Sitting of 22 June 2000

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

PRIVATE BUSINESS
LONDON LOCAL AUTHORITIES BILL [LORDS] MY ORDER)
Order for consideration, as amended, read.
To be considered on Thursday 29 June.

MERSEY TUNNELS BILL (BY ORDER)
Order for Second Reading read.
To be read a Second time on Thursday 29 June.

Oral Answers to Questions
  TREASURY
  The Chancellor of the Exchequer was asked—

  Pension Increase
  Mr. Andrew Robathan (Blaby): If he will estimate the cost to public funds of the 75p increase in the basic state pension in the current financial year. [125824]
  The Chief Secretary to the Treasury (Mr. Andrew Smith): Three hundred and seventy million pounds.
  Mr. Robathan: I suspect that, like me, the Minister is just old enough to remember the 1959 general election, when Hugh Gaitskell promised to give every pensioner an immediate rise of 10 shillings on the old age state pension. After some 41 years of Labour rhetoric and a certain amount of inflation, is the Minister ashamed that this Government can manage only a 15 shilling rise? As an heir of Gaitskell and the Labour movement, is the Minister surprised that pensioners are increasingly disillusioned with this Government?
  Mr. Smith: I do not recall the 1959 election—the relevant one for our purposes is the 1997 election. The hon. Gentleman would do well to recall that we shall spend, in real terms, £6.5 billion extra on pensioners during this Parliament, compared with what they would have got from the Conservatives.
  Mr. Denis MacShane (Rotherham): Is my right hon. Friend aware of the great concern expressed to me by pensioners in my constituency that if the Conservatives win power, pensioners will have their £150 winter fuel allowance taken away, as well as the free television licences for the over-75s and even the little sum at
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  Christmas that helps them to buy presents for their grandchildren? That is the Conservatives' policy, with Portillo the pickpocket of pensioners' purses.
  Mr. Smith: My hon. Friend is right. Pensioners have been appalled to discover that under the Conservatives they would lose the winter fuel payment, the free television licences and the Christmas bonuses. Not only that, 140,000 more pensioners would pay tax and that would hit those on the minimum income guarantee. The Conservatives' policy would not help pensioners; instead, it would hit the poorest pensioners hardest.
  Mr. Michael Fallon (Sevenoaks): Why should the pensions increase be based on last year's inflation when the motorists tax increase is being based on future inflation? While the Chief Secretary is thinking of an answer to that, could he tell us how many Labour Members have made representations about the 75p increase?
  Mr. Smith: The uprating of the state pension based on the inflation figure for the previous September is a long-standing practice that was introduced by the Conservatives in 1988.

  Charitable Giving
  Mr. Ian Pearson: What discussions his Department plans with voluntary sector bodies on the changes to the taxation of charitable giving set out in the Budget. [125825]
  Mr. Tom Clarke (Coatbridge and Chryston): What impact he estimates his plans to encourage greater use of payroll giving will have on the charity sector. [125827]
  The Chancellor of the Exchequer (Mr. Gordon Brown): The getting Britain giving package of measures, which I announced in the Budget, gives the most generous tax relief on donations by individuals and companies, including donations of shares to charities, and has involved extensive co-operation and consultation with the voluntary sector.
  We will now also bring forward a proposal that the voluntary sector, business leaders, employees representatives and people from the marketing and advertising industry examine proposals for a national campaign to promote the giving not only of money, but of time. Our objective for the payroll giving campaign, which will be launched in September, is to more than double donations to charities through payroll giving. Our changes have been broadly welcomed by the charities.
  Mr. Pearson: I thank my right hon. Friend for that reply and congratulate him on the steps that he is taking to encourage venture philanthropy and other forms of charitable giving. Andrew Carnegie's dictum that wealth brings responsibility was forgotten under the Tories, but philanthropy—giving something back—is an important part of what being a Labour Government is all about. Is not the big issue now the importance of letting people know about the opportunities that exist to give to worthy

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  causes, and can we speed up and financially support the proposals for a national television, press and radio marketing campaign to promote a new age of giving?
  Mr. Brown: I am grateful to my hon. Friend. As he rightly points out, the ceiling on payroll donations to charity under the previous Government was £1,200 and that has been lifted altogether. Individual donations below £400 did not attract tax relief, but now all individual donations do so. We will work with the industry and with charities to publicise the giving of time as well as money.
  In addition, we are about to introduce a children's fund that will give grants to innovative projects that are being run by community and charitable organisations. We are making changes in our sure start programme so that charity and community organisations can become involved, and we are creating an alliance for children that will bring together all the charitable organisations involved in helping children. We have had extensive consultations with children's charities on those matters.
  As I said, our proposals have been broadly welcomed by the charities involved. Mr. Brophy, of the Charities Aid Foundation, said about the Budget in March that it introduced
  some of the most radical changes to charitable giving ever.
  He added that at a stroke, Labour had
  created a new age of giving.
  Mr. Clarke: Is my right hon. Friend aware that there is much enthusiasm among voluntary organisations in my constituency about his various initiatives on world debt? Many of them want to contribute to organisations such as Christian Aid, Oxfam and, in Scotland, the Scottish Catholic International Aid Fund. Does he therefore appreciate that his proposals are welcome to the Churches and charitable organisations, as they indicate both community and global involvement?
  Mr. Brown: I am grateful to my right hon. Friend, and I applaud his work in furthering the cause of debt relief in the third world. Christian Aid issued a statement to the effect that it believed that the measures introduced in the Budget may help it to gain an additional £1 million in its charitable efforts for fund raising this year. Many people, not least my mother, have written to the Treasury asking us to do more on third-world aid. I believe that the proposals in the Budget help not only third-world charities, but all charities.
  Mr. John Bercow (Buckingham): Does the right hon. Gentleman understand the concern of the Industrial Careers Foundation, about which I have written to him twice since the Budget? It is worried that companies are assumed to make net donations, that they have to reclaim the tax themselves and that the charities are not able to do so on their behalf. This year, as a result of his changes and because of the structure of its donor profile, the ICF will lose no less than £5,000.
  Mr. Brown: I am grateful to the hon. Gentleman for reminding me of the letter that he sent to me at the Treasury. Despite what he says, our proposals have been widely welcomed across the board. We have made it
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  easier than ever for companies to give money to charities. We have introduced changes that the previous Conservative Government did not even contemplate.
  I have a letter from the British Legion, arising from changes that we have made to the treatment of value added tax on poppies—another matter with which the previous Government did not deal. My correspondent says that he had the opportunity to make a statement about that VAT relief to his annual conference, and he tells me that it was "extremely well received".
  Mr. Michael Portillo: As the Chancellor claims to be helping charities, may I help him with his arithmetic? His changes to advance corporation tax have cost charities £500 million a year. His further claim, which is not necessarily substantiated, is that £400 million has been given back to the charities. Will he tell the House plainly: does that leave the charities better off, or worse off?
  Mr. Brown: We have given £1.2 billion in additional relief to charities as a result of the ACT changes that we introduced. In addition, despite what was said about those changes, there has been a 20 per cent. increase in the amount of dividends that charities have received from company fund raising. As for verification of the figures on the generosity of the tax package in the Budget, £350 million is the figure that has been used by the Charities Aid Foundation and by individual charities.
  However much he wants to, the right hon. Gentleman cannot deny that the previous Conservative Government talked a lot about helping charities, but never did what we have done. Our measures have been welcomed right across the board. The National Council for Voluntary Organisations said that our changes in the Budget were "very welcome". It is only one of a number of organisations that support our measures. Charities are better off as a result of what we are doing.
  Mr. Portillo: That is simply not the case. The Chancellor put the tax package figure at £350 million, but he has taken away £500 million. However, if he will not take that from me, will he take it from the chief executive of Barnardos? He said that the Chancellor
  is giving with one hand what he has already taken away with another.
  Do not the charities know that the Government are taking away more than they have given? Is it not the case that no one believes a word that the Chancellor says?
  If the right hon. Gentleman will not listen to Barnardos, will he listen to Ian Campbell, who is the director of another charity? He said:
  The Chancellor sets up backdoor burdens on us. Spin doctors may think that sweeteners can con electors but they distrust politicians who say one thing and do another.
  Does not that explain why Labour Back Benchers are now openly briefing against the Chancellor? Do not people in the country now contrast what the Chancellor says with what he does? Do they not say to themselves, in the words of the Deputy Prime Minister:
  Isn't this spinning, and spinning is lying?
  Mr. Brown: If the shadow Chancellor wants to be consistent, let him repeat the words that he used about the Conservative party. He said that the Tories were linked to

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  harshness and thought to be uncaring about unemployment, poverty, poor housing, disability and single parenthood. He said they were thought to favour greed and the unqualified pursuit of the free market, with a devil-take-the-hindmost attitude. That is hardly an attitude that would commend itself to the charities that operate throughout the country.
  Barnardos is involved with us in setting up the children's fund, and it welcomes what we are doing in this area. Let us remember that it was the previous Government who put VAT on fuel. We have extended VAT exemptions to more charity fund-raising events, broadened the VAT zero rate for sale and hire of donated goods, broadened the VAT zero rate for charity advertising, given greater VAT relief on the sale by charities of donated goods, extended VAT relief for the provision of rooms for disabled people in day centres and increased to £100,000 the limit below which charities and other businesses do not have to account for VAT on goods in hand. We have taken action to deal with abuses of VAT, with which the previous Government failed to deal.
  The right hon. Gentleman cannot deny that, for the first time, individual donations to charities can be made with tax exemption for all such donations from the Government. Equally, companies can make individual donations and receive tax relief. That is something that the Tory party never did and, from what the shadow Chancellor says about it, would never do.
  Mr. Dennis Skinner: Is not one of the reasons why the Tories are not keen on large benefactors giving money to charity is that Brian Souter finances the Tory party campaign from Scotland, Paul Sykes finances the Tory party campaign from Yorkshire and Michael Ashcroft finances the Tory party campaign from Belize and the House of Lords? Why does my right hon. Friend not tell those three people that it is a waste of money? What is the point of giving money to this tinpot Tory party? It is like chucking money down the drain.
  Mr. Brown: I agree with my hon. Friend. The Conservative party is not a charity and never will be.

  Independent Schools
  Mr. Christopher Chope: What the annual net cost or benefit to the Exchequer is of the charitable status of independent schools. [125826]
  The Chief Secretary to the Treasury (Mr. Andrew Smith): There are no official statistics, but the Government are working in partnership with the sector, as the hon. Gentleman knows.
  Mr. Chope: I thank the Minister for that reply. Can he confirm that independent schools provide excellent value for money to the Exchequer and the taxpayer? They save the Exchequer having to fund some 600,000 school places out of taxation. For every pound received in charitable relief, the sum of £2 is spent on community benefit. Some £180 million is received in foreign earnings each year.
  Why are the Government obsessed with making remarks detrimental to the success of independent schools
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  and universities? Why do they not concentrate instead of trying to improve standards in state schools? Why does the Minister think that the number of pupils educated in independent schools has risen during the lifetime of this Government, rather than declined?
  Mr. Smith: The Government do recognise the distinctive strengths and contributions of the sector, which is why we are working in partnership with it. We believe that there are clear educational and social benefits from that collaboration. That is why we have set up our partnerships fund scheme, which this year will benefit 6,000 pupils from both state and independent schools on collaborative projects—part of a £400,000 fund that is available this year. So I dispute the hon. Gentleman's assertion, and repeat that we are committed to working in partnership, drawing on the strengths of both sectors.
  Mr. David Taylor: In the lottery of British life, far too many of the big prizes go to the 7 per cent. of people who are educated privately. Does my right hon. Friend agree that the social costs associated with this far outweigh the small sums referred to by the hon. Member for Christchurch (Mr. Chope)? Does my right hon. Friend agree with the former deputy leader of the party, and myself, in that we can never be a mature and progressive country while the levers of power of our nation are so often exercised by people who have been educated in public schools?
  Mr. Smith: The important thing is that this Government and our party stand for opportunity for all, regardless of their background or, for that matter, the school that they go to. However, it cannot be acceptable when, for example, 67 per cent. of those achieving the top grades at A-level come from state schools, but achieve only 52 per cent. of the places at the top universities. That is what our campaign for opportunity for all is about: ensuring that everybody, regardless of background or education, has the opportunity to make the most of his or her potential.
  Mr. Howard Flight: As the Minister will be aware, all educational institutions, as well as charities, suffer considerable tax costs as a result of irrecoverable VAT as well as the £500 million lost on ACT recovery. What plans have the Government for reforming the arbitrary and unjust VAT imposition on charities as well as for compensating for the ACT cost? Those are the two key issues about which charities, and in particular educational charities, are concerned.
  Mr. Smith: I note that during the 18 years they had the chance to do something about that, the Conservatives did nothing at all. When we talk about the independent sector we are not just talking about conventional public schools; we are talking about the state schools, the choir schools and the ballet schools, as well as those educating children with special needs and those serving ethnic and religious groups. Those with charitable status are, of course, benefiting from all the measures that the present Government have taken to promote charitable giving, and that my right hon. Friend the Chancellor has just set out.

  Employment (North-East)
  Ms Dail Taylor: What assessment he has made of the impact of his economic policies on levels of employment and unemployment in the north-east. [125828]
  The Chancellor of the Exchequer (Mr. Gordon Brown): In the north-east, as in the rest of the United Kingdom, we have created a sound and credible platform of economic stability; we have also created the new deal and the working families tax credit, which will help us to attain our objective of high and stable levels of growth and employment. Since the election, employment in the north-east has risen by 20,000 and unemployment has fallen by 19,000. There are more than a million people in work in the north-east, the highest-ever figure.
  Ms Taylor: I thank my right hon. Friend for that reply. Has any consideration been given to extending the new deal as a training and employment programme? In my constituency, overall unemployment has dropped by 13 per cent.; youth unemployment by 54 per cent.; and long-term unemployment by 57 per cent. It has been without doubt a success. Will my right hon. Friend refute the statement by the shadow Chancellor that the new deal has been an expensive failure? It has been a cost-effective success in my constituency.
  Mr. Brown: This is the difference between the two parties: we will extend the new deal to give young people, the long-term unemployed, single parents and others greater opportunities to get jobs. In that way, we are creating nearly a million jobs. The Conservative party would abolish the new deal and the working families tax credit. While it talks about full employment, it is removing the means by which we can achieve it.
  It is very interesting that throughout the 1980s and 1990s, the shadow Chancellor never mentioned the words "full employment" as a commitment of the Conservative party. When he was at the Treasury and unemployment was rising, he said nothing about full employment. When he was Secretary of State for Employment, he said nothing about full employment. Even when the election was over and he was criticising the Conservative party for being harsh and uncaring, he said nothing about full employment. Now, as the next Conservative party leadership election comes nearer, he tells us that he supports full employment. If the Conservative party supports full employment, why is it trying to abolish the new deal, which is helping to create full employment?
  Miss Anne McIntosh: Is not the Chancellor of the Exchequer ashamed that under his stewardship at the Treasury there have been closures, not least at Samsung in the constituency of his right hon. Friend the Prime Minister and a plant within the Vale of York, as well as Siemens in the north-east? When will he take measures to tackle the high level of the pound, the low level of the euro and record unemployment in manufacturing and farming?
  Mr. Brown: The record closures happened under Conservative Governments: 1 million manufacturing jobs were lost in the early 1980s and another 1 million in the early 1990s. The Government are creating jobs—nearly
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  1 million of them. If the hon. Lady wants to help us to create jobs, she should tell the shadow Chancellor to support the new deal instead of trying to abandon it.
  Mr. Jim Cousins (Newcastle upon Tyne, Central): May I draw to the Chancellor's attention a proposal by Sage, an information technology company on Tyneside, to create a new cluster of enterprises centred in the employment area just north of Newcastle, which would bring the benefits of employment to the whole of Tyne and Wear? May I also draw to his attention the proposals of the regional assembly of councils and the regional development agency, which will be published today and tomorrow? They are offering significant proposals to bring about in the north-east of England the self-sustaining growth that we have not had for many years. Will he respond to those proposals with more support and more investment through the comprehensive spending review?
  Mr. Brown: I am grateful to my hon. Friend for raising those points. I have visited Sage in Newcastle, and I can say that we shall announce more help in future for the regional development agencies, including One North-East, to allow them to adopt the kind of strategy that he mentioned. In the north-east, 40,000 more jobs have been created during the past year alone. I have examined the unemployment figures for each constituency: since the general election, there has been only one Conservative Member from the north-east, and youth unemployment in his constituency has fallen by 60 per cent. and long-term unemployment by 50 per cent. Jobs are up in the north-east, vacancies are up in the north-east, investment is up in the north-east—all of which the Conservatives would find out if ever they were up in the north-east.
  Mr. David Heathcoat-Amory: Is the Chancellor aware that businesses in the north-east have expressed serious alarm about his decision to impose a new energy tax—the so-called climate change levy—from next April? Businesses have told the Chancellor and the Treasury that that new tax will threaten future investment and jobs. Why does the Chancellor ignore the voice of industry, which produces investment and jobs? Does he agree that the new energy tax is completely unnecessary as the environmental changes to meet our international commitment could be far more easily achieved by other means?
  Why is the Chancellor imposing a new stealth tax that all businesses, of whatever size, will have to pay, but which will bear particularly heavily on the manufacturing industries of the north-east, which face international competition? Is the Chancellor aware that the Government's talk of partnership with industry is mere empty rhetoric if he is simultaneously imposing new burdens and taxes on the wealth-producing sectors of the economy?
  Mr. Brown: The longer the right hon. Gentleman speaks, the less convincing he becomes. Let me remind him that the climate change levy originated in a proposal from a committee chaired by Lord Marshall, the president of the Confederation of British Industry. The proposal is revenue neutral for businesses and for manufacturing industry. There will be no revenue gain to the Treasury.

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  May I also remind the right hon. Gentleman that we have done something that the Conservative party never did, by cutting corporation tax to the lowest level in the industrialised countries? We have also cut small business tax to the same level. Given that unemployment is at 1.5 per cent. in the right hon. Gentleman's constituency—and in that of the shadow Chancellor—I should have thought that he would congratulate the Government on creating jobs. In my constituency, the Rosyth unemployed workers centre existed for 15 years under a Conservative Government, but will soon hold an emergency meeting to decide whether to disband because we have created jobs. If the Conservatives want to help us to create employment, they should start backing the new deal instead of attacking it.

  Married Persons Tax Allowance
  Dr. Brian Iddon: What representations he has received on the impact of the withdrawal of the married persons tax allowance on those who receive DSS benefits. [125829]
  The Paymaster General (Dawn Primarolo): The Chancellor regularly receives representations on all aspects of the tax system.
  Dr. Iddon: One of my constituents has lost more than £15 per month—even after all the Budget changes and his increase in benefit have been taken into consideration—largely due to the loss of the married couples allowance. He had to retire early because of cardiovascular disease and take incapacity benefit. Although he receives a small occupational pension, I do not consider him to be well off. Will my hon. Friend agree to look again at how the Budget 2000 has affected such incapacity benefit recipients?
  Dawn Primarolo: I am sure that my hon. Friend fully appreciates that, without all the facts, it is difficult to respond to individual cases. The relationship between tax reliefs and qualifying benefits in the DSS system is complex. Of course, I am prepared to look again, with my hon. Friend, at the particular circumstances of his constituent.
  I remind my hon. Friend that the withdrawal of the married couples allowance was to enable the Government to focus on families with children and to start by helping the very poorest first. The children's tax credit, which will start next April and could be worth as much £8.50 a week to families, is being advertised and families are being written to directly to encourage them to apply. I am sure that he would agree that the Government should always start by helping those who are the poorest in our society.
  Mr. David Ruffley (Bury St. Edmunds): Will the Government now apologise to those couples in which an older partner is of pensionable age after 5 April this year? They will now be up to £500 a year worse off as a direct result of the abolition of the pensioners married couples allowance.
  Dawn Primarolo: I do not think that the hon. Gentleman understands that those pensioners who receive the married couples allowance will retain that—they have not lost it. With the withdrawal of the married couples
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  allowance, there are a number of other additions in the tax system for those aged under 65: the 10p starting rate for tax; the reduction to 22p; and the introduction of the children's tax credit, which will be worth up to £442 a year—far more than the married couples allowance. There are several other benefits in the system.
  The hon. Gentleman sat on the Treasury Select Committee so he knows all that. Instead of saying that pensioners are losing their married couples allowance, he should remind people that those pensioners who receive it are keeping it.
  Mr. Simon Thomas: That is all very well, but does the hon. Lady not realise how the withdrawal of the married couples allowance for pensioners discriminates against male pensioners of 64 years of age? How does she justify that?
  Dawn Primarolo: Pensioners will qualify at the age of 65 for the age-related allowance. That will put them in a far better position than non-pensioners. They will have the winter allowance of £150 that they have not previously received. They will have the benefit of the tax changes of 10p and 22p. The hon. Gentleman just wants to cherry-pick; he does not want to look at the whole set of changes to see how people's positions are being improved. He is considering only one of those changes. I encourage him to consider the matter in the round.

  HIPC
  Ms Julia Drown: What assessment he has made of the time scale for the implementation of the heavily indebted poor countries initiative. [125830]
  Mr. Tony Colman: If he will make a statement on his discussions with the IMF on debt relief for the heavily indebted poor countries. [125839]
  The Chancellor of the Exchequer (Mr. Gordon Brown): The funding available for debt relief is proceeding this year. Five countries—Uganda, Bolivia, Mauritania, Mozambique and Tanzania—have already reached their decision points under the enhanced initiative agreed at Cologne last year. Another four—Senegal, Burkina Faso, Honduras and Benin—are expected to come to the boards for their decision points before the G8 Summit in Japan next month.
  To speed up the timetable, my right hon. Friend the Secretary of State for International Development and I wrote to the managing director of the International Monetary Fund and the chairman of the World Bank suggesting a joint implementation unit; that has now been set up and has begun its work. This week, we sent two officials to Washington to work with it.
  We shall continue to work closely with our G8 partners, the IMF and the World Bank to ensure that what the whole world wants is achieved—further progress on debt relief for those countries where poverty reduction is essential.
  Ms Drown: I thank my right hon. Friend for that reply. Although the Government deserve much congratulation for leading the way on debt relief, thousands of people in this country expected more debt relief to have been

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  achieved by now. I ask my right hon. Friend to be a little more specific about the concrete proposals that the Government will take to the Okinawa summit, so that we can hope—in this new millennium—for the debt relief needed to ensure that the huge waste of life that we see at the moment becomes a thing of the past.
  Mr. Brown: I thank my hon. Friend and colleagues in the House for their work in publicising the international debt issue. We have agreed that there will be £100 billion of debt relief, and we have set up the implementation unit in the International Monetary Fund and the World Bank to consider the issues affecting individual countries. It is unfortunate that 11 of the potential recipients of debt relief are now in civil war or in conflict. That makes it difficult to agree solutions to their problems and to have the guarantee that the money will go to poverty reduction. However, we are continuing with our efforts to make progress on this matter and new proposals will be made at the Japan summit.
  I can inform my hon. Friend that the funding problem, which was the immediate blockage last year, has been solved for this year. We must now ensure that countries that are ending or moving out of civil wars can get debt relief as quickly as possible and that those that are not in civil war can get through the process with speed. That is our aim.
  Mr. Colman: I wish to mention a country that is not in civil war and that has recently returned to democracy. Does my right hon. Friend agree with the leader in the Financial Times of 19 June which argued for Nigeria's inclusion in the HIPC initiative—a call that was backed up from the United States by Larry Summers and from the Commonwealth by Chief Emeka Anyaoku, who this week returns to Nigeria? Will my right hon. Friend use his considerable influence at the IMF and the World Bank to press for the inclusion of Nigeria in the HIPC initiative? There is a crucial need for Nigeria to be backed on its return to democracy, given its importance to the region.
  Mr. Brown: I am grateful to my hon. Friend for his interest in Nigeria. Since Nigeria returned to democracy, we have taken an interest in trying to help it speed through the process of both debt reduction and economic recovery. Two proposals are being worked through at the moment. The first is to achieve agreement on the IMF programme that would provide help to Nigeria in the short and the long term, and the other is to move forward with the Paris Club creditors to secure the necessary debt relief.
  As my hon. Friend knows, the scale of the debt problems in Nigeria is enormous. The problems that have built up over the years are difficult to solve, but the two initiatives, in which Britain has led the way since Nigeria's return to democracy, will be pursued vigorously with the rest of the world community.
  Mr. Andrew Rowe (Faversham and Mid-Kent): The Chancellor deserves congratulations on following with such energy the precedent set by the former Prime Minister on the debt relief operation. Will the right hon.
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  Gentleman assure us that, when debt relief is given, the monitoring of whether the money thus saved is duly spent on health and education, as is the intention, is robust?
  Mr. Brown: I am grateful to the hon. Gentleman. I support everyone on both sides of the House who has made the effort to make debt reduction a central issue for the world community.
  The conditionality is that the money that was previously spent on debt should go to health, education or anti-poverty programmes. It is because we have now agreed, as international institutions, that countries must sign up to a poverty reduction strategy that it is possible for money to be spent in that way, and to monitor how it is spent. For example, Uganda has promised that, when it receives the debt relief, it will use it to halve the pupil-teacher ratio in its schools from 100:1, which is an appalling rate for a country in any part of the world, to 50:1. We want the countries that receive debt relief to introduce such measures.
  Mr. Geoffrey Clifton-Brown: I, too, welcome the Chancellor's announcement about the further progress made by the original 10 countries to meet the HIPC conditions. However, what personal representations have the British Government made, either directly to the countries or through the World Bank, to ensure that countries in civil war meet the conditions of good governance? They should be able to see how, by meeting the conditions of good governance and getting rid of the problems of civil war, they could be helped into the HIPC initiative, and that would improve the standard of living of their peoples.
  Mr. Brown: That is exactly the message that has gone out, particularly from my right hon. Friend the Secretary of State for International Development, who should be praised for making fighting corruption as well as good governance a central issue with every country that she talks to about debt relief and poverty reduction. The Government have also offered countries that are either moving out of conflict or simply trying to solve debt relief problems specific help in making representations to the IMF and the World Bank and, indeed, in convening as a group of countries so that they can make far greater progress with international institutions. I am determined that we use this year to make as fast progress as possible, because that is one way in which we can respond to the massive expression of public opinion which demands that we have a solution to what has been an intractable problem for years.
  Mr. Michael Clapham: My right hon. Friend's initiative in persuading the G7 countries to reduce the debt of heavily indebted poor countries is greatly appreciated, but globalisation is steaming on and poorer countries are not sharing in the wealth thus created. Today, Oxfam will report that 200 children an hour are dying in poorer countries, and that we are unlikely to reach the Copenhagen target of reducing the number of child deaths in the poorest countries by two thirds by 2015. Will he, as a matter of

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  urgency, attempt to persuade the G8 countries to act to cut debt and to make more resources available, so that poverty can be tackled?
  Mr. Brown: It is true that 30,000 children die unnecessarily every day as a result of our failure to tackle poverty and malnutrition. Around the world, 200 million people, adults and children, can barely move their bodies because of hunger and suffering. It is incumbent on us to take a lead as a Government and as a country.
  In the longer term, we need to replace the vicious circle of debt, poverty and underdevelopment with a virtuous circle of debt relief, poverty reduction and economic development. To achieve those three aims, the IMF and the World Bank have been persuaded to have poverty reduction strategies for each of the poorest countries and to help those countries to make the transition to economic development. That is what my right hon. Friend the Secretary of State for International Development is trying to do. As everyone knows, there is a world target to halve poverty by 2015. That is not enough in itself, but that is the target that we have set and we are determined to take action to meet it.

  Married Women (National Insurance)
  Mr. Steve Webb: If he will estimate the number of married women who were paying national insurance in 1990-91 at the reduced rate for married women in circumstances where they would have paid less national insurance had they paid the full rate of national insurance contributions. [125832]
  The Paymaster General (Dawn Primarolo): In 1990–91, under the previous Government, about 60,000 married women could have paid more national insurance contributions at the reduced rate than if they had paid at the full rate. With effect from April 1999, the Government ended that situation.
  Mr. Webb: I am grateful to the Paymaster General for that estimate of the number of women suffering that injustice. Does she accept that those 60,000 women were paying more national insurance than other women in the same workplace, but receiving no pension rights, unlike their neighbours, and that that was bizarre, unjust and unfair? That injustice was created under the previous Government; will the hon. Lady do something to rectify it?
  Dawn Primarolo: The hon. Gentleman knows that from 1948 to 1977, married women had the ability to elect to pay reduced national insurance contributions. Women had to apply for the reduced rate and sign a declaration stating that they fully understood that the reduced rate would mean reduced entitlement. That was changed in 1977 and the Department of Social Security ran publicity campaigns, both through employers and directly to individuals, to remind people that they could withdraw that declaration and return to making full contributions. The reasons why some women chose not to withdraw it are a matter for them.

  Child Poverty
  Judy Mallaber: What will be the impact on levels of child poverty of the changes to the working families tax credit announced in the Budget. [125833]
  The Financial Secretary to the Treasury (Mr. Stephen Timms): The Budget increased the rates of income support and working families tax credit by £4.35 for each child under 16. As a result of that and of other changes to the tax and benefits system made during this Parliament, a family with two children on half average earnings will, by the end of the Parliament, be £2,600 a year better off.
  Judy Mallaber: During last week's national child minding week and the preceding child care week, I spoke to parents and child care providers in my constituency about the value of the child care tax credit linked to the working families tax credit. Does my hon. Friend agree that the working families tax credit and the child care tax credit are among the most important weapons the Government can use against child poverty, because they both boost family incomes and give parents real choices on whether to enter paid employment? Will he tell the House how many parents currently receive the child care tax credit and will he take further steps to promote its take-up?
  Mr. Timms: My hon. Friend is quite right. Well over 100,000 people have taken up the child care tax credit, which has been a big success and represents almost three times the level of payment under the earnings disregard in family credit. We are ensuring that every applicant for the working families tax credit knows about the child care tax credit and, as my hon. Friend asked, we shall continue to draw attention to it. We shall also remind families that the Opposition would abolish it if they had the chance.
  Mr. Ian Bruce: Will the Minister look into a problem that one of my constituents has raised with me? She has received the working families tax credit through the post office since its introduction. She now has to switch to getting the credit from her employer, and is moving from receiving it in advance to receiving it in arrears, which is causing her real financial problems in looking after her children. Also, the money that the post office was earning for paying out the credit has been removed. Will the Minister look into the possibility of people receiving the credit through post offices and not necessarily through employers?
  Mr. Timms: The hon. Gentleman acknowledges the importance of the working families tax credit in helping many people to return to work. I am pleased that so many people have taken it up. I am certainly happy to look at any individual case that the hon. Gentleman may wish to draw to my attention.

  Mobile Telephone Licences
  Mr. Lindsay Hoyle: If he will make a statement on the revenue received from the auction of the third-generation mobile telephone licences. [125834]
  The Chief Secretary to the Treasury (Mr. Andrew Smith): Receipts from the third-generation mobile spectrum auction will total £22.5 billion. That is good news. We have already received £12 billion, and I told the House on 17 April that those proceeds would be used to reduce net debt. On Monday 12 June, we set out how we plan to do that.
  Mr. Hoyle: That is very good news. Can we make it even better for certain parts of the population? This Government have helped pensioners after 18 years in which they were neglected. Here is a golden opportunity to help them even more by introducing free television licences for all pensioners. Alternatively, can full consideration be given to a windfall for all pensioners using third-generation money? If we are using that money to reduce debt, perhaps we can put the debt repayments that we will save ourselves towards helping pensioners.
  Mr. Smith: I thank my hon. Friend for his suggestions. Of course, the whole country benefits from reduced debt payments and reduced debt interest achieved as a result of having diminished the millstone of debt that we inherited from the Conservatives. People are already benefiting because debt interest payments are £4 billion lower than they were when the Conservatives left office. That enables us to re-allocate resources to priorities such as pensioners, health and education. I am pleased to reassure my hon. Friend that pensioners will share the benefit of that £22.5 billion.
  Mr. Nick St. Aubyn: Will the Government treat the receipt of telecom licence fees as a revenue item, which would suggest that they intend to spend it eventually? Or will they treat it as a capital item, which would mean that they intend to bank it? Which option will they take under their new resource accounting rules?
  Mr. Smith: As the hon. Gentleman implies, the £21 billion will accrue over the 21 years of the licence, and that is how the sum is treated in the national accounts. Because it accrues over that period, the benefit is also spread over 21 years. Reducing net debt is, therefore, the prudent way of helping the public finances and benefiting the public through reduced debt interest payments, as I explained. The receipt does not alter the total managed expenditure projections set out in the Budget.

  Capital Gains Tax
  Mr. Keith Darvill: What representations he has received from businesses on his decision to cut capital gains tax for long-term investments. [125835]
  The Paymaster General (Dawn Primarolo): This year's Budget proposals for the improvements in the capital gains tax business assets taper were formulated after wide consultation with venture capitalists and others.
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  The views of business on the proposals to use taper reform to boost productivity and increase the provision of risk capital have been very positively received.
  Mr. Darvill: It is refreshing that we have a Government who are taking measures that will increase the flow of investment and are widely supported, particularly by owners of small and medium enterprises. Will my hon. Friend tell the House about any other measures that she may be considering to increase investment in businesses which will help to create more jobs and prosperity?
  Dawn Primarolo: I am glad that my hon. Friend acknowledges that the vast majority of people will receive a significant benefit from these provisions. I think that he may have been referring to proposals for new deferral relief on corporation tax paid by companies in respect of capital gains or on disposal of large shareholdings. A consultation document on the matter will be published shortly.

  Euro
  Dr. Julian Lewis: What discussions he has had with (a) the Minister for Energy and Competitiveness in Europe and (b) the Secretary of State for Northern Ireland on the timing of any move to replace the pound by the euro. [125837]
  The Economic Secretary to the Treasury (Miss Melanie Johnson): The Government's policy on membership of the single currency remains as set out by the Chancellor of the Exchequer in October 1997, and restated by the Prime Minister in February 1999. The Government have said that they will recommend joining a successful single currency only if it is in our national economic interest to do so, and if the economic case for the UK joining is clear and unambiguous.
  Dr. Lewis: I hesitate, Madam Speaker, even to dream of usurping your job, but I am not sure that that was an answer to the question that I asked, which was whether the Chancellor had met the Minister for Energy and Competitiveness in Europe or the Secretary of State for Northern Ireland to discuss factors determining their decision to join the single European currency. I even spared the Chancellor's blushes by not including the Foreign Secretary in that list.
  Is it not the case that if the Chancellor ever gets back on speaking terms with any of his ministerial colleagues, the test that they will be discussing will be not the economic tests with which he is so fixated or the Euro-federalist test with which his colleagues are so fixated, but the size of the overwhelming majority of the British people—two thirds—who are resolutely opposed to abandoning our economic and political sovereignty by replacing the pound with the single currency? Is that not what it is really about?
  Miss Johnson: I am afraid that, according to the Tory party, Paul Sykes will decide what is in the national

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  economic interest. We believe that there should be a referendum and that the people of the UK should decide what is in our national economic interest.
  Fiona Mactaggart: I was wondering whether the representations that have been made on the euro include representations from Mr. Ian Campbell, who was mentioned earlier in this Question Time by the right hon. Member for Kensington and Chelsea (Mr. Portillo) as a director of a national charity, which indeed he is. The charity that he directs is the Institute of Export, which regularly echoes the language of the Conservative party in its broadcasts, and which has nothing to do with dealing with child poverty and the other issues that we were discussing at the time.
  Madam Speaker: Order. That question was totally out of order, and does not relate to the original question. Let us try somebody else.
  Mr. Bill Rammell: Does the Minister agree that there is absolutely unity of purpose within the Government on the single currency? Is not that the most enormous contrast with what happened under the last Conservative Government, when we had Conservative MPs putting out different general election manifestos and we even had the previous Conservative Prime Minister describing three of his Cabinet colleagues as the illegitimate ones?
  Miss Johnson: My hon. Friend is absolutely right. The Tory party has always been split on Europe and on the euro. A survey in The Daily Telegraph of 50 prospective Conservative candidates suggests that the party is shifting even further to the right on Europe, if that is possible. Out of those 50 candidates, 33 take a harder anti-European stance than the Leader of the Opposition.
  Mr. Matthew Taylor (Truro and St. Austell): The House will draw its own conclusions from the fact that the Chancellor prefers to speak on charities and unemployment in the north-east than on the euro or pensions. Notwithstanding the fact that he will be sitting immediately behind the Economic Secretary, might she care to tell the House, assuming that the conditions of entry are met in the Chancellor's opinion, why she thinks Britain should join the euro and what the advantages are?
  Miss Johnson: We have said that we will consider whether we meet the five economic tests early in the next Parliament and that we will do so in terms of our national economic interest, which includes the 3.5 million jobs that are highly dependent on our continued membership of the EU—something that is deeply in question with Conservative Members.
  Mr. Dale Campbell-Savours: Can I lob my hon. Friend a very friendly question? Can I tell her that, when I meet business men in my constituency, they ask me, "When can we have the referendum?", and I tell them, "I guess it'll be in 2002"—discuss?
  Miss Johnson: I am grateful to my hon. Friend for his very helpful question. Of course, early in the next Parliament, we will look at how we are meeting the economic tests that we have set ourselves, and then we
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  will decide whether it is right to put it to the British people. It should be remembered that, in all of this, we have at heart Britain's economic interests and that we play a constructive role in the EU. In the past few days, we have secured a victory for the United Kingdom's national interest on the withholding tax, so it is clear what a constructive role in Europe can do for this economy and its people.
  Mr. Michael Portillo: May I suggest to the Chancellor of the Exchequer that he will come to regret his decision not to answer this question, because it speaks volumes about the state of the Labour party that he is not willing to answer a question on the central economic issue of the day—the Government's position on the euro? Will the Economic Secretary, who has been put in this hapless position, admit that only one of the five economic tests that have been set out by the Chancellor could in any way be thought of as being objective—even that could be massaged by the Chancellor—and that the other four tests are wholly subjective? The potential effect of the euro on unemployment, on the City, on flexibility and on investment are merely matters of opinion, on which different members of the Cabinet will doubtless take different views in due course. The tests that he has set out offer Britain no protection whatever against a potentially catastrophic decision. Will the Financial Secretary accept that the five economic tests amount to little more than four fudges and a fiddle?
  Miss Johnson: That is complete rubbish. Perhaps the right hon. Gentleman would care to comment on whether he supports his earlier statements on Europe, including that in "A Vision for the 1990s"—published by the Conservative Political Centre in 1992—in which he said that the British people and British business in particular did not want to be left out of Europe. Does he agree with that statement, or does he wish to retract it?

  Pensioner Incomes
  Mr. Bob Blizzard: What plans he has to increase pensioner incomes. [125838]
  The Paymaster General (Dawn Primarolo): As announced in the Budget, next April, we will again increase the minimum income guarantee in line with earnings, and we will double its lower capital limit. We are also developing a new pensioner credit to reward those pensioners who have made some provision for themselves.
  Mr. Blizzard: Although the Government are spending more on pensioners through the minimum income guarantee and the winter payments than if the earnings link had been restored, and although it has to be right to help the poorest pensioners first, is my hon. Friend aware that many, many pensioners are still unhappy with the situation? Is not the problem the 1.1 per cent. index inflation figure from last September, which has failed to maintain the value of the basic pension? In making plans for next year, will she ensure that a realistic inflation index is used? Will she make up for the shortfall in this year's figure? If she can add something more, it will be even clearer that the Government are committed to

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  increasing pensioner incomes, unlike the Conservative party, whose policy of giving with one hand and taking away with the other would give pensioners only 42p.
  Dawn Primarolo: On current inflation forecasts, we expect the basic state pension rise in April 2001 to be more than £2 for single pensioners and more than £3 for couples. Over the Parliament, the Government are
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  spending more than £2 billion more in real terms on pensioners than if we had restored the earnings link in the state pension. The combination of measures—the winter allowance, the change to the capital limits for the minimum income guarantee, the level of the income guarantee and the fact that it is pegged to earnings—in addition to the development of pensioner tax credits is the way forward to ensure that those who are poorest get the help that they urgently need.

