial affairs are so parlous that a moratorium is appropriate the directors are often desperate enough, no doubt frequently innocently, to mislead a nominee. We believe it is unreasonable for a nominee to rely upon the judgment of directors during the course of a moratorium; although at the beginning of the process there appears to be no alternative to this course.
We do not believe that, during the course of the moratorium, the nominee should only rely on the information submitted to him by the directors. He must obtain some cross co-ordinates. I beg to move.
Lord McIntosh of Haringey: The noble Lord, Lord Kingsland, is entirely right. We intend that during a

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moratorium the nominee should be entitled to rely on the information given to him by the directors, for monitoring purposes, unless he has reason to doubt its accuracy. There is a very good reason for that. If the nominee had to establish and/or verify the information for himself the process would be likely to be prohibitively expensive. These additional costs would probably deny those companies which need the new moratorium the most the opportunity to use it. If that were so, this would undermine our purpose in legislating in this area.
However, the Bill does address the concerns which lie behind this amendment. First, we have provided, under paragraph 23(2)(c) of Schedule A1, that the nominee must withdraw his consent to act and so end the moratorium if the directors do not supply the necessary information required of them under paragraph 22. Also, supplying incorrect information would mean that the directors have not complied with that obligation and on becoming aware of that fact the nominee would have to withdraw in that instance too.
Secondly, depending on the circumstances, a director may also have committed an offence contrary to paragraph 40 of the schedule if he fails to provide the nominee with the requisite information or submits incorrect information. We consider that that should discourage any misconduct in this area by rogue directors who hope to prevent a nominee from ending a moratorium by providing misleading information.
We therefore consider it essential that paragraph 22(3) of Schedule Al is retained, rather than removed as proposed by the amendment. We also consider that adequate safeguards are in place to deal with the concerns which have led to this amendment.
Lord Kingsland: I thank the Minister for his reply. I am partially reassured by what he has said and will look again at the amendment to see whether or not there is another way to put the point. Meanwhile, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Sharman Lord Sharman moved Amendment No. 26:
Pap 18, line 12, leave out ("must") and insert ("may").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 27, 29 and 34, which are grouped with it.
All of these amendments deal with the situation in which the nominee ceases to act or may be required to cease to act. Amendment No. 26. changes the obligation on the nominee from a mandatory obligation to an optional one. Given that the purpose is to create a relatively short moratorium, which should—as the Minister has already said—be flexible, it would be beneficial to give the nominee, who after all would be someone experienced in these matters, the flexibility, rather than the obligation to withdraw in those circumstances.
Amendment No. 27 also deals with the circumstances in which the nominee must or may withdraw his or her consent to act. It adds to the clause the obligation that the opinion on which that decision
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might be founded should be a reasonable one. Circumstances could be envisaged in which it would be unreasonable for somebody to state a particular opinion in these circumstances and the requirement that it should be based on reason is necessary.
Amendment No 29 deals with the circumstances in which a nominee may wish to withdraw his consent to act, which fall outside the terms as set out currently in paragraph 23. Paragraph 23 provides for very specific circumstances in which a nominee may withdraw his or her consent to act. It would be good to have an all-encompassing provision, where the nominee could apply to the court for reasons based on circumstances that fall outside those relatively narrow definitions. Amendment No. 29 seeks to do just that.
Finally, Amendment No. 34 extends the remit in paragraph 26 of Schedule 1 to allow, by the application of a creditor, for the replacement of a nominee who has failed to carry out any of his or her duties. I will return to the issue of the fundamental duty of the nominee later in our discussions. However, on Second Reading I made the point that I was concerned that there needed to be an understanding of where the duty of the nominee fundamentally lies. Is it a care to the creditors, to the court, to the company, or to the directors? I believe it is necessary that the creditors should have the right to apply for the removal of a nominee who has failed to comply with the duties imposed on him in this Schedule. I beg to move.
5.30 p.m.
Lord McIntosh of Haringey: I shall deal with each of these amendments in turn. To accept Amendment No. 26 would give the nominee discretion to withdraw his consent to act, rather than being obliged to do so.
If it becomes clear that the voluntary arrangement is unlikely to be approved and implemented, the moratorium should be brought to an end. If no rescue is in prospect we consider that the company should not have the protection afforded by a moratorium and so the nominee must withdraw his consent to act.
Similarly, we consider that the nominee should have no option but to withdraw his consent to act if he becomes aware that when the company filed for a moratorium it was ineligible to do so. A company should not have the continuing benefit of a moratorium if it was not entitled to the moratorium in the first place.
Similarly, again, if the directors do not provide the information the nominee requests, so that he can monitor the company's affairs during the moratorium, we consider he must also be required to withdraw his consent to act. Monitoring is an important safeguard in the moratorium period. If the nominee cannot monitor the company's affairs as he thinks fit the company should not continue to have the benefit of the moratorium.
The circumstances set out in paragraph 23(2) requiring a nominee to withdraw are such that he should have no option but to withdraw if he forms the opinion that one or more of them applies. We

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therefore do not consider the nominee should have the discretion to remain in office under these circumstances and we cannot support this amendment.
Amendment No. 27 would require that the nominee must only withdraw his consent if he forms the reasonable opinion that, first, the proposed voluntary arrangement no longer has a reasonable prospect of being approved or implemented or, secondly, the company will not have sufficient funds available to it during the moratorium to enable it to continue in business.
We agree that where the nominee does form an opinion under paragraph 23(2) it should be reasonably held. However, inserting the additional requirement that his opinion should be reasonable is not necessary in this paragraph. If the nominee acts unreasonably then his decision can be challenged by an application to the court under paragraph 24. It follows therefore that, where challenged, if a nominee withdrew his consent to act under paragraph 23 on the basis of an unreasonable opinion the court can make an appropriate order which would provide the remedy which I think the noble Lord, Lord Sharman, is seeking.
It seemed to be suggested that there is a conflict of roles for the nominee during a moratorium—that of an independent office holder with a duty to the general body of creditors and that of a professional adviser with a duty of care to his client. We do not see any conflict of role for the nominee. His role is set out in the Bill and that role determines his duties and responsibilities. He has functions to fulfil under Schedule A1. For example, before a company can obtain a moratorium he is required to express his opinion on various matters. He will either consider that he can make the required statement set out in paragraph 6, or not. In certain instances he is required to give notice to various individuals and in other instances he is required to approve certain transactions which the company may only enter into if they satisfy certain requirements. He will either be content that they satisfy those requirements, or he will not. He has to monitor the company's affairs so that, if the circumstances require, he will withdraw his consent to act and bring the moratorium to an end.
Turning to Amendment No. 29, this amendment seeks to give the nominee an ability to withdraw his consent to act—thus bringing the moratorium to an end—by way of obtaining leave from the court. But the Bill already provides enough flexibility to enable him to withdraw his consent where appropriate. We have provided that he must withdraw his consent to act at any time during a moratorium, if he forms the opinion, which I have already set out in my response to the earlier amendment, that the voluntary arrangement, as proposed or with modifications no longer has a reasonable prospect of being approved or implemented, or that the company will not have sufficient funds available to it to enable it to continue to carry on its business during the remainder of the moratorium.
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He must also withdraw his consent to act if he becomes aware that when the company filed for a moratorium it was ineligible to do so, or if the directors fail to provide him with the necessary information.
One or other of these grounds would provide for the nominee to withdraw his consent in any appropriate circumstances and that would bring the moratorium to an end. These are decisions for the nominee and not for the court and we would not wish to provide further that the nominee could withdraw his consent to act with the leave of the court. I believe case law shows that if a nominee went along to the court in those circumstances the court would be likely to say "It is nothing to do with us, go back and do your job". Under those circumstances, I ask the noble Lord, Lord Sharman, not to press this amendment.
On Amendment No. 34, in our view it would be inappropriate to extend the scope of paragraph 26 to allow creditors to apply to the court to replace a nominee. A creditor who is not satisfied with the conduct of a nominee can already apply to the court under paragraph 24 and the court can make any order it thinks fit to deal with the situation complained of.
Alternatively, the replacement of the existing nominee by another nominee could be made a condition of any extension of the moratorium under paragraph 31, or approval of a voluntary arrangement under paragraph 29. We think nothing further is needed.
Lord Sharman: I listened with great care to what the Minister had to say. I should like to read it carefully in Hansard and reflect upon it, but I do see a fundamental difference of view between us. That is the difference between an individual having a number of different roles and an individual having a different duty of care. In many cases one can carry out different roles, but one's duty of care very frequently can become conflicted if it is to more than two or three people. Having said that, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 27 to 29 not moved.]
Lord Sharmanmoved Amendment No. 30:
Page 18. leave out lines 36 to 48 and insert—
("Directions to nominee
24. The nominee may apply to the court for directions in respect of any matter arising in connection with the performance by him of his functions.").
The noble Lord said: I beg your Lordships' indulgence because in moving Amendment No. 30 I shall speak also to Amendment No. 32, which is grouped with it. The issue here is to whom the nominee owes his fundamental duty of care. Amendment No. 30 seeks to provide the ability for the nominee to apply to the court for directions. It also removes the answerability to parties other than the creditors generally and to the court.
An individual may be fulfilling a number of roles. It is difficult for me to see how his fundamental duty of care can be to more than one particular body. He may