Business of the House
12.31 pm
Sir George Young: May I ask the right hon. Lady to give the House 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 26 JUNE—Motion relating to the Police (Northern Ireland) Bill, followed by the remaining stages of the Crown Prosecution Service Inspectorate 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], followed by the remaining stages of the Fur Farming (Prohibition) Bill.
THURSDAY 29 JUNE—Opposition Day [15th Allotted Day]. There will be a debate on "Priorities in the NHS" on an Opposition motion.
FRIDAY 30 JUNE—The House will not be sitting.
The provisional business for the following week will be:
MONDAY 3 JULY—Opposition Day [16th Allotted Day]. There will be a debate on an Opposition motion whose subject is to be announced.
TUESDAY 4 JULY—Progress on remaining stages of the Local Government Bill [Lords].
WEDNESDAY 5 JULY—Conclusion of remaining stages of the Local Government Bill [Lords]. The Chairman of Ways and Means is expected to name opposed private business for consideration at 7 o'clock.
THURSDAY 6 JULY—Estimates Day [2nd Allotted Day]. At 7 o'clock, the House will be asked to agree all outstanding estimates.
FRIDAY 7 JULY—Debate on the report of the Committee of Inquiry into hunting with dogs in England and Wales on a motion for the Adjournment of the House.
I should also like to inform the House of business to be taken in Westminster Hall during July.
THURSDAY 6 JULY—Debate on the development of Community Legal Services.
THURSDAY 13 JULY—Debate on EC development assistance.
THURSDAY 20 AND THURSDAY 27 JULY—Debates on Select Committee reports are scheduled, both subjects to be announced.
Sir George Young: The House is grateful for next week's business and an indication of the business for the following week.
The House was hoping for the date of the summer recess, not least because it was hinted at by one of the right hon. Lady's ministerial colleagues in a speech in Westminster Hall yesterday.
In the Queen's Speech, it was announced that legislation would be introduced to improve the education of children with special educational needs. As the parliamentary Session matures, what has happened to that Bill and, indeed, to the Disqualifications Bill, which the
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House dealt with, at some inconvenience, in January and which has subsequently sunk without trace? Is that not further evidence of a badly managed legislative programme?
Yesterday, the Prime Minister said that the Government would produce a plan in the next few days to strengthen the post office network. Will the right hon. Lady confirm that that will be outlined in an oral statement, given the widespread concern about the matter? In villages in my constituency, fashionable addresses such as the old rectory and the old school house are now being joined by the old post office.
Before the House rises for the summer recess, will we have the third of the three armed forces debates, this one on procurement, given widespread concern about redundances at British Aerospace? Would it be reasonable to assume that the Chancellor will be making his statement on the comprehensive spending review in the second of the two weeks? What has happened to the arrangements for discussing the economy?
Following our exchange last week, when there was widespread support for a public holiday to commemorate the 100th birthday of the Queen Mother, has the right hon. Lady had the promised discussion with the Home Secretary?
Mrs. Beckett: I should have liked to be able to give the recess date today, and I apologise that I am not able to do so. I said some time ago that I hoped that the House would not need to sit in August, and that hope has strengthened. That is all I can tell the right hon. Gentleman today.
The right hon. Gentleman asked me about the debate on special educational needs. I am aware that that matter is being considered. He will know that since the Bill was first proposed, there has been a pertinent, relevant, but unfortunately rather late further report about disability, which my right hon. Friend is considering alongside earlier proposals.
The right hon. Gentleman referred to the Disqualifications Bill. The Session is not yet at an end, and the Bill has had some hearing in the House. If I recall correctly, it had an extensive hearing.
The right hon. Gentleman asked me also about the Post Office. I anticipate that when proposals for the Post Office come forward, there is likely to be an oral statement. As for his reference to the address, the old post office, no doubt in rural areas like the one he represents there are already such addresses—so many post offices closed under the Government of whom he was such a star member.
As for the armed forces debate, I am aware of the pressure last week in the context of British Aerospace. I cannot announce a debate in Government time, but I have announced a number of opportunities in Opposition time, for which Conservative Members can press their right hon. and hon. Friends. I hope and anticipate that my right hon. Friend the Chancellor of the Exchequer will be able to make a statement about the comprehensive spending review in the not too distant future.
As for whether there should be a holiday to celebrate the Queen Mother's birthday, I undertook last week to raise the matter with the relevant authorities, and have done so.
Fiona Mactaggart: I wonder whether we could have an opportunity soon to discuss the work of

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the Modernisation Committee and the hours of the House. Many of us had hoped that we would be able to discuss these matters and come to conclusions before the end of the Session; I had hoped that we might hear some news today.
Mrs. Beckett: The matter remains under discussion in the Modernisation Committee. It is my hope that in the not too distant future the Committee may have reached conclusions that it is in a position to lay before the House in a report. I cannot, of course, anticipate the judgment of the Committee. I would remind my hon. Friend that the Session does not end until the autumn.
Mr. Andrew Stunell: Bearing in mind the rather strange sequence of events surrounding Question 12 in the Chancellor's Question Time, will the Leader of the House provide time for him to make a statement on the euro and his approach to it? If he is too busy, perhaps she can persuade the Foreign Secretary to come instead.
May I draw the right hon. Lady's attention to early-day motion 526?
[That this House notes that the 1986 Social Security Act introduced a halving of widows' SERPS entitlements in respect of deaths occurring after April 2000; notes that DSS leaflets and correspondence failed to reflect that change for at least a decade after the Act reached the statute book, leading to an investigation by the Parliamentary Ombudsman; notes that many more pensioners who were not actively misled by these leaflets nonetheless knew nothing about the change until they were too old to make realistic alternative provision; and therefore calls on the Government not only to compensate those future pensioners who were misled but also to exempt from the proposed cut any person who has already reached state pension age.]
There continue to be real anger and dismay at the failure to correct the Conservatives' administrative blunder, going back more than 10 years. Can the right hon. Lady find time for a Minister to explain to the House in detail how those affected can establish a claim and receive compensation for that major pensions mis-selling scandal?
Mrs. Beckett: I am afraid that I did not hear Question 12 at Treasury questions, but I see not the smallest necessity for the Chancellor to come to the House in order to repeat what he and all of us have said on hundreds of occasions. The tendency of the press to try to reinterpret a policy that has not changed over the past two to two and a half years is deeply boring, and it is even more boring when that keeps happening in the House.
With regard to widows' SERPS entitlement, the hon. Gentleman knows that Ministers have the matter under consideration and are in the process of seeing what can be done to rectify what he rightly calls a serious case of pensions mis-selling. He might, of course, press the official Opposition to raise the matter during their time, as it is they who were responsible.
Mrs. Gwyneth Dunwoody: Is my right hon. Friend aware that when Ministers discuss
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the health service next week, it would be helpful if they could make clear not only the short-term implications of a massive transfer of NHS funds into the private sector for the short-term care and treatment of NHS patients, but the long-term effects on the NHS? Ministers should also make clear the need for people being treated in the private sector to enjoy not only the same standards of care, but protection in terms of insurance and the ability to sue anyone who is not providing that high level of care, if they have been transferred without their consent into the private sector.
Mrs. Beckett: I know that my hon. Friend is extremely well aware that it is important to the Government, as to individuals, that NHS patients be treated in the private sector only if the standards that we would all expect are preserved. I know that from time to time concerns have been expressed about those standards. Equally, my hon. Friend knows that it is the Government's intention to announce in the not too distant future proposals for a long-term plan for the health service, which should not only raise those standards, but make sure that people have access to NHS care. That is not the position that we inherited, as my hon. Friend knows, but I feel confident, Madam Speaker, that she will seek to catch your eye to make those points during the debate that has just been announced.
Mr. Peter Brooke: During the debate on the Lords, the Leader of the House expressed a commitment to set up soon a Joint Committee of both Houses. If the Government take the view that
Being democratic does not necessarily mean having elections—[Official Report, 19 June 2000; Vol. 352, c. 124.]—
what does the right hon. Lady think that being democratic does necessarily mean?
Mrs. Beckett: The right hon. Gentleman was in his place, so he will know that he did not repeat with absolute accuracy the words that I used. I am sure that that was an oversight on his part. It was my hon. Friend the Parliamentary Secretary, Privy Council Office, who made the remark to which he has referred. I share the view that an extra group of people elected to the second Chamber would not necessarily be an addition to democracy. If we and the people of this country want a means of electing people who then form the Government, which gives them a direct input into the use of power, it seems to me that that is best expressed through one superior Chamber and another that may give advice. That superior Chamber is this body, and I am surprised to learn that some Members of it do not wish it to remain so.
Dr. Alan Whitehead: My right hon. Friend is no doubt aware of the new targets for waste recycling recently proposed for local authorities. Is she also aware that a number of waste disposal authorities are having difficulty reaching those targets because of the financial regime and the amount of investment in waste management plant, and because the landfill tax operates against such investment? Will she make time in the House for a debate on the matter, given the importance of the new targets to this country's approach to recycling in the future?
Mrs. Beckett: I am indeed aware that there is great concern throughout the country that we should pursue the

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right policy on waste management and that all the details and implications of its implementation should be covered. I understand my hon. Friend's anxiety. I fear that I cannot undertake to find time on the Floor of the House, which is under great pressure. However, I recommend the extra opportunities for debate and scrutiny of the Government that Westminster Hall provides.
Mr. Stephen Day: I am sure that the right hon. Lady agrees that anorexia is a serious illness. However, will she advise us whether it would be possible for the Minister for Women to come to the House and explain the apparently ludicrous policy of having weight-watching police to monitor the number of appearances on television by fat people as compared with those by thin people? Will the right hon. Lady tell us whether the policy is simply a plot to ensure that the Deputy Prime Minister gets more television time? If so, Conservative Members heartily approve of it.
Mrs. Beckett: I am afraid that I missed the hon. Gentleman's punch line. The relevant Minister will attend Question Time on Tuesday week. I presume that the hon. Gentleman is referring to an article in the Daily Mail. I agree that anorexia is a serious and difficult subject, and I believe that some serious discussion took place yesterday about the way in which it can be tackled, but for me the tone of the article was set by a photograph on the next page—of two women wearing lampshades.
Helen Jackson (Sheffield, Hillsborough): My right hon. Friend will have seen report this week about the attack on the house of Margaret Dongo, who is a Member of Parliament in Zimbabwe. Margaret Dongo is the only Member from the Movement for Democratic Change because she is a courageous woman who had the guts to challenge the electoral malpractices of the ruling party. When I spoke to her the night before last, she told of her house being attacked by rocks and stones. She cowered under a table in fear of her life. My right hon. Friend also knows that elections take place in Zimbabwe this weekend. Will she consider a debate next week on their outcome and the difficulties that will remain whatever the result?
Mrs. Beckett: I know that the whole House deplores the violence to which my hon. Friend referred and the pressure that the opposition are under in Zimbabwe. My hon. Friend knows that the Government and, indeed, the whole House have repeatedly urged the right of the people of Zimbabwe to make their choice freely and fairly in the elections this weekend. The event that my hon. Friend described is a sharp reminder of how fortunate we are to have the political peace that we enjoy in this country.
I am confident that my right hon. Friend the Foreign Secretary wishes to keep the House informed. Perhaps a time scale will be set as the information comes in. I cannot give an undertaking for a debate at the moment, but I will bear my hon. Friend's observations in mind.
Mr. Andrew Rowe (Faversham and Mid-Kent): In a week in which the flower of English cricket has been bundled out of a test match in three days, the flower of English football has been bundled out of Euro 2000, and the flower of English hooliganism has been bundled out of Belgium, the only people not able to move about much
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were those who were trying to escape this country and who were paralysed by a computer failure at three of the main British airports and a broken rail on the London underground. Could we have a debate soon about when and whether life will improve under new Labour?
Mrs. Beckett: The hon. Gentleman began his remarks by referring to the unfortunate lack of success of some of our sportsmen and women. I attribute a lot of that to the sale of school playing fields under the Conservative Government.
Mr. Dennis Skinner: I know that the House of Lords is a problem for everybody and that we have had a big discussion of it, but I support the third way. The third option is to abolish the House of Lords. We could then have a revising Chamber of about 100 lawyers in this place; they could dot the "i"s and cross the "t"s. We do not need a second Chamber. At least two countries do not have one. And now that we have got rid of the hereditary principle, why not abolish the monarchy as well?
Mrs. Beckett: I am not entirely sure that that is what is conventionally regarded as the third way. I do know, however, that Lord Wakeham, for instance, believes that unless the second Chamber is a distinctly different Chamber bringing different experience to bear, there is no point in having it. In that sense Lord Wakeham is a unicameralist, as he has made plain, and—although it does not represent the policy that the Government are advocating—I understand the logic of that approach.
As my hon. Friend knows, the Government agree that the second Chamber should be different and distinctive, and not a clone of, or competitor with, this Chamber. That is why we are minded to accept the broad proposals in the Wakeham report.
Mr. James Gray: The 8,500 multiple sclerosis sufferers who would benefit from beta interferon will be bitterly disappointed by the Prime Minister's airy dismissal of the question asked during yesterday's Question Time by my right hon. Friend the Leader of the Opposition. I rather suspect that, by now, the Prime Minister himself may regret having so cheaply dismissed the concerns of those who are worried about the leak from the National Institute for Clinical Excellence.
Is it not time the Government found time for a debate on the way NICE works? Should we not debate not just the question of the drug's cost-effectiveness—which it may be reasonable for NICE to consider—but why civil servants, professors and doctors are considering the issue of affordability? Affordability is at the heart of the decision about beta interferon. Is it not time that the House engaged in a full debate to discuss the implications?
Mrs. Beckett: I utterly contest—as I think anyone who heard him would—the notion that my right hon. Friend the Prime Minister airily dismissed the concerns of MS sufferers. He did no such thing, as the hon. Gentleman should know if he was present yesterday—and I think, from memory, that he was.
It is nonsense to suggest that NICE is making decisions simply on grounds of cost. Only last week, it ruled that taxane drugs for the treatment of breast and ovarian cancer,

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which are also very expensive, should be made available throughout the health service. That did not happen under the Government whom the hon. Gentleman supported. The hon. Gentleman should also know, as there have been television interviews and so on, that there is some difference of view in the medical profession about the effectiveness of beta interferon. In any event, he must be aware that conclusions have not yet been reached. These are preliminary views which are out for consultation.
What I found most striking yesterday was the sheer opportunism of the Leader of the Opposition. As recently as 11 May, the hon. Member for Woodspring (Dr. Fox), the Opposition health spokesman, said:
In any limited budget, priorities have to be set. These must be on the basis of clinical need, not political convenience.
That is quite correct, but it is not what the hon. Gentleman is saying—and he may have noticed that there is a health debate next week.
Ms Sally Keeble: Is my right hon. Friend aware that the Conservative party has set up a commission to consider the modernisation of Parliament? I believe that it is due to report at about the same time as the Modernisation Committee. Will my right hon. Friend give us an early opportunity, preferably before the recess, for the two important reports to be debated? The issue is pressing for many of us, and such a debate might just give us a unique opportunity to secure cross-party consensus.
Mrs. Beckett: I am not aware of the timetable for the Conservative party commission report, and I have no idea whether it is likely to be produced before the recess. I am not sure whether I would be able to find time for a debate before the House rises for the summer but, as I told my hon. Friend the Member for Slough (Fiona Mactaggart), these matters are under consideration.
I hope that there will be a report from the Modernisation Committee in the near future, and that it will help the House to reach some views. If such a report is produced, however, and if the House can pronounce on it, the matter must be resolved before the next Session. That seems to me to be the important thing, rather than the precise timing of any possible debate.
Mr. Eric Forth: May we please have an urgent debate on the reliability, and extent of commitment, of ministerial statements? Can the debate please be led by the Secretary of State for Education and Employment? Can we have, before the debate commences—although I hope that it is held very soon—a full briefing from the chief inspector of Ofsted? That would enable us to assess how far the Secretary of State should be taken seriously, as he made an important commitment to resign his office if an important educational target was not met. We could also include a much wider-ranging debate involving several other Ministers, in order that we could judge their statements and commitments appropriately.
Mrs. Beckett: There are regular opportunities to discuss issues with the Secretary of State for Education and Employment in the Chamber. He did indeed make
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that commitment. He and his Department are well on course to deliver the targets that they have set. I thought that those who wished to see better government would applaud the Government's determination both to set targets and to ensure that they are achieved.
Tony Wright: My right hon. Friend will recall that, on Tuesday, the House was asked to consider the Second Reading of a Bill after 10 o'clock at night. That resulted in the House rising at about 1.30 am. It afforded another splendid period of nocturnal playtime for the kindergarten group on the Opposition Benches, but it did nothing to enhance the reputation of the House of Commons. Three years into the modernisation programme, the question of hours and the sensible organisation of business must be resolved. Will she ensure that the House has an early opportunity to come to a view and a decision on that?
Mrs. Beckett: I understand the point that my hon. Friend makes. I have said repeatedly that I think that no hon. Member objects to being here for long hours on occasion when there are matters of real substance, importance and delicacy to be addressed, but I accept that there are occasions when that is not always judged to be the case. I am also mindful of the need not to curtail debate.
I have some proposals. We have given much thought to whether it is possible to reconcile these two difficult elements. I hope that it will prove to be so. It is more important to achieve improvements in the efficiency of the way in which the House works than to be perhaps excessively nervous about the precise time that takes to achieve.
Mr. Graham Brady: May I urge the Leader of the House to reconsider her response to a request for a debate on the role and remit of the National Institute for Clinical Excellence, given that, on Tuesday, a number of Members on both sides of the House from the north-west of England had meetings with leading neurologists, who made it clear that there is consensus in the profession that beta interferon is an effective drug for many multiple sclerosis sufferers?
In that context, is it not important that NICE should not just take a view based on the cost to the national health service budget, but bear in mind the enormous cost to welfare budgets and social service budgets, and the costs in lost earnings and lost tax revenue, which arise from the avoidable sickness of so many people?
Mrs. Beckett: I am very conscious of the concern felt by many people with MS, and that a strong body within the profession believes that beta interferon will help some sufferers, although the hon. Gentleman should be aware that it will not necessarily help all sufferers. He will know, I hope, that there is no suggestion in the NICE report that those who receive beta interferon should cease to receive it. The report is out for consultation. It is a preliminary report in draft. Neither I nor any other Member has seen it.
Yet again, I remind the hon. Gentleman of the sensible remarks of the shadow health spokesman, which I anticipate will, in consequence, be repeated in the debate in the House next week, pointing out that there has to be

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a system of clear, explicit and transparent priority setting, and that not to have such a system—it is exactly what NICE is—would mean putting our heads in the sand and pretending that the problem did not exist. That is what some Opposition Members seem to be trying to do.
Ms Jenny Jones: Following the front-page story in today's Daily Record that Mike Tyson has physically assaulted someone so that they required hospital treatment, can my right hon. Friend arrange for the Home Secretary to make a statement on whether he will review the conditions of Mike Tyson's entry into this country, bearing in mind the fact that one of the reasons for allowing him entry was that he was not considered a threat to anybody outside the boxing ring?
Mrs. Beckett: I am well aware that my hon. Friend has taken a great interest in the matter that she raises. I have not seen the story to which she refers, nor indeed do I know whether it is well founded. May I draw to her attention the fact that it is Home Office questions on Monday, so she might find an opportunity to raise the matter then?
Mr. David Heath: Can the right hon. Lady give us any indication of when the House will have the opportunity to discuss the ratification of the statute for the International Criminal Court? Given the number of individuals around the world who would benefit from the attentions of such a court—not least General Mladic, Mr. Milosevic and Foday Sankoh—is it not extraordinary that Britain took the lead in setting it up, yet we are one of the Parliaments that is slowest to undertake the necessary ratification procedure? The House deals with a number of other measures that may be of less consequence; this is of international importance. Is it not time we got on with it?
Mrs. Beckett: The hon. Gentleman will know that no one is more mindful of pressure on the legislative timetable than I am. He will know that the ratification that he seeks will require further legislation. Although I would have hoped that the matter was not particularly controversial across the House, the hon. Gentleman will be aware, as I am, that matters that one would not have considered controversial have taken up a considerable amount of time this Session. In effect, the hon. Gentleman is making a bid for the next Queen's Speech and he will know that I cannot comment on that.
Mrs. Ann Cryer: Is my right hon. Friend is aware of the fact that the Home Office working group that has been looking into forced marriages will report at the end of this month? Does she agree that it would give a great deal of encouragement to many young Asian women in my constituency and throughout west Yorkshire were we to have a debate on the outcome of that report?
Mrs. Beckett: I am grateful to my hon. Friend, who has taken a great interest in this subject and has done a great deal of work on it. Although I am aware of the existence of the working group, which does extremely important work, I was not aware that the report was likely to emerge on that timetable and I am grateful to my hon. Friend for reminding me of that. I fear that I cannot undertake to find time for a debate on the matter on the
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Floor of the House, but it is exactly the kind of issue that she might seek an opportunity to raise in Westminster Hall.
Miss Anne McIntosh: Will the right hon. Lady agree to a early debate in Government time on the excessively high fuel duties and their adverse impact on road hauliers, other industries, not least the farming community, and those of us who live in rural villages and communities? It would also enable the Government to explain to the wider British public why two separate formulae were used to calculate the inflation rate for pensions and for fuel duties.
Mrs. Beckett: The hon. Lady raises the issue of the impact of high fuel duty, which has been much discussed in the House. She will know that an escalator was introduced on fuel duties for environmental reasons and that the precedent was set by the Conservative Government. This Government continued to follow that precedent for some time, although we have now ceased to do so. The hon. Lady will also know that the index on which the level of inflation for the pension increase was judged was set many years ago by the Conservative Government and this Government have not changed it, although these matters are reviewed from time to time. I fear, however, that I cannot undertake to find time for a further debate in Government time, although I have no doubt that in various ways they will continue to be raised.
Mr. Barry Gardiner: At a meeting of the all-party group on leasehold reform the other evening, Ministers indicated that a draft Bill would appear in the next month or so. Has my right hon. Friend had the opportunity to take further with her ministerial colleagues the discussions that were mentioned at business questions earlier this year? I refer to whether a Scrutiny Committee could examine the proposed legislation, which will introduce for the first time in English law a new form of property tender.
Mrs. Beckett: My hon. Friend—who takes a close interest in the subject, which is of considerable importance in his constituency—makes the interesting suggestion that the draft Bill ought to be subject to some form of pre-legislative scrutiny. I undertake to raise that matter with the ministerial colleagues primarily concerned.
Mr. Desmond Swayne: Notwithstanding this afternoon's debate on the intelligence agencies, may we have at least a statement on the activities of another intelligence agency operating in the House—given truly shocking reports that Labour party researchers have admitted to habitually eavesdropping on a right hon. Gentleman and passing that intelligence to 10 Downing street? Does the right hon. Lady recall the fate of a politician on the other side of the Atlantic who encouraged such practices?
Mrs. Beckett: I have heard of such reports but am not aware that anybody has admitted to habitual eavesdropping on the leader of the Liberal party. If anyone employed as a so-called political adviser has been doing so, they should be sacked for incompetence.
Mr. Denis MacShane: Does my right hon. Friend accept that there will be great dismay and

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disappointment among not scores but hundreds of hon. Members of all parties at the news that the House will not debate before the summer recess the urgent matter of modernisation? Many of us are getting fed up with a few Conservative Members jerking at the end of their chain to frustrate the clear will of the majority of right hon. and hon. Members. I ask my right hon. Friend not to say definitely today that we will be denied the opportunity to debate that matter before the summer.
Mrs. Beckett: I try never to say anything definitive during business questions. I do not definitively rule out such a debate, but at present one seems unlikely. I do not fully understand the concern as to whether or not the matter is debated before the summer recess. If such a report emerges and is debated, the important point is that a decision be made in time for it to become effective at the only point when it could be given effect to—perhaps in a new parliamentary Session. I assure my hon. Friend that I have in no way lost sight of the matter.
Mr. Patrick Nicholls: Given that time is drawing on, may I give the Leader of the House the opportunity to say yes to a request for a debate? The right hon. Lady has considered sympathetically in the past the fate of people living in Kingskerswell and the lack of a bypass there. Holcroft Fox has now reported that the people of Kingskerswell are entitled to relief and that only a bypass can provide it. Will the right hon. Lady urgently find time for a debate, so that the Government can clarify their position on the construction of bypasses? If they mean to go ahead with the building programmes they have suggested, there is one ready and waiting to start.
Mrs. Beckett: I cannot undertake to find time for a debate in the near future but I will draw to the attention of my noble Friend the Minister for Transport the hon. Gentleman's strong view that there is an urgent need to implement that project. My noble Friend anticipates making some proposals about his transport plan in the not too distant future.
Helen Jones: Has my right hon. Friend yet heard when the Government's response to the Stewart report might be available? When it is available, will she ensure that we have a debate in the House on the issues surrounding mobile phones and the erection of mobile phone masts? The latter is an issue of great concern to many of my constituents, not least in my own village of Culcheth. Will she draw those concerns to the attention of Ministers in the Department of the Environment, Transport and the Regions, so that the House has an opportunity to review the laws that were brought in by the previous Government, which give residents little or no chance to make their views known through the planning process before the masts are erected?
Mrs. Beckett: I am grateful to my hon. Friend for raising that matter, not least because it enables me to say from the Dispatch Box that that concern is deeply felt in my constituency, where several residents are running a strong local campaign. I fully understand the concern that is being expressed. There has been an initial response to the Stewart report, and consideration is being given to the
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planning implications, but of course I undertake to draw her remarks to the attention of my right hon. Friend the Deputy Prime Minister.
Mr. John Hayes: The right hon. Lady will be aware of the rally and lobby of the House today by the British Weights and Measures Association, which is fighting a laudable, vigorous and patriotic campaign to prevent further metrication of our weights and measures. Will she confirm that Ministers will make time to meet the association today? Will she also confirm that we will have a statement responding to its legitimate requests to protect the interests of small traders especially, who have already buckled under the burden of £5 billion of extra red tape from this Government and who face further regulation through the programme to get rid of British imperial measurements?
Mrs. Beckett: I do not know what pressure ministerial diaries are under, but of course I recognise the strong concern that has been long expressed by the British Weights and Measures Association. All that I can do is ask the hon. Gentleman where he was when the previous Government made the changes. This Government have already once, if not twice, postponed the implementation of the measures because we are mindful of their impact on small traders. It is yet another example of Opposition Members deploring things that they themselves did.
Mr. Paul Flynn: With her deep knowledge of social security, my right hon. Friend was, I am sure, burning the midnight oil last night reading the fascinating report by the Social Security Committee on the contributory principle, which was published yesterday. The report drew attention to the long-standing unfairness in the national insurance fund whereby contributions are increased annually by the higher rate of inflation, but benefits—including pensions—are paid out at the lower rate of inflation. As the report makes clear, the national insurance fund has an unneeded surplus, above the contingency funds, of £6 billion, which will grow considerably over the next 20 years, thus allowing the link between pensions and earnings—the higher rate of inflation—to be restored now and in the future.
Can we debate early-day motion 1?
[That this House welcomes the Government's decision to raise income support for pensioners annually in line with average earnings, but regrets the widening gap between the basic pension and income support; notes the Treasury's estimate that by April 2002 the National Insurance Fund's balance will be £8.43 billion above the minimum recommended by the Government Actuary; and urges that part of that surplus should be used to restore the link between the basic pension and average earnings for the remaining years of this Parliament, thus ensuring that all pensioners share in the nation's increasing prosperity and preventing a further increase in the number receiving income support.]
By doing so, the Government could add to the magnificent and beneficial measures that they have taken for pensioners, including the restoration of the link, as the nation's pensioners want.
Mrs. Beckett: Of course I understand the importance of the issue that my hon. Friend raises. He will know that the Committee said in its report:
We do agree with the Secretary of State that any use of the present surplus in the national insurance fund must be sustainable in the long term.
He will also know that the Government are committed to improving the welfare of pensioners as fast as we can, but we have set as our priority giving the most to the pensioners who are, by definition, in the greatest need. We will continue to do that, and we shall also continue to try to assist other pensioners, but I fear it is a matter of the time needed to remedy the deficiencies that we inherited.
Dr. Julian Lewis: Will the Leader of the House try to persuade a defence procurement Minister to come to the House and make a statement about the unusual controversy in the Ministry of Defence over the naming of the next two Royal Navy survey vessels? They were to be named HMS Shackleton and HMS Cook. There is no problem with HMS Shackleton, but I understand that the name of the other vessel has met resistance in the Ministry of Defence.
If the right hon. Lady cannot do that, can she persuade a Foreign Office Minister to come to the House and explain why, when I tabled a written question on 13 April to ask whether Lord Levy had had contact with foreign intelligence and security agencies, it took until 7 June to get a one-line reply? It read:
In line with long standing practice of successive Governments we do not comment on intelligence matters.—[Official Report. 7 June 2000; Vol. 351, c. 291W.]
Would she not agree that, if that was the right answer, it should have been given me two days after I posted the question, not two months?
Mrs. Beckett: I know nothing about the naming of ships commissioned for the Royal Navy. However, I do know that the contract that has been placed will sustain 800 jobs in Devon. That seems much more important than what the ships are called, although I have no doubt that that will be a matter of concern to someone.
Secondly, of course I regret that the hon. Gentleman did not get an answer to his question sooner. We continually remind colleagues of the importance of responding more speedily, but I fear that, as the answer revealed, there is nothing further that I can add on security and intelligence matters.
Mr. John Smith: Will my right hon. Friend find time for the House to debate the real cost of rail travel in this country compared with other European countries? According to research that I commissioned from the Library, the standard inter-city fare from, say, Paddington to Cardiff costs twice as much as the fare for an equivalent journey in Belgium or France, and more than six times as much as in Italy. That is a direct result of the policies of the previous Conservative Government, although the train operating companies deny that and try to argue that British passengers get a fair deal.
Given the amount of taxpayer's money that subsidises fares in this country, does she not agree that passengers have a right to know whether they are getting ripped off by the train operators?
Mrs. Beckett: I have some sympathy with the point that my hon. Friend makes. I know that there is
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considerable concern about fares in this country, especially in connection with the contracts signed with the rail operators. I know also that the Rail Regulator and my right hon. Friend the Secretary of State for the Environment, Transport and the Regions keep the matter under review. I fear that I cannot undertake to find time for a debate on the matter in the near future, but I will certainly draw my hon. Friend's remarks to the attention of my right hon. Friend the Secretary of State.
Mr. Stephen O'Brien: May we have an early debate on the effect of this Labour Government on Parliament and on the democratic accountability of the Executive? Charter 88 has stated that the Prime Minister has created an elective dictatorship by concentrating power in Downing street, and that the result of his control freakery is that everything is managed from the centre. Would not an early full-day debate be the appropriate way to answer that charge?
Mrs. Beckett: I have rarely agreed with much of what Charter 88 says, and I do not propose to start now.
Mr. Dale Campbell-Savours: May we have a debate on developments in the steel industry? That is especially important because the Corus group is stripping out the industry's heart and creating thousands of redundancies throughout the United Kingdom. The situation is especially bad in my constituency. Strategic sectors of British industry are being closed down, so is it not about time for the voice of Parliament to be heard?
Mrs. Beckett: Of course I understand the concern expressed by my hon. Friend, and I am very mindful indeed of the anxieties felt in constituencies such as his. He will know that steps have been taken by my right hon. Friends the Secretary of State for Trade and Industry and the Minister for Employment, Welfare to Work and Equal Opportunities to offer help and support to those who unfortunately lose out as a result of the changes.
I also understand and accept that my hon. Friend the Member for Workington (Mr. Campbell-Savours) and others have concerns about manufacturing employment more generally. I fear that I cannot undertake to find time for a special debate on the matter on the Floor of the House, but my hon. Friend might like to consider Westminster Hall.
Mr. Nigel Evans: Will the Leader of the House arrange for a debate on democracy so that Conservative Members can talk about this week's Charter 88 report, which referred to the worrying concentration of power in the hands of the Executive? We could also talk about the burgeoning cost of government: more than £2 billion a year more is spent now than three years ago, and the number of special advisers funded by the taxpayer has doubled. Such a debate would also afford Labour Members the opportunity to talk about the matters that interest them, such as why they cannot get home to bed by 10 o'clock at night.
Mrs. Beckett: I have not read the Charter 88 report. I wholly reject the notion that there is something unseemly in the way in which the Government is being run and managed.

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I hope that the hon. Gentleman will be aware that the figures for extra costs are completely spurious. The figures that Conservative Members continually use are simply the cash figures. In real terms, we are spending less on administration than did the Conservative party when it was last in government. Indeed, not only are we spending less, but the number of those employed in the public services at the centre has gone down, while the number of public servants in services such as health and education is rising and will continue to rise.
On special advisers, we take the view that Ministers should have a proper range of advice, and we take the same view with regard to the Opposition. The increase in advice to Government has been more than matched by the increase in advice to the Opposition, who are clearly in sore need of it.
Mr. John Bercow: Given that this morning, for some strange reason, the House failed to reach my Question 34 on taxation, I would like to ask the right hon. Lady for an early debate on the need for transparency in taxation. In the light of the criticism by the Select Committee on the Treasury of the Chancellor's refusal to publish the figures that show the impact of direct and indirect taxes on the typical household and on households in other income deciles, would not such a debate allow the Chancellor the opportunity to explain whether he will mend his ways and, if he will not do so, why on earth he expects to be taken seriously when he is picking the pockets of the British people on an unprecedented scale?
Mrs. Beckett: I remind the hon. Gentleman that the Government have given independence to the national statistical service, something that the previous Government never had the courage to do. That will, over time, undoubtedly increase confidence in the statistics that we publish—confidence that was sorely missing under the previous Administration.
As for the idea that the Chancellor should come here to debate the figures that he gives, I think that when he comes to the Dispatch Box we should debate the fact that we have the lowest inflation for a generation, the lowest mortgage rates for a generation, with the best levels of employment and the lowest levels of unemployment since 1980, which was the beginning of the Conservative party's term in office. Those are the issues that really matter to the British people, not the Conservative party's allegations.

SCOTTISH GRAND COMMITTEE
Motion made, and Question put forthwith, pursuant to Standing Order 100(1) (Scottish Grand Committee (sittings)),
That the Scottish Grand Committee shall meet on Monday 10th July at half-past Ten o'clock at the Glasgow City Council former High School buildings, Glasgow, to consider a substantive Motion for the adjournment of the Committee—[Mr. Betts.]
Question agreed to.

Security and Intelligence Agencies
[Relevant documents: Intelligence and Security Committee Annual Report 1998–99, Cm 4532, and the Government's response thereto, Cm 4569;
Intelligence and Security Committee's Report on the Security and Intelligence Agencies' handling of the information provided by Mr. Mitrokhin, Cm 4764, and the Government's response thereto, Cm 4765;
Second Report from the Foreign Affairs Committee, Session 1998-99, HC 116, on Sierra Leone, and the Government's response thereto, Cm 4325;
Third Report from the Home Affairs Committee, Session 1998–99, HC 291, on Accountability of the Security Service, and the Government's response thereto, Cm 4588; and
First Report from the Liaison Committee, Session 1999–2000, HC 300, on Shifting the Balance: Select Committees and the Executive (paragraphs 90 to 92), and the Government's response thereto, Cm 4737 (paragraph 56).]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]
1.23 pm
The Secretary of State for the Home Department (Mr. Jack Straw): Today is the second occasion in this Parliament that we have had the opportunity to debate intelligence and security issues. The three agencies together make a valuable and unique contribution to the safety and security of our society and, in an international context, to that of our allies.
The agencies provide us with a vital edge in tackling some of the most difficult problems that we face. They play a significant role in our efforts against terrorism, drugs and serious crime and in defence of our national security. Because of the necessary secrecy of their work, their contribution often goes unremarked and unacknowledged. Much of what they achieve cannot be given the recognition that it deserves. To do so would give those against whom the agencies work the opportunity to sidestep their efforts. It could very well also undermine the protection of those who already carry out their service to this country, sometimes at considerable personal risk.
Among other things, today's debate provides a welcome opportunity to thank the agencies and their staff for their valuable contribution. All of us who have had contact with the agencies—Secretaries of State and members of the Intelligence and Security Committee over the years—will readily acknowledge that they are world-class services.
The reports before the House are two from the Intelligence and Security Committee, one from the Home Affairs Committee, one from the Foreign Affairs Committee and one from the Liaison Committee. Of these, the one that inevitably has attracted the most immediate attention is that of the Intelligence and Security Committee on Mitrokhin. For the convenience of the House, I shall deal with that report first.
On 13 September last year I announced that, with the agreement of my right hon. Friend the Prime Minister, I had invited the ISC to examine the policies and procedures adopted within the security and intelligence agencies for the handling of information supplied by

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Mr. Vasili Mitrokhin. The Committee's report was published earlier this month alongside the Government's response and a parliamentary reply from my right hon. Friend the Prime Minister.
My right hon. Friend and I are very grateful to the ISC, and not least to its Chairman, the right hon. Member for Bridgwater (Mr. King), for their readiness to take on the additional work thrown up by the handling of the Mitrokhin material and for the thoroughness of their report. The right hon. Gentleman has also generously acknowledged that his Committee was afforded unparalleled access to material beyond that of a Select Committee in order to carry out its inquiry.
Mr. A. J. Beith: Does the right hon. Gentleman recognise that through his willingness, when pressed, to make available to the Committee all information, including advice to Ministers, he made possible the thoroughness of the report; that it would not have been possible for the Committee to reach conclusions on some matters had it not had that degree of access; and that lessons ought to be learned for the Committee's future access?
Mr. Straw: I certainly recognise the substance of the right hon. Gentleman's first point. As I and my right hon. Friends acknowledged, it would otherwise have been impossible to arrive at both a proper understanding of the story as it unfolded and proper conclusions. I also accept his other comment, without entering into any commitments about the exact boundary that we should draw, as a result of this experience, as to the extent to which the ISC should have access to material. The right hon. Gentleman will appreciate, from his long membership of the Committee, that there are some very important operational matters that the Committee itself acknowledges it would not be appropriate for it to have access to. I also believe that it would be inappropriate.
The main criticisms made by the Committee were of the failures of the Security Service in not referring cases to the prosecuting authorities in a timely manner and of failures by officials in the provision of advice to Ministers. However, there was no suggestion of any attempt to mislead Ministers. In the ISC reports, there was no criticism of Ministers in previous Administrations, nor of Ministers in the current Administration.
As the inquiry report made clear, and as the Government acknowledged in their response, mistakes were made in the handling of this material, not least in the decisions that were made and not made as to whether or not individuals should be prosecuted. The agencies as well as the central Departments concerned—the Foreign and Commonwealth Office, the Home Office and the Cabinet Office—have learned a great deal from the report and this experience, and I believe that the lessons have been identified and accepted.
Mr. Michael Howard: Can the Home Secretary shed any light on paragraph 60 of the report, which records that in his statement on 13 September 1999 he had the opportunity to reflect on the Security Service's view of the significance of Mrs. Norwood's
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activities but did not do so, and that, as a result, the public perception of Mrs. Norwood is that, in the words of the paragraph,
she provided a real contribution to the Soviet atomic bomb development
when in fact, in the view of the Security Service, she did not?
Mr. Straw: I shall do my best to answer. I am grateful to the right hon. and learned Gentleman for his warning to me that he was likely to raise the matter.
The explanation is an unusual one but is entirely accurate, as indeed everything I say in this House is. It is that in the preceding week I had had an operation on a damaged cartilage in my knee and had undergone a general anaesthetic. I was on crutches and groggy for the rest of the week. On the Saturday morning, when I was telephoned to be told that various allegations had been made in The Times that, for example, I had blocked a prosecution of Melita Norwood, which was completely untrue, I was still coming round from the effects of the anaesthetic and was hoping for a quiet lie-in, although, as the right hon. and learned Gentleman knows, the prospects of that if one is Home Secretary are random and infrequent.
I returned to London from my constituency on the Sunday, having decided that I should issue a statement as soon as I had been able to go through the material. Officials worked on the Sunday to pull together all that I had seen over the period since May 1997. My recollection is that, as I was not in a position to make a proper judgment about whether or not Mrs. Norwood's position as a spy had been either of huge or of any significance, and as the public would not have taken comfort if I had merely repeated what I was being told, I decided that it was better left alone. That is my explanation.
With the benefit of history, we know that less damage was done by Mrs. Norwood's spying than might otherwise have been the case; in the event, as the report says on page 23, the Soviets copied American designs that they had obtained. However, during the time that she had access to highly secret material and was passing it to the Russians, her behaviour was damaging both because it was treacherous and because it had the potential to be extremely damaging to the interests of this country.
Mr. Tom King: Although there has been great concentration on the nuclear secrets that Mrs. Norwood may or may not have passed on, it is worth noting that she remained active for a considerable period after she had ceased to be directly involved in that area. It is alleged that she recruited another defector as late as 1969, which makes it clear that she was still considered to be of value to the Soviet Union.
Mr. Straw: I am grateful to the right hon. Gentleman, whose point suggests that my befuddled caution on Monday 13 September was well placed. He is quite right. Although it was clear, as I made plain in my public statement at the time—Parliament, of course, was not sitting—that Mrs. Norwood's direct access to highly classified material had ended in 1951, she remained active and was obviously seen by the Russians as having some importance.

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We should not forget the positive points identified by the ISC's inquiry. They include confirmation of our success in obtaining Mr. Mitrokhin's material, which was, and remains, of huge significance to us and our allies. In addition, it confirms success in exploiting his material at home and abroad, and confirms that a decision to allow publication of a book on the material was correct and that much of the publication process—although not all of it—was sound. Finally, the report serves to highlight a point arising from the Mitrokhin material—namely, the effective work of the security and intelligence services in countering the significant and potentially damaging intelligence threat posed by the former Soviet Union.
The House will recognise the significance of the success of the ISC's inquiry. It demonstrates both the developing role of the Committee and its maturing relationship with the agencies. I am glad that there was no suggestion that the statutory accountability of any agency is inadequate, or that proper oversight and internal management are not taking place. By definition, the work of the agencies cannot be open. Proper mechanisms for scrutiny are, therefore, all the more important.
My right hon. Friend the Foreign Secretary, since he entered the House in 1974, and I, since 1979, have been among Members of Parliament on both sides of the House concerned about the lack of a proper statutory base for the intelligence and security agencies and for the part of their operations to do with the interception of communications. A series of measures put that right: the Security Service Acts 1989 and 1996, for the Security Service, and the Intelligence Services Act 1994, for the Secret Intelligence Service and for the Government communications headquarters.
Those Acts, together with the Interception of Communications Act 1985, provide for independent scrutiny by commissioners of the actions of my right hon. Friend the Foreign Secretary and myself in respect of the agencies for which we are responsible, and for scrutiny of the actions of the agencies themselves. Each officer in each agency has a duty under the law to provide the commissioners with the information they need.
I pay tribute to the work of the previous commissioners, Lord Justice Stuart-Smith and Lord Nolan, for their contribution as commissioners and for the important scrutiny role that they played. I am sure that the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) will confirm that the work of Lord Nolan—the interception commissioner—was very thorough indeed. The Home Secretary has the bulk of the responsibility for telephone interception—although the point also applies to successive Foreign Secretaries—and were any Home Secretary ever to think about approving a warrant without proper consideration, he would be brought up sharp by Lord Nolan. That fact would be made public—and quite right too. I am glad to say—on behalf of the right hon. and learned Gentleman and myself—that, so far, that has not happened.
Both commissioners retired from their role earlier this year. On behalf of the Government, the agencies and previous Ministers with whom they worked, I thank them warmly for their contribution.
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We achieve accountability of the work of the agencies through the scrutiny of the ISC whose reports form the bulk of the subject of our debate.
Mr. David Winnick: Is it not of interest that when David Bickford, the former legal adviser to the security and intelligence services, gave evidence to the Home Affairs Committee last year, he said that the credit for oversight was due to the cases of our right hon. Friend the Member for Camberwell and Peckham (Ms Harman) and our hon. Friend the Minister for Small Business and E-Commerce. It was because they had been targeted by the security services and had taken their cases to the European Court that it was decided that some oversight was essential. Perhaps we should acknowledge the important role played by our two parliamentary colleagues.
Mr. Straw: We shall not know exactly what went on under the previous Government until the records are made public. However, there is no doubt that those two cases played an important part in concentrating the mind of the Government on the need for the establishment of proper oversight.
Dr. Julian Lewis: Does the Home Secretary agree that, from time to time, it is inevitable that the Security Service will look at the activities of people who subsequently become Members of Parliament? Bearing that in mind, what would he recommend as an appropriate recourse for such people if they were anxious to find out whether they had been wrongly targeted? Does he agree that it would be unacceptable for them to be able to demand to see their files and that perhaps someone else should do the job on their behalf? Will he take this opportunity to state that the request of the Minister of State, Foreign and Commonwealth Office, the hon. Member for Neath (Mr. Hain), for such access will be refused?
Mr. Straw: As far as I am aware, no request has been made to me by my hon. Friend the Minister of State, Foreign and Commonwealth Office. The hon. Member for New Forest, East (Dr. Lewis) is waving a piece of paper at me. If he says that such a request has been made, I take his word for it. I am trying to satisfy him with the answer that I am about to give, so there is no need for him to wave something that has been pulled off the internet—even with my eyesight, I cannot read small type at that distance. I do not believe that Members of Parliament should be treated differently from anyone else before the law. That applies to cases of corruption, immunity from prosecution and matters relating to the security and intelligence agencies.
The House knows that the Security Service held inquiries into me over a period of years and that it holds a file on me. On one occasion, as I think the House knows, I was shown the file by a properly authorised officer of the Security Service, but I saw only one part of its contents. That was its decision; certainly not mine. I learned of that when I was positively vetted—successfully, I might say—in 1974 and I decided that I would never make public the facts that I had learned. Someone else decided to make the information public, but I have never sought to have access to that file. It would have been wholly improper if I had sought to do so, and

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a reply in the negative will be given to any Member of this House who asks to see his file. I hope that that satisfies the hon. Gentleman.
Dr. Lewis indicated assent.
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): Make an exception of the hon. Gentleman's file.
Mr. Straw: I do not know whether there is a file on the hon. Gentleman.
There has been some debate—the matter has been raised by the Home Affairs Committee over the years—about whether scrutiny of the intelligence and security agencies should be carried out by a Select Committee of the House or by a Committee of the kind that has been established. It needs to be made clear that that Committee is a parliamentary Committee and that, in some ways, it has clearer and stronger powers than a Select Committee because it has been established by an Act of Parliament.
I have always been relatively relaxed about what the Committee should be called because of two realities. First, the members who would be appointed to any Select Committee would be appointed in a similar manner to the way in which the members of the current Committee are appointed. Secondly, any Select Committee that was going to do its job properly would have to operate in a similar way to the Intelligence and Security Committee. Indeed, it is impossible to conceive of how it could operate in any other way if it were to be able to carry out the thorough inquiry that the ISC conducted into the Mitrokhin matter.
Although I know that the Mitrokhin saga has been uncomfortable for the agencies—one understands that—there is a silver lining. The case has emphasised the strength of the mechanisms that Parliament as a whole has agreed for the accountability of the agencies. It was a huge relief to me when I was faced with the situation over a weekend in early December that, instead of having to establish a specific inquiry led almost certainly by someone from outside the House, I was, with the agreement of my right hon. Friend the Prime Minister, able to telephone the right hon. Member for Bridgwater. I said that the case seemed to be exactly the type of issue on which Parliament would expect his Committee to conduct an inquiry. We had an altogether much more thorough inquiry than we might have had. It certainly commanded greater public and parliamentary support than one conducted by someone specifically brought in from outside.
Mr. Dale Campbell-Savours: On the issue of Select Committees, I have a copy of the Government's reply to the third report of the Home Affairs Committee on "Accountability of the Security Service". I draw my right hon. Friend's attention to a Home Office comment that reads:
The Government is not convinced that there is a strong case for change in the fundamental structure of these arrangements
and the word "now" is added at the end.
Mr. Michael Mates (East Hampshire): That was for you, Dale.
Mr. Campbell-Savours: If so, I am thankful. I understand that the word "now" was the subject of intense debate. Because I cannot debate the matter today with someone from the civil service, will my right hon. Friend explain why it was added?
Mr. Straw: As the whole House knows, the Government are entirely seamless and joined up and we all agree with each other all the time.
Mr. Denis MacShane: Not a cigarette paper between them.
Mr. Winnick: I hope not.
Mr. Straw: I hope that no one has cigarette papers in the Chamber.
It follows that every word of the response has been carefully drawn and is subject to collective responsibility. I cannot remember whether it was I or someone else who inserted the word "now", but the point is clear: we are
not convinced that there is a strong case for change in the fundamental structure of these arrangements now.
It would be absurd to say that there should never be any change in the arrangements. We should always consider such matters in the light of experience. My hon. Friend the Member for Workington (Mr. Campbell-Savours) has been a member of the ISC for some time. The experience of the Mitrokhin report demonstrated the inherent merits of that Committee. That does not mean that we should never adopt the Select Committee path, but doing so is not as urgent as some once thought. I hope that that provides a helpful definition of what the Government meant by the word "now".
The work of the Committee has been strengthened by the appointment of an investigator to assist the Committee with its scrutiny. The investigator allows the Committee to pursue its inquiries in greater depth than would otherwise be possible and to follow up specific lines of inquiry in more detail. He operates within the same legal framework as the Committee, with the same level of access, but he also has the opportunity to discuss issues directly with the staff of the agencies.
The Government's response to the Committee's annual report welcomes the Committee's involvement in many of the areas covered. My right hon. Friend the Foreign Secretary and I fully endorse its confirmation of the importance of continuing high-quality intelligence and security services for our country. Both to those involved and to the formulation of Government policy, reliable and timely intelligence will remain as important now as it has ever been.
The Government are taking an important step to update and improve the framework that regulates the use by the intelligence and security agencies—and others—of certain intelligence-gathering and investigative techniques. The Regulation of Investigatory Powers Bill proposes an appropriate framework for when the Human Rights Act 1998 comes into force, one that is consistent with that Act. It contains provisions regulating the use of investigatory powers including the interception of communications, intrusive surveillance, directed surveillance and covert human intelligence sources. The Bill clearly sets out who can use each technique and for what purpose, levels of authorisation required, oversight of the use of the

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techniques, and a complaints procedure. Members of the judiciary will act as commissioners overseeing the use of the powers, and a new tribunal will be established to provide a single point of contact for those who want to complain about the use of the powers. The nature of the agencies' accountability to Parliament has long been a matter of debate in this House. There is no need for me to explore that matter further.
Let me now go on to discuss some wider issues relating to the agencies' work.
Mr. Mates: The right hon. Gentleman says that the security services felt uncomfortable about the criticism expressed in the Mitrokhin report; no doubt that is true, but does he not agree that the report should be seen in context? Even though we are only extremely rarely able to report the agencies' successes, we know about them. Although in the Mitrokhin report we criticised the things that went wrong, the members of the Committee are well aware that things go right on many occasions, but that, because of the nature of the work, the outside world cannot be told.
Mr. Straw: I am extremely grateful to the hon. Gentleman for those words, which carry the greater authority coming as they do from a member of the Committee. Those of us who work directly with the agencies day to day would agree strongly with him. It is true of any organisation that its mistakes are more often noticed than its successes celebrated, but it is all the more true of the agencies because of the secret environment in which they operate.
The unpredictability of the post-cold-war era has thrown up different challenges, such as the global concerns of terrorism, weapons proliferation and drugs. Keeping up with, and setting up a credible defence against, today's dynamically changing threats and targets is a tough challenge. The agencies have approached those new priorities with imagination and dedication.
The agencies have scored real successes. Their achievements include helping the law enforcement agencies target drug trades, frustrating the ambitions of those regimes that seek to acquire the technology for nuclear, chemical or biological weapons achievements and frustrating those with terrorist agendas, all of which have been significant and effective as well as crucial to saving lives.
The Security Service has demonstrated great flexibility in responding to existing threats to national security and adapting to new challenges. We must all be encouraged by developments in Northern Ireland, but the recent attack on Hammersmith bridge demonstrates that the threat from dissident republican elements intent on wrecking the peace process remains real. Countering that threat therefore continues to be a high priority for the service, which makes an essential contribution to frustrating the aims of such terrorist groups and other terrorist organisations that pose a threat to UK interests.
The Security Service is a key player in countering the threat to the critical national infrastructure posed by malicious electronic attack. The National Infrastructure Security Co-ordination Centre was established in December 1999 to provide a single point of access to the
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Government's arrangements for encouraging improved defences against electronic attack. I am confident that the Security Service is an effective organisation and that accountability and oversight of the service's activities are adequate. During the three years that I have held my office, I have come to admire greatly the many staff of the service whom I have met, and the leadership of its director general, Stephen Lander, who was knighted in the birthday honours.
It is appropriate at this point to take the opportunity to inform hon. Members that the Prime Minister and I have agreed with the Director General of the Security Service that his term of appointment be extended to October 2002. [HON. MEMBERS: "Hear, hear."] I am glad to receive the approbation of the House, and am sure that members of the ISC will commend this arrangement.
As the House knows, although I am responsible for the Security Service, my right hon. Friend the Foreign Secretary is directly responsible for the two other intelligence services, the Secret Intelligence Service and Government communications headquarters, Cheltenham. GCHQ has played an increasing, and increasingly effective, role in the war against organised crime, co-operating closely with the law enforcement agencies. It too has a prime role in safeguarding the critical national infrastructure that I mentioned earlier.
The SIS relies for its effectiveness on a world-leading reputation for secrecy and trust, as well as for great expertise and professionalism. That reputation is the service's most effective tool in convincing those who might help this country—sometimes at risk to their own lives, often at risk to their livelihoods and in dangerous situations—that their secrets and personal security are safeguarded. The SIS continues to make a special, and often vital, contribution to a range of international challenges faced by Government. My right hon. Friend the Foreign Secretary will, of course, speak at greater length about the work of the agencies for which he is responsible when he comes to wind up the debate.
I know that many hon. Members want to contribute to this important debate, and it is right that we have set aside parliamentary time for them to do so. I commend the work of the Intelligence and Security Committee to the House, and look forward to continuing to work with it to ensure that we draw the right balance between scrutiny and secrecy, which is essential to maintain the effectiveness of these unique and crucial national assets.
1.53 pm
Miss Ann Widdecombe: I should like to add the agreement of the Opposition to the Home Secretary's tribute to the men and women who work in our intelligence and security services. As he rightly observed, the vast majority of them do so behind the scenes without public recognition. Their task is difficult and sometimes dangerous, yet, for reasons that we all appreciate, the full story is not told, and sometimes never can be. I also congratulate Stephen Lander on his honour, and on the extension of his contract.
The security services' work is of the utmost importance, and recent events have shown that we must remain vigilant. The murder of Brigadier Stephen Saunders in Athens was a dreadful reminder that terrorist organisations continue to flourish, even in the member states of the European Union. The Hammersmith bridge

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bomb and yesterday's explosion in Belfast pointed to a possible resurgence in terrorist activity connected to Northern Ireland.
As the Intelligence and Security Committee's latest annual report states, the threat to this country and its armed forces from the proliferation of nuclear weapons, especially in the middle and far east, remains significant and is growing. The agencies also have important roles to play in the fight against drugs and organised crime, which, sadly, remain significant forces of evil in our society. That is the national and global context in which the services and their staff have to operate.
I also pay tribute to the work of the Intelligence and Security Committee and to its Chairman, my right hon. Friend the Member for Bridgwater (Mr. King). We are indeed fortunate to have such an accomplished and experienced person as my right hon. Friend serving in that position. It is particularly encouraging that the Committee has won, and retained, the confidence of the services themselves. No doubt my right hon. Friend, when taking up his post, did not envisage the high media profile that the job has brought him in recent days, and I shall now turn to the reason for that media interest in the security and intelligence services.
I am sure that hon. Members on both sides of the House are grateful to the Committee for the way in which it conducted the Mitrokhin inquiry, and I should also like to put on record the Opposition's heartfelt thanks to Vasili Mitrokhin, who undertook his work at tremendous risk. I wish to associate the Opposition with the Committee's conclusion that Mr. Mitrokhin
is a man of remarkable commitment and courage, who risked imprisonment or death in his determination that the truth should be told.
It is to the credit of the Secret Intelligence Service that it realised the value of the material that Mr. Mitrokhin was offering, and brought him and his family to this country. However, the way in which his valuable intelligence material was subsequently handled by this country's security and intelligence services gives cause for concern. It is said that the US President may have known about that British intelligence coup before the then Prime Minister, my right hon. Friend the Member for Huntingdon (Mr. Major).
There are lessons to be learned from the Mitrokhin inquiry report, and I personally find it regrettable that confessed traitors such as Melita Norwood will never be prosecuted for betraying their country. There were undoubtedly serious failings in the system, and we can all hope that those will not recur.
In a November 1998 debate, the Home Secretary refuted the assertion of my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) that it was unusual for Whitehall Departments to work closely together. My right hon. Friend mentioned the Pinochet case in that respect, but his comments are borne out equally well, if not more so, by the Mitrokhin case, despite the Home Secretary's denial.
One of the most unfortunate aspects was that we had to learn about the whole affair through leaks to the media, and there are still a number of unanswered questions. Will the Home Secretary now—I shall give way to him when I have finished this point, as I do not think that he has answered it fully on previous occasions—tell the House why, despite the fact that he knew in December 1998 that
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details of the Norwood case would be published, he failed to make a statement to the House until those details had already been made public?
When I put that question to the Home Secretary on 26 October 1999, he argued that he could not have made a statement because he was waiting for the Attorney-General's decision on whether to prosecute Mrs. Norwood. He said that he was asked
why I did not inform Parliament when I was first told of plans to publish the Mitrokhin archive. As I said, I was told that in December 1998.
He went on to say:
before the Attorney-General and the prosecutors could decide, she—
that means me
was inviting me to announce that consideration of prosecution was in train. That … would have been wholly improper.—[Official Report, 26 October 1999; Vol. 336, c. 830–31.]
However, the Attorney-General's decision, in so far as it was a decision, was made on 22 March 1999, so for six months we heard nothing whatever from the Home Secretary. The right hon. Gentleman—and, for that matter, the Foreign Secretary—must have known that the matter would shortly come into the public domain via the media, but publication was allowed to take place before a statement was made to the House. Indeed, the information was drip-fed to us by the press—as I put it at the time, we were practically having a spy a day—when the House could have been informed much earlier.
Does the Home Secretary think that the House and the country had a right to know about those matters from the Government before details of the Mitrokhin archive and the Melita Norwood case appeared in the newspapers? I ask that question not to make a partisan point, but to try to clarify the Home Secretary's view on the important issue of the procedure in such cases.
It is amazing that the Prime Minister, who, after all, has overall responsibility for those matters, was not even told about the Melita Norwood case until the day before the story broke in The Times last September. Whatever the Home Secretary may say, there appears to have been a complete lack of co-ordination. Why was the Foreign Secretary informed of the publication project in October 1997, the Prime Minister in December 1997, but the Home Secretary not until December 1998? Was there any co-ordination between their offices—or, indeed, between them personally?
It appears from paragraphs 22 and 56 of the Committee's report that the relevant chapters of the book were not cleared by the Home Secretary or the Attorney-General, so why did the Foreign Secretary approve the book for publication on 21 April last year? In doing so, did he seek the views of the Home Secretary or the Attorney-General, or was he misinformed that the passages had, in fact, been cleared? It is also a matter of concern that the publication criteria set down in 1996 by Sir Malcolm Rifkind, the then Foreign Secretary, were not followed. That was one of a number of significant failures in the Departments of State themselves.

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I find it hard to believe, as paragraphs 59 and 60 of the report state, that when it was realised last summer that the details would come out in the press, the
media lines to take were being developed by the working group with support from the FCO and the Home Office. The Home Secretary saw the press lines in the week prior to the … story appearing in the Times. The Foreign Secretary did not see them.
Once the story broke Ministers were unable to use the prepared press lines because they were inadequate.
That simply beggars belief. It is clear from the Committee's report, which is excellent and does it credit, that there were many serious failures—but we need not go further over the details.
It is doubly unfortunate that the failures involved sensitive, indeed unique, material such as that provided by Mr. Mitrokhin. Those failures have distracted attention from Mr. Mitrokhin's actions, which, as I have said, deserve the highest praise. In the light of the Committee's report, the Government have decided to put in place measures to try to rectify the deficiencies, and I can only hope that the situation that has been described to us will never recur. It did no one any credit.
Mr. Straw: I shall try to be as gentle with the right hon. Lady as I can, but the simple truth is that as soon as the matter broke, she reached conclusions about it. She says that they are correct, but they are not supported in any particular by the conclusions of the Intelligence and Security Committee. She concluded that there had been a major lapse by current serving Ministers. There had been lapses, but not by Ministers. If there had been lapses by Ministers, I would hope and expect that members of the Committee would have said so, and said so publicly. They did not.
It is a matter of record, and is stated in paragraph 64 of the report, that my right hon. Friend the Foreign Secretary was told on 22 March 1999 that the
Security Service are clearing the detail contained in those chapters … with the Home Secretary (who was briefed on the project in 1998, and is supportive) and the Attorney General.
That is what my right hon. Friend was told, and he had every reason to believe that it was correct. As it turns out, it was incorrect. That has been brought to the attention of the House and the Committee. Of course it has been accepted that there were failures. The Government have accepted in our response that there were failures in the Home Office, in other Departments and in the Security Service, but there was no failure, as the right hon. Lady implied that there was, by Ministers.
If there is a next time—we always learn from experience, but we cannot avoid such things—I suggest that the right hon. Lady does not make such intemperate statements as the one she published on 13 September, in which she stated that I must publish the legal advice that I claim makes a prosecution impossible and explain why I kept it secret from Parliament and the public for more than eight months.
If the right hon. Lady is suggesting that, as a matter of Opposition policy, she is now committed to publishing the legal advice available from the Law Officers in every case, or in any, she had better say so now, because a
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fundamental aspect of the work of the Law Officers is that their advice to Ministers is never published. Government could scarcely operate if it were.
Miss Widdecombe: That is a fascinating defence to accusations that I have not even made. I quoted direct from the Intelligence and Security Committee report. I am very sorry indeed that the right hon. Gentleman did not realise that, but I shall not weary the House by quoting it again. He will find that I quoted specific paragraphs about the utter failure of co-ordination between Departments. If he takes that personally, perhaps there are reasons. I do not know about that, but I do know that every criticism that I have just made has been made in a report praised by both sides of the House as an extremely thorough piece of work.
The right hon. Gentleman may also recall that the final announcement of the decision not to prosecute Melita Norwood was not made to the House, but leaked to the media half an hour before the answer was laid, for which an apology had to be made. Not for a moment can he try to pretend that the handling of this issue—by politicians, by officials or by the various services concerned—has been all that it might have been. Very generously, I noted that the Government have agreed to put in place measures to try to rectify the deficiencies, and hoped that those measures would be effective.
On another aspect of the work of the security services, there is widespread concern at the intention of the former director general, Dame Stella Rimington, to publish her memoirs. It is vital that the men and women who work for our security and intelligence services can feel utterly secure in the knowledge that they and their work will never be compromised by the publication of such books. I hope that the Government will take those concerns into consideration. In his winding-up speech, will the Foreign Secretary tell us more about the Government's intentions, and, perhaps, what stages have been reached in the clearance process?
We were all shocked, and, I believe, deeply disgusted, bearing in mind the origin of the tragedy, by the death of the 58 illegal immigrants in Dover on Monday. Both sides of the House condemn the organised criminal racketeers who feed off human misery and suffering. The introduction to the Committee's report covering 1998–99, which we are debating, stated that there had been "no improvement" in the fight against the traffic in illegal immigrants, and added:
Rather the reverse has occurred …
In the light of recent events, that is certainly an issue to which the Government should turn their attention. I welcome the Home Secretary's indication on Monday that they will give the matter attention. It is crucial that the House is kept informed and that the issue is not neglected.
Another issue raised in the annual report, and one that the Government did not fully address in their response, was resources. The head of the Secret Intelligence Service and the Director General of the Security Service both voiced their concerns about the 2001–02 financial year, saying that the position would be challenging, and flagging up the possibility of being unable to maintain current service levels and meet new challenges.
The Committee observed:
We believe that these concerns should be fully addressed as a matter of some urgency.

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That must be especially true, given the Foreign Secretary's remark about the security services during the debate in 1998:
If they are to do their job, they must have confidence that they will be resourced to fulfil the tasks that we place on them.—[Official Report, 2 November 1998; Vol. 318, c. 583.]
The Committee was also concerned about the level of resources being focused, along with Customs and Excise, on the fight against drugs. It observed:
We are not convinced that enough effort is being focused at stopping the drugs reaching the UK.
All those matters are particularly worrying. Perhaps the Foreign Secretary can tell us what progress is being made in the areas that I have identified.
I cannot resist observing that I hope that the Government are taking seriously the problem of missing laptop computers, which has come to light in recent months. We have heard of instances of laptops belonging to members of the security and intelligence services going missing or being stolen in what can be described only as bizarre circumstances. We have had to listen to stories of tapas bars, taxis and train stations. I shall be grateful if the Government will clarify the truth of this when they respond, and tell us exactly how many laptops have been lost in recent months by members of the security and intelligence services, and, so far as they can tell us, in what circumstances.
Will the Government at least confirm that no classified or sensitive information has been lost as a result of the adventures with laptops? I hope that measures have been put in place across the services to prevent a recurrence of incidents that make the services look remarkably foolish.
Over the past year and a half, the Select Committees on Home Affairs and on Foreign Affairs have both produced reports that have made a valuable contribution to on-going debates. Several of my right hon. and hon. Friends will no doubt wish to refer to the Foreign Affairs Committee's report on the Sierra Leone affair in greater detail than I shall, but the cover-up climate that surrounds the issue means that questions will inevitably have to be asked, and it is only right that they should be.
For example, will the Foreign Secretary indicate, in more detail than hitherto, his reasons for refusing the Select Committee informal access to the head of the Secret Intelligence Service? How does that differ from the arrangements that the Home Secretary makes in respect of the security services, and why?
Will the Foreign Secretary also comment on the Committee's conclusion that his refusal to allow it access to the head of the SIS has inhibited its inquiry? Perhaps that is what the right hon. Member for Berwick-upon-Tweed (Mr. Beith), the Liberal Democrat spokesman, had in mind. What does the Foreign Secretary have to say about the personal criticism of Foreign Office policy, as opposed to the Home Office and the Ministry of Defence, that appears in paragraph 108 of the report?
That brings me to the issue of accountability, on which the Select Committee on Home Affairs has produced a report. As I have already said, my right hon. Friend the Member for Bridgwater and the other members of the Intelligence and Security Committee do an excellent job. There is no greater testament to that than the thorough investigation into the Mitrokhin affair. In so far as one can draw such conclusions relatively early in its existence, the Committee is clearly doing its job supremely well.
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The Government now see no reason to change the present arrangements. The Opposition agree with that view, as do the majority of the Committee. It is a unique Committee which scrutinises a unique and very sensitive area of the Executive. All sides of the debate agree that its establishment was a significant step forward.
The arrangements put in place by the previous Government are not yet even a decade old. I note the Home Secretary's comments in evidence to the Select Committee that the current arrangements should have time to bed down. When we are talking about institutions with histories much longer than that, I do not think that four or five years can possibly provide a proper evaluation of the new system.
The country's intelligence and security services do a vital job in safeguarding the nation during the increasingly uncertain and violent times in which we live. They, and men and women such as Vasili Mitrokhin, are all too often the unsung heros. Once again, I pay tribute to them, their good work and those who oversee them.
2.14 pm
Mr. Kevin Barron: The House will know that I serve on the Intelligence and Security Committee. I shall refer briefly to two matters in the annual report that may be of some interest to Members and to the wider public, who, I hope, read our debates about the agencies.
First, there is the continuing interest that the Committee takes in international developments in intelligence oversight. Two members of the Committee, including me, went to a bi-annual inspector-generals conference in Canada in June 1999. Members of the Committee more senior than I had attended it previously. There were representatives from countries such as Australia, Belgium, Canada, New Zealand, South Africa and the USA. It was good that South Africa was represented, because the Minister responsible was present, and the Committee that oversaw his Department, along with representatives of the agencies. Some good debates on oversight took place.
In the introduction to the report are set out the inward delegations that have come to this country, including officials and parliamentarians involved in intelligence and oversight, They have come from countries such as Australia, Canada, Germany, Hungary, South Korea, Romania, Poland and the Ukraine.
Having emerged from communism, many of those countries are referred to by the west as developing democracies. I hope that we influence them in talking about the way in which we in this country approach our work in overseeing agencies. They explain to us in great detail the roles that they play in that respect, and some of them have real reservations about the way in which their agencies operated in different guises many years ago. It is a fascinating debate in which to be involved. They see their agencies as operating more along the lines within which our agencies have operated over many years.
The second issue arising from the annual report is serious crime. The Committee was told about the growing importance of smuggling cigarettes into the United Kingdom. Customs and Excise estimates that about £1,500 million is lost to the Exchequer every year as a result of duty and tax avoidance. Some lorry containers can bring in smuggled cigarettes to the value of £1 million. We were told that the scale of the profits that

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can be made from cigarette smuggling is comparable with the profits made from drug smuggling, and that criminals are turning to cigarette smuggling because the risks and penalties are lower than those that apply with drugs. We have emphasised the fact that we believe that any additional resources given to the agencies to allow them to work in this area could effectively be self-funding for the Exchequer through the recovery of duty and tax.
The Government's response was that they agreed about the loss of revenue to the Exchequer through smuggling, and that they would continue to keep under consideration the resources needed to combat it. Since the report was published, millions of extra pounds have gone into Customs and Excise to try to stop serious crime, including smuggling and the avoidance of duty.
We have not emphasised penalties. If I were found with half a million pounds worth of class A drugs in the back of a lorry, I would face a penalty of up to life imprisonment. However, if I was found with half a million pounds worth of smuggled cigarettes, the penalty would be much less. It is no wonder that people are moving into smuggling cigarettes and not dealing in class A drugs. Perhaps my right hon. Friend the Home Secretary could give us his views on that, or write to me. I understand why we did not highlight that part of the report, but we should consider the issue of penalties.
The major report that we are debating relates to the Mitrokhin inquiry. We concluded that there was serious failure on the part of the Security Service in that it did not consult the Law Officers about the case of Mrs. Norwood. We also noted that the action prevented her possible prosecution. Some of the headlines that followed the publication of the report seemed ridiculous, implying that we had suggested that she should have been prosecuted. The simple fact is that it was not up to us, just as we did not think that it was up to the Security Service, to take that decision. The report makes that clear.
The other issue relating to Melita Norwood was that she had slipped out of sight. We believe that was a further serious failure on the part of the Security Service over a number of years. We were advised that the systems covering prosecution referrals to the Law Officers and the monitoring of espionage cases within the Security Service have been changed to prevent similar serious failings occurring again. I emphasise that, because it took place during our inquiry. It was recognised that things had gone a little wrong, and procedures inside the agencies were changed.
We agreed that the establishment of an interdepartmental working group to oversee the publication of the Mitrokhin archive was a sound decision. However, we concluded that officials failed to keep Ministers fully informed and to ensure that the decisions of the working group were carried out. As a consequence of those failures, Ministers made decisions on the basis of incorrect information.
We also noted that the working group was not adequately constituted to develop the necessary media strategy and to ensure that Ministers were alerted in a timely manner and provided with appropriate and robust lines to take. We stated in our conclusions that
misleading stories were allowed to receive wide circulation by a failure to anticipate the likely media focus and to have prepared and promulgated appropriate responses.
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In the Government's response, they accepted that the preparations for the handling of the publicity surrounding the archive were ineffective, and officials recognised that there would be considerable public interest, and that the Government's normal and entirely proper refusal to comment on intelligence-related matters would not be adequate. The implications of non-prosecution of Mrs. Norwood were not sufficiently worked through. In consequence there was inadequate preparation of responses to the reaction and the interest aroused in the media and in Parliament.
I see quite clearly how the situation came about, but given that the Government acknowledge that officials recognised that there would be considerable public interest, and that Government's normal and entirely proper refusal to comment on intelligence-related matters would not be adequate, it is no longer normal or entirely proper to use the stock phrase that has been used for decades in this country—that the Government do not comment on matters of national security.
A debate must take place about the way in which Ministers and officials should speak to the media in such circumstances. Different terms are needed to replace the stock phrase that has been circulating in and around the agencies for many years. I do not claim to have the answer, but there seems to be a slight contradiction in the Government's conclusion about how they should operate at the public interface in future.
The Committee recommended that greater consideration was needed when briefing Ministers and senior officials on sensitive material, to ensure that accurate briefing is given on all the information.
Our greatest concern was that the mishandling of the publication of the Mitrokhin archive detracted from the major achievement of the SIS in exfiltrating Mr. Mitrokhin, his family and the material, together with the successful dissemination of the material to foreign liaison services. The information that we received sped around the world to foreign agencies, which most of us would argue was to the general good of counterintelligence. It is a great pity that the handling of the publication of the archive detracted from that.
I put on record the bravery of Mr. Mitrokhin, who believed that the organisation for which he was working in his own country was betraying the people of his country.
Mistakes were made, and they were admitted. There was no hint at any time in our proceedings that anyone was trying to mislead us in any way. It is important to recognise that nothing happened to compromise national security, no one was put at risk, and there was no deliberate attempt to deceive Ministers or anyone else. No one tried to shirk responsibility.
If, after reading the report, one asks why a certain thing happened in such an organisation, the answer is that it was probably a result of the culture of the organisation. We all recognise the distinctive culture of Parliament or the culture of ministerial office.
It is to the credit of my right hon. Friends the Home Secretary and the Foreign Secretary that they asked our Committee—a Committee of parliamentarians who were either elected or, in one case, appointed to the other place—to look into all the details of the case and to report in such an open way. Little was taken out of the report made available to the public. We, and the public, should be grateful for that.

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I hope that the confidence-building measures in which we, as the oversight Committee, are engaged with the agencies and with Government organisations, will continue in the future.
2.26 pm
Mr. Tom King: I am pleased to follow the hon. Member for Rother Valley (Mr. Barron), who is a valuable and respected member of the Intelligence and Security Committee.
I start by expressing my appreciation to the Home Secretary and to my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) for their kind personal comments. I welcome the debate on behalf of the Committee. This is the most important parliamentary occasion of the year for the Intelligence and Security Committee, and we appreciate the fact that it involves the presence of two of the most senior Cabinet Ministers. That is a proper recognition of the importance of the agencies for which they are directly and personally responsible.
It may be a little churlish to make an early criticism. I welcome the debate, and my goodness, we waited for it. The delay in holding the debate is quite unacceptable. The debate after our last annual report took place on 2 November 1998. We hope to produce our next annual report in six weeks.
The present debate is on the 1998–99 report, which was sent to the Government with a letter from me to the Prime Minister dated 6 August last year. The Government took six months to respond. Their response is dated 28 January this year, and now, on 22 June, five months later, we have the chance of a debate. I ask the Home Secretary and the Foreign Secretary, both of whom I am pleased to see in their place, to use their influence to ensure that the next debate is more timely.
As I said, we will submit our next annual report at the end of the summer Session. There should be a real determination for the Government response to be available by the time the House comes back in October, and that we should have the debate when the report is fresh and current. The debate on a previous report was held on 2 November, as I mentioned. I need to put that on the record. The Foreign Secretary and the Home Secretary will understand why I am doing so, and the Whip on duty may report this to the business managers as well. It is unacceptable that there should be such a time lag.
If I had to choose a text to represent the year's work, it might be a quotation from the leader in The Times after the publication of our report on Mitrokhin. The Times was kind enough to refer to it as
a strikingly successful example of public accountability.
We appreciate that comment.
Against that background, I pay my tribute to the members of the Committee, several of whom are in the Chamber, and to our staff, who support us so well. By the nature of their work, they will not be recognised by name, but their contribution will be recorded elsewhere—perhaps Upstairs, or in the future. We appreciate their work.
Let me comment on Select Committees and the alternative of a different style of Committee. I pay tribute to my colleagues' attendance at meetings of the
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Intelligence and Security Committee. I read the paper by the Liaison Committee that discusses new arrangements for improvements in Select Committees. It considers punitive measures that perhaps should be available for the Chairman to take against members who signally fail to turn up for Select Committee meetings and are regular absentees. I am glad to say that that has never been a problem for me in the six years that I have been Chairman of the Intelligence and Security Committee. That should be recognised.
I am speaking personally, although I will probably take the overwhelming majority of the Committee with me on the comments that I am about to make. "Overwhelming" may be an exaggeration; perhaps "significant" would be better. I am unimpressed by the suggestion that there is an urgent need for a change. The Times quotation suggests that we are doing something right, and breaking new ground in a way that was perhaps not apparent to the Liaison Committee or the Select Committee on Home Affairs when they prepared their reports.
The Intelligence and Security Committee is a parliamentary Committee; Parliament established us to do our job. There are differences between our Committee and Select Committees. On a previous occasion, the Home Secretary famously destroyed the illusion that because Parliament votes on the membership of Select Committees, they are the product of the free vote of an independent House of Parliament. The selection of some and the exclusion of others who might be less acceptable show that the forces that are at work are pretty close to Government.
It is acknowledged that the Intelligence and Security Committee is slightly different. The Home Affairs Committee's report recognises that we require special arrangements and that we could not be an ordinary Select Committee. If one visits the House of Representatives Permanent Select Committee on Intelligence, and walks down the secure corridor towards the armed guards standing by the door, one realises that it is not an ordinary, free-standing Select Committee. We meet in secret and have secure premises, which are required for our work.
The report of the Select Committee on Home Affairs also recognises that the agencies, for which we have oversight and responsibility, answer to different Ministers and Departments. If one sought to replace the Committee, it would have to be with a single Select Committee. That is common ground between those who advocate a Select Committee. The report had integrity in that it acknowledged that the Intelligence and Security Committee was doing quite a good job. It also recognised that the Committee was evolving, developing and appointing an investigator.
That report was written before we broke new ground with the invitation from the Home Secretary and the Prime Minister to investigate the Mitrokhin affair, with full access to all relevant papers and advice to Ministers. The latter was important, and enabled my right hon. Friend the Member for Maidstone and The Weald to ask some difficult questions because we had all the information whereby we were able to reconstruct the paper trail and some of the problems that had arisen.
The calibre of members of the Intelligence and Security Committee is as good as that of the members of any other Select Committee. It comprises many senior hon. Members. Other Select Committees, such as the Home

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Affairs Committee and the Liaison Committee, tend to write reports as if we were from another planet. Yet some of my colleagues on the Intelligence and Security Committee serve on other Select Committees. I was disappointed that the Liaison Committee, whose Chairman I had approached, did not invite me even to attend a meeting as an observer or to comment to the Committee before it further investigated some of its proposals.
There is much common ground between us. The Liaison Committee report complained about delay in Government responses and suggested that two months should be the norm. I agree; I have just complained about the delay of six months before we got our response. The report stresses the need for a debate on reports. I even found some common ground with its complaint about the inconsistency of Government replies. It stated that some were exemplary and others were superficial. I agree with that. Perhaps the Government will refer to it in their response to the debate.
I have been proud to chair the Intelligence and Security Committee since its inauguration and during its development and evolution, which continues. We need Government support and a proper understanding by them that the Committee is an important bulwark and safeguard for the intelligence agencies and public confidence in them. The fullest trust, confidence and openness by Government is necessary when appropriate to enable us to discharge our duties.
If the Liaison Committee wants to return to the matter—its report said that it might—a little consultation with parliamentary colleagues who serve on the Intelligence and Security Committee might be helpful. We might then be to help the Liaison Committee. I want to put that on record because I do not imagine that the Government have many empty slots in their legislative programme, and I do not therefore believe that the matter will be pursued with any urgency. That could not be justified.
I add the Committee's strong endorsement to the tribute of the Home Secretary and my right hon. Friend the Member for Maidstone and The Weald to those who work in our intelligence agencies. The nature of their work means that it is impossible for people to know the challenges and dangers that they face and the very personal risks that they sometimes run. It is not known that sometimes they have to be moved very quickly, and arrangements have to be made to move them and their families because of imminent threats, perhaps after their identity has been betrayed by others. Those people are dedicated to the security and protection of our country and we owe them a great debt.
I want to put on record my admiration of the leadership that those people receive. I do not exclude from that Sir Richard Wilson, the Secretary of the Cabinet, whose interest in our Committee's work I appreciate. He has attached importance to our work. I also thank the Cabinet Office for its support. I add my personal recognition of Sir Stephen Lander, the Director General of the Security Service, whom I congratulate on his award.
Our appreciation of our relationship with the agencies, and their quality is part of the background against which we work. We require the fullest possible Government
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co-operation whenever we have to be involved and in whatever work we may have to undertake. We are grateful for the Prime Minister's endorsement and his assurance of that full co-operation in our work.
Our job is to scrutinise, to recognise and respect work that is well done, but not to develop the sort of cosy relationship in which we become apologists for the intelligence and security agencies. The best service that we can do them is at all times to be alert to mistakes and occasions when standards are not maintained and integrity is not protected, and to speak out without fear or favour.
Some hon. Members referred to my public profile. We began with almost total invisibility. The profile has grown, however. It is an important part of our work that the public know that we exist, and can have some confidence that a Committee independent of Government oversees the agencies.
In a recent article about Menwith Hill, one of the criticisms made by a certain newspaper was that it was an incredibly secret place, which no Minister or other Member of Parliament had ever visited. Let me put it on record that the Committee has made two visits, and that a number of our colleagues have made individual visits. Both the fact that such visits are made and the fact that it is known that there are not "secret places" that are off limits for the Committee are important, not just to satisfy us but in terms of the public confidence that they create.
Mr. Campbell-Savours: Perhaps the right hon. Gentleman will emphasise that it is he who speaks for the Committee. When journalists telephone its members, they should not be offended when we tell them—to put it bluntly—where to get off, because we simply do not talk. The Chairman talks on behalf of the Committee, and they should always approach the Chairman.
Mr. King: I thank the hon. Gentleman.
As was said earlier, the Committee seeks to maintain the seamlessness—the Government constantly strive to achieve a similarly seamless appearance—that enables it to speak with one voice. Difficult decisions, or judgments, must often be made on what can or cannot be said about certain issues. I am sure that the Home Secretary and others—such as my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard)—who have held his post know that the problem is remembering what is public. I hope to take on that responsibility for the Committee when trying to make the necessary judgment, and I hope that we strike reasonable balances.
I have spoken of the contribution that the Committee can make. I am grateful for the support that the Government have given to the developments that we have achieved in the evolution of the system. We take considerable interest in the expenditure of the agencies. I am afraid that the number of asterisks that appear in our report representing the details of that expenditure must be pretty frustrating for the ordinary reader, but every asterisk represents information that we hold as a Committee. We have examined the expenditure involved, and have been able to identify it. For instance, one heading relating to the Secret Intelligence Service relates to the cost of running agents. That is the degree of detail that we examine.
We are grateful for the assistance of the National Audit Office, which was not originally envisaged in the legislation. It has already done valuable work, and I think