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well be there to supervise a moratorium for a limited period of time, but it will be found to be almost impossible to attract professionals into this function unless there is a clear definition of the duty of care. In my judgment, this amendment seeks simply to put that issue on the table and suggest that it should be to the creditors generally and to the court. Amendment No. 32 is a consequence of that decision. I beg to move.
The Deputy Chairman of Committees (Lord Brougham and Vaux): I should advise the Committee that if this amendment is agreed to I cannot call Amendment No. 31.
Baroness Buscombe: I should like to speak to Amendment No. 30 and, with it, Amendments Nos. 31 and 32. We are in considerable agreement with regard to the amendment moved by the noble Lord, Lord Sharman—to the extent that we agree that the nominee should be able to apply to the court for directions in respect of any matter arising in connection with the performance by him of his functions. However, we do not agree to the extent that the noble Lord seeks to remove lines 36 to 48. It is our view that a creditor would then be unable to challenge the nominee's decision. We cannot believe that that is the noble Lord's intention. It would be unrealistic for creditors to be allowed the right to challenge the decision of the nominee. There is common ground between us and we should be happy if Amendment No. 31 were accepted. However, the removal of lines 36 to 48 would present a problem. The nominee should have the right to ask the court for directions. This jurisdiction has always been given to office-holders in the position of the nominee. The original right was that of a trustee to apply to the court for directions, and that right has been given to all office-holders who do not act in self-interest, or similar office-holders.
We cannot support the noble Lord's second amendment on this point, Amendment No. 32. It seeks to remove a further right from the creditor; namely, the right of the creditor, and others, to take proceedings against the nominee. Would that have the effect of granting immunity to nominees—many of whom are likely to be accountants?
Lord McIntosh of Haringey: Amendments Nos. 30 and 32 are -ferocious" amendments which would remove from creditors a considerable element of the protection which, as the noble Baroness, Lady Buscombe, has rightly pointed out, is carefully provided for in this part of the schedule. Paragraph 24 provides that,
"(1) I f any creditor, director or member of the company, or any other person affected by a moratorium, is dissatisfied by any act, omission or decision of the nominee during the moratorium, he may apply to the court".
In general terms, paragraph 25 provides that,
"(1) Where there are reasonable grounds for believing that—

(a) as a result of any act, omission or decision of the nominee during the moratorium, the company has suffered loss, but

(b) the company does not intend to pursue any claim it may have against the nominee,

any creditor of the company may apply to the court".
I repeat the warning that I gave about applications to the court. Courts are quite unlikely to entertain such applications and Mr Justice Neuberger in a recent case expressed the view that the courts should not be used by the administrator in relation to an administration order as a way of avoiding commercial and administrative decisions which are properly for him, and to enable him to obtain the court's endorsement of his intended course of action. The judge said that the court was not there to act as a bomb shelter for the administrator. The case was T&D Industries plc v Another—and, as he is nodding, it seems that the noble Lord, Lord Kingsland, knows the case.
I do not believe that the duty of care issue is as the noble Lord, Lord Sharman, described it. There is only one possible successful outcome of a moratorium, and that is an agreed voluntary arrangement. Thai: cannot be achieved without a duty of care to all the parties; they all have to accept that the voluntary arrangement is agreed to. However, these "ferocious" amendments would remove the important safeguards provided by paragraphs 24 and 25 for those affected by a moratorium which enable interested parties 1.o challenge a nominee's actions. They are replaced with a provision that the nominee may apply to the court for directions in respect of any matter arising in connection with the performance by him of his functions. That provides no safeguard for interested parties, but offers a nominee the means to seek directions from the court, which, as I have indicated, is unlikely to be successful. The nominee should be accountable for his actions; that is why we need paragraphs 24 and 25.
I now turn to Amendment No. 31. We do not consider that the nominee should be given the power to apply to the court for directions, for exactly the reason I gave in response to other amendments. The nominee's role in the moratorium is such that he should not be in a position where such an application is appropriate. We must not lose sight of the fact that the nominee will not have any of the company's assets in his possession nor will he be running its affairs.
Commercial and administrative decisions are for the nominee, not for the court. We do not consider hat the courts should be used to provide the nominee with a way to avoid taking decisions which are rightly for him and to enable him to obtain the court's endorsement of his intended course of action. That is what I believe Mr Justice Neuberger was saying.
5.40 p.m.
Lord Sharman: I can see very little wrong with immunity for accountants. That said, it was my expectation that, under the Bill's provisions, quite a number of people who would act as nominees and supervisors would not be accountants; they would be from a new body or bodies to be recognised. I fear there is still some distance between us on the issue of duty of care and I want to reflect on the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 31 and 32 not moved.]
Baroness Buscombe Baroness Buscombe moved Amendment No. 33:
Page 19. line 18, after ("in") insert ("and fund").
The noble Baroness said: Paragraph 25 of new Schedule A1 gives the creditor the right to apply to the court where the company has suffered loss as the result of some act or omission of the nominee. On such application, the court can authorise the creditor to pursue a claim in the name of the company. In our view, the court should have power to direct the company to fund the creditor in bringing the claim.
In essence, where the company has suffered loss as a result of an act, omission or decision of the nominee, and where the company has no intention of pursuing a claim it may have against the nominee, we believe that not only, as the Bill provides, should the creditor be able to apply to the court for authorisation to pursue a claim and direct the company to assist in the pursuit of a claim; we believe it only reasonable, only equitable, that the company should fund that claim.
That approach is in accordance with numerous decisions, including, for example, Wallesteiner v Moir and subsequent cases. Where a minority shareholder wishes to bring a minority shareholder's action in the name of a company, he can apply for an indemnity against the costs of that action. We feel that a similar opportunity should be provided here; otherwise, the creditor is paying for litigation for the benefit of the company—in which case, the Bill as drafted discourages any such creditor. I beg to move.
Lord McIntosh of Haringey: I hope I can reassure the noble Baroness. The amendment indicates a concern that the court may not be able to order the company to fund a claim where it authorises—as it can do under 25(3)—a creditor to pursue a claim against a nominee under that paragraph. Paragraph 25(4) gives examples of matters which may be covered by an order made under sub-paragraph (3). It is clear from the words "among other things" in sub-paragraph (4) that matters which may be covered by such an order are not limited to those set out in sub-paragraph (4). Therefore, if the court thought it appropriate to order the company to fund pursuit, by a creditor, of the company's claim against the nominee, it could do so without the further words being added.
Baroness Buscombe: I listened with care to what the noble Lord said and am not entirely happy with it. I will read his comments in Hansard, but, for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 34 not moved.]
5.45 p.m.
Lord Sharman Lord Sharman moved Amendment 35:
Page 20, line 4, at end insert (", except that all creditors shall be entitled to attend and vote").
The noble Lord said: In moving this amendment I have but one purpose; namely, to enable the Minister to confirm what I understand he said earlier—that it
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is the Government's intention to amend the insolvency rules to enable secure creditors to vote on any proposed extension of the moratorium. Having said that, I beg to move.
Lord McIntosh of Haringey: I can confirm that we will consider the point raised by this amendment when we come to revise the insolvency rules, with a view to giving effect to the Bill. The provisions currently determining who is able to attend and vote at meetings is dealt with in the insolvency rules. One moment, I may have gone too far? Or—I can go further! We intend that secure creditors will be able to vote in full on the extension of the moratorium.
Lord Sharman: I find that response totally satisfactory, in which case I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Buscombe Baroness Buscombe moved Amendment No. 36:
Page 20, line 17, leave out (". or authorised to act as nominee,").
The noble Baroness said: In moving this Amendment, I shall also be speaking to Amendments Nos. 38, 49, 66, 68, 69, 77, 83, 85, 87, 88 and 94.
Subsections (3) and (4) of Clause 4 create a new type of insolvency practitioner who can act as a nominee or supervisor of a voluntary arrangement. Subsection (4) envisages such a person being authorised by a body recognised by the Secretary of State satisfying certain security requirements and not being ineligible on certain, specified grounds. These persons need not be insolvency practitioners.
As we said at Second Reading, that is worrying because it is inherently likely that an authorised person will be someone who has not made it as an insolvency practitioner and who has therefore become an authorised person instead. There would be no need for him to be an authorised person if he were already an insolvency practitioner. The result would be that an authorised person could in practice be less able than an insolvency practitioner.
This is particularly dangerous because of the new procedure for a moratorium, which cuts out the role of the court. Under existing law, a company can obtain a moratorium if it petitions the court for an administration order. The petition is usually heard within five days. The court can then continue the moratorium by making an administration order. An individual can obtain a moratorium if an interim order is granted by the court. The court is, therefore, closely involved at a very early stage. This is an important safeguard, since a moratorium imposes extreme restrictions on creditors, so the courts police these moratoria carefully.
The Bill as currently drafted will get rid of this important safeguard. A company or individual will be able to obtain a moratorium without any involvement by a court. To allow mere authorised persons, who may not be insolvency practitioners, to be the only real safeguard is unacceptable.

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In discussions with the Minister, following Second Reading, he made quite clear that the Government see no reason for standards to drop. However, I believe we should reflect upon the fact that, thanks to the Insolvency Act 1986, standards for insolvency practitioners have risen. We see the introduction of this new animal, this new style authorised person if you like, as a dumbing down of those standards. At the moment to be an insolvency practitioner and have a licence one must pass exams and have experience, and one is regularly policed by the joint monetary unit inspectors, with the threat always hanging over one of disciplinary tribunals and fines.
It is our belief that a further important point must also be taken into account with regard to these amendments. These authorised persons will only be able to handle a voluntary arrangement. It is our belief that they will inevitably recommend a voluntary arrangement, because otherwise if they recommend, for example, a bankruptcy in practice they will not be able to act and so they will not receive a fee.
Perhaps I may offer an example. Take someone who is in considerable debt and has no assets. He goes to a "new style" insolvency practitioner, an authorised person, who then will draft a voluntary arrangement proposal. He is bound to get it through the practice. Creditors would be paid, say 10 pence in the pound over the next five years. The fees of the insolvency practitioner for this would be, for example, £5,000. If the individual went bankrupt he would be much better off, but then, of course, the authorised person would not receive his fee.
As we speak, bankruptcy registrars who police the situation are trying to stop this practice. If we have individuals who are only licensed to handle a voluntary arrangement then this is bound to happen. I beg to move.
Lord Sharman: I should like to speak to Amendments No. 98 and 99 which stand in my name and are grouped with this amendment. I agree with the noble Baroness about the enabling aspects of this legislation. I am sure that the Minister will tell us that enabling provisions are contained in this Bill, and that we should wait and see.
There are two conflicts here. First, it is my judgment that the process by which a moratorium may be selected will inevitably be dominated by insolvency practitioners. I cannot envisage circumstances in which the directors of a company, with the duty of care they have to their shareholders and the provisions for failing or becoming insolvent, would think it sensible to take advice from anybody other than a practitioner in insolvency. It may be difficult to see this group of persons, whomever they may be, emerging. Nevertheless, if it is desirable that this enabling provision be included in the Bill then the body so recognised must have proper ethical standards, proper training and so on.
Amendments Nos. 98 and 99 seek to add the words "regulated professional" to the clause so that we are talking about "regulated professional bodies". That would require that any body falling into that category
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was subject to regulations, proper rules of ethics, and appropriate training and development for the task they would be carrying out. That would be a sensible provision.
The Earl of Sandwich: I hope that I may speak to Amendments Nos. 96 and 97, although we are straying into Clause 4. I have some sympathy with the remarks made by the noble Baroness, although this is not a subject on which I have had any expertise, or even familiarity, up to now, except in the context of Third World insolvency, in which the Minister also has a special responsibility. By chance I have been in conversation with a friend who is an insolvency practitioner who has privately expressed concerns about this Bill to me. I decided they were important enough to bring them before the Committee. I know from reading the documents that all noble Lords are aware of these in general, but I will not repeat them in detail since they were aired at Second Reading. As we have heard, they enabled the Secretary of State to recognise bodies and to authorise persons to act as nominees or supervisors not otherwise authorised to act.
I know enough about the professional status of other professions to be genuinely surprised by this clause, which appears to threaten the integrity of a highly respected profession in which much public confidence is vested. We have seen, for example, that the proposed nominees, albeit on a temporary basis, would not just be acting as practitioners but be defined as such, although evidently not qualified to make judgments on other kinds of insolvency procedure. This is where I support the noble Baroness, Lady Buscombe, and I understand that it lies at the heart of concerns among the practitioners as well as their professional body, the Association of Business Recovery Professionals. They argue that there is a clear risk that these acting practitioners will tend to recommend the voluntary arrangements where another process might be more appropriate. This could alter the whole direction of an insolvency procedure.
I know the Minister sought to answer this point during the Second Reading debate. He suggested (at col. 1271 of the Official Report of 4th April 2000) that the ABRP has already allowed some of its members to qualify through business rescue experience, but he will know that such company reconstruction work is carried out outside the formal procedures whereas in this case we are talking about formally appointed practitioners.
The Minister admitted that he did not know how this new role would work out and that the Government. were in no hurry to implement the measure; so why is it necessary? Are there not enough fully qualified professionals? Will this clause not give the public and the profession a sense of unease and uncertainty about the value and status of the insolvency practitioners and even about their credibility.

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I understand the profession as a whole supports the general direction of the Bill, but this clause causes professionals, such as my friend, much concern and I would like to pass the Minister's comments and assurances to him.
I am also interested to know whether the Minister has considered the question of a name for the new type of practitioner should this clause remain in the Bill as there is likely to be much confusion about it.
Finally, I also support the noble Lord, Lord Sharman, in his amendment to the new section, which requires the nominee to be a member of a body recognised.
It clearly follows from what I have already said that this needs to be a professional body and that the wording should at least be in line with Section 390(2) of the Insolvency Act.
6 p.m.
Lord McIntosh of Haringey: I am glad to have had the opportunity to listen to this useful debate. At present, only licensed insolvency practitioners may act as nominees and supervisors of voluntary arrangements. I have no hesitation in acknowledging that their skills, education, training and experience make them particularly suited for this and I have no doubt they will continue to undertake these roles.
However, that is not to say that there is, or could be, no other body whose members might also be capable of acting as nominees or supervisors or that such a body might not emerge in the future. That is particularly true in relation to the new moratorium.
We are not alone in recognising that. The insolvency practitioners have already recognised that people other themselves might have relevant skills. The trade association, formally the Society of Practitioners of Insolvency, is now called the Association of Business Recovery Professionals. Membership of that body is open to others with expertise in financial rescues. Those skills may prove very useful in achieving rescues by way of voluntary arrangements. If a body exists or is formed whose members are capable of acting as nominees and supervisors we see no good reason why its members should be prevented from playing a part in the rescue process, and that is why the power to recognise such a body was included in the Bill. Put another way, it is not essential that a nominee or supervisor need have the skills of an "undertaker" which is the way of commonly characterising an insolvency practitioner, as well as those of a "doctor"; he only needs those of the "doctor" to achieve the rescue.
It is clear that the Secretary of State would only recognise bodies which have in place suitable regimes to ensure that their members are up to the required standards. That regime will, of course, include suitable provision for recognition and measurement of skills, education and training, experience and so on. I do not see why any nominees or supervisors who could have been authorised in this clause should be thought to be "not up to the mark", as the noble Baroness, Lady
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Buscombe said, just because they do not choose to become insolvency practitioners but choose to specialise as doctors rather than undertakers.
We should not ignore the fact that some voluntary arrangements never get off the ground because the company or debtor concerned cannot afford the fees of the insolvency practitioner. If these amendments are passed it will prevent people coming into the marketplace who are capable of doing those jobs of nominee and supervisor to a satisfactory standard and perhaps at a lower cost. However, I cannot overemphasise that the reason for taking this power is to ensure that we can harness skills which, but for Clause 4 in its original and unamended form, would not be available to those attempting a rescue. We see no reason why standards should drop if the Secretary of State is allowed to recognise new bodies under new Section 389A.
From what was said on Second Reading, and here again today, it is clear that noble Lords are content with the Secretary of State's ability to recognise bodies to authorise insolvency practitioners. It will therefore be understood that we are slightly puzzled when it is suggested that the new class of nominee and supervisor will not be up to the mark. For that to be the case, it has to be assumed that the Secretary of State would recognise a body which did not have in place an appropriate regulatory regime meeting the requirements of Clause 4. That will simply not be the case—if a body cannot come up with a suitable regime to ensure that those it would authorise are up to the mark, it will not be recognised under Clause 4.
The regime of a body recognised under Clause 4 may, of course, be different from that of a body recognised under Section 391, since the members of a body recognised under Clause 4 will only be authorised to act as nominees and supervisors and not as insolvency practitioners generally.
I do, however, recognise that a difference between Section 391(2) of the Insolvency Act 1986 and what will be new Section 389A(5) may have caused some of the concern regarding standards. That may have resulted in the two amendments to which the noble Lord, Lord Sharman, has spoken. Section 391(2) refers to the recognition of a body which "regulates the practice of a profession" whereas new Section 389A(5) does not. But nothing of significance should be lost by that difference.
If it is suggested that the new breed of nominee supervisor would only recognise a voluntary arrangement, I would reply that the recognition of bodies under Section 391 of the Insolvency Act 1986 is only for the purpose of authorising individuals to act as insolvency practitioners, say as the liquidator and administrator of a company, or as a trustee in bankruptcy; or, indeed, as a nominee or supervisor. Thus recognition of a body under Clause 4 is only for the purpose of authorising individuals to act as nominee and supervisor. Neither power purports to regulate the provision of advice to a company or debtor that is in financial difficulties.