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that its contribution will continue to grow. The investigator to whom the Home Secretary referred represents an addition to that valuable work. I pay tribute to another supporter of the Committee's work—the Chairman of the Public Accounts Committee, who has been very helpful in certain circumstances.
The most recent and obvious evolution of our work is represented by what we did in regard to Mitrokhin. I do not want to add a great deal to what I have already said about our report in press announcements: the hon. Member for Rother Valley has said a fair amount about it, and my right hon. Friend the Member for Maidstone and The Weald drew attention to certain matters of concern. However, I want to stress the importance of putting the issue in context.
My hon. Friend the Member for East Hampshire (Mr. Mates) spoke of the need to recognise the successes of the agencies. This has been one of the few instances in which success has been manifest and public. The fact that there has been some confusion about publication, and the fact that there have been some failures in regard to prosecution and other matters, must not be allowed to detract from the overall understanding that this was a remarkable and outstanding intelligence success. I believe that the Federal Bureau of Investigation claimed that it was the largest pool of counter-intelligence material that it had ever received, and the Central Intelligence Agency paid similar tribute to the help that it had been given in the identification of people who had been betraying national interests in the United States and many other countries.
The tributes paid to the SIS' s exfiltration of Mr. Mitrokhin, his family and his material, and the pursuit by the Security Service of a number of the leads that arose from it, mark important and praiseworthy achievements, but we must never forget Mr. Mitrokhin himself—an extraordinary man, whom the Committee had the privilege to meet and interview about his work, and about the remarkable archive that he produced. It has given us an unparalleled understanding of the nature of the KGB and its activities over the years. We believe that there is more material to be published, which will of course be of great interest to those concerned with the history of espionage and intelligence in other countries over recent years.
Nevertheless, the achievements of the Mitrokhin report should not blind us to the fact that mistakes were made in its handling. Lessons must be learned. Those are the principles that guided us. We appreciated the Government's early recognition that mistakes had been made once matters came to light, and we believe that the steps that were taken were appropriate to meet our initial criticisms.
There is one question that I am asked most often in interviews, and on more public occasions. There is a latent suspicion that we do not really need the agencies. Why do we spend nearly £1 billion on them? Did not this world of espionage pass with the end of the cold war?
In the foreword to our 1998–99 report, we referred to the various areas in which intelligence is critical. We referred, for instance, to the need for support for our military forces in actions overseas, and, in particular, to Kosovo. Since then we have seen the events in East Timor and, most recently, in Sierra Leone. We now consider the issues involved in weapons proliferation, and the increasing concern felt in Washington about national missile defence against the risk of missiles and weapons
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of mass destruction in the hands of rogue states. The importance of the agencies' task in trying to counter some of those challenges is all too real.
Only yesterday, I read a comment in a defence journal about Kazakhstan, whose Defence Minister has admitted that the country has not the slightest idea how many weapons it has. In earlier days, Kazakhstan had a certain relevance to Soviet missile and nuclear activities. It is now trying to conduct an inventory. The report that I read alleged that 40 Mig 21s had been smuggled to North Korea from Kazakhstan. Admittedly it is an elderly aeroplane, but it is not one that we would wish to become part of the currency of arms smuggling.
To those who say that we now live in a safer world, let me say that the truth is that, following the collapse of the Soviet Union and some of its controls, the availability of weapons and access to nuclear and other materials present a threatening and dangerous scenario, and it is vital to have the best possible intelligence to try to prevent proliferation.
So soon after the tragic assassination of Brigadier Saunders, there is no need for me to restate the reasons why international terrorism continues to pose a major threat. I understand that the French football team in the European cup is now having to have special security against a threatened international terrorist attack. It is a continuing threat. The Home Secretary reminded us of Hammersmith bridge and of our own domestic concerns. It is an area in which intelligence and security continue to be needed.
The Committee visited Dover a few months ago. I do not think a single member of the Committee was surprised by the tragic news that came from Dover, having seen the situation in that port and the pressures that exist. Our 1998–99 report emphasised the importance of enhancing intelligence capability against organised crime. We specifically mentioned immigrants as one of our areas of concern.
I touch on several other issues that are of concern to the Committee. I do not want to accuse the two senior Ministers here, the Home Secretary and the Foreign Secretary, of breach of the Trade Descriptions Act 1968, but there is a publication called "National Intelligence Machinery." It describes the role of Ministers and makes it clear that the Prime Minister has overall responsibility. It then draws attention to the Ministerial Committee on the Intelligence Services. It looks pretty good on paper. I do not think that it looks very good in practice. It might be a good idea if that committee met and had some actual physical presence. It would be a nice gesture, if no more, to the intelligence agencies.
It is not a party political point because the ministerial committee was not known for the frequency of its meetings during the term of office of the previous Government, either. It may interest members of the previous Government to know that the ministerial committee even existed, but it did.
If we are to have ministerial accountability, if it does make sense to have divided responsibility for the intelligence and security agencies, and if the structure is to be such that there is separate accountability, the argument for the ministerial committee meeting must be strong. It could be a valuable exercise. If it met, not necessarily frequently, but at least annually, that would be a significant improvement.

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The Committee takes considerable interest in personnel practices in the agencies and in recruitment and retention. I must add one sharp criticism and one complaint about the Government response. Two reports ago, we made a proposal in response to a problem, which is well known, involving Mr. Tomlinson. He complained that he was dismissed from the Secret Intelligence Service and was denied any redress or access to an employment tribunal on the ground that it was impossible to hear the evidence which was said to be too secret to be available to an employment tribunal.
We came up with a fairly simple proposal: it should be possible to set up a special tribunal identical to the normal employment tribunal, but constructed in such a way that it could handle secret matters. The Government accepted that proposal. We have said some rude things in our report—I shall not rehearse them—about the shambles of the parliamentary handling of that. The Home Secretary need not look embarrassed because, as ever, another Department handled the Bill concerned—the proposal was tacked on to the Employment Relations Bill as an amendment.
Having made the proposal, the Committee was never consulted when the amendment actually went in. It never even came through the Commons; it was done in the Lords and came back. However, we were assured that we would be consulted on the regulations. What is pretty outrageous is the Government response:
The Government is therefore disappointed at the reaction of the Committee to this prompt improvement in the rights of members of staff of the agencies.
That was written in January. There was supposed to have been a prompt improvement. It has not actually occurred yet. Regulations have not been introduced yet and there has been no consultation of the Committee. It is a proposal that we made two years ago, so I ask that it be dealt with promptly. The Government said that it was a wonderful idea. Unfortunately, they have not yet done it.
I have referred to areas of expenditure and the assistance of the NAO. We are seeking to give greater information about the cost of the individual agencies; we referred to that in our report. The Government were looking forward to a meeting with us to discuss those matters further. That meeting has now been held. I think that it was helpful. I hope that we will be able to make progress on that matter and that next year's report will be rather fuller in that respect than this year's. We await Ministers' response on that point.
The area of expenditure that we addressed that was of particular concern to us—we got agreement to the publication of NAO reports on the matter—was the cost of the new premises for the SIS and the Security Service, and the substantial over-runs in expenditure that were incurred on both occasions. Although they were past events, we quoted them because we recognised that the complexity and scale of the new accommodation project for GCHQ was far greater than either of those undertakings.
We gave the clearest warnings of our concern, in view of past experience, that the problems should not be repeated and that there would be the closest watch. We were grateful that the response in January says:
During its planned move to new accommodation GCHQ is paying considerable attention to ensuring that degradation of its operating capability is kept to a minimum and that all essential services are maintained.
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Later, in paragraph 17, the Government noted
the Committee's endorsement of three guiding principles in the management of the GCHQ New Accommodation Project. GCHQ has sought to ensure that the maximum likely costs have been identified.
They added that GCHQ would
continue to supplement its own project management experience and expertise by the use of contractors and expert advisers. GCHQ—
this was written in January—
understands the need to control costs at all stages … Limits on spending will be set before work commences, and any need for subsequent adjustment will be carefully scrutinised.
The Committee is under no illusions about the challenge that is represented by the new GCHQ accommodation project and its importance. The Committee supports the project going forward, but it would be failing in its duty if it did not put on record its continuing great concern about the matter, of which the Foreign Secretary is aware. I shall not go further into the matter now, but we have continually sought to raise the matter and remain anxious as to whether its seriousness is yet fully recognised.
The two issues that our report says will lead to further work are files, on which we hope to have more to say in our next report—I shall not go into it in detail—and security procedures, which has been a constant theme of every report that the Committee has written. We are concerned about whether the agencies insist on constant vigilance on internal security. The recent events involving laptops are merely an illustration of the problem that we have been continually trying to draw to the attention of Ministers and heads of agencies. We have not had the worst experiences; other countries have suffered worse lapses of security recently. We can maintain that position only by constant attention to this tiresome, time-consuming but critically important role.
Finally, we attach great importance to security and secrecy. The Intelligence and Security Committee seeks to establish the highest standard in its own conduct in that respect. Against that background, let me express a personal view. Obviously, we have concerns about the actions of a former head of the Security Service. It is one thing to publish a book about one's early childhood experiences or happy holidays, but it is quite another to write a book that covers in any detail work or responsibility in this area. It is peculiarly critical in respect of somebody who has been the leader of an agency as it raises concern that other members of the agency might be tempted or attracted by financial reward to do the same. There is a heavy responsibility on a former director-general.
Sir Archie Hamilton: Does my right hon. Friend agree that we also have the unfortunate precedent of General de la Billiere's memoirs, which described what the SAS did during the Gulf war? It opened the door to a large number of other books by former members of the SAS.
Mr. King: My right hon. Friend, who was then Minister for the Armed Forces, will remember that well, and I do too. I entirely share his reservations on that point.
A letter to The Times by a former Member of Parliament completely distorted the position with regard to the book by Sir Percy Sillitoe, a former Director-General of the Security Service. The right

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hon. C. R. Attlee PC, OM, CH, MP, who wrote the foreword to it, specifically said that it was unfortunate that, in the interests of secrecy, Sir Percy had had to leave out the most interesting parts of the book, which would have been of interest to the reader. The letter to The Times gave the impression that he had been allowed to put it all in, when the opposite was the case.
It would be wrong to talk about the work of the Intelligence and Security Committee or the agencies without recognising the importance of our allies in intelligence and security. We have the privilege to meet many of those who work with our agencies and with the oversight committees and we are familiar with those in Washington and other capitals who are part of the intelligence alliance and the parliamentarians in those countries who oversee them. We pay tribute to them, the work that they do and the relationship that we have with them.
In our report for 1998–99 we said:
Our safety depends on good intelligence and security, and it is vital that these agencies are properly maintained and funded in a sustainable way. That is the responsibility of Ministers and those in charge of the Agencies. It is our responsibility as a committee to hold them to account.
Our report describe how we have sought to discharge that task and I commend it to the House.
3.3 pm
Ms Rosie Winterton: As the newest and most junior member of the Intelligence and Security Committee, having been appointed in January, I am grateful for the opportunity to speak in today's debate and to follow the right hon. Member for Bridgwater (Mr. King), the most senior member of the Committee, whose style of leadership—and, after all, he does have style—has helped it develop in a way that would not have been thought of at its inception. The right hon. Gentleman has managed to win the trust and respect of those in the agencies and of Ministers, and we should pay tribute to him for that.
I also thank my fellow Committee members on both sides of the House for their help and advice, and the staff who serve the Committee for all their hard work.
I confess that when I joined the Committee I was somewhat sceptical about the work of the intelligence and security agencies, which is a not uncommon reaction given that the agencies have traditionally been shrouded in secrecy. Until recently, it would have been unthinkable to have had this debate, given that until a few years ago the existence of the intelligence and security agencies was not even acknowledged.
As I have learned more about the work of the agencies and have come into contact with many of the people who work for them, I have come to recognise the role that they play in protecting our democracy and the dedicated and professional work that is carried out, often in extremely dangerous situations.
I know from my reaction to learning more about the work of the agencies how important increasing one's knowledge can be in increasing one's confidence in the agencies. Most people in the United Kingdom understand the need for the intelligence and security agencies to operate within a ring of secrecy, but they also want to know that Parliament is making sure that the agencies are not operating outside the law or in any way that
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undermines our democracy. People need that reassurance, not least because of suspicions that have developed about the activity of the agencies whether as a result of fiction, film, controversy around issues such as files, as referred to earlier, or of allegations by disaffected or former members of the agencies.
Of course, Ministers are responsible for the agencies, but as has been enshrined by the establishment of the Intelligence and Security Committee in 1994, it is now recognised that it is right for elected representatives to be involved in overseeing the work of the agencies. I believe that it is entirely proper to keep questioning the effectiveness of the oversight system that is being set up. As my right hon. Friend the Home Secretary said, in the light of experience we need to keep looking at whether the oversight that we have is adequate, and to be openminded about that.
Mr. Winnick: I am grateful to my hon. Friend and I am pleased that she has joined the Committee. Obviously, it goes without saying that there is an absolute need for all democracies—and certainly our own—to have security services to protect our freedom and our civil liberties. Does my hon. Friend agree that, had there been parliamentary oversight at the time, it is quite likely that my right hon. Friend the Home Secretary, my right hon. Friend the Member for Camberwell and Peckham (Ms Harman) and the Minister for Small Business and E-Commerce would never have been targeted in the first place? The lack of oversight probably played a role in the dirty tricks campaign against Harold Wilson in the 1960s. It is all somewhat alarming and hopefully will end as a result of the introduction of parliamentary scrutiny.
Ms Winterton: Past suspicions about the agencies' activities led to the establishment of the Committee, to develop an oversight system that works. We must question whether oversight needs to go further, to ensure that such activities never happen again.
Sir Archie Hamilton: Does the hon. Lady accept that whether or not a file is kept on a Member of Parliament is an operational matter that does not come under the existing Committee's remit and probably would not in future?
Ms Winterton: I will address later the question of how much members of the Committee are told.
Openness and transparency within the constraints of national security are key to building confidence. The Committee should be looking at improving public faith in the system. That is doubly important as the agencies move into areas such as serious crime; drug trafficking; and smuggling—whether of alcohol, cigarettes or people. As the intelligence services work increasingly alongside law enforcement agencies such as the police and HM Customs and Excise and the contrast between them becomes clear, there will need to be even greater emphasis on the services' accountability.
Whether or not the Committee should become a Select Committee is discussed among its members. I believe that as demand for greater openness, transparency and accountability grows there will come a time when the public and Parliament will demand Select Committee status, albeit with the constraints already described. Whatever form the Committee takes, the key question is how much access its members have to information.

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Members of comparable committees in other countries—notably the United States—do a different job, so are given more information. The American people have gained more confidence in the oversight of senate and congressional committees not just because those committees are responsible for allocating money to the intelligence agencies but because they know that their members are kept fully informed. They have more information about operational matters—that may cover some aspects mentioned by the right hon. Member for Epsom and Ewell (Sir A. Hamilton).
As my right hon. Friend the Home Secretary said, the Mitrokhin inquiry—my first encounter with the intelligence and security agencies—was an enormous step forward in proving that it was possible to give ISC members access to all the relevant information without compromising national security. I hope that experience will lead to greater trust between the Committee, agencies and Ministers.
This debate is an important part of building public confidence in the scrutiny process. I was not a member of the Committee when the report that is before the House today was delivered to the Government 10 months ago. It is a matter for concern that it has taken so long for the report to be published and for it and the Government's response to be debated. The last report was debated 19 months ago and the Committee is now on the verge of completing this year's report. Parliament might feel that the Committee is not reporting back in a timely fashion. It is important that our debates be relevant to topical issues, so I hope that it will be possible for the House to debate future reports more quickly.
The terms of reference of the ministerial committee to which the right hon. Member for Bridgwater referred are to keep under review policy on the security and intelligence services. That provides for some oversight but it may be tricky to achieve that if that committee does not meet often.
Other important reasons for oversight are efficiency and ensuring value for money. The Committee expressed concern about overspending, particularly on the agencies' accommodation. Parliament wants to be reassured that the agencies are using public money wisely. The work of the National Audit Office has been extremely valuable to the Committee.
Duplication should be avoided, however. Paragraph 37 of the annual report notes the appointment of an adviser to improve efficiency within the single intelligence vote and to review joint working and co-operation. As the agencies enter more into tackling organised crime, and in the light of technological developments, the need to avoid duplicating work and to ensure that it is undertaken efficiently will become even more important.
The Committee, with its overview of all three agencies, is in an ideal position to monitor this. The Committee requested access to the efficiency adviser's reports and I am pleased that the Committee has received the first of them, even though it was submitted to Ministers more than a year ago. I hope that future reports will be available more quickly.
Although I have some concerns, I firmly believe that over the years the Committee has been successful in pushing back the frontiers of security and oversight. That
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could not have happened without the co-operation of the agencies and Ministers. I hope that Parliament will recognise that achievement and will be assured that members of the Committee are always looking to see what more can be done to encourage transparency and openness from our intelligence and security services, without undermining the extremely important work that they do for our country.
3.20 pm
Mr. A. J. Beith: I am glad to follow the hon. Member for Doncaster, Central (Ms Winterton), who has been a refreshing addition to the Intelligence and Security Committee. I have only one worry—it is a matter of record that every woman who has ever been appointed to our Committee has been made a Minister shortly afterwards. I do not wish to dampen the hon. Lady's promotion prospects, but it would be helpful if we could make use of her experience for slightly longer.
My right hon. and hon. Friends would wish me to place on the record their welcome for the work of the Committee, expressed in the reports. The reports are important, but the fact that a representative group of Members of Parliament is inside the ring of secrecy, watching and asking questions and maintaining accountability, is at least as important—and, I would suggest, much more important. We have been pressing for the Committee for 20 years and are delighted that it has been set up. As a party, we would prefer a Select Committee, but it would operate very differently from other Select Committees, and Select Committee status would not add to the Committee's ability to do its job. For that, we need to continue improving access to relevant and necessary information, which is a higher priority than changing the Committee's status.
I pay tribute to my colleagues on the Committee. It is a hard-working Committee and, as the Chairman pointed out, the attendance record is excellent. Ill-health is almost the only reason for any protracted absence from the Committee and we never have a problem with the Committee's quorum, as other Select Committees do. I also wish to pay to tribute to the staff, including the investigator recently added to the staff, and to those in the leadership of the agencies, who recognise the value and importance of the Committee's work.
On behalf of my right hon. and hon. Friends, I also wish to stress the importance and value of intelligence and the organisations that provide it. Their staff show remarkable skills, dedication and, in some cases, courage in very dangerous situations. Intelligence saves lives; it can prevent or help to end conflict; it affords protection to our forces on active service; it helps to track down organisers of large-scale crime; and it is a shield against threats to our financial system, our communications and information technology, and to democracy itself.
Intelligence gathering can also compromise civil liberties, and it therefore must be controlled by a strong legal framework. It is worth putting on record the fact that, whatever controversy surrounds some of its provisions on information technology, the Regulation of Investigatory Powers Bill will significantly strengthen the legal framework and restraint under which intelligence gathering takes place. That is why, in general terms, we have supported that legislation and wish to see the greater part of it on the statute book.

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As well as a legal framework, monitoring and accountability—such as the Committee can provide—is important to the civil liberties safeguards alongside which intelligence and security services must operate. Ministers like intelligence. In my experience, a gleam comes into their eyes as they tell one how valuable a particular piece of intelligence has been. Therefore, there is always a risk that their appetite for intelligence will lead them to underestimate the political risks and the civil liberties downside to an action that they authorised. That is all the more reason why the Committee must exist to provide oversight. For that reason, it needs to be more fully informed than it has sometimes been about what is being done or is contemplated. The Committee is precluded from, and would not normally envisage, examining operational matters, but a decision to embark on an operation or kind of operation may have such important implications that the Committee should be kept informed and should be able to inform the judgment that Ministers make.
Sometimes agencies—I have in mind examples from around the world—have acted without authority, but the greater danger is usually that actions are covertly authorised by Ministers and Governments, safe in the knowledge that they can be disavowed. Many actions, for example, for which the CIA was criticised in earlier decades were not rogue actions by an uncontrolled agency, but covert actions authorised by US Presidents, who did not wish it to be known that they had authorised them. There may be a case for non-disclosure at the time, but such decisions should not be taken by an Executive free from an active monitoring process.
That point leads directly to an issue that arose in the Mitrokhin case. It will arise again in the Committee's work and I particularly wish to draw the Foreign Secretary's attention to it. The greatest difficulty the Committee has in obtaining information, and where intransigence is at its greatest, it arises not from the detail of agency work—when we have to ask about an operational matter that suddenly has wider implications—but from advice to Ministers. Nothing in the British system is more rigorously protected than advice to Ministers. It is sometimes protected more rigorously than operational details.
Without knowing what Ministers were told, and what they authorised, it is impossible for the Committee to give the House and the country the reassurance that they require. The Home Secretary recognised that when he asked us to look into the Mitrokhin case, and that is why the report is thorough and effective. It is only when one sees the original copy of the submission made to the Minister, with notes written on it in his own handwriting, that one can be sure what the Minister knew and what direction he sought to give to events. The Home Secretary's example should be followed in other cases where the central issue is who knew what, and when, and what they did about it.
There is such a blur surrounding the issue of what Ministers' private offices were told, and such uncertainty about whether Ministers were told everything that their private offices knew, that the Committee needs to see the documentation to give the House the reassurance—often readily available in the documents—that the Minister did not know, or did know and recommended appropriate action.
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There is no question but that mistakes were made by the Security Service and the Home Office over the failure to consult properly in the Mitrokhin case about non-prosecution, and the handling and publication of the material. In the Melita Norwood case, it is difficult to stomach the idea that someone who sought, from the comfort of Britain, to help the most repressive and murderous regime on the face of the earth to build an atom bomb should escape any penalty for her actions. That explains why there is such widespread public indignation that mistakes made earlier precluded proper consideration of prosecution of that woman when it might still have been possible.
Those admitted errors have totally distracted attention from the most important point about Vasili Mitrokhin's archive. Its production and release was an act of supreme courage by a true patriot, who saw that the KGB was destroying his country and working against the interests of the Russian people, and against democracy and freedom all over the world. The extent of KGB penetration was far greater than was realised at the time in the west, and it was a further remarkable success for the Secret Intelligence Service to have obtained the archive and achieved the safe exit of Mitrokhin and his family from Russia. Those crucial aspects of the case should be brought back to mind, as they were by the right hon. Member for Maidstone and The Weald (Miss Widdecombe), the Home Secretary and the Chairman of our Committee. They were the real messages of the Mitrokhin archive, not the mistakes that were made in handling some of the material—even the failure properly to address the question of prosecution. The significance of that archive is the courage of the man who produced it, and the competence and skill of our intelligence service in bringing that material to Britain and making it available for action at home and abroad.
I wish to touch briefly on one or two issues raised in the annual report. One is the employment tribunal issue, to which our Chairman, the right hon. Member for Bridgwater (Mr. King), referred. It was indeed the Committee that stressed the need for a dedicated employment tribunal for the staffs of security and intelligence agencies.
The Government say that they have acted promptly in the matter, but they did not introduce the amendment to the Regulation of Investigatory Powers Bill until it was on Report in the House of Lords. They got it wrong, as they had to admit when they amended the first version that they introduced. Added to that, the regulations have not been produced that would make the tribunal available, which makes the Government's interpretation of the word "prompt" seem ludicrous.
The Government have taken a strange position with regard to the Committee's suggestion that the procedures are pretty draconian. Under them, the applicant can be excluded from the whole inquiry, and may be represented only by a special advocate. In addition, he has permission to make a statement only before the inquiry starts. The exercise of those strict powers ought to be reviewed, and we suggested that the commissioners would be the appropriate body for that.
The Government have discouraged and resisted that option, saying that an applicant could go to judicial review. However, it is absurd to suggest that a possibly quite lowly member of staff would have the resources to go to judicial review to achieve what other people achieve

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by going to an industrial tribunal. The proposal does not address the gap that the Committee was seeking to deal with.
In their response, the Government said that they would consider whether the operation of powers of exclusion would benefit from involvement by the commissioners. I welcome that, but the Government also said that they would consider the matter in the light of experience. I doubt that there will be much experience to draw on, and I sincerely hope that I am right. We do not expect the tribunal to be taking a case a fortnight. Such cases are supposed to be pretty rare, and we do not want two more to go badly awry before the Government say, "Oh dear, there is something wrong. We had better start again."
We want to get the procedure right now. If there are any more cases that might sow potential difficulties for the future, they must be handled properly and in a way that conforms as closely as possible with the normal approach, based on natural justice, of employment tribunals. That should be the case from the start.
One of the other issues on which the report focuses is the assistance that the agencies could give in dealing with international drug traffic. Some very good work has been done, sometimes in very dangerous conditions, to support the law enforcement bodies in that regard. However, the objective for the agencies in such work never seems very clear, and neither does the proper level of resources that should be devoted to the task.
That is an important matter. The drugs problem and the damage that it does to society are so serious that, if it were clear that a substantial addition of resources could make a great difference, there surely could be no hesitation about finding those resources. The matter would be given a very high priority indeed, but it has never been clear how much of the traffic in drugs could be stopped by the application of extra resources.
Obviously, there is more than one reason for tracking down the traffickers. Drug trafficking is a hydra-headed monster. We can never put all the people involved behind bars, but it is desirable in principle that at least some should be caught and very severely punished.
What quantity of drugs can be confiscated, and what effect can be produced? Will we stop enough trafficking only to raise the street price a bit, or can we stop enough to make a significant difference to the problems in our society? If the difference is to be great, substantial additional resources must be provided. However, I do not think that Ministers have thought enough about what the intelligence effort on drugs trafficking can achieve and whether it deserves considerable resources. I hope that that question will be more clearly addressed.
Similar questions arise with regard to matters such as illegal immigration rackets. Intelligence can play a role in identifying the racketeers responsible for the other day's appalling tragedy in Dover, but it is not the agencies' role to deal with asylum seekers or individual immigration issues. Other agencies handle those matters, and the intelligence agencies have different and more compelling responsibilities. There is potential for co-operative effort to deal with serious organised crime related to immigration rackets, but that potential is limited and the effort needs to be well targeted.
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The report also deals with the funding of the National Criminal Intelligence Service. In their response, the Government have indicated that they are reconsidering that matter. The present arrangements slice funds from hard-pressed police forces around the country, and it seems to us that they will never achieve the level of funding that may be necessary for the national and co-ordinated criminal intelligence effort that NCIS must provide.
An issue that figures significantly in the report is the management of major capital projects. After the drastic overspend on Thames house at Vauxhall cross, the GCHQ's new accommodation project was an obvious cause for concern as it is on a much larger scale. Completing it on time, to cost and with no interruption to operating capabilities requires the highest levels of expertise. Clearly, however, the project will not be completed to cost. The Government have stated publicly that new financial arrangements have had to be made, and there must be some doubt about whether the work will be completed on time with no interruption to operational capabilities.
The work of GCHQ is vital. The facility's presence in Cheltenham is strongly supported by the local community, as my hon. Friend the Member for Cheltenham (Mr. Jones) regularly reminds me. It needed new accommodation, so the project was necessary. However, I am not satisfied that the project management skill and expertise given to GCHQ was equal to such a large task. It is the biggest-ever private finance initiative, and a huge undertaking.
We have not heard the end of the story yet. The project is of great importance to the effective operation of our intelligence services and involves very large sums of money. If we are not careful, I fear that it will be dealt with by fire fighting rather than by the application of management skills and expertise. The sophistication of those skills goes beyond anything GCHQ or almost any part of Government has had to supply before.
My final point is a general one. The Committee and the House must recognise the danger that management attention in the agencies can be consumed to too great an extent with past mistakes and history. Scarcely a Sunday goes by without newspaper allegations about the agencies, either in the recent past or the very distant past. It is part of the regular Sunday newspaper diet.
Most such allegations have to be investigated, if they are not already under investigation, but some go back a long way. Often there are lessons to be learned, and sometimes stones must be turned over that have not been turned over before. However, agency managers must be allowed to keep their eyes on the ball, and to concentrate their efforts on current and future threats. That is what they are paid for. Their work was recognised in the welcome honours list award to Stephen Lander, and in his reappointment as head of MI5. It has been recognised also in the praise from hon. Members of all parties today.
Past mistakes have to be examined, but the agencies' primary task is to deal with current and future threats to the people of this country, to our democracy and our civilisation. Occasionally, we have to remember that.
3.38 pm
Mr. David Winnick: I begin by wondering whether any of the defects and omissions in the way in which the security services handled the case

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of Mrs. Norwood would have come to our knowledge if the Intelligence and Security Committee had not existed. The answer is pretty obvious: little or no such information would have come to Members of the House of Commons.
I say that because I well recall all the arguments endlessly repeated by successive Governments to explain why, given that the Security Service was accountable to the Home Secretary and the Prime Minister, it would be totally inappropriate to subject it to the scrutiny of a committee of parliamentarians. When I intervened on my right hon. Friend the Home Secretary, I pointed that oversight came into existence thanks to the work of my hon. Friend the Member for Leicester, West (Ms Hewitt), who is now Minister for Small Business and E-Commerce, and of my right hon. Friend the Member for Camberwell and Peckham (Ms Harman). When they took their case to the European Court of Human Rights, it was felt that they would certainly win. As a result, the arrangements regarding oversight by the House of Commons were changed.
I may be considered to be a critic of the security services, but I have always accepted that all democracies need such services. Moreover, even if the terrorism of the past 30 years carried out by the IRA and loyalist groups had not existed, the need for the security agencies is nevertheless obvious. However, we should be under no illusions that all has been well. Peter Wright, for example, defends, or justifies, the state of near-lawlessness in which he operated as a senior MI5 agent, and the dirty tricks—targeted against the Labour Government of the time—for which he, although not only he, was responsible.
Dr. Julian Lewis: Will the hon. Gentleman give way?
Mr. Winnick: In a moment. The way in which my right hon. Friend the Home Secretary was targeted because of his presidency of the National Union of Students could not be justified, and no Conservative Member would attempt to justify it—even the hon. Gentleman to whom I am about to give way.
Dr. Lewis: This must be the first time since I have been a Member of this House that I have agreed with the hon. Gentleman. However, he should set the record straight and point out that whereas Peter Wright said initially that large numbers of security services operatives were engaged in the sort of dirty tricks that he himself admitted to, subsequently he retracted that and admitted that if he had to put a real figure on it, that figure was one—namely, Mr. Peter Wright.
Mr. Winnick: Be that as it may, in my view, for what it is worth, Wright did not act alone—but I shall not pursue that point.
Paragraph 29 of the report shows that not only were senior Ministers not told about what had happened at the time, neither were the most senior members of the Security Service. If ever there was a case for parliamentary accountability, this is it. All the previous arguments put forward by Ministers fall to the ground. If the Intelligence and Security Committee had been in existence in the early 1990s, some of the non-disclosures would probably not have occurred.
As for Mrs. Norwood, I take the same view as other right hon. and hon. Members: it would have been far better if she had faced justice. I see from the report that
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there is some doubt about the seriousness of the information that she passed on to Russian agents. I am only a layman in these matters, but I was rather surprised that, given her position in the organisation, she could have passed on such serious information. However, one thing is certain—if Mrs. Norwood had had more important information, she would not have had the slightest hesitation in passing it on. She wanted to do as much as possible for the regime to which she was loyal—the one that ruled in Moscow.
It would have been much better if she could have been taken to court but, by the time her role was revealed, nearly half a century had elapsed and she was in her late 80s. In many respects, Mrs. Norwood's real punishment is that the cause that she served with such dedication all her adult life has not only collapsed in Europe but has been exposed as downright evil.
Dr. Lewis: The evil empire.
Mr. Winnick: We all recognised that it was evil long before the collapse of the Soviet Union and the other events in eastern Europe. Let us think for a moment about the cause that Mrs. Norwood was serving. It was responsible for mass murder, the gulags, the denial of all civil liberties and the secret police, and it had contempt for the rule of law and truth. That is what she dedicated her life to. So I suppose that it could be said that she has had her punishment, even if it was not the sort of punishment that she should have had for betraying her country.
The Shayler case has been in the news for nearly three years now. I am certainly not an apologist for what Shayler did, but I doubt whether there is much to be gained by pursuing the matter. The French court has refused extradition, and the affair continues; I do not know how much time and money is being spent on it. Some newspapers are involved and are in danger of being taken to court again. Whether Shayler was the right sort of person to have been recruited for MI5 in the first place is, to say the least, doubtful. Clearly he is eager to play the martyr, and my view—which is perhaps the minority view—is that the sooner this saga is ended, the better it will be for the security services.
One argument is that if Shayler gets away with it, others in the security services would spill the beans. It would be a poor state of affairs if there were other people like Shayler in the security services who needed to be discouraged. Let us hope that he is a one-off. Whether his motive is money or conviction—I suspect that it is money, but I could be wrong—I think that we should end this business.
Mr. Mates: The hon. Gentleman and I agree on one thing: we hope that Shayler is a one-off. However, the hon. Gentleman's contrast in logic is interesting. He says that Mrs. Norwood should have been punished for committing crimes betraying our nation, but that Shayler should not be dealt with for the alleged crimes betraying our nation with which we want to charge him.
Mr. Winnick: That is a point of a kind. If I may say so—what the hon. Gentleman said had occurred to me before his intervention—there is a difference between what Mrs. Norwood did and what Shayler did. How long

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will the Shayler saga continue? Will it go on until next year, and the year after that? As I said, I think that it should be ended soon, but obviously some disagree.
My final point is about accountability. The ISC has done a good job, although I had doubts at the beginning about whether it was the right kind of Committee, and about the people on it. Indeed, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) mentioned the fact that in a previous debate I had made the criticism that its members would all be made Privy Councillors. I had my suspicions, and I am pleased to say that I was wrong.
I do not want to give the impression that the ISC has not done a good job. It has, and I congratulate it on its activities as a Committee of parliamentarians. Nevertheless, I take the view—as does the Select Committee on Home Affairs, of which I am a member—that there should be a different form of parliamentary accountability. In its third report, which came out in June last year, the Committee said:
In our view, it is inevitable that the intelligence services will one day become accountable to Parliament. That is the logical outcome of the process of reform embarked upon by the previous Government. The existing arrangements are merely transitional and are still evolving—witness the fact that the ISC itself is now demanding, and has been given, facilities that were undreamed of when it was established only five years ago. We hope that the Government will keep an open mind on this issue.
Some of the arguments against establishing a Select Committee were made in former times, when it was argued strongly that the intelligence services should have no parliamentary scrutiny. However, we are evolving. I think that some form of Select Committee will be established within the next 10 years or so. I may not be here by then, but I can imagine others pointing out all the criticisms that were made at the time of the idea of setting up such a Committee.
I accept that the ISC has shown independence, but we need to go further. We need a Committee that reports directly to the House. I do not believe that it is appropriate for the Committee to be set up by the Prime Minister and to report to the Prime Minister. Members of Parliament on such a Committee, like those on other Committees, should report directly to the House. That does not mean that any such Committee can operate like other Select Committees, but in the end there should be that form of parliamentary accountability, which means reporting here, rather than to the head of the Executive.
Dr. Norman A. Godman: I am confident that this does not meet my hon. Friend's requirements, but I should like to point out to him that recently members of the Foreign Affairs Committee met a senior representative of the security agencies. As one who was there, I can say that it was a very useful meeting.
Mr. Winnick: I accept that entirely.
If the change recommended by the Home Affairs Committee came to pass at some time—obviously, that will not be now—it would send an important signal that the oversight process was totally independent of the Executive. That is not the present position. While I praise the work of the members of the ISC, there is not the feeling that they are totally independent of the Executive, not because they are not independent-minded Members
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of Parliament, but because of the manner in which the Committee is set up, which sends the wrong signals. That is no reflection on my colleagues or on the Opposition Members who serve on the Committee, and do so with great distinction.
Mr. Barron: My hon. Friend is effectively appointed to his position on the Select Committee on Home Affairs by the Government Whips office. Is that Committee independent of the Executive?
Mr. Winnick: Of course the way in which we get on to Committees is not independent of the Executive, but once a Committee is in existence and once we are on it, there is no doubt that we are independent of the Executive and report directly to the House. If it is argued that there is not really much difference in practice between the ISC and the sort of Select Committee that I would like to see created, that is all the more reason why further consideration should be given to setting up such a Committee.
Mr. Barron: Given that everyone would agree that if the Committee were a Select Committee of the House it would still have to work within the ring of secrecy, no doubt some of the evidence that it took could never be reported. My hon. Friend's Committee's report was published before our annual report, to which I referred in my speech. The asterisks in our annual report would also have been in any report by such a Select Committee. In view of all that, what is the practical difference, given that my hon. Friend's report took even longer than ours—a delay that we complained about—to be debated in the House?
Mr. Winnick: In the end it is a matter of whether the right signals are sent. The very fact that the ISC remains the subject of controversy because of the way in which it is set up is important. Select Committees are not set up in that way.
I tried time and time again, with others—I believe that my hon. Friend was not in the House at the time, or if he was he did not take part in our debates—to persuade the then Government to give some parliamentary oversight. Time and again I was told that that was not possible. Therefore, I speak with some experience on the matter.
The ISC has done a good job, and I am pleased with what is happening, but it is not likely that my right hon. Friend the Home Secretary or my right hon. Friend the Prime Minister will change the position in the near future. I have no doubt that at some stage there will be a Select Committee, and when it comes into existence it is extremely unlikely that my hon. Friend, or anyone else, will say that we should revert to the ISC as it stands now.
3.56 pm
Mr. Michael Howard: It is always interesting to follow the hon. Member for Walsall, North (Mr. Winnick). To adopt a phrase that that hon. Gentleman used, I thought that the hon. Member for Rother Valley (Mr. Barron) had a point of a kind, and that it was a pity he did not acknowledge that.
I am grateful for the opportunity to make a relatively brief contribution to this important debate. I join with others who have recognised the significance of the