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Such companies and debtors should seek advice from those they consider most suited to give it. That may or may not be an individual authorised by a body recognised under Section 391 or Clause 4. We simply do not accept that this point is valid. We consider that it is important that those who have the skills to achieve a rescue by way of a voluntary arrangement are able to assist companies and debtors in this way. Even the Association of Business Recovery and Professionals recognises that people other than insolvency practitioners already have skills which can usefully be brought to hear in achieving a rescue.
We consider that the Secretary of State will be able to ensure that recognition is only given to a body under Clause 4, where it can ensure that its members are up to standard and conduct themselves in an appropriate manner. Any concerns about the ability of those authorised by virtue of Clause 4 to do their job properly as nominee or supervisor should be unfounded. If standards are not maintained, the Secretary of State can revoke an order recognising a body under Clause 4. Under those circumstances, we cannot accept these amendments.
Baroness Buscombe: I thank the Minister for his response but ask him to clarify a point that I may not have quite right. Is he saying that I am wrong in suggesting that an authorised person is licensed only to handle a voluntary arrangement?
Lord McIntosh of Haringey: He is licensed only to act as a nominee or supervisor in a moratorium.
Baroness Buscombe: In which case, is he therefore not able to suggest other routes which might in fact be more beneficial to the person who has gone to him? I made the point about the small man who is in debt but would actually be better off going bankrupt than having a voluntary arrangement.
Lord McIntosh of Haringey: He can do that, of course, and he can give the advice. However, the successful outcome of a moratorium—that is what a moratorium is for—is a way in which the business carries on trading with the agreement of its creditors. The form that takes, whether it is a formal, voluntary arrangement, is open. A failure of a moratorium, however, is where the business goes bust and the creditors decide they would rather the business go bust than that it should be allowed to continue. That must, however, be their judgment and the nominee or supervisor is there to seek to achieve the continuation of the business.
Baroness Buscombe: I thank the Minister for his response. I am still unhappy with regard to the point we have made; namely, that whatever the circumstances the authorised person is almost bound to recommend a voluntary arrangement even where other procedures might be more appropriate. Indeed, in a sense I am saying that it is much less expensive. I agree with the noble Lord, Lord Sharman, that directors of the company are not likely to go to an authorised person. I thank him for his support.
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However, I return to my example of the individual, the small man, who is in debt without any assets, and take up the point made by the noble Earl, Lord Sandwich. He is unlikely really to know who he is going to. The point made by the noble Earl, Lord Sandwich, is very important in that there is some confusion as to the role, and indeed the credibility, of these new authorised persons. They are not just acting as insolvency practitioners but, in a sense, holding themselves out as insolvency practitioners.
Lord McIntosh of Haringey: I think I understand the difficulty we are having. The point being made by the noble Baroness, Lady Buscombe, is about pre-moratorium advice: in other words, whether or not we should go into a moratorium. I now understand and I am sorry to have been slow on the uptake. Neither the power under Section 391, which is the insolvency practitioner power, nor the power under Clause 4, purports to regulate the provision of advice to a company or a debtor that is in financial difficulty. That is not restricted to an insolvency practitioner or an authorised person, or anybody.
Companies or debtors seek advice from the people they consider most suited to give it. That could be their auditors, their bank managers, their brothers-in-law, or whoever it might be. What we are doing is nothing to do with advice before considering whether or not to go to a moratorium. We are looking at the qualifications for being a nominee or supervisor.
Baroness Buscombe: We made this point because an authorised person is only able to handle a voluntary arrangement; he is almost liable to recommend a voluntary arrangement. This may be cynical, but it will happen in practice because that is the only way he is going to get paid.
Lord McIntosh of Haringey: He gets paid as a nominee also, but as a supervisor, of course. If the phrase "voluntary arrangement" is being used as an alternative to "moratorium", anyone can ad vise on whether a moratorium is a good idea, and both creditors and the company have to agree to it—I stress "anyone", not merely an authorised person or insolvency practitioner. The nominee comes in when a decision has been taken in principle to go for a moratorium and he is paid as the nominee or the supervisor of the moratorium.
Baroness Buscombe: I thank the Minister for that response. The exchange on this point has been helpful. Again, I shall read the noble Lord's remarks with care.
I should like to return briefly to the points made by the noble Earl, Lord Sandwich, in regard to naming the authorised persons. It is important, particularly in relation to the "small guy" who is in difficulty and who needs help, that he should understand clearly, up front, whom he is approaching and what advice they are able to give. I thank the Minister. We shall read with care all that has been said and we may return to this point at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Baroness Buscombemoved Amendment No. 37:
Page 20, line 43, leave out from ("a) to ("that") in line 45 and insert ("moratorium may be extended (or further extended), with or without conditions, if a meeting summoned under paragraph 27 resolves that it be adjourned (or further adjourned) and resolves").
The noble Baroness said: In introducing this amendment, I have a similar point to make in relation to Amendment No. 39. If the Minister is content, it may make sense to take the amendments together.
Lord McIntosh of Haringey: Yes, indeed.
Baroness Buscombe: Under the Bill as drafted, the meeting can resolve to extend the moratorium. However, the wording does not necessarily have that effect. It is a question of semantics. We do not question the purpose of the clause; both amendments merely propose a drafting point. A meeting can resolve itself to do anything, but that does not necessarily mean that it gives effect to that resolution. We believe that the wording should be the other way round: that the moratorium should be extended if the committee so resolves. The same is true of Amendment No. 39, which states that,
"A committee shall be established if, with the consent of the nominee, a meeting summoned under paragraph 27 resolves that the moratorium be extended … and resolves that such a committee be established; and such a committee may exercise the functions conferred on it by the meeting".
Although this is a drafting point, it is an important point of meaning. I beg to move.
Lord McIntosh of Haringey: I am glad that the noble Baroness, Lady Buscombe, has taken these two amendments together, because I can give the same happy reassurance on both of them. We are convinced—and we have taken further legal advice on the matter—that the amendments do not change the substance of paragraph 30(1) or paragraph 33(1) in any way. Amendment No. 37 merely re-states the content of paragraph 30(1) in different terms. The meaning of paragraph 30(1) is perfectly clear. It provides that where a meeting of the company or its creditors convened to consider the approval of a proposal for a voluntary arrangement is to be adjourned, the meeting may also resolve to extend, or further extend, the moratorium period, subject to any conditions the meeting may impose.
Amendment No. 39 relates to paragraph 33(1). The meaning of the paragraph is perfectly clear. It provides that if a meeting of the company or its creditors resolves to extend, or further extend, the moratorium, it may also, with the consent of the nominee and subject to paragraph 33(2), resolve to establish a committee to exercise the functions conferred on it by that meeting. Those seem to us the objectives of the amendment. We are convinced that our wording achieves those objectives.
Baroness Buscombe: We are going to have to agree to disagree at this point. Amendment No. 39 seeks to amend paragraph 33 of New Schedule A1, which merely gives a meeting summoned under paragraph 27
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power to resolve that a committee be established. However, it does not establish such a committee. I wonder if we could flag up that this is purely a drafting matter and might be approached in a different way. It is purely a matter of semantics.
Lord McIntosh of Haringey: I think that a motion to resolve a committee establishes a committee.
Baroness Buscombe: Perhaps I have a different legal background. I looked up the word "resolve" in the dictionary and it states,
"to disintegrate, or break up".
Lord McIntosh of Haringey: That is the meaning of "dissolve"!
Baroness Buscombe: The Oxford Dictionary states that "resolve" means to disintegrate; that is one meaning. I think that I will have to return to this matter at Report stage. However, I press the point that if one resolves to do something that does not give effect to it. It is a great idea; you can resolve to do all sorts of things, but it does not necessarily mean that they will happen. I should have thought the Government intend that the measure should have the effect of summoning a committee.
Lord McIntosh of Haringey: The noble Baroness and I have no doubt spent far too much of our lives in committees. I believe that a resolution of a meeting which states that a committee is established establishes a committee. However, I shall write to the noble Baroness on that matter.
Baroness Buscombe: I thank the noble Lord. That is an excellent idea. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 38 and 39 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 40:
Page 22, line 23, at end insert ("but must be made within seven days of the decision taken by the creditors' meeting").
The noble Lord said: I rise to move Amendment No. 40 and in doing so will speak to Amendment No. 70. Paragraph 34 of the New Schedule Al provides that the decision of the creditors' meeting is to prevail in any decision of the company meeting. It also gives the right to a member of the company to apply to the court to rule that the decision of the company meeting has effect instead of the decision of the creditors' meeting. There appears to be no time limit for a member to make that application.
Since these decisions are fundamental to the whole scheme of the moratorium, it is, in our view, desirable that there be a short time limit for a member to apply to the court. We believe this time limit should be seven days. The New Section 4A of the 1986 Act inserted by paragraph 5 of Schedule 2 should be consistent with this proposed amendment. I beg to move.
Lord McIntosh of Haringey: I understand the concern of the Opposition that the supervisor may be

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afraid to start to implement the voluntary arrangement because a member of the company may apply to the court in instances where the decision of the creditors and company meetings are at variance. However, supervisors should not be hesitant about implementing voluntary arrangements in these circumstances.
Paragraph 34 of Schedule A1 and paragraph 5 of Schedule 2 both make it clear that if the decisions of the two meetings are at variance, the decision of the creditors' meeting is the one that has effect. So those concerned may rely on that decision and act accordingly. That would continue to be the case until such time as the court ordered otherwise. For that reason the timing of any application by a member of a company is not critical for the nominee or supervisor, so we do not see any reason to restrict the time period in which a member of a company can make such an application, particularly as we have given the court adequate powers under paragraph 34(5) to deal with the situation where it sees merit in an application by a member. Indeed, a member may well need considerably more than seven days to consider his position.
However, if a member was concerned that prompt implementation of a voluntary agreement, as approved by the creditors and rejected by the members, was damaging to his circumstances, he would need to make an early application to the court in order to protect his interests. He would do that promptly because it is in his interest to do so, irrespective of any time limit.
In addition, the amendments do not work on their own terms. They require an application to be made to the court within seven days of the decision of the creditors' meeting which is at variance with that taken by the meeting of the company. But the company meeting which takes that decision may take place, say, 10 days after the decision taken by the creditors' meeting. Where that happens the time limit for making an application to the court will have expired before it is known that the two decisions are at variance.
Lord Kingsland: I am perfectly happy to accept that amendment to my amendment. The point I am making is that we need a clear rule. I shall return to this matter at Report and meanwhile beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland Lord Kingsland moved Amendment No. 41:
Page 22, leave out line 36 and insert—
("(ii) could have been so entitled (but was not present or represented at it) but did not have notice of it,").
The noble Lord said: In moving this amendment I shall also speak to Amendments Nos. 45, 46, 71, 75, 76, 89 and 93.
Paragraph 35 of the new Schedule Al deals with the effect of the approval of a voluntary arrangement. Sub-paragraph (2) provides that a voluntary arrangement binds those who are entitled to vote at a creditors' meeting and those who would have been so
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entitled if they had had notice of it. However, a creditor would still be entitled to vote at a creditors' meeting even if he had not had notice of it. Subparagraph (2)(b)(ii) has no effect because no creditor would have been entitled to vote if he had had notice of the creditors' meeting. Notice is irrelevant for the purposes of entitlement to vote. I beg to move.
Lord McIntosh of Haringey: These amendments certainly address real issues, which we do recognise. Firstly, they replace the word "would" with "could" and secondly replace "if he had had" with -but did not have".
If these amendments were to be accepted we consider that, in relation to the first issue, on occasion they may have the unfortunate consequence of the "unknown creditor"—that is, the one who had not had notice of the meeting to consider the voluntary arrangement proposal—being bound by that arrangement when he should not be. We only want a voluntary arrangement to bind those who would have been entitled to vote at a meeting if they had had notice of it. We do not want a creditor who could have been entitled to vote to be bound by a voluntary arrangement in the event that they would not have been so entitled at the meeting once the votes had been determined.
What we do intend to do—and I hope this will reassure the noble Lord—is to make provision in the Insolvency Rules to define in which circumstances an unknown creditor would have been entitled to vote at the creditors' meeting if he had had not ice of it. This will make it possible to say with certainty whether a creditor would have been entitled to vote and therefore whether he is bound by the arrangement. I think the Red Queen would have one or two things to say about this issue.
With regard to the amendments which address the second issue, these may be consequential on those which address the first, but we do not see that they would change the substance of relevant paragraphs in any way. The amendments only restate the contents of those paragraphs in different terms. We are satisfied that the meaning of those paragraphs is perfectly clear.
As the case may be, they either provide that a voluntary arrangement binds every person who in accordance with the rules would have been entitled to vote at the meeting to consider a voluntary arrangement proposal if he had received notice of it; or provide that such a person may apply to the court to challenge the decisions taken at those meetings.
The noble Lord, Lord Kingsland, said that notice is not relevant as to the entitlement to vote, but Rule 1.17 of the Insolvency Rules says:
"Subject as follows: every creditor who was given notice of the creditors' meeting is entitled to vote at that meeting".
I realise that this is a complicated issue but it is certainly our intention to meet the objectives of these amendments with provision in the Insolvency Rules.

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Again, perhaps it might be helpful if I could expand on that by writing to the noble Lord, Lord Kingsland, and others who have taken part in these debates.
Lord Kingsland: This is the first occasion this afternoon, when the noble Lord the Minister had given me some grounds for hope. I am much obliged to the Minister for his reply, which I shall read with the utmost care. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sharman Lord Sharman moved Amendment No. 42:
Page 22, line 37, at end insert—
("(2A) Nothing in sub-paragraph (2) shall affect the rights of any creditor to bring legal proceedings against the company and to obtain judgement against the company in the full amount of its debt for the sole purpose of making a claim against an insurer by virtue of the Third Parties (Rights Against Insurers) Act 1930.").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 72 and 90. All three of these amendments concern the position of creditors who may have rights under the Third Parties (Rights Against Insurers) Act 1930.
As we have just discussed, paragraph 35 binds creditors into the terms of a voluntary arrangement. However, that could have the effect of prejudicing their position against a third party insurer. Such creditors should not be bound by those arrangements if it prejudices those rights to recover their claim from the insolvency insurer. In the case of Sea Voyager Maritime Inc and others v Bielecki, the court held that a creditor who was bound by an arrangement was unfairly prejudiced because the compromise of his debt prevented him from proceeding against the insurer. This problem would be exacerbated by the proposed new provisions unless we made a specific exemption for creditors who have such claims.
The amendments to the three pieces of the Bill provide just that. They provide statutory protection solely for the purpose of enabling the creditor to proceed against an insurer. I beg to move.
Lord McIntosh of Haringey: Again, I think I can reassure the noble Lord, Lord Sharman, on this point. I understand the concern that the noble Lord has expressed and I sympathise with it, but we do not consider the amendments are necessary. We take the view, and there is case law which supports it, that creditors who are able to make a claim under the Third Parties (Rights Against Insurers) Act 1930 and who find themselves bound by a voluntary arrangement should be able to seek relief from the court on the grounds of unfair prejudice under either paragraph 36 of Schedule Al of the Bill, or Sections 6 or 262 of the Insolvency Act 1986 as appropriate.
It was decided in the case of Sea Voyager Maritime Inc and others v Bielecki that a person who is bound by a voluntary arrangement is prejudiced as a creditor by the terms of the arrangement if that person is not able, or at the very least, may not be able, to proceed to judgment for the full amount of any claim that it may
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have against the debtor and thus cannot, or may not be able to, recover in respect of that claim against the insurer under the 1930 Act. The application for relief in that case was made under Section 262 of the Insolvency Act 1986, because it relates to individual voluntary arrangements. That section is reproduced in paragraph 36 of Section A1 and Clause 6 of this Bill, and Section 6 of the Act.
Thus, a person who suffers unfair prejudice because their rights under the 1930 Act have been impaired may apply to and should be granted relief by the court under either paragraph 36 of Schedule A1 to the Bill, or Sections 6 or 262 of the Act as appropriate.
Lord Sharman: I am very grateful to the Minister for his response and much encouraged by it. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 43:
Page 22, line 39, leave out ("dividend") and insert ("amount").
The noble Lord said: With this amendment I speak also to Amendments Nos. 44, 73, 74, 91 and 92. These amendments relate to the company voluntary arrangement procedure, with or without a moratorium, and to the individual voluntary arrangement procedure, with or without an interim order, respectively. They are taken together as they address an identical point.
Paragraph 35 of Schedule Al, paragraph 6 of Schedule 2, and paragraph 9 of Schedule 3 all provide for "unknown creditors"—that is, those creditors bound by a voluntary arrangement even though they did not receive notice of the meeting to consider the proposal—to receive any "dividend" to which they would have been entitled. But the word "dividend" carries the connotation that it is a sum calculated at a rate of so many pence in the pound. However, a voluntary arrangement can provide for different creditors to receive varying amounts which might be calculated in different ways. For example, it could provide that each creditor should receive a specific sum, say £l,000, irrespective of the amount of individual claims, or, say, 10 per cent. in the pound on the amount of his claim; or perhaps a sum calculated by way of reference to the sum paid to a class of known creditors. We do not intend to fetter those proposing voluntary arrangements in such a way that proposals can only provide for the position of unknown creditors to be addressed in only one way, so the amendments will replace "dividend" with "amount" to achieve that result. I beg to move.
On Question, amendment agreed to.
6.30 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 44:
Page 22, line 43, leave out from ("person") to end of line 44 and insert ("the amount payable under the arrangement").
On Question, amendment agreed to.
[Amendments Nos. 45 and 46 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 47:
Page 24, line 1, after ("and") insert ("may").
The noble Lord said: I speak to Amendments Nos. 47 and 48, extremely tersely. In paragraph 36(5) of new Schedule A1, the reference to paragraph 30 should be a reference to paragraph 34. We also think it would be appropriate for the court to have a discretion as to whether or not it revokes and suspends any decision as proving the voluntary arrangement which has effect on paragraph 34. I beg to move.
Lord McIntosh of Haringey: Paragraph 36(5) largely replicates Section 6(5) of the Insolvency Act 1986, which deals with company voluntary arrangements.
In both cases the effect of the provision is that, where the court is satisfied that a revised proposal will not be submitted for consideration by the meetings which the court has directed to be held, it is required to revoke the direction and revoke or suspend any decision approving the voluntary arrangement which has taken effect.
If this amendment were to be agreed to, an inconsistency would be introduced between the procedure leading to a company voluntary arrangement which is preceded by a moratorium and one which is not. That is to say that where the arrangement is preceded by a moratorium the court may revoke or suspend any decision approving the voluntary arrangement. But where there is no moratorium the court must revoke or suspend the decision. This inconsistency would not be appropriate. It is our intention to insert a moratorium into the existing company voluntary arrangement procedure—that is what this Bill is about—and the existing procedure should only be modified where the existence of the moratorium requires it, which is not the case here.
Some people might suggest that it is Section 6(5)—that is, the original scheme—which is wrong and that the court should be able to exercise its discretion in these circumstances in relation to both Section 6(5) and paragraph 36(5). However, that would be inappropriate as well. The challenges we are concerned with here arise from situations where the court has accepted that some form of unfair prejudice or material irregularity has taken place and where the court has directed that further meetings be held but is satisfied that the directors do not intend to submit a revised proposal. In such circumstances, it is clearly appropriate that the court should either suspend the decision approving the voluntary arrangement or revoke it, thus giving relief from the effects of the unfair prejudice or the material irregularity concerned.
Lord Kingsland: I must confess that the noble Minister's remarks will lead me to think again about these amendments and in those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland Lord Kingsland moved Amendment No. 48:
Page 24, line 3, leave out ("30") and insert ("34").
The noble Lord said: I beg to move.
Lord McIntosh of Haringey: I did not realise that the noble Lord, Lord Kingsland, had spoken to Amendment No. 48. He is quite right about Amendment No. 48. Paragraph 36(5)of Schedule A1 to the Bill refers to the decision approving a company voluntary arrangement following a moratorium under paragraph 30 of that Schedule, but in fact such decisions have effect under paragraph 34 of that Schedule, not paragraph 30. I am pleased to accept the amendment.
On Question, amendment agreed to.
[Amendment No. 49 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 50:
Page 25, line 10, leave out ("by petition").
The noble Lord said: There is no need for the application—which creditors or member; of a company can make under paragraph 38 of Schedule A1 to the Bill—to challenge the acts or omissions of the company's directors during the moratorium to be made "by petition". It is more appropriate—and more consonant with modern practice—for such applications to be made in accordance with the system in Part 7 of the Insolvency Rules 1986, which set out how court applications are made in insolvency cases. This amendment removes the words "by petition" from paragraph 38(2). I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 51:
Page 25, line 35, at end insert—
("( ) In making an order under this paragraph the court shall have regard to the need to safeguard the interests of persons who have dealt with the company in good faith and for value.
( ) In relation to any time when an administration order is in force in relation to the company, or the company is being wound up, in pursuance of a petition presented before the moratorium came into force, no application for an order under this paragraph may be made by a creditor or member of the company; but such an application may be made instead by the administrator or (as the case may be) liquidator.").
The noble Lord said: Paragraph 38 of Schedule A1 enables any creditor or shareholder of the company to challenge the acts or omissions of the directors of the company during the moratorium. They can do this either during the moratorium or after it h as come to an end. When dealing with such an application the court can make such order as it thinks fit for giving relief in respect of the matters complained of. It could, for instance, order a transaction to be reversed or compensation to be paid by whoever the court decided.
On Second Reading it was suggested that third parties might be discouraged from dealing with a company during a moratorium period because of fears that the transaction in which they were involved might later be overturned by the courts. It is probably