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availability to the House of an opportunity to express its views on the workings of the security and intelligence agencies. The work that they do is vital for the well-being of our country, and I begin by paying tribute to the agencies and the way in which they perform their duties.
As my right hon. Friend the Member for Bridgwater (Mr. King) and my hon. Friend the Member for East Hampshire (Mr. Mates) said, reports, debates and press coverage inevitably tend to concentrate on those few occasions when things go wrong. There is much less coverage on the many more occasions when things go right, often spectacularly so, and as a result of resourceful, relentless and extremely diligent work that the agencies conduct on our behalf. We are greatly in their debt.
I do not believe that occasional lapses, even serious lapses, from the high standards that the agencies rightly set themselves should be allowed to obscure that important and central fact. In paying that tribute, I am happy to associate myself with the remarks of the Home Secretary and others about Sir Stephen Lander. I add my congratulations to those that have already been expressed, and warmly welcome the Home Secretary's announcement that his term of office is to be extended.
I also pay tribute to the Intelligence and Security Committee, which was set up by the previous Government. The present Chairman, my right hon. Friend the Member for Bridgwater, has been its Chairman from its inception. It has won universal respect, and that has a great deal to do with the way in which my right hon. Friend has chaired it. It has worked remarkably well, and I have no doubt that it will continue to do so for a long time to come.
I am also glad to have the opportunity to endorse the Home Secretary's tribute to Lord Nolan and Lord Justice Stuart-Smith for the oversight work for which they were the responsible commissioners. The right hon. Gentleman was right. I agree with everything that he said about the work that they have done.
I should like to say a few words about the Committee's report on Mitrokhin and then make some suggestions for the Committee's future programme. The fact that Mitrokhin confided in the Secret Intelligence Service, came to this country and provided such copious and vital information was, of course, a consequence of his personal bravery and courage, to which tribute has already rightly been paid, but it was also an outstanding coup for the Secret Intelligence Service. It was a remarkable operation, and none of the concerns that have arisen about subsequent events and the way in which certain information was handled should be allowed to cloud in any way the brilliance of that achievement.
As the Committee's report sets out, when I was Home Secretary I was not told about Mrs. Norwood. I think that I should have been told. Although the decision whether she should be prosecuted would have been for the Law Officers, I would have been entitled to be consulted about that decision. In the event, neither the Law Officers nor I were told. Clearly we should have been. I hope that lessons will be learned from that, and I am sure that they will.
I listened with interest to the earlier exchanges between my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) and the Home Secretary. I would simply say—I am glad that the Home Secretary is in his place to hear me say it—that I think that he was
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absolutely right to draw the distinction that he did between the culpability of Ministers and the culpability of their Departments. I would simply add, as gently as I can, that he was not quite as ready to make that distinction when he was in Opposition. I shall say no more about it than that.
As for the future work of the Committee, I am delighted that it has set out in the annual report its
intention to pursue the co-ordination between the Agencies and the law enforcement organisations in fighting serious organised crime, in particularly the Agencies work conducted overseas.
The involvement of the agencies in fighting serious organised crime began when I was Home Secretary, and I attached great importance to it. I have absolutely no doubt that the agencies have an enormous contribution to make.
I took particular steps to engage the agencies in proactive work, particularly in relation to the international traffic in drugs. It is well known that many drugs cartels are extremely sophisticated organisations, with resources that dwarf those available to many sovereign states and Governments. Only by the most determined employment of all means available can the countries whose populations suffer grievously from that evil trade hope to make an impact on it.
The right hon. Member for Berwick-upon-Tweed (Mr. Beith) asked some thoughtful questions about whether we can make a big difference to the trade and why, if we can, we do not devote more resources to the fight. I believe that we can make a significant impact on the trade if we take our efforts seriously and devote the required resources. I hope that the Committee will pursue its inquiries into how action is working out in practice. I note from paragraph 68 of the report that the Committee is not at present confident that all that could be done is being done. I hope that the Committee will pursue that point and that the Government will take the report very seriously.
I hope that the Committee's interest in better co-ordination will not be limited to the work of the agencies in relation to serious organised crime. There is always a danger of duplication and a lack of co-ordination between the various agencies. It is essential that the utmost vigilance is exercised in order to minimise that danger. The Committee could have an important role in helping to achieve that.
Finally, I want to say a word about an aspect of the work of the agencies that seems to me to be of absolutely crucial significance. It is well known, although obviously there are constraints about what can be said in public on the matter, that the close co-operation that has taken place over the years between the intelligence agencies of the United Kingdom and those of other English-speaking countries—particularly those of the United States of America—has been of inestimable value to all concerned. Those have probably been among the most fruitful working relationships that have ever occurred between different countries.
Today is not the day for an extensive debate on all the implications of the Government's determination to press ahead with the European defence initiative. My right hon. Friend the Leader of the Opposition raised that matter

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yesterday, quoting the comments of the French Minister responsible for European affairs, who said last week in connection with defence policy:
We don't agree with the "Americanisation" of the world … we are saying that together we can build a new superpower … and its name will be Europe.
That is just one of a number of recent statements by highly placed members of the French Government that have contained more than a tinge of anti-Americanism. If, instead of continuing to be a partner of the United States of America, Europe sets about becoming its rival, will that not place great strain on a relationship that has been of so much benefit to this country, to the United States, to Europe and to the world as a whole? Will not those strains be particularly severe in intelligence, in which, so far as this country is concerned, the relationship is perhaps even closer than in any other field?
The Government have consistently sought to brush off any such concerns, but I believe that real issues exist that merit the closest scrutiny. I hope that the Committee will feel able, within its remit, to pursue those matters to ensure that all the implications of the Government's actions are properly considered.
4.5 pm
Mr. Dale Campbell-Savours: I shall not pursue the route taken by the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), but I remind him of a visit made to America by him, me and others last year, during which the matters that he just raised were discussed. If I recall correctly the conversations that took place, the Americans were not as concerned as he would have us understand them to be. Following the problems that arose during the war in the former Yugoslavia, the American view was that we needed to build a European pillar and to take on greater responsibilities. That is precisely what we are doing. The right hon. and learned Gentleman appeared to dismiss comments made to us on that visit.
Mr. Howard: I do not wish to turn the debate into a private argument of recollection about what was said during our visit to the United States. I am sure, however, that the hon. Gentleman will appreciate the discretion with which concerns expressed during that visit were put forward. Since that visit, more than a year ago, matters have proceeded apace on the development of a European defence initiative outside the framework of NATO. I am sure that the hon. Gentleman would agree that it would be perfectly possible—indeed, desirable—for enhanced European co-operation on defence to occur, and for the pillar to which he referred to be set up, within NATO. That, however, is not what is being envisaged.
Mr. Campbell-Savours: I note no detectable difference between the position today and that outlined last year. I do not want to go too far down that route now.
This will probably be my last opportunity to speak on this matter. For reasons of ill health, I shall retire next year, and, if the delay in holding the next debate is similar to that for this one, this will definitely be my last chance. For that reason, I wish to reflect on my experience on the Intelligence and Security Committee. I shall pay some
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tributes, but shall also make some slight criticism of the current structure. I concur with much of what was said by my hon. Friend the Member for Walsall, North (Mr. Winnick).
The right hon. Member for Bridgwater (Mr. King), the Chairman of the ISC, would agree that the Committee is among those best attended by parliamentarians. He may take the view that it would sometimes have been better if had not been so well attended. The Committee holds vigorous debates within its structure, and it is not all plain sailing with everyone agreeing. We vigorously debate issues relating to the services, and there are differences of opinion. We leave the Committee agreed, however, because a common strand unites us—our belief in the task that we have undertaken and in the excellent service provided by the agencies.
Before I speak about the structure, I pay my personal tribute to all the people whom I have met over the years who are involved in front-line activities. Yes, we do meet people in the services—although we do not know who they are, so that we are not compromised. We must pay great tribute to the bravery of many of those people.
We met Mitrokhin. He is a man of considerable courage. I believe that what he did was done for his country. He acted in the belief that people in the former Soviet Union should, at some time in the future, have the opportunity of reading what he said. He set out the truth as he saw it and, one day, will be one of the great figures in the new nation that is being created within the former Soviet Union.
I want to say a little about how the Committee works, because I am often asked "Does this structure work?". Yes, it works. It holds the system to account. There are problems, but the role of the Committee is changing. The process of accountability is constantly increasing and developing. The way that the Committee operates at the end of one year is very different from its operation at the end of the previous year. There are reasons for that.
Within the agencies, there is a recognition of the need for greater accountability. I am sure that our arguments in Parliament were just as vigorously pursued in the agencies when they considered the changes that took place in the early 1990s. The highly charged response of the media to the allegations of Shayler and Tomlinson have also exerted some pressure on the process of accountability.
There is a new generation of young people in the agencies. Perhaps their values are different from those of people who have been members of the agencies for many decades. When we meet such young people, I am very conscious that they are aware of the role of parliamentarians. They see the role of Parliament positively. In many ways, they see a partnership between the heads of the institutions that they represent and the membership of the Committee. The attitude of people in the agencies—especially young people—is extremely healthy and helpful.
The agencies are beginning to realise that it is better to have us on their side. At times, the arguments that they want to have—certainly on finance—are, in essence, political. The arguments are about priorities. The agencies will have noticed that some of the comments that they made to us about the need for additional resources—not generally, but in particular areas—were picked up in the report.

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The report—unlike that of many Select Committees—is written in great part by members of the Committee. Often, Committee reports are written by the Committee clerk and subject to amendment by its members. We should be open about that fact. That is the reality for many Select Committees, although that does not detract from my general view as to the need for Select Committee status.
The agencies have learned to trust Members of Parliament. My colleagues and I have signed the Official Secrets Act—but it is more than that. When people in the agencies discuss their business with us, they need to know that our commitment is a little more than mere compliance with the legislation. They need to know that we believe that the ring of secrecy must be in place to safeguard their interests. I hope that, over the years, they have learned that the secrets of the state are just as safe with politicians as with people in the agencies.
There have been difficulties—they know that. If they have felt under pressure during questioning from the Committee, they should realise that we were only exercising our right to hold them to account. That is what the process is about; we are helping them in their task.
Dr. Julian Lewis: I agree with the general thrust of the hon. Gentleman's remarks. Surely, he is not saying that all politicians can be trusted with a blank cheque for access to all the secrets of the agencies. In the Mitrokhin archive itself, two now-deceased politicians—Tom Driberg and Raymond Fletcher—were named as agents of a foreign power. What would have happened if they had accidentally been appointed to an ISC? There must be some protection.
Mr. Campbell-Savours: There is protection. The Whips nominate and the Prime Minister appoints. Therein lies the protection for which the hon. Gentleman calls.
Another reason why change is going on and why the system is so important is that there is an international movement under way in terms of accountability—the right hon. Member for Bridgwater made some allusion to that. Our system is not unique. It exists in various forms in countries throughout the world. In America, it is extremely advanced, and less advanced in some parts of Europe. Without breaching the Official Secrets Act, I shall tell hon. Members of a particular incident that I shall always remember after I have left the House.
In a former eastern European satellite state, I attended a dinner with a committee that mirrored the British ISC. Around the table, monitoring their country's security services, were people who, during the dark years of east European and Russian fascism, had been imprisoned for five, 10 or 15 years. One man, who is now the chairman of his country's committee, spent 12 years in prison. The work that he is doing must have been unimaginable to him then. That is the sea change that is taking place internationally—as such committees are set up to carry out a vitally important task.
Those committees are all going down a single road—the British system. Within 20 years they will all arrive—they will have created a system that mirrors the American one. The American system is the best. We are told that it leaks, but when one talks to people who work in those committees or who monitor them—certainly in Congress and in the Senate—they say that the system is leak-proof.
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None the less, people in the congressional and senatorial system have access to almost every secret of the state and are made aware, in advance and in great detail, of operations carried out by their intelligence services. That is unimaginable in the United Kingdom. If we raise such ideas in our Committee, there is great resistance to them in the services themselves. However, I say to people in the services that that system will come here and that it will work. It works in America, so that agenda is inevitable.
The march of history will, I am sure, underwrite precisely what I have said today. The arguments about whether the ISC is a Select Committee will simply be cast aside by history. The process is inevitable; it will happen. My hon. Friend the Minister may resist a little today, but the word "now" in the Government's response was fought over and it indicates the way in which we are going. I say to hon. Members, "Just watch this space." and I say to members of the agencies, "Please do not resist."
Although the ISC reports to the House to account for itself, it is essentially a system of extra-parliamentary accountability, and I do not accept that such a system is fully credible. Yes, it is credible, but not fully credible.
I read with interest the report of the Select Committee on Home Affairs. I congratulate my hon. Friend the Member for Walsall, North (Mr. Winnick) and the other members of the Committee on that excellent report. It addressed all the issues that I have addressed over the years. I also pay tribute to those friends on the Select Committee on Foreign Affairs who support the view that I have expressed today. However, they have not yet decided to produce a report to set out their views, because, as I understand it, they are in a minority at present.
I also pay tribute to the work of the highly important Liaison Committee for its excellent report. It is the most senior Committee of parliamentarians, which comprises all the Chairmen of the Select Committees. It drew up a resolution that states that it believes that the issue of a Select Committee will not go away. Its report says that it will return to it. That agenda will not disappear.
Dr. Godman: My hon. Friend referred to the Select Committee on Foreign Affairs. I remind him that its report on the Sierra Leone affair recommends that the Foreign Office should show a mature attitude
towards controlled access for the Foreign Affairs Committee to appropriate intelligence material and to witnesses from the Secret Intelligence Service.
Needless to say, the Foreign Office's response rejected that sensible recommendation.
Mr. Campbell-Savours: I understand my hon. Friend's concern. I do not want to show any disloyalty to my Committee but, in the structure that I want established, it would not be necessary for the Foreign Affairs Committee to carry out investigations in the way that he suggests. A parliamentary Committee—the Intelligence and Security Committee—would carry out such inquiries and it would be able to transfer information across the parliamentary Select Committee system to other Committees provided that it had the approval of the Prime Minister and resolutions gave it permission to do so.
The reasons for Select Committee status were set out in—if I may say so—my modest contribution to a debate at column 617 on 2 November 1998 in which I outlined

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the mechanics of my proposed system. I hope that those with an academic interest in the subject will take the opportunity of referring to that modest contribution. My speech centred on the ability to refer matters to other Select Committees; the power of Parliament to call for persons and papers, an issue on which I am not able to go into detail today; the power to take evidence on oath, a power that Parliamentary Committees have and that the Standards and Privileges Committee exercises occasionally; the power to offer the defence of privilege to statements given by our witnesses, a matter that has still not been satisfactorily resolved; and the greatest power of all, which is the power to hold witnesses in contempt if they mislead Members of Parliament when giving evidence.
The latter is the ultimate power. I do not believe that we are being misled, but we should have the power to hold people in contempt if we are misled. That would signal to the outside world that we will not be misled, because members of the agencies will know that they will be held in contempt if what they say is subsequently found to be untrue. I do not question what the witnesses say, but we must have such a failsafe arrangement.
We have been told—we have heard it again today—that legislation would be required to implement my proposal. Let me make it absolutely clear. That is nonsense. Legislation is not required; all that is required is a resolution of the House of Commons. That is not my view, but that of the Clerks when I approached them two years ago to check my analysis of the changes that would be required.
Safeguards would be needed, and I know that hon. Members have expressed their concerns. Some argue that no way can be found to restructure the practices and procedures of the Select Committee so as to ensure Executive influence for reasons of national security over material that it may seek to publish. That is simply untrue. A resolution of the House could require that the Committee sought the approval of the appropriate agency before reporting to the House. The resolution could further provide that in the event that a dispute arose between the agency and the Committee over the publication of information or evidence in a report to the House, the matter of the dispute could be referred to my right hon. Friend the Prime Minister for his decision and the Committee could be required to comply with his decision.
If, in unforseen circumstances, the Committee or any member of it were to threaten to breach the Committee's rules of procedure as approved by the House, it would always be open to the Leader of the House, on the instruction of the Prime Minister, to dissolve the entire Committee or remove any member of it on a resolution tabled on one day and that took effect the next.
We are told that such a Committee could not be prevented from taking evidence in public session if that were the wish of the Committee. A resolution of the House could introduce a general prohibition on the Select Committee taking evidence in public session. A resolution of the House could introduce a general prohibition on the Select Committee publishing reports, and it could further place a requirement on the Committee to seek the
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permission of the appropriate agency, and the Prime Minister in conditions of dispute, if it wished to publish a report.
There is no reason that the resolution of the House should not stipulate the procedure to be used in the publication of reports. It could require the Committee to publish its reports subject to sidelining by the Prime Minister for reasons of national security, as currently happens.
Mr. Mates: I am sorry to interrupt the hon. Gentleman, because I wish to make my own remarks on this subject. However, all the exceptions that he has just listed would turn his brand new Select Committee back into the Prime Minister's ISC.
Mr. Campbell-Savours: The hon. Gentleman obviously did not hear me when I said that hon. Members should read my modest contribution of 2 November 1998. In it, he will see the answer to the question that he has just asked.
I have referred to some of the changes and some of the differences, but there are many powers that the ISC does not have which would rest with a new Select Committee.
Mr. Winnick: With respect to the Opposition Members who are present now and who were around at the time of the original debate, I cannot recall any of them advocating any sort of parliamentary oversight for the security services. The hon. Member for East Hampshire (Mr. Mates) points at himself, so perhaps he did so, but that makes him the exception. Almost no Conservative Member that I can recall stood up and advocated such oversight.
Mr. Campbell-Savours: In fact, we do have support on the Opposition Benches—there are some Conservative Members who feel strongly about these matters, but they are not present in the Chamber today.
As I said, my last speech on this subject before my retirement gives me my only chance to raise certain controversial issues, one of which is the general principle of the treatment of whistleblowers. Every organisation has aggrieved people—we even have them here in the House of Commons. Wherever people congregate to work, there will be some who have problems and grievances. In most organisations, there are established routes for dealing with those grievances and I wish to explore those available within the services for which we have some monitoring responsibility.
If a person within the services generally has a grievance, he can go to his trade union or staff association, depending on which service he works in. He can go to line management within the organisation at progressively more senior levels, depending on the response he receives. In the services, he can go to his staff counsellor, who has been given the powers to deal with certain problems that might arise. I suppose, in extreme circumstances, if that individual still feels that his argument is not being heeded, he can go to the Cabinet Secretary and argue the case there. There is also a system of employment tribunals that has been recommended by the Committee. We await the details, in the absence of the regulations mentioned by the right hon. Member for Bridgwater; we have expressed our concerns about the delay, but the new structure is being set up.

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What happens if, even at that stage, having gone through all those processes, a person who is grieving feels that he is not being listened to? Recent experience has drawn our attention to the fact that people in those circumstances tend to move abroad, even though, in doing so, they apparently break the law. They feel that their voice can be heard only from outside the United Kingdom. The problem that then arises is that when people say that they should not be prosecuted, they misunderstand the response that the state must make in such circumstances: the idea that the services can ignore the breaking of the law is preposterous; the state has to respond in one way or another, depending on the circumstances.
In such conditions, can complainants who remain dissatisfied seek redress by some other route? I cannot say that the ISC should receive and deal with complaints, as that is not within our remit as currently defined and set down in the law. It is clear that the ISC is not a vehicle to be used as a receptacle for complaints. The question remains, therefore, what can complainants do if all else fails?
I wonder whether they can approach a Member of Parliament to find a solution to their problem. As we all know, there are Members of Parliament who specialise in such matters. It may well be that a whistleblower will choose to go to his Member of Parliament and set out his case—hopefully, without breaching the Official Secrets Acts, which he should avoid doing at all costs. Even if he did breach the Acts during the course of the conversation, if it could be shown that he did so without malevolence and not in a deliberate attempt to bring matters into the public domain, it strikes me as improbable that the prosecuting authorities would want to prosecute—although that is a matter for their judgment.
I would never invite people to go to their Member of Parliament and break the law by spilling the beans, even as a last resort. None the less, people who feel such a strong grievance that they are impelled to act in a way that I personally would regard as thoroughly irresponsible might consider going to their Member of Parliament before acting.
It has been an honour for me to serve on the Intelligence and Security Committee. I always used to say that my most enjoyable experience was serving on the Public Accounts Committee for 11 years, but the ISC has proved a wonderful experience. The comradeship among the membership, despite our minor disputes, has been first class and we have worked together extremely well. To those outside who wonder about the structure, I repeat: the structure needs reforms, but it does work—it does work.
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Mr. Michael Mates: I am glad to follow the hon. Member for Workington (Mr. Campbell-Savours). I strongly agree that our shared experiences of the past six years are far better than the membership of any Select Committee could have been, and I am glad that he has become a convert.
My colleagues on the Intelligence and Security Committee have picked most of the plums out of the reports that we have debated, so I shall content myself with addressing two issues. In connection with both, I shall draw on my experience as a member of the Select Committee on Defence for 12 years; for six of those years, I had the honour of being its Chairman.
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The first issue is financial oversight. The Chairman of the ISC, my right hon. Friend the Member for Bridgwater (Mr. King), and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) have said that our Committee is in the process of overseeing some extremely expensive projects. That is always a difficult task for parliamentarians, because, by and large, we are not involved in making the decisions that set the projects in train. My experience on the Defence Committee related to the Trident project—an enormous project, 10 times larger than the GCHQ project, which is itself large. The Defence Committee examined that project every year for 11 years, and I can state that such constant and repeated scrutiny makes a difference to the way in which Ministers and officials make decisions on long-term projects.
I can speak only for myself, but I believe that my colleagues on the ISC will agree that, during the coming four or five years of the GCHQ project, it must be made absolutely clear to officials at GCHQ, the Foreign Office and the Treasury—and anywhere else that that large project touches—that we shall be watching, we shall return to it again and again, and we shall report on it as often as we feel necessary. A fundamental part of any oversight Committee's duty is to ensure that taxpayers' money is spent effectively and well.
We must also ensure that the services involved in the project are able to maintain their vital efficiency during transition periods resulting from huge advances in technology. The speed of that technological advance is one of the most difficult problems that they have to cope with. One can start to put in place a proposed IT system but, six months later, someone will have thought of something better, so it will be out of date. If one is on a fixed-price contract, it will cost more to change the system. We accept that and, no doubt, allowances must be made for it.
I do not want to go into details as we are not ready to report, but I am sure that the Minister will not be surprised to learn that the matter will be a major feature of the Committee's annual report this year. Things have already gone wrong as a result of lack of skill in managing a project of that size, and that needs to be taken into account. Lessons must be learned very fast indeed to ensure that a bad situation—which, I believe, we are in at the moment—does not become worse.
Until this afternoon, I thought that I carried with me all members of the Committee bar one. Now, however, I shall have to do a little more work before saying that again. Consequently, I speak entirely for myself on the question of a Select Committee. I was a member of one Select Committee for 12 years and know the limitations of such a Committee. I was also a member of a Select Committee that dealt with extremely sensitive matters. Indeed, those matters were probably more sensitive than those handled by any other Select Committee, as we were right into the nuclear business, the deterrent business and some of the most secret weapons development business. We had a constant battle to be told what we needed to know. Neither of those who advocates establishing a Select Committee has mentioned that.
It is not a question of being in a position to know everything. Indeed, it is quite wrong that anybody should be in such a position. However, one needs to know about secret, delicate and confidential matters before one is told about them. The hon. Member for Workington

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(Mr. Campbell-Savours) advocated the American system. However, the Americans know far more than they need to, which is why they have leaks.
Mr. Campbell-Savours: What leaks?
Mr. Mates: Leaks from members. A member of the Permanent Select Committee on Intelligence in the House of Representatives, for example, was thrown off it for leaking. That has not happened in the Intelligence and Security Committee, and I pray that it never will. We are in a position in which we are told everything that we need to know. We sometimes have to struggle to get that information, but that is part of the constructive tension which, in fact, is getting much better, as we are becoming more and more trusted as a result of not leaking.
If, to be dogmatic, we were to say that the Committee should not be different from any other in the House of Commons and should be a Select Committee—with all the reservations mentioned by the hon. Member for Workington which, in fact, is why the Intelligence and Security Committee is different—would we be able to oversee the intelligence services better? Frankly, I do not believe that we would. Such a Committee would be less good, as we would have to rebuild the whole system of trust and there would be Committee members who were immune to removal, except by a vote in the House of Commons. The hon. Member for Workington knows perfectly well how difficult it would be to obtain that.
At the moment, there is a sanction on us: if I say something out of place—perhaps not here, but certainly outside—the Prime Minister can fire me tomorrow. That is right, as I am in a privileged position within a ring of secrecy in which some very important matters are discussed. The hon. Member for Workington said that dismissal from a Select Committee can take place the next day. However, that would not happen. I remind him of what happened when an attempt was made to remove a member of a Select Committee at the beginning of a Parliament. The matter was delayed until, eventually, it had to be debated.
That is the nature of this place, and it is the nature of troublemakers to make sure that such things happen. While I am on the subject of troublemakers, let me say that if people feel that the Committee is less independent than a Select Committee of the House of Commons, they should look at the hon. Member for Workington, who is on it. I was surprised when he was appointed.
Mr. Campbell-Savours: I bet you were.
Mr. Mates: I have been extremely happy to work with the hon. Gentleman over the past three years and am glad to pay tribute to him for his work, which has been conscientious and keen, with the exception of one or two bees buzzing around his bonnet that we have to keep swatting. However, the suggestion that a parliamentary Committee of which the hon. Gentleman is a member is the Executive's poodle does not bear close examination.
It has been acknowledged all round that the Committee is successful. The case for turning a Committee that is working well into a Select Committee is non-existent.
Mr. Tom King: As my hon. Friend knows, the Committee has drawn on international experience and
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visited other countries. The problem that he has just described is precisely what happened in Australia. When the Australians first conceived the idea of an oversight committee, it was introduced in the federal Parliament. As a result of inadvertence or the Whips looking around quickly to see who was interested in intelligence, all those with such an interest were appointed to the Committee. However, they were what my right hon. Friend would call the bother squad. His point about trust is critical to this, as the Committee was frozen out of the process completely and the agencies made a point of telling it as little as they could about anything. In the event, the Parliament realised that the whole thing was a failure, and the committee collapsed and had to be reconstituted.
Mr. Mates: My right hon. Friend makes the point very adequately.
Mr. Campbell-Savours: That is my point.
Mr. Mates: Yes, but what my right hon. Friend described has not happened to us because we have been properly constituted. If we were in a Select Committee, we would not be in the same position.
Mr. Campbell-Savours: What is the difference? In each case, the Whips select the Committee members.
Mr. Mates: I am not sure whether the hon. Gentleman is trying to make his point or my point. His point is that, because the Intelligence and Security Committee is not a Select Committee, it is not independent. My point is that that makes no difference to selection, although there is some consultation.
Mr. Campbell-Savours: It is the power that counts.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. We cannot have sedentary conversations.
Mr. Mates: I am not sedentary, Mr. Deputy Speaker, and I would rather this were not a conversation.
Dr. Godman: I am grateful to the hon. Gentleman for showing his characteristic courtesy in giving way as he is winding up.
Conservative and Labour members of the Select Committee on Foreign Affairs are united in the view that there are occasions on which it might be appropriate to cross-examine witnesses from the intelligence agencies.
Mr. Mates: I fully accept that the Foreign Affairs Committee would like to do that. When I was Chairman of the Defence Committee, I would have liked to cross-examine the defence intelligence services. Of course, we all want to do that. However, is it right? I am firmly of the view that the existence of the Intelligence and Security Committee means that there is no need to do that, unless one wishes to argue that the Committee is not doing its job properly.
Of course, it would be nice for the Select Committee on Home Affairs to make such a cross-examination. Members of that Committee all have their own agendas. Indeed, the report on the ISC was cooked up three years ago by three hon. Members who are very proud of what

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they have done. I, however, think that they are greatly mistaken. Writing and producing a report with an agenda means that one ends up saying some rather silly things. For example, the third report of the Home Affairs Committee states:
the scrutiny committee—
meaning the Intelligence and Security Committee—
should be … clearly seen to be independent of the executive.
For the past half hour, the hon. Member for Workington has shown how independent he is of the Executive. The report concludes:
it is inevitable that the intelligence services will one day become accountable to Parliament.
They are. That accountability is here now, today. With my colleagues, I am proud to be part of that excellent accountability process.
4.48 pm
Sir Archie Hamilton: I should like to join hon. Members on both sides of the House in paying the highest tribute to people who work in the Secret Intelligence Service and the Security Service, who do a fantastic job for the country and risk their lives in doing it. I should also like to pay tribute to the Intelligence and Security Committee, on which I had the privilege of sitting in the last Parliament. Indeed, that was a great job, which I enjoyed enormously. The report on Mitrokhin is first class and a good extension of the Committee's activities.
I should like to talk about the structure and accountability of our security and intelligence services. Whatever we make of the Mitrokhin case—it must be said that the archive was an enormous wealth of intelligence—it raises serious concerns about the accountability of the services. The fact that the possible prosecution of Melita Norwood was never referred to Ministers and that the Law Officers were never consulted about whether she should be prosecuted should concern us all very much. We cannot second-guess the decision about whether Mrs. Norwood should have been prosecuted, and that is not the question, but that should have been a ministerial decision. We should be concerned that Ministers were not involved at key moments and learned of her existence only when it was probably too late to do anything. Those worries were also expressed by the hon. Member for Rother Valley (Mr. Barron).
My concerns go further. One of the problems with the two main agencies and GCHQ is that they answer to two of the busiest Secretaries of State in any Government this country has had. I do not believe that the Foreign Secretary and the Home Secretary have the time to go into the detail needed to make sure that the agencies are held to account, and the fact that the Prime Minister is inevitably involved in the agencies does not mean that they are being held to account. Those are the most pressurised Ministers in the Cabinet of any Government.
Much has been made of what might happen to the Intelligence and Security Committee, and whether it might be beefed up in some way. I shall not get involved in the issue of a Select Committee, which was raised by my hon. Friend the Member for East Hampshire (Mr. Mates). It is immaterial what parliamentary Committee oversees the services. The Intelligence and Security Committee is doing a first-class job, and I can
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see no reason to believe that a Select Committee could do a better one. The problem, however, is that there are, inevitably, limits to what can be done by any parliamentary Committee.
That problem always comes down to operational matters. Are we to have a parliamentary Committee that gets involved in knowledge of operational matters in the agencies? I do not believe that that will ever happen. The people who want it to happen do not help their case by quoting the United States. The experiences of the United States have been somewhat bruising, and that makes it much less likely that Members of this House will be made privy to operational matters in the Secret Intelligence Service and the Security Service.
We need a new sense of accountability within Government. Since the days when I was on the Committee, I have advocated that we should have a Minister who is responsible for the two agencies and GCHQ. He should be at the level of Minister of State, operate within the Cabinet Office and answer directly to the Prime Minister. We would then have somebody in a unique position to judge value for money. That Minister would be completely in the ring of secrecy and would know precisely what the agencies were up to. He would be in a stronger position to make sure that resources were deployed in the right directions. He would be able to demonstrate to the Government as a whole whether they were getting value for money, and they would then be able to alter priorities.
There has been talk on both sides of the House about co-ordinating the activities of the two agencies. That could more easily be done if one Minister were responsible for them and able to bring them together. It might mean that my right hon. Friend the Member for Bridgwater (Mr. King) would get a quicker response from the Government to his Committee's reports, and we might even have got an earlier debate.
That would only be the first step. The problems of the agencies are historical, and we can understand why we have ended up as we have. Before Christopher Andrew wrote about the Mitrokhin archives, he wrote an excellent book about the security services. He spelled out how the Security Service had been established and how the Secret Intelligence Service had its origins in naval intelligence, and so forth. We understand how we have arrived at our present position, but we have two agencies that we would not choose to set up if we started with a clean sheet of paper now.
It was understandable that we should have a home-based service and one based, and operating, abroad. However, we are continually saying that we live in a global marketplace, and communications have changed dramatically. The problems that the agencies are dealing with are international. Trade now works across the globe, and illicit trade is exactly the same. In the prosecution of the drugs trade it is now rather artificial to draw a line between people who operate in Bolivia, where the drugs are grown, or Colombia, where they are processed, and other people who deal with the drugs when they arrive in the United Kingdom and are distributed.
I am keen on the idea of a drugs tsar, but he should be somebody who emerges from one of the secret agencies and he should have total responsibility for pursuing drugs wherever they are and for being involved in the whole chain—from the growth of cocaine, for example, to its

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distribution in this country. If we had such a person, we would cut down on duplication and allay the concerns of my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) and the hon. Member for Doncaster, Central (Ms Winterton), who is worried about the degree of co-ordination and about duplication.
Espionage and counter-espionage are among the many other activities that are undertaken by the agencies, and there is not as great a division between those activities as people might imagine; indeed there are tremendous crossovers between them. As a result of the activities of the Secret Intelligence Service, Gordievsky and Mitrokhin produced a mass of information that enabled the Security Service to prosecute people in this country. Many people are recruited as agents when they are in this country. We draw an artificial line between espionage and counterespionage, and I would like the two activities brought together under a single agency.
There is no line to be drawn between the agencies in dealing with terrorism because, almost invariably, terrorist acts executed in cities in this country are planned abroad. I should like to see a single agency dealing with terrorism. We must be careful not to continue the artificial division between home and abroad, when there is a web linking activities abroad to those in this country.
In 1994, under the previous Government, there was a great discussion of whether special branch or the Security Service should be responsible for dealing with terrorism in Great Britain. I confess that it did not worry me terribly who took control, as long as somebody did. As we now know, the Security Service came out on top, and we have seen a measurable improvement in our activities against Irish terrorism in this country. We can attribute an awful lot of that to the fact that those activities have been pulled together.
The tragedy is that, in an earlier period when Northern Ireland was more peaceful, we thought that it was a good idea to introduce police primacy, so the Royal Ulster Constabulary has a responsibility for intelligence in Northern Ireland. It would have been much better if Northern Ireland intelligence activities had been brought together under the Security Service.
We should seriously consider bringing both agencies and GCHQ together in a single service, underneath which people could be responsible for the main areas of activity. That would avoid duplication and we could hold someone responsible, which is extremely difficult to do now, for the subsidiaries that would emerge under a single service. I totally accept that enormous political problems would be involved. Normally, in any Cabinet, the Home Secretary and the Foreign Secretary are quite big beasts—I am not sure how much that applies to the current ones—and vested interests would argue against such a change, but it should be seriously considered.
Those views were shared when I served on the Intelligence and Security Committee, certainly by Lord Gilbert. When he was persuaded to give up his seat—Dudley—and take a seat in the House of Lords, he was offered a ministerial position if Labour were elected in 1997. He was keen that his job should be as a Minister of State in the Cabinet Office, responsible for the security and intelligence services, but something went wrong. I envisage an episode of "Yes, Prime Minister" and
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Lord Butler, as he now is, saying, "Very brave, Prime Minister." Lord Gilbert subsequently became Minister for Defence Procurement—a job that he had done 17 years earlier.
If the Security Service and the Secret Intelligence Service were reorganised, we should find that they operated much better. No business would be operated with such artificial divisions between home and abroad. We should carefully consider bringing the services together, and a start would be to have a Minister of State with responsibility for such matters in the Cabinet Office. If we went down that road, all our worries about duplication and overlap would disappear and we would have a much more efficient service in the areas that matter so much for the security and long-term strength of this country.
5.2 pm
Dr. Julian Lewis: I begin with an apology for missing a small part of the Back-Bench contributions at the start of the debate for a reason which I cleared with Madam Speaker's Office in advance, but I apologise nevertheless. I think it almost presumptuous to intrude on a debate that has been dominated, from the Conservative Benches at least, by a raft of Privy Councillors and former Ministers; none the less, I shall give it my best shot.
This is one of those occasions when I think I perhaps made my most useful contribution before making my speech. To my surprise, I managed to secure from the Home Secretary a frank and unequivocal undertaking that, if and when the Minister of State, Foreign and Commonwealth Office, the hon. Member for Neath (Mr. Hain), does what he said he would do, as stated in The Sunday Times on 11 June, and asks
to see his MI5 file after discovering that the security service kept records on his case for 25 years
he will be sent away with a flea in his ear. That is in a sense the second undertaking in a row, because, as some hon. Members might recall, my previous campaign was provoked by the right hon. Member for Hartlepool (Mr. Mandelson), now the Secretary of State for Northern Ireland, demanding a couple of years ago that all old MI5 files, including the one held on him, should be destroyed. After initiating a special debate on the subject, I secured the Home Secretary's agreement that the Public Record Office would be properly brought into the process. A satisfactory outcome has now been reached, whereby files of historical value will be preserved on a much greater scale.
The hon. Member for Workington (Mr. Campbell-Savours), who is sadly not in his place, paid eloquent tribute to Vasili Mitrokhin for what he did. Indeed, as we are talking about an intelligence triumph of which this huge book is only the tip, it must surely be recognised that 90 per cent. of the credit should go to Mr. Mitrokhin. The other 10 per cent.—an essential 10 per cent.—should be divided between MI6 and MI5 for getting him and his material safely out of Russia, processing and distributing it, and safeguarding its security so that the leads that it gave could be followed up as effectively around the world as has evidently been the case.
However, I am sure that the Security Service, in particular, did not like one aspect of the Mitrokhin affair—the emphasis that Mr. Mitrokhin rightly put on publication. I understand that Mr. Mitrokhin insisted that

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if he were to allow the use of his material—and it remains his material—for intelligence purposes, it must be published to the world, for which I give him three hearty cheers, more hearty even than the plaudits that he has already rightly received during the debate. I have told the House on previous occasions of my concern about what I regard as the unnecessary cover-up culture involved in dealing with historical events on which the Security Service could easily afford to lift the curtain.
In the previous debate on the subject on 2 November 1998, I referred to the fact that Mosley's British Union of Fascists was funded by Mussolini. We now know that, as early as 1935, special branch and MI5 had verified that that was happening on a large scale. It should not have taken until late 1983 for the historical record to be set straight and for confirmation to be forthcoming from the Security Service archives.
Similarly, we know that the British Communist party—despite all its vehement denials year in, year out—was in the pay of the KGB and was funded at least from 1958 until at least 1979 by cash payments to Reuben Falber in this country from his KGB contact. Sums of up to £100,000 a year were involved—heaven knows what that would be worth today. We know that only because of the discoveries made in the archives in Moscow. If MI5 knew about it—I bet it did—it hung on to that secret material for a long time.
It is important to destroy that cover-up culture on historical matters because such dilemmas, debates and controversies often repeat themselves. When fighting front organisations for the communists in the post-war period, it would have been helpful to cite the example of front organisations for the fascists in the pre-war period having been funded in that way. It is also important as a deterrent. As Professor Christopher Andrew has said—although I am unsure whether it has been referred to in the debate—perhaps Mitrokhin's greatest achievement is the fact that no one who has ever been in contact with the KGB can be sure that sooner or later such deplorable behaviour will not come to light. That is a devastating blow to the Russian intelligence agency's reputation, which it will take decades to overcome, if it ever can.
Having said all that, I was a little disappointed—I should not be surprised if Mr. Mitrokhin himself was a little disappointed also—that this thick volume did not contain a larger number of revelations about spies in Britain. Indeed, when it was to be published, it was not intended to reveal the identity of Melita Norwood. She was identified only as Agent Hola or, as had been known for many years from the Venona transcripts, Agent Tina. Her identity became known only because of the sleuthing of David Rose, the BBC journalist who put together the film series "The Spying Game", of which more in a moment.
The problem is that the Security Service seems to take the view that unless and until a person is convicted in a court of law—no matter how guilty that person is of treachery, spying or acting as an agent of influence for a foreign and hostile power—that person's name must never be revealed, even if there are no security implications. I believe that if the evidence is strong enough, such an approach is fundamentally wrong and unjust. People in public life are often accused of all sorts of wrongdoing without being convicted in a court of law. The burden is on the accuser to prove his or her case, and the remedy of taking a libel action is there for the accused if the
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accusation is false. I do not like the way decisions to conceal identities are made—sometimes for security reasons or as a bargain, but sometimes just to cover up embarrassment and so as not to rock the boat—because all too often people guilty of gross misconduct and treachery do not suffer even the punishment of having their deeds exposed to the contempt of their fellow countrymen.
I refer again to the excellent series "The Spying Game", and congratulate the BBC on that fine example of public service broadcasting. However, it had a slightly unfortunate aspect as it ran the exposure of a number of spies from different sources into a single collection. For example, Dr. Robin Pearson, the Hull lecturer, was exposed not by the Mitrokhin archive but by the Berlin Stasi archive, which has been available for some considerable time and was excellently researched by Dr. Anthony Glees, the academic who was the principal researcher for the relevant episodes of that series. Similarly, the identity of Professor Vic Allen, CND executive member, a Stasi agent in regular contact with East German intelligence who reported and spied on the anti-nuclear movement in order to make it even more helpful to Soviet foreign policy and military objectives than it was of its own volition, came out into the open only because of the revelations in the Stasi archive.
Some documents in that archive were not handwritten notes, valuable though those are, as in the case of Mitrokhin, but original documents such as receipts for the blood money that Dr. Pearson took from the East German intelligence agencies for his treachery, signed in his own hand. There should be no question of covering up the identities of those people, even if, for one technical or security reason or another, they are not to be prosecuted.
Eventually, I managed to secure a debate on the Berlin Stasi archive. However, I remain concerned that no proper examination of it was made until Dr. Glees went out there and made those discoveries for himself. Security Service operatives had been out there for a couple of days and took photographs of each other sitting on the toilet of Erich Mielke, the former intelligence boss. That was it, although there had been a Mitrokhin operative in reverse—Operation Rosewood—a few years earlier. The Americans succeeded in purchasing a vast quantity of Stasi material, which they made available to the British, just as we made the Mitrokhin material available to them. Nevertheless, there was no guarantee that everybody awaiting discovery in the original Berlin archive had been picked up in the archive sold to the Americans and passed on to us.
I want to cover two more points. The Home Secretary made a remark earlier, and I hope that no enthusiastic representative of his checking his contribution for Hansard will be tempted to alter it. He mentioned the threat from the Soviet Union then and the former Soviet Union now. He was right to make that remark, and I hope that it appears in the record tomorrow. There is still a threat from the former Soviet Union. This morning, I checked with the Clerk of the Defence Committee, on which I have the privilege to serve, whether it would be in order to refer to something that happened in a meeting yesterday between ourselves and representatives of the Russian Duma. He confirmed that the meeting was not held under Chatham house rules or off the record, but I shall not be too specific.