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unlikely that a court would upset a transaction to the detriment of a third party who dealt with the company in good faith and for value. However, we recognise that a fear of that possibility could act as a real disincentive for people to deal with a company during a moratorium, so we have brought forward this amendment, first, to make it clear that when a court is considering giving relief in respect of a complaint under paragraph 38, it must safeguard the interest of persons who have dealt with the company in good faith and for value.
The second part of the amendment addresses the position under paragraph 38 when an administration order or winding-up order is made against the company on a petition which had been presented to the court before the moratorium was obtained. This situation necessarily implies that no voluntary arrangement has resulted.
Both administration and liquidation are collective insolvency procedures; that is, they operate so as to affect the interests of all the insolvent's creditors who are then dealt with in accordance with the statutory schemes in the Insolvency Act. It is therefore appropriate that when one of those procedures is invoked on a petition which was presented before a moratorium was obtained, but was then stayed by it, the right to make an application under paragraph 38 should be exercisable by the administrator or liquidator rather than by individual creditors or shareholders, otherwise there would be an unacceptable conflict.
The amendment also removes the right of creditors and shareholders to take individual action under paragraph 38 in these circumstances and gives it instead to the liquidator or administrator. I beg to move.
On Question, amendment agreed to.
Baroness Buscombe Baroness Buscombe moved Amendment No. 52:
Page 25, line 45. leave out ("(c). (d) and (e)") and insert ("(a) to (f)").
The noble Baroness said: In speaking to Amendment No. 52 I shall also speak to Amendment No. 53. Very briefly, paragraph 39 of the new Schedule AI creates certain offences where a moratorium has been obtained. The prohibited acts are contained in sub-paragraph (4). It appears from sub-paragraphs (2)(b) and (3)(b) that an officer of the company does not commit an offence if he is privy to someone else fraudulently removing any part of the company's property and other similarly prohibited acts. We can see no justification for that privilege. I beg to move.
Lord McIntosh of Haringey: We have modelled paragraph 39 of Schedule A1 on Section 206 of the Insolvency Act 1986 which deals with fraud and the like in anticipation of the winding-up of the company. This is a long-established provision which has been found to work perfectly satisfactorily and that is why we have used it as the basis for paragraph 39. We would not wish to see it amended in the way suggested.
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Section 206—Members of the Committee will like this part—is derived from the Companies Act 1985, which was derived from the Companies Act 1948, which, in turn, was derived from the Companies Act 1929. The section in the 1929 Act seems to have been based on another provision in the Bankruptcy Act 1914, which, in turn, was derived from the Debtors Act 1869. All of these sections refer to a company officer, or the debtor, as the case may be, being guilty of an offence if he is, or is privy to another, concealing, destroying or mutilating or falsifying relevant books or papers, making a false entry in such books or papers or fraudulently parting with or altering or making omissions from such books or papers. However, none of those other sections provides for an officer, or a debtor, to be guilty of an offence if they are privy to another concealing, fraudulently removing or pawning any of the company's or debtor's property. However, that is not a difficulty as existing legislation already allows for the prosecution of directors who are privy to others dealing with the company's property in a way which constitutes an offence under Section 206 of the Act and paragraph 39 of Schedule A1. Officers might be prosecuted in this regard under, say, The Accessories and Abettors Act 1861.
Accordingly, if this paragraph were to be amended as is proposed, it could cast doubt on the meaning of the existing provisions on which it was modelled and also on the use of other legislation to prosecute those officers who are privy to offences by others in relation to company assets.
Baroness Buscombe: I have to admit to being stumped on this. First, I was going to say to the Minister that I do not remember the Act of 1869, I am not sure whether he does.
Lord McIntosh of Haringey: I took part in the debates!
Baroness Buscombe: It begins to feel like that in this place. I certainly do not remember the Act of 1861. I am not sure that I agree with what he has had to say but I will read with care what he has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 53 not moved.]
Baroness Buscombe Baroness Buscombe moved Amendment No. 54:
Page 26, line 5, leave out ("to the value of £500 or more.").
The noble Baroness said: I shall speak also to Amendments Nos. 55, 56 and 64. The point I make here is brief. It may have been relevant to the previous amendments. We can see no justification for the limit of £500 in sub-paragraphs (4)(a) and (b). Any officer who conceals any part of a company's property, even if worth under £500, should be guilty of an offence. I am aware that this goes back to 1914 but should that alone allow people to remove, for example, a second-hand lap-top, something which is eminently stealable? Surely this is why we have a Parliament so that we can make and change laws, otherwise what are we here for? We have an opportunity to make sure that this does

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not happen and to make sure that the officers act responsibly and that is why we have brought forward this amendment. I beg to move.
Lord McIntosh of Haringey: I like the idea of using a legislative opportunity to improve the law. However, I would like to point out, first, that the two offences where this limit will apply are very specific offences which can only apply in insolvency situations; in this case, during the 12 months immediately before the moratorium commenced and during the moratorium itself. These two offences are concealing any part of the company's property or fraudulently removing any part of the company's property. If misconduct which could amount to theft has occurred—or any other type of offence— it could be considered for prosecution as such and no minimum financial limit prescribed by the Bill would apply to that. Secondly, similar offences exist elsewhere in the Insolvency Act 1986; for example, in Section 206, which deals with offences in relation to companies that are would up and, in Section 354. relating to bankruptcies. Both have a £500 minimum limit and offences of this kind have had a minimum limit at least as far back as the Bankruptcy Act 1914, to which the noble Baroness, Lady Buscombe, referred, when the figure involved was £10.
Thirdly, if we discovered that we could not prosecute individuals for these two offences in cases where we thought we should be able to, we would review the £500 minimum limit and we would not need primary legislation to do so. Paragraph 10 of Schedule I gives the Secretary of State the power to vary the minimum value of the property for the purpose of these offences and we would have no hesitation in reviewing that level if we felt it was appropriate. However, experience in relation to both Sections 206 and 354 suggests that £500 is the right cut off point and it seems a perfectly reasonable assumption that it will be the appropriate level here too. "If it ain't broke, don't fix it."
Baroness Buscombe: I hear what the Minister has said but cannot agree with him. I think it is "broke" and that we should fix it, in which case we will consider what he has had to say today but may well return to this at Report stage. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 55 and 56 not moved.]
6.45 p.m.
Lord Kingsland Lord Kingsland moved Amendment No. 57:
Page 27, line 5, after ("charge") insert (", or any instrument creating an obligation secured or to be secured by a floating charge,").
The noble Lord said: In moving Amendment No. 57 I shall also speak to Amendment No. 59. Paragraph 41 of the new Schedule A1 renders any provision of a floating charge void if a moratorium, or a preliminary step, should be a crystallising event. The Opposition
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believe, with the greatest possible respect, that this paragraph needs refining which is what these amendments seek to do. I beg to move.
Lord McIntosh of Haringey: It is standard practice for a debenture creating a floating charge to identify certain events, the occurrence of which will trigger the floating charge to crystallise and/or the right to appoint a receiver. In practice, a debenture may cross-refer to the events of default set out in the documentation for the loan which the debenture is securing because those events of default will commonly be events which will trigger crystallisation of a floating charge and/or the right to appoint a receiver. This device avoids the need for these events of default to be set out in full in both the document creating the floating charge and the loan documentation.
The fact remains, however, that the provision which provides for or will trigger crystallisation will be contained in the debenture itself and not elsewhere. That will be so even when crystallisation is triggered by cross referencing to events contained in other documentation. Paragraph 41, therefore, properly targets provisions contained in an instrument creating a floating charge. I urge the noble Lord, Lord Kingsland, to withdraw these two amendments.
At the same time, I wish to speak to Amendment No. 58, which is in the same group. On Second Reading I said that we had a concern that without an amendment the stay on creditors' rights contained in the Bill would not be fully effective against possible action by the holder of a floating charge. This was dealt with by Amendment No. 17. I said also that we would bring forward an amendment to ensure that provisions that might be included in charge documents, which would allow restrictions to be imposed on the company's ability to deal with assets covered by a floating charge, could not be triggered either because a moratorium had been obtained or because of anything done to obtain a moratorium. This amendment deals with the latter point.
Paragraph 41 already provides that a provision in the document allowing a floating charge to crystallise—that is, become a fixed charge—if a company obtains a moratorium or takes action with a view to obtaining a moratorium, is to be void. Otherwise, such provisions might become commonplace and make rescues very difficult. This amendment provides that a provision in the floating charge document, which would allow restrictions to be imposed on the company's ability to deal with its assets, is also to be void if triggered by a company obtaining a moratorium or taking action to obtain a moratorium. Without this amendment, such provisions might also become a standard feature of floating charge documents and mean that a company would not be able to deal with its assets in the way it could before it took action to obtain the moratorium. Obviously, if as a consequence of such a provision, a company had to seek leave of the court or permission' of the chargeholder under paragraph 19 of Schedule Al before it could deal with its assets during a