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I was perturbed by the presentation given by a number of members of the delegation, with whom I shall enjoy sitting down for dinner this evening at the invitation of Madam Speaker, for which I am grateful. I hope that it is not withdrawn in the next hour and a half. One of the delegation's observations can be summarised only as a crude attempt to divide the United Kingdom from the United States by suggesting that we should all be terribly concerned about the way in which the United States tries to promote its own security interests at the cost of those of Europe and the United Kingdom. There were also appeals to the fact that we had fought on the same side against the Nazis. That was true from 1941–45; I am not sure that it would bear scrutiny for 1939–41.
There were attempts to balance the enormously restrained NATO military attacks in the Kosovo crisis with the sheer barbarism in Chechnya. Incidentally, who believes that the bomb explosions in Moscow were caused by Chechen terrorists, conveniently giving the Putin regime the excuse that they needed to go in and devastate their homeland? Many Kremlinologists of repute in this country do not believe that it was anything other than a provocation and a pretext for both electoral and tactical military reasons by the Russian special services.
There have been worrying developments. There has been a noted rise in anti-semitic attacks in Russia. There has been an attempt by President Putin to displace the rabbi who serves the Russian-Jewish community with an extreme fundamentalist rabbi, who would be unrepresentative. There has been the arrest of Vladimir Gusinsky, which means the silencing of an independent voice that is critical of the regime, and this also carries overtones of anti-semitism.
During the election campaign, the one person, Grigori Yavlinski, who might have made it necessary for President Putin to go into a run-off ballot, was attacked on official television for being supported by "foreigners, Jews and homosexuals". The one thing that can be said about the situation in Russia is that although the Putin project is to recreate the power structures of the communists, it is to do it without Marxist ideology. The aim is to restore a powerful state and eventually to build a new version of the former USSR where there is political and military dominance, without the economic burdens of direct administration. That is an advantage because it does not involve the ideology that carries the appeal into other countries that communism used to have.
If the Home Secretary now recognises that there is still a threat from Russia, which we hope to get along with much better in the future than we did in the past, it is only right for him to reverse a decision, which I have been asking him repeatedly to do, to dismantle what was for many years the most important branch of the Security Service, namely F branch, which dealt with subversion. According to the third edition of the glossy booklet entitled "MI5 The Security Service", the
Security Service currently has no investigations in this area—
that is, the area of subversion. It continues:
During the financial year 1997/1998 only 0.3 per cent. of the Service's resources were allocated to the remnants of this work, predominantly to pay the pensions of retired agents.
It is not satisfactory that a country that still faces threats and that could still be subject to subversion should have dismantled the section of its Security Service that deals
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with subversion. I have been grateful to the Home Secretary for what he has done in preserving files. I have been grateful to him also for what he has said today about preserving the ability of the Security Service not to have Members demanding access to their own files. I would be even more grateful to him if he would restore the one missing element of the jigsaw, which is the anti-subversion apparatus of MI5.
5.22 pm
Mr. Norman Baker: First, I apologise to the House for not being present for the opening speeches, for a reason that I conveyed to Madam Speaker yesterday. It involved significant constituency activities, with a visit from leading French politicians and the signing of an accord in relation to the Newhaven port, which is of key importance to my constituents.
I am grateful for the opportunity to contribute to the debate. I have listened with considerable interest to Members' speeches. I listened with, I hope, a learning mode in place. In many instances, those who have spoken are members of the Intelligence and Security Committee. They have an insight which I do not.
I hope to bring an outside view to the debate—that is, one from outside the Committee—and perhaps in one sense a more mainstream view of Members of this place than the privileged view which others have expressed this afternoon. I have that much in common, if perhaps nothing much else, with the hon. Member for New Forest, East (Dr. Lewis), other than an interest in these matters.
There is a need to strike a balance between the proper secrecy procedures that are in place within our security services and the need for democratic accountability. The key question is how that balance is struck. In an answer to me, the Home Secretary said:
I accept that there should be … openness in the work of the Security Service, provided it does not endanger national security in any way.—[Official Report, 30 March 1998; Vol. 309, c. 894.]
That seems to be a fair and proper description of how the Government should be approaching these matters.
I shall argue that perhaps we can go a little further a little faster in tilting the balance towards accountability without endangering national security in any way. I pay tribute to the steps that were taken by the previous Government under the right hon. Member for Huntingdon (Mr. Major) and that have been taken by the present Government to move slowly—sometimes painfully slowly—towards a more open and accountable system, which in my view has not endangered national security. Perhaps the lesson to be learned is that further steps can be taken without endangering national security.
Not long ago, we were not even told that MI5 and MI6 existed. We started that far back. Now we have operations put on a legislative footing. We have the Intelligence and Security Committee and, as someone outside that Committee, I have formed the opinion that it does a good job.
I have confidence in the capabilities and the integrity of the right hon. Member for Bridgwater (Mr. King), who chairs that Committee. I have absolute confidence, of course, in my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), who has been in the House since 1973, and in other hon. Members, such as the hon. Member for Workington (Mr. Campbell-Savours).

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They bring not only experience but a commitment to democracy and civil liberties, which are important in examining the work of the intelligence and security services.
I pay tribute to the steps that have been taken, as the hon. Member for New Forest, East noted, by the Home Secretary in small ways to open matters up, and by the Foreign Secretary, who was kind enough to publish the Zinoviev letters in response to a written question of mine. We now have the annual debate in Parliament. Those are all worthwhile steps, but we can go further.
I shall deal first with the subject of files, to which the hon. Member for New Forest, East referred. It is right that there is now independent scrutiny by officials of the Public Record Office. I called for that in November 1998. However, we are told in paragraph 79 of the Committee's annual report that 3,000 files were destroyed in the time between the decision to involve independent scrutiny being taken, and that scrutiny kicking in.
One wonders what was in those files. It must have been a fast operation to destroy them before the scrutiny process began. A fair-minded person must suppose that the files contained information that might cause embarrassment to the security services and that they might, with hindsight, regret compiling them.
I entirely concur with the future programme of work set out in the report with regard to files. I refer to paragraph 89 on page 36, which refers to three issues relating to personal files. The first is
whether individuals should have rights in connection with the destruction or otherwise of any file held on them and protections against having inaccurate information gathered, stored and used against individuals' interests.
That is a crucial issue for the Committee to pursue. It is a principle on which both the present Government and the previous one acted by introducing data protection in other respects. That seems consistent and should apply to material held by the security services.
There was speculation in the newspapers a while ago that a file was held on the Home Secretary and the then Minister without Portfolio, the present Secretary of State for Northern Ireland. It is difficult to imagine anyone who is less of a security risk than the Home Secretary—[Interruption.] From where I am standing, the right hon. Gentleman seems to be a fully paid-up member of the establishment. If files are held on such people, perhaps the security services have been a little over-enthusiastic in their information-gathering activities.
It is right that if a file has been held on the Home Secretary, or anyone else, which the security services deem it no longer operationally necessary to retain—that is a proper consideration—why should not that person have access to the file and know what was written about him or her? Otherwise, something that may have been written by a very junior official a long time ago could stay on someone's record for ever, which seems wrong. The record may be destroyed, but the memory remains.
People must have the right to challenge that information when the security services consider that the file no longer needs to be kept for operational reasons. I hope that the Committee will press for that.
The second issue in the Committee's future programme of work is
the position under future/current data protection legislation,
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which is clearly linked to the first issue and to the third, which is
implications of the European Convention on Human Rights.
I commend the Committee for that programme of work on files, and I hope that progress is made.
On 29 July 1998 the Home Secretary, who I am pleased to see has returned to the Chamber, made a long, full and helpful statement about personal files. He said that there were 13,000 active files on United Kingdom citizens, and it would be interesting to know whether there is an up-to-date figure. Perhaps the Foreign Secretary will be able to tell us; if not, I would be happy to table a question after the debate. The Home Secretary also said that 110,000 files were destroyed or earmarked for destruction. It is important to establish whether those earmarked for destruction have been destroyed, or whether they are lying around somewhere.
I refer Ministers to paragraph 47 of the 1997–98 report of the Intelligence and Security Committee, which expressed anxiety about the age cut-off point. On the 110,000 files, it states:
We note however that reviewing in this respect is currently restricted to files on individuals who are over 55 years old. This means that there may be files on individuals under the age of 55 because they joined an organisation which was categorised as subversive possibly 20 years ago and these files may still be used for vetting and other purposes. However, no such files would be open on someone who joined the same organisation today.
It also says that the Committee will consider that further. I do not know whether the Committee has done that, but it is an important point.
Since being elected to Parliament, I have tabled several written questions on the interception of communications. I note with interest and perhaps a little anxiety that the number of warrants issued each year has continued to increase. In July 1998, Lord Nolan said:
I am satisfied that the substantial increase in interception is due to the continuing incidence of large-scale crime coupled with the greater interception facilities available to the various agencies.
That clearly explains why the number of interceptions has increased.
I want to consider Lord Nolan's second reason: the greater interception facilities available. That means that technology is progressing apace and that it is now possible to intercept more accurately and perhaps more speedily than hitherto. There is therefore a greater tendency—or, at least, temptation—for the security agencies, including the police, to use interception facilities. That may be useful in detecting large-scale crime. I am sure that we are all grateful if the use of the facilities has facilitated the detection of large-scale crime and the arrest and prosecution of those responsible.
Mr. Mates: The advance of technology is double edged. It makes intercepting old technology easier, but it is much harder to intercept digital technology, which an increasing number of criminals and terrorists use. Any increase in numbers is related not to the ease of interception, which is in many ways more difficult, but to the urgency of the cases. Criminals are now so sophisticated; for example, they use mobile telephones and satellite phones to do their deadly deeds. We must pick them up.
Mr. Baker: I am grateful for that intervention and I accept the hon. Gentleman's point. It poses a problem for

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those of us who are committed to accountability and democracy. There is a difficult balance to strike between ensuring that our security services are given the opportunity to detect crime, and maintaining proper civil liberties. I do not have the answer, but the question concerns me as an ordinary Member of Parliament.
In the spirit of my initial remarks to the effect that more information could be made available without endangering national security, I ask the Home Secretary whether more information could be provided on interceptions for which warrants have been granted. We are given information about the number of warrants, but not about the number of individuals or telephone lines that may be subject to interception. That extra information would not endanger national security, and it might help Members of Parliament and others to build up a picture of the activities of the security services. Could the provision of such information, which is not person-specific, be considered as part of the Government's review of the need to make the security services more accountable to Parliament and to the population generally?
Especially in the light of the increasing number of warrants that are being issued, or for which permission has been granted, I am worried about the level of authorisation required for the issuing of such warrants, and in particular, the powers that are winding their way through Parliament under the Regulation of Investigatory Powers Bill. When a body or person wishes to interfere with the liberty or privacy of another person, it is important for there to be some external check on the process; otherwise there is surely potential for corruption.
Hitherto, the Home Secretary and the Foreign Secretary have signed warrants. That is entirely right. The Home Secretary has assured me in written parliamentary answers that he takes the matter very seriously and has considered it properly before doing so, and I am sure that that is true. However, I am worried about what may happen if senior officials have, in some respects, authority that has previously been exercised by elected Members. I understand that that may happen under the Bill. As the Home Secretary probably knows, my party has proposed a greater use of circuit judges rather than a reliance on senior officials.
Mr. Straw: I can entirely refute the possibility, or even the idea, that in the context of the legal regime senior officials will act corruptly, as the hon. Gentleman suggests. I see no prospect of that. The senior officials who deal with warrants do so with the utmost integrity. They, too, scrutinise applications with enormous care. The circumstances in which a senior official, rather than the Secretary of State, could authorise a warrant are significant, and can be circumscribed under the Regulation of Investigatory Powers Bill. Principally, they will arise only when a Secretary of State has already made a decision to intercept in respect of that target.
Mr. Baker: Let me make it clear that I have no evidence of any corruption on the part of any official. I do not impugn any official, nor have I any reason to do so. I am making the entirely philosophical point that if an organisation is controlling and monitoring itself, there is a potential for something to go wrong. I am always interested in any aspect of our work here involving
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intrusion on someone's liberty or privacy, and I feel that there is a good reason for there to be an external check. That is the only point that I am making, but it was helpful to hear the Home Secretary's comments.
I am worried about the fact that, on occasion, information that conveys details about an individual, perhaps to a large degree, is not even subject to the warrant-seeking process. I understand that it is possible for information to be gleaned about telephone calls made by an individual without any requirement for warrants—for example, information about the number of calls made, the telephone numbers to which they are made, and how long the calls last. Such information can build up a picture of an individual's activities, even if the words spoken are not recorded. I understand that the same will shortly be possible with e-mails and other electronic communication; it will be possible to establish the sites visited, for how long they have been visited, and so on.
As I am not a member of the Committee, I hope that Ministers will allow me to raise the issue of the Government's policy on interceptions or monitoring of Members of Parliament—elected Members. This is really a constitutional issue. On 30 October 1997, a parliamentary answer given to the hon. Member for Walsall, North (Mr. Winnick), who is no longer present, confirmed that the Government's policy on the interception of Members' communications was as stated in 1966 by the then Prime Minister, Harold Wilson. Nothing had changed. The answer was that no interception would take place.
I ask, in a genuine spirit of seeking information from the Government, how that squares with the various reports that appear to point in the contrary direction—reports that have appeared intermittently, almost regularly, in our national newspapers, often in respected national newspapers.
The Sunday Times of 15 November 1998 said that, allegedly, MI5 warned the Prime Minister about the activities of the hon. Member for Brent, East (Mr. Livingstone). The Guardian reported in a front-page story on 22 October 1998:
Potential cabinet Ministers and other members of the Government were vetted by MI5 at the last two general elections, it was officially admitted yesterday.
The names of individuals who the intelligence agency considers security risks were passed to the Prime Minister.
Dr. Julian Lewis: Quite right, too.
Mr. Baker: Perhaps it is quite right. I am not making the point that that should never occur. The point that I am making is that it appears to be inconsistent with the information given in parliamentary written answers.
Mr. Mates: I am sorry to interrupt the hon. Gentleman again, but it is important that we get this right. Vetting means positively looking at someone's security classification. The loose terminology of the newspaper simply means that the Security Service—probably the head of the Security Service—reported to the Prime Minister on any Members upon whom it had information of anything untoward. That does not mean that the Member's communications had been interfered with. It means that the Member had come to the notice of the Security Service. That is quite a different matter from vetting.
Mr. Baker: I understand that point entirely, but I was making a wider point. An article in The Mirror alleged—

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I have no evidence for this; I quote just because of a desire for knowledge—that MI5 phone taps and checks were ordered on a particular Member of Parliament who was branded a blackmail risk.
I do not know whether that occurs or not, but it would be helpful to know to what extent there is interception of any communications, surveillance, vetting or anything else involving Members. What general rules apply? What parameters apply in those respects? That is the question that I am asking the Foreign Secretary to address in his winding-up speech. What are the parameters and limits to which gathering information about Members of Parliament can extend? I ask no more than that.
Also on accountability, another area in which there could be greater openness is the finances of the security services. On 15 December 1998, I asked the Prime Minister to publish the National Audit Office report into the new headquarters for MI5 and MI6, a matter that my right hon. Friend the Member for Berwick-upon-Tweed referred to earlier. The answer from the Prime Minister was that disclosure would harm national security or defence.
That is contrary to paragraph 43 of the Intelligence and Security Committee report, which states:
We were surprised that the reports had not been previously published, and the Committee believe that these NAO reports should be published. We believe that publication would not in any way prejudice national security or compromise commercial confidentialities.
That is a conclusion with which I entirely agree. This is not about national security; it is about value for money and proper use of public funds—that is all. Whether there is a roof garden, or trees costing three times as much as they should, is not a matter of national security. It is a matter simply of whether the bill has been paid properly and whether there is proper accountability for funds.
The record shows that the budget for those buildings was about three and a half times overspent. Had there been more involvement and more openness about those issues, and perhaps more involvement by the Intelligence and Security Committee, that might not have happened. Further to that, what steps are being taken, and how open are the Government being in ensuring that the GCHQ building does not fall into the same trap as Thames house and Vauxhall cross?
As for openness about finances, I fail to see why the Government insist that they cannot publish a separate budget head for MI5, MI6 and GCHQ. There is a separate budget head for MI5; it is in some of the booklets. It may look as if it is a secret, but it is in there somewhere. It is also included in the single intelligence vote.
What on earth is wrong with our knowing the total amount spent on MI6 or GCHQ, and even perhaps, without endangering national security, some sort of crude breakdown within that figure? In my view, the attitude is a throwback to the era of obsessive secrecy which should be over. I hope that the Government will look again at that in the months ahead.
I am not asking for radical change. I am grateful, in so far as I am aware of it, for the work that the security services do to protect us all. I am also grateful for the work of the Security and Intelligence Committee on behalf of parliamentarians, in so far as I can ascertain what it does from its reports and elsewhere, and I have confidence in its work. I believe that it has shown that it
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can deal with security matters in a responsible way, and that Parliament and the security services can be more open about the work that they undertake without in any way endangering national security.
That may require a Select Committee, as hon. Members have argued this afternoon, or it may require rejigging the existing Committee. It will certainly involve more access to information from the Committee and more openness about advice to Ministers and the availability of such advice to members of the Committee. This is a relatively modest shopping list, but I hope that it is a sensible one and that the Government will respond accordingly when the Foreign Secretary replies to the debate.
5.47 pm
Mr. Francis Maude: As one would expect, we have had a very good debate. It has been serious, thoughtful, well-informed and devoid of the spirit of partisanship that sometimes prevails in this place. I have been in the Chamber for most of the debate, and much of it has been not so much about the exercise of the accountability which these relatively new arrangements still amount to, but about how we might extend that accountability. I shall say a little about that, but it is proper that at this stage we should devote our attention to exercising accountability rather than seeking constantly to extend it.
All the speeches have been well informed and serious and the House will have appreciated that. The right hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke with sanity and in a considered way. Let me also say that we all felt deeply for him in his recent sadness. We are very glad to have him here and to hear his sane voice.
I should also mention the speech by the hon. Member for Workington (Mr. Campbell-Savours). I am sorry that he is not in his place, but he has been here throughout nearly all the debate. He spoke of this being his last opportunity to speak in a debate on this topic, which suggests that he may know rather more about the date of the election than the Home Secretary or the Foreign Secretary.
Mr. Straw: Some time before May 2002.
Mr. Maude: I am grateful to have confirmation that the constitutional arrangements remain unchanged.
The hon. Member for Workington has been a remarkable parliamentarian—although not always a comfortable one from the point of view of those of us who served as Ministers under the previous Administration, or even current Ministers. However, as we undertake our task of holding the Executive to account, being comfortable is not always what we seek. We seek high principle, dedication, public service and acuity. The hon. Gentleman has all those qualities and I am glad to pay tribute to him. It is clear from the speeches of Committee members that there is an extraordinary degree of cohesion and friendship among them, which is important to the Committee's work.
My right hon. Friend the Member for Bridgwater (Mr. King), who speaks with such authority on the subject, has undertaken a remarkable and important task as the Committee's first Chairman. It is one of unusual delicacy and sensitivity, in creating what must be almost by definition a unique form of scrutiny—something

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accepted even by those who argue for change. Trust in the way in which that form of scrutiny and accountability operates is of the utmost importance. The personal authority, high integrity, wide experience and judgment that my right hon. Friend brings to leading that process—together with his ability to command real respect from all parts of the House—is crucial. I pay tribute to him for the way in which he has discharged an important and serious task.
There was a fascinating and somewhat theological discussion about whether the current arrangements should be changed, and the Committee transmute over time to some form of Select Committee. Everyone agrees that the current arrangements work extraordinarily well for something that is so new in—this cannot be repeated too often—an area of great delicacy and sensitivity. As the procedures continue to bed in, it is important that the public, the House and those within the agencies have confidence in their operation. I strongly support the view taken by my hon. Friend the Member for East Hampshire (Mr. Mates) and others that we should not consider a Select Committee structure. The existing system is good and we should concentrate on making it work well in exercising the accountability that comes with it rather than seeking, at this stage, to extend it.
The extraordinary process since the late 1980s of bringing the security and intelligence agencies, with their lack of public recognition, out of the darkness has been important in reassuring people of the essentially benign role that those agencies play. Creatures that exist totally in the dark can easily excite disproportionate fear and anxiety. Of course it is right for us to be vigilant about the agencies' role but we should exercise such vigilance against the background of our understanding that the agencies exist and operate as the servants of liberty, not its enemy.
Even before the existing arrangement, all the agencies were accountable to Ministers who were themselves democratically accountable. My right hon. Friend the Member for Epsom and Ewell (Sir A. Hamilton) made an interesting suggestion about changing part of that accountability in future, which I am sure we will want to think about carefully. However, we should never forget that the security and intelligence agencies have always operated within some framework of accountability—albeit more limited than that which operates today.
All who have contributed to the debate have spoken about the work of the agencies themselves, and I endorse all that has been said, especially about the work of the Secret Intelligence Service and GCHQ, which are the agencies that fall within the portfolio that I shadow. We should recognise that the excellence of the SIS's work, and the height of its reputation, is not least among that unique set of international assets which gives Britain global reach and which should give Britain disproportionate influence in the world. I remember from my own close contact with the SIS, when I was a Foreign Office Minister 10 years ago, that we were not allowed to call it the SIS—we had to refer to it in a dark and mysterious way as "the friends across the river." That contact gave me a profound admiration for the men and women who comprise the service, and who demonstrate
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dedication, public service, resourcefulness and—as many hon. Members have pointed out today—simple, raw courage.
Part of what those agencies provide for this country is the ability to help other friendly countries with intelligence input that they would otherwise lack. That gives this country greater influence which other, comparable countries simply do not have. To achieve that, the agencies need proper resources and commitment to their capability. They need continuity, which is crucial: after all, they operate in a world that is not notably safer since the end of the cold war. The cold war, born, as it was, out of oppression and totalitarianism, provided a dreadful stability for the most awful of reasons, and it is unequivocally good news that that has ended. However, it has not led to the world becoming more stable. It is, if anything, less stable and predictable, and more turbulent. The new world today holds greater opportunities for prosperity and peace, but there are myriad threats and risks.
A peace dividend has not been available in the sphere of intelligence, and rightly so. The big reduction in the need for intelligence in relation to the former Soviet Union has more than been taken up by the need to counter threats that are more immediate to civil society. My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) talked about the need to counter organised crime, especially drug trafficking and illegal immigration—which has had dreadful effects, as we have seen this week. That is a crucial area of activity and it is right that a greater part of the resources of the agencies should be devoted to activities to counter proliferation and terrorism, and action to disrupt and investigate international crime.
The Mitrokhin affair has rightly been the subject of much discussion in this debate. I take this opportunity to applaud the work of the agencies in that case, especially that of the SIS. It is always the case that it is the things that go wrong that get the publicity and attention, but much goes right that is unapplauded. In the Mitrokhin case, however, we were able to see what was, by any standard, a remarkable piece of intelligence work with a huge dividend for this country and for our allies. I place on record the plaudits of the Opposition for the work that was done.
My hon. Friend the Member for New Forest, East (Dr. Lewis) mentioned that we should give credit not only to the agencies: much of the credit must go to Mr. Mitrokhin himself, who was extraordinarily brave in standing up for what he believed. He performed a great service for his country and our country, and for humanity generally.
The Committee has made some sensible and moderate recommendations. Of course there were faults in the subsequent handling of the Mitrokhin operation, and they have been highlighted, but it would be a shame if they were to mar an otherwise exemplary operation. I do not want to harp on about the failures, although it is clear that some were serious. Views may differ about whether Mrs. Norwood should have been brought to book for her betrayal, but it is unsatisfactory that, in effect, the decision was taken by default.
My right hon. and learned Friend the Member for Folkestone and Hythe spoke also about the effect of the current proposals for European security and defence

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identity in respect of intelligence operations. I shall introduce a minor point of partisan difference at this point, although I see that that upsets the hon. Member for Rotherham (Mr. MacShane).
European defence will require intelligence sharing, yet there are clear differences of allegiance. It did not need the apparent leak by French intelligence officers of target details during the Kosovo operation to show that. It would be useful if the Foreign Secretary would explain how he expects liaison within the European Union defence framework to work.
The natural and important links between Britain and the Echelon group are based on a long period of continuity and trust and exist for the purpose of sharing intelligence. Is there not a risk that those links would be endangered by an arrangement that would necessarily involve sharing intelligence with countries that have different perspectives and aims?
From my own experience, I know that foreign policy decisions are coloured by intelligence information. It is hard to see how there can be a complete common foreign and security policy without complete intelligence sharing. That is even more true of military operations, which depend crucially on intelligence.
In that context, it was disturbing to read an article in this month's edition of Prospect magazine. Written by a French official, it argues that the British would not be able to play a leading role in the EU unless they jettisoned their special intelligence links with the United States. The official states:
Britain must choose Europe or betray it.
That is an unsatisfactory thing to read.
Mr. MacShane: What is his name?
Mr. Maude: He is unnamed, for perfectly understandable reasons. It would have been very odd if he had been named. It is disturbing that such sentiments can be uttered for publication, and it bears out the sort of concerns raised by my right hon. and learned Friend the Member for Folkestone and Hythe.
Mr. Howard: Is it not astonishing that Labour Members should demand the name of the source of that remark? It is entirely consistent with named, sourced and published emanations in recent weeks from the highest elements in the French Government.
Mr. Maude: My right hon. and learned Friend is right, and the concern about the matter is real. No one is saying that under no circumstances can these potential conflicts be resolved, but we know that intelligence sharing is founded on continuity, trust and mutual confidence, which can be built up only through a long period of co-operation.
The Government are engaged in a frogmarch towards the European security and defence identity, and the Foreign Secretary must tell the House whether there is any risk that that might endanger intelligence sharing through the Echelon group, which is a crucial element of our intelligence capability. If the intelligence-sharing that we enjoy were lost, we would suffer by denying ourselves access to the product of others' intelligence capabilities.
On the question of trust and confidence, I want to say a word about Dame Stella Rimington and her famous book, which is being considered by Government officials. I 536
suspect that I am not alone in believing that one of the obligations that members of all agencies accept is a self-denying ordinance on writing about the work of the agencies. That is not some quaint, old-fashioned relic of the dark days of absolute secrecy—I believe it to be crucial for operational effectiveness.
As I said earlier, trust is essential at all levels. It is especially essential between agents in the field and the service that they help. The Secret Intelligence Service, in particular, has been extraordinarily successful in creating that sense of complete trustworthiness. After all, it often asks people to place themselves in positions of extreme risk for what they believe in. Such people may be at high risk for many years afterwards. People need to be confident that events will not be written about in such a way that might enable them to be identified subsequently, however well disguised in the writing they may be, by detective work carried out by journalists and others. After all, Mrs. Norwood was publicly identified by a journalist carrying out just such detective work.
Dr. Julian Lewis: Is there not another particularly objectionable aspect to this? What makes the sale of memoirs about MI5 and MI6 so lucrative are the risks run by the agents, who often receive very little financial reward. What does it look like to them to see the desk warriors, who do not run any significant risks, getting £1 million for a book?
Mr. Maude: My hon. Friend makes a powerful point. From everything that I have heard, seen and read, it is hard to over-state the distress and outrage that is felt about this by people in all the agencies. I take this opportunity to say to Ministers that we believe that it is quite wrong that Dame Stella should seek to publish such a book. The Government would have our wholehearted support in preventing such publication.
Mr. Winnick: It may well be wrong for Stella Rimington to publish the book. Presumably a lot will be deleted. However, I should like to get this quite clear. Is the right hon. Gentleman suggesting that the Government should prevent the publication of the book, even if they have the powers to do so? I hope not.
Mr. Maude: Yes, I think that the Government should prevent its publication. It has been argued that it would be perfectly appropriate for Dame Stella to publish memories of her early childhood and a study of the psychological stress involved such an operation. That would be interesting and probably uncontroversial. However, to write about the service that she has led would be quite wrong. She should make the honourable decision not to pursue the book's publication, but if she persists in seeking to write about her life in the service, the Government should prevent the book's publication. They would certainly have our support in doing so, and I hope that they would have the support of the whole House.
I want to say a word about the Regulation of Investigatory Powers Bill, which is in another place. It is mentioned in the report of my right hon. Friend the Member for Bridgwater, and it is important in this context, because of a clear conflict of objectives. Perhaps the Government have done their best to reconcile those objectives, but we believe that they have not yet successfully done so.

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The emergence and startling growth of new media require some ability for the authorities to have specific access to communications for limited and specific purposes, but two conflicting public goods are at risk here. The first is a general entitlement; we are all entitled to feel that we should have privacy for our communications. The second is a matter of wider importance: the Government's own declared objective, which we strongly support, of making the United Kingdom the prime centre for e-commerce and network development.
I should perhaps declare an interest, as I am a director of a start-up internet company. I am aware of the real concern within the sector about the effect of the perceptions of the Bill. There is massive concern about the effect of the Bill on the sector's development and on the prospects for the UK of becoming a serious base for this kind of business. It is, after all, a very mobile business, able to relocate in other parts of the world literally within hours.
Plenty has been said about the effects. The London Investment Banking Association said recently:
the legislation also needs to avoid casting doubt on the efficacy of encryption as a means of legitimately protecting the confidentiality of commercial information.
It believes that the Bill does not currently provide that reassurance. The Director of Cyber-Rights and CyberLiberties (UK) describes the Bill in its current form as
creating an intimidating environment for the legitimate use of encryption products by UK citizens.
He says:
Such legislation would no longer be compatible with the Government's policy to make Britain the best place for e-commerce and network development.
Those are serious concerns.
We understand the countervailing objective for the agencies to have the ability to intercept communications. No one contests that that is a desirable end and that a serious public good is served by it. It was mildly frustrating when looking for details of what the agencies said about it to find in the report of my right hon. Friend the Member for Bridgwater, in the section on commercial encryption,
GCHQ stated in their evidence that
followed by five lines of asterisks;
The Security Service told us that
followed by three lines of asterisks; and
The SIS stated
followed by four lines of asterisks. That was not very illuminating. One understands why it appeared in that way, but it did not help the argument very much.
One of the problems is that the UK is the first country to proceed down this path. There is some credit in trying to be first, but we should not always seek to match every development in technology, in the market and in communications with equivalent regulation. Such legislation can look, and can even be, unreasonably draconian. It can prove simply inappropriate in view of the rapid development of such media. Therefore, I take this opportunity to ask the Government to look again at how the legislation will work and to introduce some serious amendments to it.
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In conclusion, I should like again to pay tribute to all those in the agencies for the work that they do. The country owes them a big debt of gratitude for their dedication, service, knowledge, resourcefulness and courage. I pay great tribute to my right hon. Friend and his Committee for the way in which they have embraced the important, serious, high task of bringing accountability—of bringing into the light an area that has always remained largely in the dark—and for giving reassurance to the public that these are agencies that serve the cause of liberty and are not its enemies.
6.14 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): The debate has had a select attendance, but in my quarter century as a Member of Parliament, I have rarely attended a debate so well informed and so serious in tackling the issues before the House. I have also rarely attended a debate in which the addressing of serious issues has been so little diverted by party points. All hon. Members who have spoken today may take some pride in having demonstrated the Chamber's role of scrutiny in a responsible and non-partisan manner.
The tone for the debate, and for the annual report before us, owes a great deal to the diligence and character of the right hon. Member for Bridgwater (Mr. King). His deep experience of government has admirably equipped him for the role of Chairman of the Intelligence and Security Committee. I wish him well on his forthcoming retirement; he will leave a gap that the House will be challenged to fill.
The right hon. Gentleman took proper pride in the high attendance at the ISC. As a regular witness there, I can testify to the unusually high attendance, and, following my recent visit, to its unusual unity, at a level not often found in Select Committees. He was right to point out that the Committee's work is shared by all its members, and many of those who have spoken today may take pleasure in their contribution to it.
I may be able to help the right hon. Gentleman and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on their point about regulations for special employment tribunals for members of the agencies. I am advised by my colleagues at the Department of Trade and Industry that they intend to consult the ISC next month on draft regulations, and I hope that that will enable us to make progress. I cannot promise that all my responses today will be so expeditious or so welcome.
The right hon. Members for Bridgwater and for Horsham (Mr. Maude) raised the subject of the proposed memoirs of Stella Rimington. The text has been submitted to the agencies for scrutiny and Stella Rimington has agreed that nothing should be published that would undermine national security. She has not yet submitted the text to a publisher, so there is time for her to reflect on whether it would be right to do so. I am sure that she will wish to bear in mind the comments made here today as she comes to a judgment on whether to proceed.
Mr. Winnick: On the basis that nothing should be published that will undermine national security, and if Stella Rimington decides to go ahead with publication, will the Government take no action to stop her?
Mr. Cook: I cannot say anything as definitive as my hon. Friend advises me to. Discussions continue and it

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would not necessarily be helpful if we took too clear a view. While the book may contain nothing that would directly compromise national security, I detect from many of the speeches today that Members would wish Stella Rimington to reflect on the example that she would set and on whether it would be wise to proceed.
Rare partisan points were made by the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) and the right hon. Member for Horsham, who both managed to introduce Europe. Given how high Europe ranks in Conservative thinking, we should probably be grateful that it did not play a more prominent part in the debate. As the right hon. and learned Gentleman and the right hon. Gentleman pressed me on the matter, I can say that we agreed, only this week at the Feira European Council, to four working groups with NATO to consider the interface between the European security and defence policy and NATO. Intelligence is obviously part of that interface, and I can think of no one better to oversee the work than Javier Solana, until recently the Secretary General of NATO and now overseeing European security as the High Representative of the European Council.
I will not undertake to see nothing in the proposals. Nor would we agree to anything that would put at risk our special relationship in intelligence with the United States. I do not entirely follow the logic of those who are concerned that we will not be able, because we are entering into a security arrangement with several of the countries of Europe, to continue with our special relationship on intelligence. We have maintained that relationship for 50 years with exactly the same countries as members of NATO.
Nor am I particularly impressed by threats from an anonymous French man that the security initiative would compromise Britain's national intelligence gathering; I am absolutely confident that the French have not the slightest intention of allowing it to compromise their own national intelligence gathering. I do not, therefore, feel an active threat from that quarter.
Mr. Howard: Is not the Foreign Secretary missing the point? I referred to the quotation from the French Minister for Europe in which he made it perfectly plain that he wanted to see Europe as a rival to the USA—there are those who regard that as an honourable and legitimate objective. If that is the type of Europe that is being envisaged by at least some of those who are behind the initiative, is it not inevitable that the Americans will have concerns about continuing to share their intelligence with those who want to set up a rival to them in the world?
Mr. Cook: The United States shares intelligence with us as members of an alliance that includes France. As to US anxiety, I can only refer the right hon. and learned Gentleman to the comments made by the President of the USA in Germany earlier this month. Referring to European security, he said:
There is no contradiction between a strong Europe and a strong transatlantic relationship.
It is not incumbent on Opposition Members to try to be more pro-American than the American President.
The right hon. Member for Maidstone and The Weald (Miss Widdecombe) inquired as to whether security had been compromised by the disappearance of the laptops in the ownership of the agencies. I advise the House that
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we are confident that security has not been compromised. Nevertheless, it is plainly vital that we address that important security aspect. I welcome the fact that the ISC investigator is carrying out a review of the matter. We look forward to the report and will ensure that any conclusions or findings of the Committee are fully fed into our response to those events.
That matter underlines the fact that the ISC does not act as a means of scrutiny only on behalf of Parliament. The Committee is a valuable partner for the Government in ensuring that we maintain proper accountability and rigour over the security agencies.
It is in exactly that spirit that the ISC undertook the Mitrokhin study; we are grateful to it for having done so. The members of the Committee addressed that duty with diligence, conscientiousness and discretion. Their report is welcome, as the debate has demonstrated, because it restores a sense of balance to the Mitrokhin issue. Mistakes were made under both Administrations, but it is important that we apply ourselves to the lessons that should be learned for the future.
As the right hon. Member for Bridgwater pointed out, the great value of the report is that it underscored what a major achievement it was for SIS to get Mr. Mitrokhin out of Russia with his information. It was an outstanding piece of intelligence work, as the Committee recorded. It provided more leads for counter-espionage work than any other counter-espionage operation. We owe a major debt to the agencies for having made that possible and to the immense courage of Mr. Mitrokhin during the long years when he accumulated the information that has been of such value to those of us who want to expose the threat to our values and our societies.
I agree with the hon. Member for New Forest, East (Dr. Lewis) at least in that we cannot learn the lessons of the past if we do not know the facts of the past. In that, Mr. Mitrokhin has been of extreme value to us. The hon. Gentleman referred to a long list of issues on which we had had to wait for too long to find the truth. I add to that list the fact that we had to wait until last year to discover that the Zinoviev letter was a forgery. I am grateful to the hon. Member for Lewes (Mr. Baker) for having prompted us to undertake that project so as to put those facts into the public domain.
Mr. Straw: It was too late for the 1924 general election.
Mr. Cook: Indeed. Nevertheless, it is important that the matter be put in the public arena. I can give an undertaking to the House that, wherever it is safe to do so, we shall share historical facts that the public are entitled to know and that we should have no fear of sharing with them.
I am sorry that the hon. Member for Lewes is not a member of the Intelligence and Security Committee. Given the volume of parliamentary questions that he tables on the topic, he qualifies at least for associate membership of the Committee. He made several detailed proposals for enhanced scrutiny. However, in the 30 minutes since he sat down, it has not been possible for the Government to take a collective view on them. We will, of course, reflect on those interesting ideas as we expand the operation of scrutiny and make sure that we maintain the oversight of the work of the agencies.