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moratorium, its ability to conduct its business would be seriously hampered and the rescue would become much more difficult and costly to achieve.
Lord Kingsland: I thank the Minister and shall read what he said closely in Hansard. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 58:
Page 27, line 10, after ("crystallise") insert ("or causing restrictions which would not otherwise apply to be imposed on the disposal of property by the company").
On Question, amendment agreed to.
[Amendment No. 59 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 60:
Page 27, line 24, after ("Regulations") insert ("(except regulations under paragraph 5)").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 61. The amendments provide for the regulation-making power in paragraph 5 of Schedule A1, the power to modify the qualifications for eligibility of a company for a moratorium, to be subject to the affirmative resolution procedure. We have brought forward these amendments after consideration of the recommendations made by the Select Committee on Delegated Powers and Deregulation in its Sixth Report of 16th February. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 61:
Page 27, line 26, at end insert—
("( ) Regulations under paragraph 5 of this Schedule are to be made by statutory instrument and shall only be made if a draft containing the regulations has been laid before and approved by resolution of each House of Parliament.").
On Question, amendment agreed to.
Baroness Buscombe Baroness Buscombe moved Amendment No. 62:
Page 27, leave out lines 29 to 37.
The noble Baroness said: With this amendment we are responding to the proposed additional grounds for a winding-up petition in paragraph 6 of Schedule 1, which we believe to be a waste of time. If the company is insolvent, a petitioner can rely upon paragraph (f) in Section 122(1) of the Act. If the company is not insolvent, there is no reason for the ground. Why should a moratorium come to an end with no voluntary arrangement being approved, to give a right to a creditor to wind up a solvent company? I beg to move.
Lord McIntosh of Haringey: Where a company has not been able to reach an accommodation with a creditor, it will almost certainly be in considerable financial difficulty. Cessation of business is probably almost inevitable and liquidation is highly likely—and probably appropriate. In such circumstances, what
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would be the point of requiring a creditor intent on winding up the company to suffer the delay and expense in establishing the company's insolvency to the satisfaction of the court as would otherwise be required of him by Sections 122 and 123 of the Insolvency Act 1986? It is far better to allow that creditor to petition on the grounds that no voluntary arrangement had been agreed when the moratorium ended.
However, even that does not mean that liquidation is inevitable. The court will, of course, retain its discretion on whether or not to make a winding-up order on such an application. If it did not consider it appropriate to exercise its discretion to make a winding-up order, then no order would be made, notwithstanding the fact that the company had failed to secure agreement of a voluntary arrangement following a moratorium.
Baroness Buscombe: I shall read the Minister's response with care. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sharman Lord Sharman moved Amendment No. 63:
Page 28, line 7, leave out ("of filing") and insert ("on which the arrangement takes effect").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 95. Both amendments seek to clarify the position of claims by creditors arising in the case of voluntary arrangements. Paragraph 42(9) provides that the effective date of these claims should be that of filing. There can be a delay between filing and the date on which the arrangement takes place. I believe it is important that the claims of creditors arising in the period between filing and the approval of the arrangements should be included in those arrangements. That is what Amendment No. 63 seeks to achieve.
In the case of Amendment No. 93, paragraph 12 of Schedule 3 deals with the situation where claims arise between an interim order and the approval of a voluntary arrangement. With this amendment I am seeking to ensure that the claims of creditors which arise in the period between that of an interim order, where there is one, and the approval of a voluntary arrangement are included in that arrangement. I beg to move.
Lord McIntosh of Haringey: I hope I can assure the noble Lord, Lord Sharman, on this point. The effect of paragraph 9 of Schedule 1 and paragraph 13 of Schedule 3 will be that when a company voluntary arrangement is approved following a moratorium, the date by reference to which any preferential debts are to be established will be the date of the commencement of the moratorium. In insolvency legislation this reference date is described as the "relevant date".
This proposal will be consistent with a consequential change which we propose to make to the Insolvency Rules 1986. This concerns the calculation of the amount of creditors' claims for the purposes of both

CWH 53
voting on and being bound by a proposal for a voluntary arrangement involving a moratorium. Under existing rules 1.17, to which I have already referred, and 5.17 creditors' claims are usually calculated as at the date of the meeting. But we believe that, where a moratorium is involved, they should be calculated at the date the moratorium comes into force and we propose to amend the rules accordingly.
As a result, only those creditors for debts outstanding when the moratorium is obtained will be eligible to vote on and be bound by any agreed voluntary arrangement. Those creditors for debts incurred after the start of the moratorium will not be eligible to vote on and will not be bound by the voluntary arrangement and will, once the moratorium comes to an end, be able to pursue the company or debtor for those debts in the normal way. Accordingly, debts arising during a moratorium will be dealt with on a different basis from pre-existing debts.
In non-moratorium cases the date for calculating creditors' claims will remain the date of the meeting to approve the arrangement and that is why the relevant date for calculating preferential debts in those cases will be the date on which the voluntary arrangement takes effect, as provided in Schedule 2 paragraph 11 and Schedule 3 paragraph 13.
If the amendments proposed to paragraph 9 of Schedule 1 and paragraph 13 of Schedule 3 were to be accepted the result would be that preferential creditors would be placed at a disadvantage in relation to other creditors.
Lord Sharman: I am grateful to the Minister for his response and in particular for his assurances on the amendment of the Insolvency Rules. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 64 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 65:
Page 28, line 25. leave out ("17(3), 18(3)") and insert ("17(3)(a), 18(3)(a)").
The noble Lord said: The purpose of paragraph I1 of Schedule 1 to the Bill is to amend Section 432(4) of the Insolvency Act 1986. The paragraph has the effect that various offences contained in Schedule A1 to the Bill are to be exceptions to the general rule provided for in Section 432(4). The references in paragraph 11 to paragraphs 17(3) and 18(3) of Schedule A1 are inaccurate as in each case the offence is actually contained in paragraph (a) of sub-paragraph 3 rather than in sub-paragraph (3) as a whole. We have brought forward this amendment to ensure accuracy in the proposed amendment to Section 432(4) of the Insolvency Act. I beg to move.
On Question, amendment agreed to.
Schedule 1, as amended, agreed to.
Clause 2 agreed to.
Schedule 2 [Company voluntary arrangements]:
[Amendments Nos. 66 to 72 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 73:
Page 31, line 2, leave out ("dividend") and insert ("amount").
On Question, amendment agreed to.
7 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 74:
Page 31, line 6, leave out from ("person") to end of line 7 and insert ("the amount payable under the arrangement".").
On Question, amendment agreed to.
[Amendments Nos. 75 to 77 not moved.]
Lord Kingsland Lord Kingsland moved Amendment N o. 78:
Page 32, line 48, after ("answer") insert ("or obtained by examination of that person under section 133 or section 236 of this Act").
The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 79 to 81 and 101 to 105. As your Lordships are aware Clause 10 amends Section 219 of the 1986 Act by restricting the use of evidence obtained in an investigation under Section 218(5) in criminal proceedings. This amendment is made because of the terms of the Human Rights Act 1998.
In our submission, the same issue arises with respect to evidence obtained under Section 133 and Section 236 of the 1986 Act. Following the decision of the European Court of Justice in the case of Saunders v the United Kingdom, the Secretary of State has developed and applied a policy of not using against an accused in criminal proceedings a transcript of his compelled evidence.
As far as insolvency proceedings are concerned, evidence is compelled from office holders pursuant to the powers contained in Section 236 of the Insolvency Act 1986 or by inspectors appointed under the Companies Act. In a case called ex parte McCormick, a judicial review over the use of compelled evidence failed. However, it was by definition, a case that took place before 2nd October 2000, the date when the Human Rights Act comes into force; and the narrow principles of Wednesbury, unreasonableness and irrationality, are likely to limit the usefulness of this precedent for the future.
There are associated two issues here, issues with which the Minister will by now be extremely familiar as a result of his experiences in taking through your Lordships' House the Financial Services and Markets Bill, now the Act, and the Utilities Bill. The first of these issues concerns whether or not, in effect, the procedures to which I have already referred under the 1986 Act are essentially criminal.
In deciding whether a given charge is criminal under the Human Rights Convention, the first matter to consider is how the offence is described in the domestic system of law. If it is described as criminal that is the end of the matter. If it is not, that is not the end of the matter because then the court must consider the nature of the offence and the degree of severity of the penalty that the person accused is likely to incur.