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I now come to a central theme of the debate which was picked up, in particular, by my hon. Friends the Members for Doncaster, Central (Ms Winterton) and for Walsall, North (Mr. Winnick). That is the wide-ranging oversight that we now have over all the agencies. I referred earlier to the fact that I have been a Member of the House for a quarter of a century. When in the 1970s I started an annual Adjournment debate on the activities of special branch, it was seen as a rather daring innovation in accountability.
At that time in the 1970s, if anybody had suggested that we would have a six or seven-hour debate in prime time on the work of the three agencies on the basis of a report conducted by Members of the House, who had interviewed and taken evidence from all the agencies, he would have been regarded as an unrealistic visionary or perhaps, even worse, as a subversive who should attract the attention of the hon. Member for New Forest, East. On that point, I carry the hon. Gentleman with me.
The change has been of value and importance not only to Parliament in improving our ability to carry out scrutiny, but to the agencies, many of which have widely welcomed the progress that has been made. My hon. Friend the Member for Workington (Mr. Campbell-Savours) has done sterling service on these issues as a member of the ISC and as a Member of the House. I agree with his observation that the new generation at the top of the agencies take a more open approach than was possible or encouraged during the cold war. This new generation regards accountability as an asset to an agency, not as an irritation.
I firmly believe that the discussion that the heads of the agencies and others within the agencies have had with senior Members of the House and the Committee and the debates that we have had in the House on the Committee's report have all been of great assistance in ensuring that the priorities and objectives of the agencies reflect the concerns of elected Members of Parliament. They also mean that there is a broader consensus on the national interests and the risks that the agencies should focus on to protect those interests.
There is one dramatic measure of how far forward we have moved over the past 20 years in involving the agencies in the public debate. It took place yesterday when all three agencies appeared before the human rights taskforce of the Home Office. It brings together non-governmental organisations active in human rights, which are able to discuss between them how the agencies will shape their operations and their methods to make sure that they are entirely compatible with the European convention on human rights, which we are importing into British law. Such an encounter would have been unimaginable two decades ago, but it is entirely healthy and valuable for both sides of the debate.
It is right that Parliament and the public should have the opportunity to hold all public institutions to account and the security agencies should be no exception. My right hon. Friend the Home Secretary and I are accountable to Parliament and, through Parliament, to the public for the actions of the agencies. We are responsible for ensuring that they act in accordance with the law, and we take those duties seriously. As Secretary of State, I have the right to know what is done under my authority and I am responsible for scrutinising applications and for
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signing warrants. My right hon. Friend and I are also responsible for ensuring that the agencies have the resources that they need to carry out their important work. We are both accountable to Parliament.
There are robust processes for ensuring that we are both kept informed about important things that we need to know or which we may need to know for future. I have bilateral meetings with the chief of the SIS and with Francis Richards, the director of GCHQ. I have officials at the Foreign and Commonwealth Office dedicated solely to the job of understanding what the agencies are doing and guiding them on our policy.
Dr. Godman: Along those lines, I have a question about the Government response to the Foreign Affairs Committee report on Sierra Leone. Is my right hon. Friend in a position to confirm that which is stated in paragraphs 21 and 22 on page 3 of that response, that the modernisation of arrangements for liaison with the intelligence services and the handling of intelligence has been carried out, and that he is satisfied with the new arrangements? He promised modernisation and updating of procedures; has the programme been completed?
Mr. Cook: I would not say that the programme has been completed, the matter is one that requires constant updating and review, but I can tell my hon. Friend that we have made major changes in those procedures and in the structure of the Foreign Office to ensure that we are better able to liaise with the agencies, oversee their work and ensure that the appropriate intelligence is properly handled and disseminated. I would not say that there is nothing further to be done—indeed, I would be open to criticism were I to do so—but I can say that I am robustly confident that we have made a big improvement on the situation of two years ago.
As a further safeguard to the work done by my right hon. Friend the Secretary of State for the Home Department and me, our actions are subject to independent scrutiny, not only by Parliament, but by the commissioners set up by the Acts. Each officer of each agency has a duty under the law to provide those commissioners with the information that they need to do their job. To sum up: the heads of the agencies are accountable to my right hon. Friend and me, we are accountable to Parliament and, as the Secretaries of State concerned, we have to come to the Chamber today to account for the actions of the three agencies and to confirm that they have acted within the law and will continue to do so.
Before I turn to the two agencies that are specifically accountable to me and for which I have to account to Parliament, I should enter one word of balance. It is important that we make sure that oversight by Parliament and accountability to Parliament works well and openly. However, I am sure that the members of the ISC will agree that it is equally important that we preserve the secrecy of the agencies' operation. Good human intelligence depends on individuals around the world who are prepared to trust the ability of the SIS to protect their identity; protecting those identities means protecting their livelihoods and, often, their lives. Protecting the scale of GCHQ's capability is also important to ensuring that it is able to carry out its work of interception. All intelligence collection needs the protection of secrecy for its methods if it is to remain effective.

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I am responsible for two agencies: GCHQ and the SIS. Before talking about them, I should like to stress that the work of both is of greatest value when seen together. The collection of signals intelligence and of human intelligence often bears its greatest fruit and best results when the two are put together. Both agencies deserve credit for their achievements in matters of profound importance to the safety and security of the nation.
Let me give two examples. Together, the agencies can ring the alarms on attempts to acquire the technology of weapons of mass destruction. That used to be of concern only in connection with nuclear technology, but it is now of concern also in relation to biological and chemical weapons, which can be acquired more cheaply and with a lower technical threshold. The information that the agencies collect gives us as a Government the opportunity to attempt to persuade those who are developing such programmes of the real cost to them of pursuing a capability in weapons of mass destruction, and of the benefits of abandoning that ambition. The agencies also keep a close watch on the readiness of some countries or individuals within them to sell the technology for weapons of mass destruction. That, in turn, enables us to try to influence the countries in which such individuals may reside about the importance of adhering to the non-proliferation regimes.
The other example that I will share with the House is the agencies' work on narcotics and illegal drugs, to which the right hon. and learned Member for Folkestone and Hythe referred. I entirely endorse his observation about the value of their work in that field. In the fight against drugs, the provision of intelligence to law enforcement agencies, not only in the UK but in a range of other countries, is vital to disrupting drug trafficking—a pernicious trade that continues to destroy the lives of people here in the UK. Action by the UK security and intelligence agencies has made a real contribution to our anti-drugs strategy and to achieving the aim of stifling the supply of drugs to our streets.
In my time as Foreign Secretary, I have attended a number of international meetings at which we have had a wholly sterile debate as to whether the prime objective should be to reduce the demand for drugs in the countries that consume them, or to reduce the supply of drugs from the countries that produce them. That is a pointless debate—we need to do both. The work of SIS and GCHQ is immensely valuable to us in making sure that we can disrupt and deter the drugs trade along points in the chain before it reaches the United Kingdom.
GCHQ carries out activities that meet all three of the functions set out in the Interception of Communications Act 1985. It provides assistance on national security, serious crime and economic well-being. In the recent past, it has produced intelligence to help to safeguard the security of British troops in Bosnia and Kosovo. It assists the law enforcement agencies in the war against organised crime.
GCHQ also defends our economic well-being against modern, and more unconventional, threats. Britain's essential infrastructure, such as water, power and transport services, is increasingly managed by information technology. A computer-based attack on those services could cripple the nation just as effectively as a military attack. GCHQ's information security specialists help the Government and industry to protect themselves from vulnerability to such attacks.
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Of course, GCHQ now faces a very wide range of technical challenges that are increasing with every passing year. Chief among those is the growth and rate of change in global telecommunications and the spread of the internet, which is changing the way in which so many organisations communicate. A second challenge is the growth of global telephone systems. Organised crime can now operate on the basis of buying a phone in one country, using it in a second country to call a third, and paying, or failing to pay, the bill in a fourth. Keeping up with the globalisation of communications technology requires commitment and a deep understanding of complex technical issues.
A third challenge to GCHQ is the growth of encryption, which can be a valuable safeguard for honest people doing honest business over the net. However, it can also be a potent weapon in the hands of those who wish to avoid their legal obligations. I listened with respect to what the right hon. Member for Horsham said on that matter. He would not expect me to say what lay behind the asterisks in the report, and members of the Committee, having struck those words out of their report, would be rather astonished if I did.
I can sum up the expression of all three agencies by saying that they all firmly support the work that the Government are doing on that matter. We have to make a choice here, even if it is a difficult one. We cannot ask the agencies to be more effective on serious crime, drug trafficking and the traffic in human beings if we do not listen to them when they tell us their technical and legal requirements for continuing to do that work.
If GCHQ is to keep pace with technical change, it needs the building and the equipment to do so. That is why we have begun the new accommodation programme for GCHQ to provide it with the facilities that it needs to guarantee its capability well into the future. I congratulate the current director, Francis Richards, who has quickly come to terms with that immense project. He is motivating the staff through the process of change and has quickly and honestly squared up to early problems.
GCHQ's new accommodation is to be purpose built for the modern IT environment and will provide the basis on which GCHQ can handle large quantities of complex information quickly and intelligently. It is our responsibility to ensure that GCHQ stays a jump ahead of the field, and the new programme will give it the ability to do that. The right hon. Member for Bridgwater wisely said that the scale and complexity of the project is almost unrivalled: it is not only a building, but the relocation of probably the most complex IT operation in Britain.
The right hon. Gentleman knows that we are taking steps to improve the management of that programme, but I agree with him and the hon. Member for East Hampshire (Mr. Mates) on the importance of monitoring the project's development. I can therefore inform the House that I have asked for regular reports on the progress of the programme, the development of its management, the containment of the costs and the avoidance of unacceptable disruption of service to the clients.
I stress that the SIS makes a valuable contribution through human intelligence to all those objectives—against proliferation, the drugs trade and terrorism. I echo what has been said by a number of hon. Members about the courage of those who work in the field. By definition, working to tackle the drugs trade or proliferation or

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terrorism means operating in countries that can be unstable and can present dangers to everybody—including, of course, those who work there on behalf of our intelligence services. The whole House will want to support the commitment and the courage that they show in performing services of great value to the nation and also to us, as the Government and the representatives of the people.
I want to highlight another two aspects of the SIS. First, there are areas of the world where British interests are engaged and where the relationships of power are, to put it kindly, not always transparent. The SIS provides a unique perspective on key regional and national developments in those areas. At its best, SIS intelligence from human sources can and does forewarn the Government of when things will go wrong and contributes to our options for steering them in the right direction. Secondly, SIS deployment worldwide provides unique added value when local flashpoints arise and a surge of diplomatic and sometimes military effort is needed.
I echo a point made by a number of hon. Members. Sometimes we are hampered in getting the value of the agencies across to the public because we cannot talk about their successes. Those successes can be spectacular. I want to try to put that right by sharing with the House a recent SIS success. Hon. Members will know that I have recently visited Sierra Leone, where we have seen a recurrence of an appalling civil war with grave civilian casualties. In relation to that, I want to put on record the great success that we have had in obtaining intelligence, particularly through the SIS. I can tell the House that the intelligence agencies have successfully shown the degree of Liberian involvement in the conflict in Sierra Leone and the contacts with the rebels in Sierra Leone.
At last week's General Affairs Council in Brussels, I was able to use that intelligence through the Minister of State—my hon. Friend the Member for Leicester, East (Mr. Vaz)—to convince our European partners that we should take a tougher line with Liberia. As a result, they agreed to step up pressure on the Government of Liberia and to be willing to use our own aid as a lever on them. We would not have been able to do that without good-quality intelligence and the effort of those in the field who provided it. In that way, the agencies contributed to our promotion of democracy and human rights in Africa. They helped to secure our aim of stability
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in the region and thereby protected our national interest. That is a good example of a success story achieved by the agencies and how good intelligence used by the policy makers can make a real difference.
Most of those present throughout the debate have been members of the Intelligence and Security Committee. For those who are not members of it, I would commend the foreword to the annual report as an excellent summary of why we need the agencies in an unstable and dangerous world. The growth of heroin in central Asia is a threat to security on the streets of Britain. Terrorist bombings in east Africa can be a threat to our trade and to our citizens in east Africa. Efforts to acquire chemical and biological weapons anywhere in the middle east can be a threat to our own people. Our dependence on information technology is vulnerable to being disrupted by any point around the globe with access to global communications.
I entirely echo the conclusion of the foreword that our safety depends on good intelligence. I congratulate the ISC on having provided us with a sound basis for the debate. I believe that the debate has established both the value of our intelligence and security agencies, and at the same time has demonstrated the health of their accountability to Parliament.
Mr. Greg Pope: I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

NORTHERN IRELAND GRAND COMMITTEE
Ordered,
That

(1) the matter of devolution in Northern Ireland, being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Grand Committee;

(2) the Committee shall meet at Westminster on Wednesday 5th July at 10.30 a.m., when it shall take questions for oral answer and shall then consider the matter of devolution in Northern Ireland, referred to it under paragraph (1);

(3) notwithstanding the provisions of Standing Order No. 88 (Meetings of Standing Committees), at that meeting the Chairman shall interrupt the proceedings under paragraph (2) at half-past One o'clock; and

(4) at the conclusion of the proceedings under paragraph (2), a motion for the adjournment of the Committee may be moved by a Minister of the Crown pursuant to Standing Order No. 116(5) (Northern Ireland Grand Committee (sittings)).—[Mr. Pope.]

Local Authority Housing Revenue
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]
6.46 pm
Mr. Tony McWalter: My topic for this evening's Adjournment debate would appear to be as dry as dust and as unappetising as shards of broken glass. It is a subject of which today's issue of The Guardian stated:
It is about as riveting as the Schleswig-Holstein question.
Palmerston said that those who sought to understand it went mad.
My topic specifically is reformed local government finance as it applies to a specific group, that of new towns which are debt free and have a negative housing subsidy. Negative subsidy means that they are in the black, in credit.
Debt-free sounds good, even privileged. However, we should remind ourselves that many of those who sleep on the embankment are debt-free. That does not mean that they have no need of resources.
The fact that the local authority for the area which I represent—it is called Dacorum—is debt-free means that it is being asked, as current policy is drafted, to take savage cuts of no less than 41 per cent. of its budget. The citizens of the area are faced with an unprecedented and catastrophic decline in the quality of service that they have received from their local authority, particularly recently.
I present this topic as a supporter of a Government whom I believe to be one of the best that this country has ever had. There has been a magnificent commitment to tackling educational failure, child poverty, pensioner misery, pain caused by alleviable medical conditions and the scourge of unemployment. The achievements do not quite match the commitment yet because many problems had to be tackled from a base of neglect for decades. However, there is strong evidence that the new Government's initiatives have addressed many of the problems that were left neglected.
I am proud of the Government to whom I commit my support in Parliament. However, I am still independent-minded enough to reflect on where there are sometimes failings, and to ask myself which issues need drastic attention. Local government finance is just such a topic. Over a period when the Government have introduced many special initiatives, and have often asked local government to be a partner in them, there has sometimes been a singular lack of understanding of the reality that local authorities have had their resources stretched to the point at which systems of service delivery are breaking. Yet we know that to be true. If schools have done well under the Government, why are there still threats of library closures? If those who wish to train for jobs have done well under the Government, why is it so difficult to get a decent level of support from council social services departments?
The answer is that when the Government commit themselves to expenditure in one area, they often commit themselves at the same time to a freeze or, at best, a very gradual upturn in another. As they were working from the very low base left to us by the previous Government in the provision of so many services, even a standstill budget will drive some services into the buffers.
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The topic of local government finance is not quite as dry as some might think. It affects the quality of people's lives. A woman in my constituency whose mobility is less than it was requires a small ramp at the rear of her house. The council recently stated that no such work could be carried out now, because of uncertainty about continuing funding for the Government. That is the case in service after service.
Faced with a 41 per cent. cut, what funds can the council commit to such cases? A woman needs new bathing arrangements because of her recent disability. The social services may help, but for years that department has been starved of the resources that would allow it to be proactive in the provision of such facilities. Dacorum borough has often helped in similar cases, but now it cannot.
My hon. Friend the Minister knows that I have a specific complaint about the effect of the new system of resource accounting on my constituency. The change to the new system is for the general good, but it needs to be implemented with considerable care in the labyrinth of local government finance.
The local government authority in my area, Dacorum, is an excellent example of its kind. A Labour administration from 1995 introduced a series of measures designed to tackle poverty and to initiate what we would now call a new deal. It pioneered many such beneficial initiatives, including a close relationship with local police, pre-dating the Government, which has resulted in an area of low crime and recent record falls in crime rates.
Dacorum is debt-free. That is one of the reasons why it could be proactive and support so many of the services not taken up by Hertfordshire county council. Voluntary services seem to be making up for many of the deficiencies of a social services system that is stretched to breaking point. One such organisation is the local Council for Voluntary Service, under the inspirational leadership of Mrs. June Street, who was recognised by Her Majesty for the quality of the work that she has done for the people of Dacorum.
If the local authority faced extraordinary resource difficulties, as Hertfordshire did, at least we had a voluntary service system supported by Dacorum borough and free of some of the impediments faced by many borough councils. That made a huge difference to the quality of life of many of the most needy people in my area.
For years, Dacorum has not asked permission from the Government to borrow. Inevitably, its housing stock decreased markedly under the right-to-buy proposals, but it remains strongly the landlord of choice for the many people who cannot afford to buy, even at discounted prices. Rents in the area are 6 per cent. lower than in Stevenage, and if a large-scale voluntary transfer of the stock were proposed, residents of Dacorum would say, "No way!" The council supports a number of housing initiatives outside the housing revenue account, including a women's refuge and a centre that supports those with mental health difficulties.
The net effect of the moves was that Dacorum, through selling houses and the contentious sale of a large playing field, which was technically a housing asset, was able to liberate itself from governmental spending constraints. It was able to use the interest on capital receipts and the receipts themselves to tackle poverty, deprivation, desperation and social malfunction, especially when it was led by a Labour councillor, Julia Coleman,

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between 1995–99. In my view, in its use of resources, Dacorum borough council operated as a council should. It does not operate in that way now.
In its finances, the council faces the equivalent of planning blight, even catastrophe. It is tempting to be party political and say that the reason is that, since May 1999, it has been run by a minority Conservative administration. However, that accusation would be unfair. The Government have established a new system of organising local government finance that could be massively prejudiced against Dacorum and significantly damaging to other new towns, including Bracknell, Harlow and Crawley.
What is the origin of the blight, which means that my pensioner constituent will not receive help to get her bath, and that pensioners who enjoy a game of bowls at an economical price will be denied it? What threatens the budgets of dozens of voluntary organisations, which deliver services to the elderly, the mentally handicapped, the homeless, the mentally ill and those who need supported employment? The origin of the misery is that Dacorum has what is called "negative housing subsidy", and assets that exceed its liabilities. That makes it technically debt-free. It has debts, but they are covered by its assets.
Since an Act of Parliament in 1989, Dacorum has not received any borrowing authority to build or improve its houses, which number about 12,000. It had a negative housing subsidy, which it was required by law to put into its general rate fund. That meant that, this year, £8 million "profit" on the council housing budget subsidised general rate activities. In addition, the council is regarded as having what is technically called a mid-year subsidy credit ceiling, which is also negative—about £36 million. That mid-year subsidy credit ceiling, which is negative subsidy, is deemed an asset on which it can make interest.
Negative subsidy is a funny term. The whole system is built around the idea that councils are up to their ears in debt and that they want to borrow. A council that has managed its affairs well, whose policies anticipated many of the Government's policies and which is not in debt and is delivering a high-quality product to its people is somehow deemed an affront to the system. Hence the ridiculous language of negative subsidy. The mid-year subsidy credit ceiling system is deemed to deliver the council interest of £2 million on its assets. The sum is the item 8 credit that appears in the title of the debate on the Order Paper.
The £8 million in the council's general rate fund, which is 41 per cent. of the council's revenue, is threatened because the Government want no transfers from housing funds to the general rates. The straight implication is that Dacorum would have to slash its annual revenue budget by £8 million. Hundreds of local organisations would close their doors for ever. A council that does so much good will, alas, no longer be able to do that.
What did the Minister for Housing have to say about that? On 23 May he said—
It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]
Mr. McWalter: I am grateful to you, Mr. Deputy Speaker. I thought that I had temporarily got lost, in terms of the procedure. I hope that the debate will not last too much longer, so that we can get away a bit early.
On 23 May, the Minister for Housing and Planning said:
The majority of respondents agreed that it was right to regard local authority housing as a national programme and that assumed surpluses in authorities' housing accounts should be retained within housing and redistributed through a pooling mechanism.—[Official Report, 23 May 2000; c. 437W.]
It can be said in words of one syllable that £8 million is to be lost by my local authority to authorities that are deemed more needful.
I have little doubt that—to quote Tony—those who say that they will rob Peter to pay Paul will have the support of Paul. In this case, the Pauls are in a strong majority; but it might be sensible to consider the implications for Peter before seizing his assets. So far, the Government have suggested a 10-year phasing in of the change—that is, the removal of the negative housing subsidy of £8 million. I thank the Minister for that, but it still represents a considerable year-on-year reduction. I value the work of my council, and I passionately value the welfare of my constituents. I thank the Minister for what he has done, as far as it goes, but I want a better outcome.
A second line of attack was recently offered by the technical advisory group to the Department. The group notes that for a decade local authorities that have been borrowers have been required to put aside money to cover their debts. That generated a resource that the Government could use for a national housing initiative. Debt-free authorities, however, did not make such provision. They did not put aside money to cover their debts, because they had no debts. They spent capital receipts, as they were fully entitled to do; or they saved them, and ploughed the interest into improving the quality of life of their citizens. That is certainly what Dacorum did. New rules for resource accounting now assume that they did not spend the money, and effectively require such authorities to pass the interest to the Department even if they no longer have the interest-earning capital.
I make the point because it has particular significance for other new towns. They regard this as retrospective legislation with a vengeance. Fortunately for Dacorum and for Hemel Hempstead—the same does not apply to some other new towns—at least Dacorum still has the money. It is still receiving interest, and it could meet the bill. The only misery—in fact, a major series of pieces of misery—that the item 8 transfer could cause would lie in the fact that Dacorum might then have no capital programme. After all, it has money, so it has no need to borrow—but look! It must not spend its money, or it will not be able to make its £2 million deemed interest payments to the Department.
The item 8 transfer would also mean that Dacorum would lose £2 million from its general rate fund, as part of the overall £8 million lost. It would never be able to get a capital programme going, because—this is a crucial point—new towns lack the land assets that older councils have.
Some might think this series of penalties rather steep for a new town that makes its contribution to the £160 million a year that is raised by such towns for

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the Treasury through what used to be the Commission for New Towns, and is now English Partnerships. Some might consider such a penalty an absolute injustice to an authority that has made far fewer demands than others on Treasury resources, and that has made no contribution to the public sector borrowing requirement for a decade. Some will say, "If this is what happens when things are managed well, what is the point of managing well?".
The technical advisory group suggested that authorities that are debt-free should be asked not to make item 8 payments from the time of their freedom from debt. Freedom from debt does not mean that there are not major problems—including housing problems, which in my constituency are not covered by the housing revenue account.
In my constituency, the price of houses is too high to be managed on the salary of a teacher or nurse, so we have a brain drain to those parts of the country that have accommodation at more reasonable prices. We need affordable housing, but we will not get it through that other mechanism. We need support for housing, some of which will be outside the housing revenue account. A sensible Government would recognise the contribution by authorities that are not in debt and organise things appropriately.
I saw on the internet last night that Hilary Chipping from the Minister's Department has written to all local authority finance officers. She talked about the item 8 credit and said that the Department would
write to you in October with any proposals for changes.
I am glad that there is a commitment to review item 8 arrangements, but it means that blight continues until October. I urge the Minister to recognise that the issue is more urgent than that. We need action now. Special action for new towns needs to be taken ahead of that universal consultation. I speak for colleagues who are also implicated in this business.
Hilary Chipping said in the letter to chief finance officers:
There will be transitional arrangements.
I am grateful for that, but again, she will write later in the year. In the meantime, the authority is looking at what happens to that £6 million.
What do I want from the debate? First, I want an assurance that the Minister understands the gravity of the situation afflicting Dacorum and other authorities that are in negative housing subsidy. Secondly, I want an assurance that, whatever happens, he will ensure that there will not be a catastrophic cut in the council's budget over whatever period. I need that assurance now, so that rational planning of services can restart. Thirdly, I want him to press for the mid-year subsidy credit ceilings to be set at zero, as his own advisory group has suggested, rather than be deemed negative. That would allow assets to be used for the good of the community that generated them. It would permit a continuing capital programme and set item 8 credits at zero.
I hope that the Minister recognises the passion with which I have dealt with the matter, which looks on the surface rather cold and technical. These are real people; these are my constituents. Dacorum is an excellent council delivering on Labour's agenda for improvement in the quality of life of our citizens. I cannot bear to see it threatened, as it is at the moment.
7.8 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin): I thank my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) for setting out the issue so clearly. It is to his credit that he made simple some fairly complex problems. I hope that he will find my response as clear.
I acknowledge the problem and the effect on my hon. Friend's local authority in particular, and on some others. I think that he knows that the Government take the matter seriously. He will recall that I have met two delegations on the issue: one of local authority leaders and one of Members of Parliament, including my hon. Friend.
The debate is timely. We are considering the detailed arrangements for the new financial framework for local authority housing next year, and looking closely at the position of negative subsidy authorities. We have already announced that there will be transitional arrangements from April next year to assist them. We shall shortly consult on those proposals.
Perhaps I should say a few words about the system of local authority housing finance and what we will do to improve it. There is general agreement that the present finance system is difficult to understand. It fails to provide the right framework for maintaining a valuable national asset and for taking forward the important changes that we are introducing, which are designed to ensure the best use of housing, best value in the provision of services and more effective tenant participation.
The housing revenue account must change. It will move to a resource accounting basis, making more transparent the cost of capital tied up in assets and providing additional resources to maintain it over the longer term. In due course, subject to Parliament's approving the necessary legislation, we propose that it should once again become a pure landlord account, no longer confusing housing activities with the personal support given to individual tenants through rent rebates.
In tonight's short debate, I shall not explain the intricacies of the existing system or our proposed changes. They can be found in the speech made by the Under-Secretary, my hon. Friend the Member for Stretford and Urmston (Ms Hughes), on 8 February in a debate which I believe that my hon. Friend attended.
As my hon. Friend will appreciate, under the existing system, resources are lost to housing at a time when there is a continuing need for them. That will all change with the introduction of the new financial framework. First, when we introduce the major repairs allowance next year, there is likely to be a substantial change in the amount of subsidy paid to authorities. That is essential in order to provide the revenue resources that authorities need to maintain their stock. As a result, authorities that are in negative subsidy—such as Three Rivers, which is in or near my hon. Friend's constituency—could go out of negative subsidy altogether and again be entitled to receive subsidy. Others, such as Dacorum, may remain in negative subsidy but at a lower level, with more rental income retained within the housing revenue account to spend on their stock. In either case, there will be consequences for the general fund.
The system will change again when we are able to take rent rebates out of the housing revenue account. When that happens, we propose to capture all assumed

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surpluses, including all those that are offset against rent rebates. We have recently confirmed our intention to introduce the pooling of those surpluses. They will then be redistributed to authorities in deficit. When that change is introduced, negative subsidy authorities will no longer be able to transfer resources to their general fund. Along with all other surplus authorities, they will be required to pay their overall surpluses into the pool for redistribution to other housing authorities. That will ensure the most effective use of scarce resources. It will mean that housing resources are retained within housing.
We recognise that, for negative subsidy authorities, the changes may cause difficulties elsewhere. That is why we have said that we shall introduce measures to enable them to make the transition to the new system. Those measures will operate from next April. My hon. Friend pointed out that his local authority was attributing some of the cuts or the inability to provide services this year to the impending changes. I can say only that so far there is no basis for that as the changes do not come into effect until next April.
We are also reviewing the assumed investment rules to see whether there are any grounds for amending them next year. The local authority associations are fully involved in that review, and I understand they are keeping negative subsidy authorities informed of progress. I have already confirmed that we believe that the rules are generally sound in principle. However it may be justified to make some changes for debt-free authorities, which I
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understand would include most of those in negative subsidy. That could go a long way towards reducing the difficulties that they face as they move to the new system.
My hon. Friend asked three questions. The first was whether I understood the gravity of the situation. As I have explained, I do and have done for some time, thanks to his eloquence and that of others who represent the local authorities that are affected. That is why we are putting in place the transitional measures. We are aware that they must be finalised by December, to enable local authorities to make plans for the subsequent financial year.
My hon. Friend asked me for an assurance that there will be no catastrophic cuts and I can give him that assurance—but I cannot assure him that there will be no cuts. My hon. Friend asked also if I would press for the mid-year subsidy credit ceiling to be set at zero. I cannot do so, but we will be consulting on the way forward and that is one of the issues we shall be considering.
I am grateful to my hon. Friend for raising a topic of considerable importance for a number of authorities, especially the one that my hon. Friend represents. I hope that I have reassured him, at least to some extent, that his concerns and those of his local authority have not fallen on stony ground. Equally, I hope that he accepts that the changes we are making to the housing revenue account system are long overdue.
Question put and agreed to.
Adjourned accordingly at fifteen minutes past Seven o'clock.

Preamble
[SIR ALAN HASELHURST in the Chair]

School Meals
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Kevin Hughes.]
2.30 pm
Mr. Barry Sheerman: It gives me great pleasure to open this debate on the Education and Employment Committee's first report on school meals.
I begin by making a confession. The only active role that I played in the report was presiding over the press conference, because I was appointed Chairman of the Select Committee after all the hard work had been done. However, since that time I have immersed myself, if one can, in school meals and have taken it upon myself to visit many schools to check some of the facts that the Select Committee discovered and reported. I hope, Mr. Deputy Speaker, that you will bear with me if I purport to be an expert on the subject of our report, but I did not make the visits with the members of the Committee, a number of whom have changed since the report was put together.
The Chairman of the Committee was my hon. Friend the Member for Croydon, North (Mr. Wicks), a colleague of the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Redditch (Jacqui Smith), who will reply to the debate. I pay tribute to him and the members of the Committee who did such a thorough job on the report. I assure hon. Members that we shall act as passionate and informed advocates of the findings.
I have read the report in great detail and read the evidence. Indeed, it has been one of my priorities on the many trips that the Select Committee has made to schools to visit school kitchens and look at the meals that are provided.
We discovered that the overall nutrition of many people in this country is in a serious state. Indeed, it would not be too dramatic to say that the diet of many British school children is a disgrace and a savage indictment of our society. Hon. Members should read recent reports on nutritional levels in Glasgow and study the Medical Research Council's work, which points out that in many ways the diet in 1950 was much healthier than it is now or was in the 1990s. That is shocking to most people in this country, who would expect us as parliamentarians to try to do something about it. It was the intention of my colleagues on the Education and Employment Committee to tackle this state of affairs with their normal thoroughness.
Many people put nutrition to one side, as if it were an added-on extra, believing that what is important is teachers, resources, computers and all the other things in a good school, but a child who is undernourished and not getting a proper diet is less able, or unable, to concentrate on the lessons. That is not a healthy child: it is a child who cannot apply himself or herself to the business of acquiring knowledge. Therefore, I hope that
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today we can focus on the integral part that the school meal and school nutrition play in our children's educational levels and the overall health of the population.
The overall impact of poor nutrition on children's health is a cause of serious concern. If the Government are serious about their commitment to reducing infant mortality by improving the health of expectant mothers, and doing something about the burden of coronary heart disease that kills most of my constituents —in some areas the largest killer is cancer, but in my constituency it is coronary heart disease —and the many forms of cancer and bone disease that affect people in later life, they must regard childhood nutrition as part of that commitment. We must consider not only childhood diseases but the diseases that occur later in life. Childhood nutrition is a significant factor in achieving those goals. Furthermore, a great deal of research shows that improving a child's diet has a positive effect on his or her educational performance.
Those who take an interest in the history of this matter will be aware of that great piece of legislation, the Education Act 1944. Some of my friends who make over-generous claims about what Labour did in 1945 sometimes make the mistake of saying that the 1944 Act was introduced by Labour. It was not. It was the Butler Act, introduced by Rab Butler, who later became Lord Butler. However, although he introduced the Bill, it had the support of the wartime coalition Government, who were still in power in 1944. The approach to the Education Act was therefore agreed by all parties.
In addition to the tremendous change that the Act brought to the education system, it ensured a fundamental change in our approach to school lunches, as they were described. The regulation prescribed that those lunches should provide children with one third of the daily nutritional requirements laid down by the Department of Health. One can understand that approach being taken in a country that was coming out of the war and out of rationing. The embargo around Britain made it difficult to bring in fresh food, of which there was a scarcity.
After the war, therefore, the importance of school meals was realised. I do not want to make a heavy political point, but they were, tragically, abolished by a Conservative Government when Mrs. Thatcher, as she then was, was Prime Minister, in the full flush of her first Administration in 1980. That did a great deal of damage. I know many members of the Conservative party in the House today who agree that it was a mistake. They can now see the problems that were caused. They understand that, given the Medical Research Council's research comparing 1950 with the 1990s, something went seriously wrong, which no one anticipated. It was believed that the markets would provide, and that good food would come naturally from a competitive process in the school meals system.
Mr. Nick St. Aubyn: How does the hon. Gentleman respond to the evidence given to the inquiry that implied that much of the food being produced pre-1979 was not being eaten by children because they found it so unattractive?
Mr. Sheerman: I have read all the evidence, and the report. I found much evidence from all sides on that

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matter. Of course, I understand that there is a great deal of food wastage. One must move with the times, and not provide stodgy, old-fashioned food. There was an element of that, and I do not want to push this aspect of the argument too far.
However, there is no doubt that, with no guidance or standards, it was impossible to judge the quality of school meals for 20 years. I welcome unreservedly —as does the all-party report —the reintroduction of standards relevant to our time that give a basis on which to judge the quality of the food that our children eat in school.
Mr. James Clappison: The hon. Gentleman was setting the scene successfully until he reached his last point, from which it would be wise for him to move on.
The comments of my hon. Friend are amply borne out by the evidence recorded on page 17 of the report. In response to question 60, the chairman of the Local Authority Caterers Association said that, after an initial drop-off from 1980, the number of pupils taking meals increased year by year, that school catering provision was extremely good and that many local authorities had excellent standards. I appreciate that the hon. Gentleman wants to move away from that point.
Mr. Sheerman: I want to move on, but I should comment briefly on the dreary experience of many of us who were in Parliament during those years. There was a real decline in the quality of school food-shift towards the culture of baked beans, pizza and chips and away from a proper balanced diet. One could not say to the head of a school or governing body, "This is not of the right standard", because there was no standard by which to judge. It would have been unfair of me not to have made that point, but I shall now move on.
In February 1997, following a commitment in the run-up to the general election, the new Labour Government introduced voluntary guidance entitled "Eating Well at School". In July 1997, in the "Excellence in Schools" White Paper, the Government announced that they would introduce minimum nutritional standards for inclusion in school meal contracts by May 2002. The Committee wholeheartedly welcomed the Government's decision and their commitment to ensuring that nutrition in school meals reached acceptable standards.
I have to say —not just to please everyone in the Chamber —that I have a criticism of the Government. Given that there is such a demand for standards, why must it take so long —until 2002—for a Government elected in 1997 to reach the point that we all want to get to? I understand what is involved in consultation processes and in producing our report. I have been a Member of Parliament for a long time —probably about the same length of time as you, Mr. Deputy Speaker. However, despite that, and the fact that I understand the procedures involved and the difficulty of introducing change, I still feel that the machinery of government grinds small and slow. I should have liked this problem to have been dealt with much faster, as a matter of priority. I hope that I have been even-handed in balancing the blame for that.
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The Committee strongly advocated that the school meal regulations should be based on scientific, nutrient-based guidelines. We were therefore very disappointed when the Government did not accept our recommendations that nutritional standards for school meals should be based on nutrients, which can be measured. The evidence that the Committee took clearly showed, across a range of opinion, that any adopted standard should be measurable. Alternatives such as "You can have a bit of that and a bit of this", "It looks nice on the plate" or "You can only have chips three days a week and baked beans once a week" do not add up to a standard that we could present to a school, saying, "Here are the guidelines and how to meet them through nutritional standards". It seemed to members of the Committee to be plain common sense, backed up by much of the research work and many of the leading health advocates in the country, that we must have a standard that can properly be measured.
Unfortunately, in that fundamental regard, the Government's response has been disappointing. They have made a mistake: the Committee has not changed its mind about that. Governments being Governments, they have the right to disagree with Select Committees —although I cannot understand why, especially in the case of the Education and Employment Committee. During our few hours of debate, perhaps we will have been so eloquent that the Minister will have totally changed her mind and we will get a pleasant surprise.
I understand from the National Heart Forum, with which the Minister had a meeting earlier this week, that her Department believes that it can ensure nutrient levels using the food-based approach. "Food-based approach" is an interesting phrase. I do not know what other approach there is. It is a technical term for a balance of foods on the plate throughout the week. However, it is unclear to the National Heart Forum and to me how that balance will be delivered. I hope that the Minister will enlighten us.
As a political realist, I agree that there is scope for strengthening the guidance for monitoring local and national standards. If it came to a knock-out fight, I would rather have a standard than not, but I would be very careful about how it was monitored, and I agree with the experts that after two years it should be reconsidered. I am giving the Minister until the end of the debate to change her mind and to accept the suggestion of a review after two years. I am providing a good range of options.
I am again going to criticise the Government, because I would have expected a Health Minister to be present. The two elements are indivisible. The educational element cannot be cut out, and diet is so important that I would have liked the Minister for Public Health —an hon. Lady who represents another Yorkshire constituency —to be alongside the Under-Secretary. There is a joint responsibility, and standards cannot be monitored without a strong health input. The Government have introduced a Food Standards Agency and a Health Development Agency. Most people believe that those two new organisations should be involved in the early evaluation and review of the regulations. Some have also called for full evaluation of the achievement of those two bodies after the two-year regime.