CWH 55
In the opinion of the European Commission for Human Rights, it is relevant if the measure complained of affects the general interests of society normally protected by the criminal law. In a recent case called Société Stenuit v France, the European Commission for Human Rights held that a ministerial power to fine a company for anti-competitive practices did, indeed, involve a criminal charge. Although disqualification proceedings are not criminal proceedings according to domestic law, they have many characteristics which would align them to criminal penalties.
The proceedings are undertaken on the initiative of the authorities. The allegations are instituted following a formal investigation undertaken by officials invested with special powers. The penalties are really severe if the party investigated is found to have offended. The investigations involve considerable interference with the freedom of the individual. And the penalties involved impose a heavy costs burden and affect the status of the individual as a consequence.
For all those reasons, I believe there are sound grounds for arguing that, in effect, these offences are criminal offences. If that is so, any individual pursued under them would be entitled to the full protection of Articles 6.1 to 6.3 of the European Convention. It is clear that that protection is not reflected in the Bill.
Even if I am wrong, these offences still attract substantial protection for the individual under Article 6.1; because the protection under Article 6.1 applies to civil as well as criminal offences. The European Court of Human Rights has held in a number of cases that in determining the civil rights of an individual, the principles of "equality of arms" and "fair balance" apply between the parties.
This is not an appropriate moment to develop this point any further. I believe I know what the Minister is going to say in response to what I have said; if I do not then I have cautious grounds for optimism. I look forward with great interest to hearing what he has to say. I beg to move.
Lord Sharman: I should like to speak to Amendment No. 101, which is included in this group, and by comparison with the recent exposition of the noble Lord, Lord Kingsland, is a modest contribution to the debate. It seeks to clarify what evidence the prosecution would be capable of leading to, or introducing into, criminal proceedings.
The term "relating to" used in Clause 19 is a wide one. As presently drafted, it seems to prohibit the prosecution from taking any evidence related to the terms of the reply, including the circumstances surrounding the making of the reply. That is too wide. While on the one hand compelled evidence is clearly not something that one would want to see used in prosecution, it should be possible to ensure that the privilege of non-self-incrimination is maintained while allowing the prosecutor to bring in other competent evidence. Therefore, replacing the words "relating to" with the word "or would achieve that objective.
Lord McIntosh of Haringey: I am the last person to dwell on,
"old, unhappy, far-off things,
And battles long ago".
The noble Lord, Lord Kingsland, knows perfectly well that we believe that these human rights issues are important. That is why Clause 10 of the Bill amends Section 219 of the Insolvency Act. Clause 10 provides in terms that answers obtained using the powers exercisable under Section 218(5) of the Act—namely, those exercisable under Sections 431 or 432 of the Companies Act 1985—cannot be used in evidence in criminal proceedings against the person who gave those answers other than in very limited circumstances. Similar provision is made in relation to new Section 7A(6) of the Act by paragraph 10 of Schedule 2.
However, it is already the case that answers given at an examination under Section 133 and 236 of the Insolvency Act cannot be used in evidence in criminal proceedings against the person concerned, again, subject to limited exceptions. That is because, on 14th April of this year, paragraph 7 of Schedule 3 of the Youth Justice and Criminal Evidence Act 1999 came into effect amending Section 433 of the Insolvency Act. Section 433 is not relevant to evidence obtained under Section 219 as proposed to be amended or Section 7A, as those sections provide for the use of powers contained in the Companies Act, not the Insolvency Act.
Therefore, given that evidence obtained under Sections 133 and 236 of the Insolvency Act cannot be used in criminal proceedings against the person concerned except for limited purposes, I urge the noble Lord, Lord Kingsland, not to press these amendments.
7.15 p.m.
Lord Kingsland: I thank the Minister for his reply. I shall read his remarks carefully in Hansard, either to return or not to return to this matter at Report stage.
Amendment, by leave, withdrawn.
[Amendments Nos. 79 to 81 not moved.]
Schedule 2, as amended, agreed to.
Clause 3 agreed to.
Schedule 3 [Individual voluntary arrangements]:
[Amendments Nos. 82 to 90 not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 91 and 92:
Page 36, line 25, leave out ("dividend") and insert ("amount").
Page 36, line 29, leave out from ("person") to end of line 30 and insert ("the amount payable under the arrangement."").
On Question, amendments agreed to.
[Amendments Nos. 93 to 95 not moved.]
Schedule 3, as amended, agreed to.
Clause 4 [Qualification or authorisation of nominees and supervisors]:
[Amendments Nos. 96 to 99 not moved.]
Clause 4 agreed to.
Clauses 5 to 8 agreed to.
Schedule 4 [Minor and consequential amendments about disqualification of company directors etc.]:
Lord Sharman Lord Sharman moved Amendment No. 100:
Page 39, line 9, at end insert—
("( ) It shall be competent for a director to object to proceedings being retained in the wrong court and to apply to the court to transfer proceedings to the proper or more appropriate court for determination: and if the court is satisfied that proceedings should be transferred, they shall be transferred to a specified court for determination.").
The noble Lord said: This amendment seeks to make clear that a director can object to proceedings being retained in the wrong court and seek to have them transferred to the proper or more appropriate court. Under the Bill as drafted, proceedings could be raised in the wrong court, to the prejudice of a respondent director. If the director should be given an opportunity to address this issue, then it is appropriate that he or she be afforded the opportunity of making representations in the proper form. That is what the amendment seeks to achieve. I beg to move.
Lord McIntosh of Haringey: It is not necessary to make this provision. The court already has the power to transfer proceedings to another court when it considers it appropriate to do so. Therefore, it is open to a party to the proceedings to apply to transfer those proceedings.
Lord Sharman: I am grateful to the Minister for his response, on which basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 agreed to.
Clause 9 agreed to.
Clause 10 [Restriction on use of answers obtained under compulsion]:
[Amendments Nos. 101 to 105 not moved.]
Clause 10 agreed to.
Clause 11 [Insolvent estates of deceased persons]:
Lord Sharman Lord Sharman moved Amendment No. 106:
Page 7. line 28, at end insert—
("(6) Subsection 5 shall not apply in relation to the estate of a person who died before the coming into force of that subsection."").
The noble Lord said: This amendment refers to a matter to which I spoke at Second Reading, dealing with the position of insolvent estates. It is necessary that there should be no retrospective effect on any third party who might have acquired property in good faith. This is why the amendment states:
"Subsection 5 shall not apply in relation to the estate of a person who died before the coming into force of that subsection".
I beg to move.
Lord McIntosh of Haringey: We understand the concern of the noble Lord, Lord Sharman, which he also raised at Second Reading. We agree that, left as it is, this clause could prejudice the marketability of property where the deceased's interest in jointly-owned property has passed to the survivor on death, irrespective of whether the deceased is solvent or not. We would not wish an arm's length disposal of a
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property by a surviving partner to be made unnecessarily difficult because prospective purchasers were concerned that they might find they did not have good title if the deceased's estate became insolvent.
However, we are not in a position to put down an amendment to deal with this point at this stage. We are in the process of preparing one which should deal with this concern and we will bring this forward as soon as it is ready.
We also propose that the new provision will apply only in those cases where the petition for the insolvency administration order is presented after the new provision has come into force. We recognise that this will not go as far as the proposed amendment. However, on that point I would have to say that we are not convinced that the creditors of an insolvent estate should be in a worse position if the debtor has died than if he is living. We think that limiting the application of the new provision in the way I have just described strikes an appropriate balance.
We are also looking at how we might protect the position of innocent third parties where there have been dealings in the property between the date of death and an insolvency administration order. I hope that reassures the noble Lord, Lord Sharman.
Lord Sharman: I thank the Minister for his reply. I a m much reassured and I look forward to seeing the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
Clause 12 agreed to.
Clause 13 [Model law on cross-border insolvency]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 107:
Page 7, line 41, leave out ("made with the agreement of the Lord Chancellor").
The noble Lord said: In moving this amendment I shall speak also to Amendment No. 109. The amendment provides that the consent of Scottish Ministers must be obtained before the Secretary of State makes regulations extending to Scotland giving effect to the UNCITRAL model law on cross-border insolvency under this clause. This is appropriate as implementation of the model law is likely to touch on matters which have been devolved to that jurisdiction. Additionally, the amendment makes it clear that the agreement of the Lord Chancellor is only necessary where such regulations are to extend to England and Wales.
Perhaps I may refer to Amendment No. 108. In that amendment the noble Lord, Lord Sharman, proposes that regulations under Clause 13 should be made with the agreement of the Advocate General for Scot land as well as that of the Lord Chancellor, but we propose by amendment of this clause that regulations be made, in so far as they extend to Scotland, with the agreement of Scottish Ministers. That has been done with the consent of the Scottish Parliament. Furthermore, the clause, as we propose it to be amended, will mean that regulations extending to England and Wales will be made with the agreement of the Lord Chancellor. I beg to move.

CWH 59
On Question, amendment agreed to.
[Amendment No. 108 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 109:
Page 8, line 26, at end insert—
("( ) Making regulations under this section requires the agreement—

(a) if they extend to England and Wales, of the Lord Chancellor,

(b) if they extend to Scotland, of the Scottish Ministers.").

On Question, amendment agreed to.
Clause 13, as amended, agreed to.
[Amendment No. 110 not moved.]
Remaining clauses and schedule agreed to.
Title agreed to.
Bill reported with amendments.
The Deputy Chairman of Committees: That concludes the Committee's proceedings on the Bill.
The Committee adjourned at twenty-four minutes past seven o'clock.

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