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I urge the Minister to change her mind and to back the nutrient-based standard, but if our advocacy fails, we would still want the guidance to be strengthened with the implementation of the regulations monitored and evaluation by the two bodies.
That is my most critical comment on the Government, and I shall move on to matters of common agreement and concern.
The Select Committee is pleased that the Government have accepted much of our report, including the necessity of the whole-school approach to learning about food and nutrition. Some of us would go even further and argue for a more multi-dimensional approach to health and life skills in schools. Some members of the Committee met the BBC's education unit only this morning and looked at some of the amazing educational programmes, including some about life skills, that are being adapted to on-line learning.
Every product —every chair, bench, light, piece of plastic and so on —can be given a life-cycle analysis. We can tell how much energy it uses, where it originated, how it was made, what it cost and what it will cost to dispose of it. A total life-cycle analysis can be made of any material object. Why do we not have a life-cycle analysis of young people? Why do schools not have a fully dimensional approach to teaching young people about a healthy diet and exercise, explaining that smoking and other drugs, early pregnancy, ear piercing and tattooing in obvious places can lead to poverty and difficulty in achieving what most of us would consider a good standard of living? There is an urgent need for the health, food and education sectors to get together and —perhaps with some of the extremely good material that the BBC is providing and planning —to ensure that we have a life-cycle analysis for human beings so that people can learn about the implications of early decisions on the rest of their lives.
Schools should have a whole-school, holistic approach. I have received many letters from people stating that Delia Smith would never have had the enormous success with her "How to Cook" book teaching people to boil an egg if anyone anywhere had been properly teaching children about food and the preparation of food. We are getting to a dangerously low level of activity in the food sector in schools. I know that there is a minimum period —I think it is 12 weeks —but we need an holistic approach that goes right through the school experience, because learning about food and diet is so important.
What is most depressing is to see a young woman becoming overweight —I believe that it applies to young men now, but I did not know that until recently —because she eats too much junk food, and she then takes up smoking to slim. What an awful cycle of bad health that is! I am looking at a great friend and neighbour of mine, my hon. Friend the Member for Bradford, North (Mr. Rooney), who has the noxious habit, but I think that he will accept that it is not a good cycle to get into. He may have seen the light since I last spoke to him and given up, but I have my doubts. Young students' life chances are affected by the negative effects of poor diet, lack of exercise, smoking, drug abuse and early pregnancy. The Committee's findings highlighted the fact that a child who does not receive sufficient nutrition is a child severely disadvantaged in the learning journey.
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One thing that I congratulate the Department on is the concept of a learning journey and the way in which the curriculum has been redesigned. There will now be a rough guide to the learning journey for parents and a map to the learning journey for students. That is brilliant. That is a very modern way of describing the educational process. A child must be well fed, well nourished and well provisioned if he or she is to survive that tough journey. Gaining knowledge is not easy: one must sweat and work with all one's heart and mind. However, those of us who have been lucky enough to undertake the journey successfully know that it is worth while.
Before closing my remarks, I want to answer one or two other criticisms that have been made of our report. Some of those involved in school catering have accused us of too much interference, when they, the experts, have far more knowledge of the food industry. I saw one letter that said "What a cheek, trying to suggest that we should know how to steam fish and boil potatoes". There are some good providers in the food catering sector, but they are not all equally good. Members of Parliament know that. Many of us go to receptions and meals in the course of our work not a mile from this place —usually about half a mile —and we have pretty fair opinions of the quality of catering in the different establishments.
Going round the schools, I found dramatic differences between the really good and the average school meals. There were some schools that, through good management and imagination, provided excellent school meals with diversity and choice, and a good range of vegetables, salads and pastas. The best are very good, much better than the average. I tell the catering partnerships that it can be done, but I acknowledge that good food is often more expensive than poor food. I know that, when budgets are cut, there is a temptation to go back to beans, burgers, pizzas and the dreary litany of ghastly food that so many people, young and old, indulge in. That is not to say that there is no room for fast food. I have four children —three daughters and a son. I used to drive tens of miles to find a Pizza Hut when my son went through a phase of thinking that the Pizza Hut was the only good place to eat. Indeed, we once spent some time in the Nevada desert looking for a Pizza Hut, which was particularly taxing. Nevertheless, we found one —they are everywhere. We are seeking a balanced diet.
If the Government want better food, they cannot ignore the fact that that will mean more expense and a larger food budget for schools. We should not kid ourselves or pretend that all schools can provide a wide range of beautiful, fresh food and a greater range and diversity in an attractive environment. Too often, we saw horrible places to eat. We do not expect adults to eat in horrible places, although during the time that I have been in Parliament I have come across some pretty horrible places for Members to eat in —some are better, but some have a pretty horrible environment.
In general, people have a choice —they go willingly to eat in pleasant and welcoming environments. We must do more to encourage schools to provide the premises that make eating food a pleasurable experience. I realise that that has cost implications. The Government have a significant initiative involving school building and renovation —much work is going on in my local

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authority, Kirklees, where a private sector partnership is carrying out a massive reinvigoration of school premises, and 20 schools will be affected.
Unless the importance of school meal provision is emphasised, the facilities may be tucked away in a corner or in the oldest, dreariest and least lit or ventilated part of the school, which is not good. The design of kitchens and schools is important.
To return to the point that was made by the hon. Member for Guildford (Mr. St. Aubyn), although standards are involved, we also need to move with the times. These days, in order to make food attractive to young people one has to make the places in which they eat attractive, which requires innovation and imagination. One sees that in the high street —a wonderful revolution in our country has resulted in London, Leeds, Huddersfield and Halifax having better food, more restaurants, and more diverse places to eat than ever before. People want to eat in settings that are attractive. If we cannot provide such facilities in schools, we should not be surprised if the lure of the burger bar and the fish and chip shop becomes compelling to schoolchildren. That is how I respond to the suggestion that our approach involves interference by a nanny state.
I shall conclude on the most important point. One's diet in one's early years has a dramatic effect on one's life expectancy and life chances. When I re-read the Committee's report, I was struck by the fundamental themes that run through it. A significant percentage of our population is tragically affected by the poor diet that they choose. Recent medical research shows that the situation has declined rather than improved during the past 40 years. Children get the habit of good food in their early years and at school. Schools are about education, and they should educate students about diet and good food. We should inculcate them with knowledge about the essentials of good, fresh food and the need for a proper diet. We must encourage lifelong learning —that will help children to become healthy adults and, in turn, good and nurturing parents.
Although members of the Select Committee produced an excellent report, they should not simply walk away saying, "We have finished the report. Producing it was a good, cathartic experience." We should say to the Government, "We shall watch carefully to see how you will respond and whether you will incorporate our conclusions in policy commitments." We shall return to this matter time and again. This subject is too important to be left alone.
2.59 pm
Mr. Nick St. Aubyn: I really enjoyed this inquiry. We had an interesting visit to a school in Reading and we had our fair taste of school meals whenever we visited schools in the course of other inquiries. We went to Lambeth, Reading and other parts of the country to look at early years provision. Nutrition is very important in early years. I am sorry to have missed the first few minutes of the speech made by the hon. Member for Huddersfield (Mr. Sheerman), but this issue needs to be addressed from the earliest stages of the education system. The hon. Gentleman asked why it is
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taking the Government so long to act —five years in all. Typically for this Government, however, they have a five-year implementation period but only a two-month consultation period with the outside world on their proposals. That is a wholly disproportionate effort.
Charlotte Atkins: I am surprised that the hon. Gentleman is so anxious for the Government to act so quickly to reverse the previous Government's legislation that removed nutritional standards for school meals.
Mr. St. Aubyn: I am sorry if I did not make myself clear. I was surprised —although that was tempered by previous experience of this Government—that in the course of a five-year programme, they have allowed only two months for outside consultation. They have allowed five years for implementation because they do not believe that the problem is that pressing. We heard a great deal of evidence that the deregulation of the provision of food had not caused any overall deterioration. The object of introducing new guidelines must be to raise standards.
We must be careful here. We can be forthright in our views about what is right for children. However, all of us who have children —the hon. Member for Huddersfield and I have ample experience —know that they do not always do what one expects. Unless their diet is attractive as well as wholesome and nutritious, they will find their own means of supplementing the food that they are given. It is hard to escape the observation that although the past 50 years have seen a massive increase in the amount of soft drinks consumed by children, which one would have expected to have done a great deal of damage to their teeth, children's dental health has markedly improved. As in all the areas, we can point to good practice. We should, as the report recommends, encourage children to consume healthy liquids as well as healthy foods, but we should not become too precious in our approach to their development in the big bad world.
Dr. Evan Harris: I am listening to the hon. Gentleman with great interest. I do not want to make a judgment on the point he is making. I simply want to counsel him and other hon. Members on the dangers of associating cause with effect on the question of whether the improvement in dental health is despite or because of an increased consumption of fizzy soft drinks and sugar.
Mr. St. Aubyn: I am grateful to the hon. Gentleman, whose knowledge of medicine greatly exceeds my own. Indeed, I was implying that that improvement was despite the consumption of these fluids. One must keep the problem in perspective, given that there are other remedies, such as proper dental health care. There was a moment when I thought that the hon. Member for Huddersfield was decrying the fact that children in the 1980s and 1990s discovered baked beans, pizza and chips. Those will always be a part of children's diet. There is little that we can do about that.
Helen Jones: Would the hon. Gentleman take it from someone who was teaching before and after the Education Act 1980 that the experience on the ground was of a great deterioration in

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school meals? Fresh meat and fresh vegetables almost disappeared from school canteens. Does he accept that we cannot encourage children to make healthy choices about food if those healthy choices are not on the menu?
Madam Deputy Speaker (Mrs. Gwyneth Dunwoody): Order. Interventions, however telling, must be brief.
Mr. St. Aubyn: Certainly we saw evidence from a number of sources that the effect of deregulation was not as bad as that. As I implied earlier, the meals that were provided met the nutritional standards laid down at the time, but were often deeply unattractive to children. Many children simply did not consume that gunge. I respect the hon. Lady's specific experience, but we received written evidence from the Local Authority Caterers Association, which says on page 9 of the report:
Without doubt the introduction of Compulsory Competitive Tendering has led to some Local Education Authorities saving money on the provision of school meals and updated the systems and methods of production.
I will deal with that issue in a moment.
Other witnesses told us that, initially, there was a drop in the take-up of school meals because the price went up in 1980, but that was rapidly reversed. In the opinion of most, including the National Heart Forum, it would not be fair overall to say that the quality of school meals deteriorated.
I mentioned the evidence of the Local Authority Caterers Association. One important change that resulted from the introduction of competitive tendering following deregulation was that a great deal of investment went into the production of school meals. Many schools had hopelessly out-of-date kitchens and facilities, many of which might have been regarded as unhygienic. They certainly would have been regarded as such by today's standards.
There simply has not been the scope within the education budget in the past 20 years to meet the significant capital investment and economies of scale that have been undertaken by contractors. We can see the results today. Many contractors have hubs from which they distribute school meals, which means not only that their internal standards can be more rigorously tested and enforced, but that delivery of school meals is much more consistent and efficient than previously.
Mr. David Drew: I remind the hon. Gentleman that contractors in rural areas must travel a lot further.
Mr. St. Aubyn: Indeed. However, in rural areas —which, typically, have much smaller primary schools —a hub from which to deliver meals has induced a great many economies of scale. Small rural primary schools have avoided making the capital investment that they would otherwise have had to undertake, which has perhaps enabled many schools to survive. Therefore, a deregulated system has many advantages.
However, no one pretends that deregulation is perfect. We can always look for improvement. As a member of the Select Committee, I endorse the idea that new standards should be set, because I believe that we
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now have an opportunity to make improvements, build on the successes of the past 20 years and learn from them. Why should we make improvements? Despite the fact that children's health has been improving overall, poor nutrition has a significant effect on their educational attainment. We took evidence from Dr. Michael Nelson, who says on page 34 of the report:
Recent evidence from the US and the UK shows that cognitive function is poor in children with poor dietary status but no overt signs of deficiency, and that intervention to improve diet…results in improved cognitive function and learning ability.
There can be no doubt that well-fed children, who have breakfast before they enter class and eat nutritious food during the day, will be more capable of concentrating on their studies. As Members of Parliament, we know what it is like to rush into the House to deliver a speech without having eaten a good meal beforehand.
Schools want to ensure that their pupils have a decent meal. Pressure to ensure a high quality of school meals exists in the local education authority system, which is why the need for new standards and guidelines has not been pressing hitherto. However, we are moving towards a new world. The Government already contemplate more direct funding for schools to purchase provisions themselves. The Conservative party will take that to its logical conclusion and make schools free of local education authority interference in such spending decisions. As purchaser provision reaches school level, more guidance about standards is necessary, but it is also important that schools retain flexibility in choosing how best to deliver a decent school meal.
The National Heart Forum mentioned a national school fruit and vegetable scheme, which the Select Committee looked on with enthusiasm. In its evidence, the National Heart Forum told us, on page 31 of the report:
Fruit and vegetables… are one of the main components of the diet where you see huge social class differences with those in social class one eating about 50 per cent. more or half as much again as those in social class 5. This… to an extent, this reflects the social class differences in heart disease and in cancers later in life.
If we can develop schemes whereby all children receive their fair share of fruit and vegetables, we will have done a great deal for their physical as well as their educational development.
There is, however, a problem with a fruit and vegetable scheme. In comparison to milk, fruit and vegetables are far more perishable, so any scheme will have to be flexibly developed. It may require Government initiative and incentive, but it will take place at the local level. Schools will, perhaps in collaboration with local farmers, farm producers and food stores, work out their own schemes.
Children must be encouraged to consume what is good for them. It can be difficult persuading those who are entitled to free meals to claim them. Much confusion, as a result of conflicting evidence, reigns on that matter. Some said that children were unhappy about showing that they merited free meals; others disagreed. There are new ways of identifying the children, so they can claim their free meal without it being evident where the meal is delivered. That must be preferable to the old-fashioned systems.
Where there is a high entitlement to free school meals, it may be worth considering converting the cost of the entitlement into a general subsidy for the delivery of

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meals on the site. That would not mean departing from contracting-out arrangements; once the price of the school meals had been negotiated with a contractor, a standard percentage discount would be applied to make them highly accessible to the children.
The report's main conclusion is that the Government should get on with it. Many who responded to the consultation on the draft regulations and guidance wanted the Government to take action. Curiously, the Government did not consult on one question. Paragraph 24 of the report on the response to the draft regulations, published earlier this month, said:
Food vs nutrient-based standards…was not an issue for consultation.
The argument about food versus nutrient-based standards arose during the Committee's inquiry. Although responses were not invited on that issue, respondents who volunteered views were split down the middle. More than half supported food-based standards, and the minority, which was nevertheless 20 out of 44, supported nutrient-based standards.
High prices will deter take-up by children, so we must be mindful of the cost of imposing the new regime. A nutrient-based system will be easier to police than a food-based system, because conditions can be built into the contract with the supplier, who could be subject to spot tests. If the supplier failed a spot test, severe penalties could be imposed. That would place the onus on the supplier to meet the standard.
Food-based standards will require more evidence-gathering in the school, and much more debate will take place after the evidence has been gathered. Food-based standards will be more expensive to implement and regulate. The Government should consider the extent to which their food-based approach should be legally enforceable, instead of part of the guidance package given to schools.
The Committee heard that many with experience in school meals felt patronised by the Government's initial approach. It was unnecessary to tell those people how to undertake basic tasks such as boiling an egg or baking a cake. I gather from the latest response that the Government have wisely withdrawn from such excessive nannying of the people doing the cooking.
If the Government are to succeed in responding to the consultation, they must set new standards, use a light touch and only generally educate the schools that will now take the purchasing decisions. That will ensure that the quality of school food is raised and, more important, that the quality of school food consumed is raised.
3.18 pm
Mrs. Alice Mahon: One of the first debates in which I took part in the House, 13 years ago, was on health and I spoke about the importance of school meals. That subject is dear to my heart, as a Member of Parliament, a mother and a recipient of school meals when I was younger. I welcome the debate and congratulate the Committee on its report. I congratulate also the Government on accepting some of the recommendations, and I will say how I would like the measures to go much further.
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A school meal is one of the most valuable services that we can offer children. Even now, it is the main meal of the day for some. We could all visit schools in our constituencies and talk to teachers who would tell us that such a meal is the mainstay for many pupils. For almost 100 years, schools meals have played a vital role in nourishing children, especially those from poorer families. The meals were first introduced in the 19th century, when they were provided by charities. My mother, who was one of 11 children, welcomed the free school meal, which was provided by a charity because she was from a big family; she told me many times that she would have gone hungry without it.
The 1906 Act allowed local government to raise money on the rates to provide meals for schoolchildren. The interest in school meals came about when working-class recruits in the Boer war died like flies; their health was so poor, they could not fight off diseases. As my hon. Friend the Member for Huddersfield (Mr. Sheerman) said, the Education Act 1944 was vital; it was part of the welfare state and made it compulsory for local authorities to provide a school meal for any child whose parents wanted to buy one. As a child of that generation, I benefited directly from the measure and so did my family.
During the second world war, school meals were provided for all children as a public health measure. The nation had gone through a very bad period in the 1920s and 1930s and health was not as good as it could be. In 1965, the price of a school meal was fixed at an affordable level, and strict nutritional guidelines for the quality of those meals were standardised throughout the country. Under the 1965 directive, schools also had to provide free school milk for children during their mid-morning break. That seems like an age of enlightenment because, at that time, everyone accepted the case for good public health and recognised that what one ate as a child determined one's health as an adult. There was a consensus about health; that consensus was inherited when we all worked together so closely and so well during the second world war.
We returned to the dark ages in terms of public health with the election of the Tory Government under Mrs. Thatcher. It was an act of unique irresponsibility to get rid of nutritional standards; Mrs. Thatcher, who earlier got rid of free school milk for the majority of school children, was determined to go even further. I do not understand the logic of anyone who applies a free-market philosophy to children's health, but the Education Act 1980 removed the obligation for school meals to meet nutritional standards. We can all talk about freedom, but I want freedom from poor health and from eating junk food. Those are much more important freedoms to give to the nation.
Mr. St. Aubyn: I should be interested to know what the hon. Lady would say to the representative of the National Heart Forum who, when asked in the Select Committee if standards in schools had declined since the previous Government took nutritional guidelines off the menu, said:
It is difficult to say, but from some of the latest information we have had from school children, it looks as if it is more or less the same.
Mrs. Mahon: I was a mother with children at school during that period and I know that the quality of school

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meals went down. My children had previously loved school meals and did not enjoy them as much after the nutritional guidelines were removed. Fast food, fizzy drinks and chips were introduced after 1980; my children were brought up to eat fruit and vegetables and to like a good midday meal. I witnessed a deterioration of the standard of school meals.
Mr. St. Aubyn: There may have been a variation in standards. Was the local education authority where the hon. Lady's children went to school run by her party or another party?
Mrs. Mahon: During the 1980s, the LEA was run by the hon. Gentleman's party, but that is irrelevant. I was active in the public sector union NUPE at the time and as I was on the national advisory committee for women, I represented the school meals staff. I went in and out of schools all the time, so I had vast experience throughout the country of the quality and popularity of school meals. The National Heart Forum may have carried out research, but I have certainly done my own.
I cannot understand how a Prime Minister could have been so irresponsible. Why did Mrs. Thatcher set out —almost deliberately, it would seem —to destroy what everyone agreed was a cheap, efficient and valuable service? I am not saying that it did not need to be modernised or that the menus did not need to be revised —I am all for change. Perhaps we should not be surprised. On taking office in 1979, the same Government tried to bury the Black report on inequalities in health, which was commissioned by the Labour Government in an attempt to identify and offer solutions to the specific health problems experienced by those living in poverty.
It is interesting to note that the Black report recommended free school meals for all children. Sir Douglas Black was quite unequivocal, and recognised the value of the midday meal. I have supported the principle of free school meals throughout my life, and I give the Minister warning that I have campaigned on this issue frequently. In the long run, free school meals would be cost-effective in terms of the health of the nation.
I congratulate some trade unions —Unison in particular —on campaigning tirelessly to put the issue of school meals in the spotlight, and the Child Poverty Action Group has published superb material and carried out good research over the years.
How do we make further progress? The report and its recommendations are moving the debate along, and that is certainly doing some good. I must also congratulate the Government on accepting some of the recommendations. That is to be welcomed, and if we are serious about improving the health of the nation, that is the place to start. We are all sensible enough to know that children need nourishing diets to protect their health.
Reliable surveys have shown that the diets of British schoolchildren are high in fat and sugar, and often low in the vitamins and minerals necessary for healthy growth and development. We can all quote from our favourite survey but, by and large, surveys agree on those points. Scientists and the medical profession agree that the best way to protect against dietary diseases in
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later life, such as heart disease and certain cancers, is to begin as early as possible. High nutritional standards and enabling children to eat a healthy diet in school are a very important part of that, and I support my hon. Friend the Member for Huddersfield in his plea for a raising of standards.
For many years, the Child Poverty Action Group has called for the implementation of many of the report's recommendations. In particular, I pay tribute to the Child Poverty Action Group in the constituency of my hon. Friend the Member for Bradford, North (Mr. Rooney). I have spoken to members of that group and listened to what they had to say. They are very active and have contributed much to the debate. A recent letter from the Bradford group stated:
In addition to the reports recommendations —
which it welcomes—
we would like to see entitlement to Free School Meals extended to children in families receiving Working Families Tax Credit or Disability Tax Credit.
Like Unison, it also wants
to see action on encouraging take up of Free School Meals and the ending of the stigmatization of children claiming them.
That is still the most significant reason why some children do not take up free school meals. I realise that all manner of procedures have been designed to prevent those who do take up those meals from being discovered by their peers, but the truth is that children have a way of finding out such things. If all children received free school meals, we might escape that problem, and I wholeheartedly support the Bradford Child Poverty Action Group's plea.
Finally, I am slightly disappointed that the Government have not gone a little further. I have already mentioned Unison and the Child Poverty Action Group. They gave evidence to the Committee on the question of the low take-up of free school meals, and the attitudes of children and parents towards them. It is a very sensitive response, and I am pleased with it. Similarly, the British Medical Association gave irrefutable evidence that school meals are vital if we are to be serious about the health of our children.
The health of our children is far too important to be left to chance. I give warning to the Government and the Minister that some of us are not going to let this one go. We want free school meals. Will the Minister, at the very least, consider free school meals for the children of people who draw family tax credit? That would be an enormous start.
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Charlotte Atkins: I am delighted that the Select Committee report has received so much interest in terms of media coverage and this three-hour debate. I am especially pleased because I proposed the report to the Committee, and I was delighted that it was taken up.
I had three reasons for proposing the report. First, school meals are an important part of a child's day. If one has unhappy children in the dining room, one has unhappy children in the classroom also. That makes a tremendous difference to their learning ability. Secondly, nutrition can make a real difference to

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learning outcomes, especially among more deprived children. School meals can provide a significant proportion of their nutritional intake, because so many of them do not have a cooked meal in the evening. A hungry child cannot learn. Thirdly, school meals provide an opportunity to the school and to us to teach children about the value of healthy food.
We chose to conduct our inquiry at the time when the Department was working on its draft regulations and guidance for nutritional standards for school lunches. They are a significant development, and a real credit to my right hon. Friend the Secretary of State for Education and Employment. He has been committed to reintroducing nutritional standards for years. I remember him giving that commitment to Unison conferences many times; first as shadow Secretary of State for Health, then as shadow Secretary of State for Education and Employment and finally as Secretary of State. He has turned around the situation that the Conservatives introduced when they stopped nutritional standards being part of the important service delivered in schools.
The reintroduction of nutritional standards is a milestone. That is the case whether those standards are based on nutrients or on food groups, as long as the process is properly monitored. One of our recommendations was that governors should monitor the delivery of school meals, and that the Office for Standards in Education should make sure that they do so. As chair of governors at a primary school in London, I regarded the subject of school meals as a very important part of my duty. I was chair of governors at an inner-city primary school with an intake of very deprived children—including a great many children of refugees and of single parents and children living in short-stay housing —and school meals were very important.
We have a worrying legacy, because we are becoming a nation of snackers and junk food addicts. Average sugar consumption has risen in Britain by more than 30 per cent. since 1980. Britain is the proud holder of one title: the fattest European nation. In this country, 17 per cent. of men and 20 per cent. of women are considered clinically obese. How can we break this vicious circle? Schools are already worried about obesity in children. Recent Medical Research Council reports have concluded that today's children are more at risk of developing osteoporosis, heart and respiratory diseases and some forms of cancer than their more deprived parents and grandparents.
Eating habits are learned, primarily, at home. What can schools do to turn back the tidal wave of junk food? As a governor of a school in London and Member of Parliament for a Staffordshire constituency, I am aware of a wide range of provision. The Committee saw some good provision in Reading. However, in my role as chair of governors in a London school, I was alarmed by the way in which school meals contracts went to outside contractors. In such cases, the considerable skills of the school meals staff were undermined. Schools were serving up standard menus, prescribed by these outside contractors.
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Instead of Val the head cook serving up her excellent cheese and tomato tagliatelle—a great favourite with the children, especially the vegetarians —she had to cook fish tiddlers and turkey dinosaurs. Turkey dinosaurs taste a bit like chewed string, but they are expensive to buy in, even though they do not really look like food at all —just lumps of substance that have been chewed up and covered in breadcrumbs. Many children never saw anything that resembled natural food and got used to eating a diet of —almost —pre-digested mush that would have been more suitable to a one-year-old child than to a growing young person.
The situation in rural Staffordshire is different. Staffordshire caterers provide marvellous Staffordshire oatcakes, filled with cheese, which are very nutritious, and good-quality meat dishes. Perhaps this is because there are beef farms producing excellent beef, and dairy farms producing excellent milk. People are used to eating real food —although, of course, huge amounts of chips and burgers are also eaten.
Primary schoolchildren are a more captive audience; they are less likely to vote with their feet and leave the dining room than secondary school pupils. If we are to change eating habits, we must start with the youngest children. As a nation, we are not very interested in good food. In most other European countries, family cooking and dining out represent the norm. In France, good restaurants are full of children; they are often very young, but well behaved and enjoying real food. They eat smaller portions of their parents' food, and the restaurants encourage parents to bring their children, so that they can enjoy that experience.
In the United Kingdom, food is often cooked in a microwave and rushed down by children sitting in front of the television. That is a way of filling up with food, rather than enjoying it. Sitting down to eat with classmates is an important communal experience for schoolchildren. It gives them the opportunity to develop the social skills that, sometimes, can be sadly lacking.
When we visited Reading, we found that one of the pupils' complaints was that children who brought in a packed lunch were not allowed to sit with the children who were having school meals. That creates many problems. It encourages children with packed lunches to eat their lunches quickly and go outside, rather than enjoy eating with their classmates. Children might be encouraged also to tell their parents that they would rather have a packed lunch, because they can sit with their mates. The Committee recommended that school governors should ensure that there is enough space to allow all pupils to eat together, even if it has to be in several sittings. The shortness of the lunch break may present problems, but it is important not to segregate children. I believe that children may decide not to have school meals because they cannot sit with their friends.
The challenge that we face is how to wean children off instant energy foods, such as burgers, chips and sweets, and build in fruit and vegetables. One suggestion, which was mentioned by the hon. Member for Guildford (Mr. St. Aubyn), was a national fruit and vegetable scheme, building on existing good practice. The Committee recommended such a scheme in the introduction to the report, and I am pleased that the Government's response was positive.

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We said that the Department for Education and Employment should work with the Ministry of Agriculture, Fisheries and Food to secure an expanded intervention stocks disposal scheme, so that we could use the mountains of surplus apples and pears to encourage children to eat fruit at school. Most children—certainly my 13-year-old daughter —are unlikely to choose an apple rather than an inviting pudding, so the fruit should be offered at break times. It is particularly important for teenagers who do not have breakfast to have a piece of fruit at break time to help them to carry on with full attention until lunch. Therefore, I hope that we can introduce that scheme. I hope that the Minister will be able to update hon. Members on the progress being made on the MAFF and DfEE initiatives. The intervention stocks disposal scheme clearly would be only a small part of a programme to improve diets.
Many of those who would benefit most from a nutritious school meal are missing out—the number is estimated to be more than 300,000 —because they do not claim their entitlement to a free school meal. The Select Committee backed Unison and the Child Poverty Action Group in calling for research into the reasons for the low take-up. I am pleased that the Government have responded positively to that recommendation too.
I want to see a similar campaign to the pensions take-up campaign, in which we are encouraging pensioners to take up the minimum income guarantee. Such a campaign should be conducted in schools and at benefit offices to encourage parents to claim free school meals. The children of parents on working families tax credit are not entitled to free school meals, but I hope that we can ensure that such families will get them for their children, as well as those who have not claimed.
Schools can adopt many strategies to remove the stigma attached to the take-up of free school meals. In primary schools, many pupils pre-pay for their school meals, so it is not such a problem. In general, the teachers collect the money or it is taken to the school office, and no money changes hands at the counter. However, we should encourage secondary schools to introduce a swipe card, so there is no way of knowing whether pupils are having a free school meal or not.
In Reading, we saw some excellent food when we visited a local school. I was amazed how easy it was to pick out the pupils having free school meals, although it was for the best possible reasons. A paying child could go up to the counter and choose six doughnuts. We heard about one child who had parental support for choosing six doughnuts for his lunch. Pupils on a free school meal had to have a balanced lunch, so they had to have a vegetable, a main course item and a pudding. However, that meant that they were picked out, which clearly was not sensible. I would like that school to encourage all pupils to have a balanced diet. I appreciate that there is a problem, because some pupils might object and might leave the dining room empty. However, I hope that we can overcome the stigma attached to free school meals, even if the arrangements are introduced for the best possible reasons.
We have an opportunity to make a significant impact on the quality of school meals and to turn round the diet of our school pupils. If we do not, we will store up massive health problems for the future. There must be a middle way between girls who starve themselves to
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achieve the waif-like figures of fashion models —which led to the body image summit—and the fast-food junkies who are making the UK the obesity capital of Europe.
Several hon.rose—
Madam Deputy Speaker: Order. Three more Back Benchers want to speak before the winding-up speech. Hon. Members are being very attentive, so I am sure that they will bear in mind that if there is discipline we shall fit everyone in.
3.45 pm
Mr. Terry Rooney: I welcome the report of the Education and Employment Committee. For far too long, the school meals service has been the Cinderella of children's education, yet it plays a vital role because in feeding the mind, one must feed the body as well. My hon. Friend the Member for Halifax (Mrs. Mahon) mentioned the Education (Provision of Meals) Act 1906. That came about because, in the early 1900s, Bradford council had the temerity to introduce school meals. In a spirit of malice—there is no other word for it—the then Liberal Government said that it was illegal and that the council could not do it. The council went to court and won its case, which resulted in the 1906 Act.
Bradford was also the first local authority to introduce pre-school and after-school meals, which is an aspect that is ripe for development. In the list of evidence submitted to the Committee, I was pleased to see evidence from the dietician's department of our local hospital, which has played an important role over the past 20 years in trying to maintain nutritional standards, despite Government efforts.
I come from a generation that, perhaps unwittingly, benefited enormously from the 1945–51 Government, who introduced measures such as national health milk, orange juice and cod liver oil. One cannot overstate the contribution that diet makes at an early age to people's health in adult life, in relation to bones, teeth, cholesterol levels and the heart. That is why nutritional standards are so important. One cannot over-regulate for that, and deregulation should not even be on the agenda.
In due course, there will be 25,000 individual providers of school meals instead of 140 local authorities. I am worried about how to keep tabs on that. I know head teachers in my local authority area who have been jumping for joy at the prospect of school meal budgets being devolved to the school, because they see opportunities to extract money from that. By working with relevant food contractor suppliers, they will be able to do so. There is a real danger that the devolving of budgets, with the best of intentions, will have a negative effect.
We live in a society with a fast-food culture. I personally think that McDonald's is the enemy of the world. I can say that here, because I cannot be sued for libel. My six grandchildren —there is another one on the way—love McDonald's, but there has to be a balance. Once a week is probably all right; every day is not on.
Over the past 30 years, we have seen enormous changes in eating opportunities. In my city, there are Chinese, Thai, Indian, Italian and Caribbean

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restaurants. There is even the odd fish and chip shop left. People's tastes and opportunities have changed, and children have been exposed to those new influences. There is no need to put dull, stodgy food on the table to give school kids a balanced, nutritional and healthy meal; it can be tasty and enjoyable. I am old enough to remember the time when rice was a pudding. Nowadays, nobody knows what rice pudding is or how to make it.
My hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins) suggested that the right setting in school can contribute immensely to children's social and personal development. Much has been said about stigma and whether it exists. About 40 years ago, I was receiving free school meals, which was the worst experience of my life, bar nothing—I have not lost an election yet, and that might be worse. A bowl of sago was placed in front of me and the head teacher stood over me and told me that the state had paid for that bowl of sago and that I would stay there until I had eaten it. I could not stand sago and, to this day, I can smell it at 100 yd and become nauseous. Such experiences may not be as frequent in schools now, but they still exist and they turn people off.
We should be worried that some 35 per cent. of all children who are entitled to free school meals are not receiving them. Somewhere, someone is suffering, because those children come from the poorest families. If they are taking money from the family budget to spend elsewhere or are receiving meals by other means, that is a failing. For many years, I have been involved with the Child Poverty Action Group and during the past couple of years I have been involved locally with its take-up campaign on school meals. The Tong school in Bradford is a progressive school in most matters, but it did not realise how discriminatory it was being until it became aware of our campaign. Its deputy head teacher wrote to me stating:
We recognised the stigma still attached to the receipt of the pre paid tickets
and stopped separate queueing. The letter continued:
Students, school staff and families are delighted with the improved provision, and we now feel we are catering properly for all the pupils who need, and deserve a satisfying mid day meal.
The letter also stated that
the take up of free school meals increased by 25%. We now have a regular 100% take up, of the pupils in school, who are entitled to the meal.
That is a progressive school with a good head teacher and a good governing body who understand the world. Yet those practices had existed for 20, 30 or 40 years. Sometimes it is necessary for someone outside to look at what is happening.
It is worrying that 35 per cent. of children entitled to free school meals are not receiving them. The problem involves practices, different coloured dinner tickets and different queues. Kids are extremely sensitive to being made outsiders within their own environment. There is discrimination and we must recognise that.
I turn to the wider social exclusion agenda. Commendably, the Government have a target to eliminate child poverty and the thrust of that policy is to get parents into work. By and large, people are better off in work than on benefits. Calculations will show that
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someone who works 20 hours a week will receive this much and be that much better off, but they never include the fact that the right to free school meals is lost. That means £20 to £30 a week for someone with three children and those families, even with parents in work, are poor if they were entitled to that benefit. There is a deception.
It was wrong when the right to free school meals was removed in the Social Security Act 1988 for the children of parents on income support and when that right was abolished in terms of family credit. A notional calculation was made and when questions were tabled to the Treasury, the replies explained what those notional calculations were. However, that meant nothing to people. What matters to people is that if their children suddenly stop receiving free school meals, they must find £20 to £30 a week from a low wage. If we are serious about abolishing child poverty and about the welfare-to-work agenda, that bullet must be bitten. The measure would cost between £350 million and £400 million, which is peanuts. It is 2 per cent of the amount we got for the mobile phone licences. If we are serious about child poverty and welfare to work, that is the agenda that the Government must grasp.
About 200,000 people are employed in school meals services up and down the country. Admittedly, most of them are part time. But there is a tremendous job-creation opportunity in the school meals service if it is developed properly. There was a time when 60 per cent. to 70 per cent. of children stayed for school meals. It is now down at about 35 per cent. Where are they going? Most parents work, so where are those kids going at lunchtime? It is all right if they are 14, 15 or 16 but seven, eight and nine-year-olds are leaving school at lunchtime. What dangers are they being exposed to?
Finally, my hon. Friend the Member for Halifax mentioned the Black report in the 1970s and how it was ditched and quietly buried. Another report was published in 1988—the Acheson report on health inequalities. It showed that, in 20 years, nothing had changed. Health inequalities were, if anything, worse than in the 1970s. A fundamental element of health inequality is the school meals service and the amount of money that people can spend on food. That is why the agenda must include the working families tax credit and whether people will have enough money to pay for school meals.
3.56 pm
Helen Jones: Like my hon. Friend the Member for Huddersfield (Mr. Sheerman), I was not a member of the Select Committee when the report was prepared, so I claim no credit for it. It is an excellent report and I wanted to say a few brief words because, like my hon. Friend the Member for Halifax (Mrs. Mahon), I believe that this country used to have a proud and honourable tradition of providing good school meals. We should return to that tradition because, as has been said many times already, it is important for children's health and their educational prospects,
The Select Committee received plenty of evidence that good school meals are vital for children's health and

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should be an important part of our public health agenda. The National Heart Forum has been quoted several times already. It said that
the risk of developing chronic disease is established early in life, making a focus on children and their diets essential to an effective prevention strategy.
It estimates that a third of serious heart diseases and a third of cancers in this country can be attributed to poor nutrition. That is the scale of the problem that faces us. We also know that a diet high in fats and sugar is causing obesity. Not only do many of these problems begin in childhood, but they are overwhelmingly the diseases of poverty.
The Child Poverty Action Group pointed out that the diets of families on income support were far less likely to be adequate than those of families not on benefit. It quoted the 1999 survey by the Local Authority Caterers Association, which pointed out that 22 per cent. of parents still rely on a school meal to ensure that their children have a balanced diet, and 60 per cent. of parents consider it a vital part of their children's diet.
Good school meals play a vital part in ensuring that children can learn effectively. They should therefore be seen by the Department for Education and Employment not simply as a peripheral issue, but as an important part of raising education standards in schools. The hon. Member for Guildford (Mr. St. Aubyn) quoted Dr. Nelson's evidence that poor diet had been shown to impair cognitive functions. That could be put right by simple nutritional intervention.
The BMA also gave evidence to the Select Committee to show that children who were anaemic had a lower IQ. That could be equivalent to at least a grade at GCSE. One does not need to read the academic evidence. Anyone who has seen children in schools knows the effect that a lack of food has on their concentration. Any teacher, and I was one for 10 years, knows which children have not had breakfast. Any teacher can see a child's concentration dip mid-morning if he or she has not been adequately fed. We want to put that right.
The deterioration that took place in the school meals service over 18 years of Conservative government was an attack on the poorest in our society. It affected not just their health, but their education and life chances. It hit at their chances of getting themselves out of poverty through education. The Education Act 1980, which abolished nutritional standards for school meals, was one of the most retrograde steps in both health and education policy. I must tell hon. Members who dispute that that some of us were there at the time, and we watched children's diets change.
Before the 1980 Act, a school meal was by and large the main meal of the day not only for children, but for teachers as they were fairly low paid. Young teachers often relied on it. It changed almost overnight from fresh vegetables and decent meat to frozen pizzas, the chicken dinosaurs that my hon. Friend the Member for Halifax described, chips and pasties. School children ate those foods day after day. It was made even worse under the Social Security Act 1986 when 500,000 children lost their entitlement to free school meals. It was legislation by spite, which has never been put right. Children paid the penalty for that, which is why I welcome the Government's response to the report and the fact that they have accepted many of the Select Committee's recommendations. It is an important part of the antipoverty agenda, but much more needs to be done.
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As the Select Committee said, there needs to be a whole school policy on teaching about healthy eating. We must try to ensure that children learn to deal with advertising and to assess properly the messages that many advertisers give them about food. My hon. Friend the Minister will appreciate that we must start teaching young people to cook in schools again. The decline in cooking has been one of the most awful things that has happened in the past few years. People do not learn about food and healthy eating.
When one in nine children go without breakfast, and one in six do not go home to a cooked meal, it is appalling that the take-up of school meals, particularly free school meals, is falling. The reason is clear from the evidence: there is a stigma attached to taking free school meals. The Select Committee heard a lot of evidence about how that can be overcome by using tickets, smart cards and so on. I hope that the Government will give clear guidance to schools now that they have devolved budgets on how they should administer free school meals, so that children are not deterred from taking them up because of the stigma. I also hope that they will reconsider their attitude towards hot meals, because children are far less likely to take a free school meal—or their parents want them to—if only cold meals are provided. A hot meal is far more attractive and provides better value for money.
More important, as my hon. Friend the Member for Bradford, North (Mr. Rooney) said, many of those who are not currently entitled to receive free school meals should be. The Acheson report recommended the extension of free school meals to children whose parents are in receipt of working families tax credit as an important way of improving health. The cost would be about £400 million, as my hon. Friend the Under-Secretary said on 4 April. That substantial sum must be weighed against the cost of treating diseases that arise from nutritional deficiencies, and against the loss to this country of educational attainment. It is cheap at the price, and the Government should accept that.
I also want to speak about the educational and social value of children eating school meals. That is so important, but the environment in which they eat is often not conducive to learning social skills. Dining rooms are often too small, so children are rushed in and out in shifts. The decoration is often appalling because of years of neglect of school buildings. The crockery and cutlery is often abysmal. I pay tribute to school meals staff who have struggled to provide a good service in those conditions. Many of them are good at providing decent school meals, but also perform valuable social functions within a school. Children often provide dinner ladies with information that they would not give to their teachers. They are often the first to pick up children's problems.
I also pay tribute to schools that have tried to improve the atmosphere in which their school meals are delivered. The William Beamont community school in my constituency has set up a proper dining room with tablecloths and flowers on the tables, proper crockery and cutlery. Children have to earn points in the school's behaviour management programme in order to eat in it—and they queue up to do so. That shows that young people respond when they are given proper facilities.

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Much more needs to be done to make school dining rooms more attractive. I cannot complain, because we have recently received funding for a new dining room and kitchen in another of my constituency's schools— the Beamont infant and junior school—but many schools still need new buildings. I have seen the Government's response to the Select Committee's recommendation on using the standards fund to improve school dining facilities, and I hope that the Government will also take advantage of the new opportunities fund.
We must update school meals. We must provide a proper environment in which to eat and we must ensure that children eat properly. The Government have made an excellent start, but they must regard it as the beginning, not the end, of a continuing process that is so vital for children's health, well-being and education.
4.8 pm
Mr. David Drew: It has been an interesting debate on an interesting report. I shall be brief and not reiterate what other hon. Members have said. We appreciate the need for joined-up government for the operation of schools and the health service, so I hope that my hon. Friend the Under-Secretary will confirm that she is working with her ministerial colleagues. I am not sure whether the Chairman of the Select Committee, my hon. Friend the Member for Huddersfield (Mr. Sheerman), was right to ask for a member of the Department of Health team to be present today, but I know that my hon. Friend the Under-Secretary will inform Ministers in other Departments about what was said here about taking matters forward.
I shall not speak for long on the nutritional aspects of the report, because other hon. Members have covered them well. However, as an aside, I shall remind my hon. Friend the Member for Bradford, North (Mr. Rooney) of the lobbyist who spoke to us on a recent trip to the United States with the Select Committee on Culture, Media and Sport. The current criticism of McDonald's in the USA is that it is not fast enough. People who go to McDonald's are arguing for even more convenient food. The time between placing an order and receiving that order is now down to 42 seconds, which says something about humanity. The argument is that people who go to McDonald's want to spend more time with their families and therefore need their food quicker. It would be better if they sat down with their families to eat, rather than tried to place the convenience factor higher up the agenda. We all face such problems as parents and as people interested in the operation of our schools.
One important aspect of the report has not yet been touched on. I shall tread gently in talking about it, because of the accusations about a nanny state and about new Labour's views on telling people what to do. The operation of school meals is important to the evolution of food policy. We have no food policy, because the Government have been wary about the subject. My friend Tim Lang, a professor at Thames Valley university, argues that we will always have problems associated with eating until we have a proper debate. It is time that we had that debate, so I will take it forward, even if I do so gingerly.
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It is little known and perhaps less understood that many rural local education authorities, based on the remaining county council areas, still have county farm estates. In my authority in Gloucestershire, I have pushed for those estates to be used to provide food for our children. For far too long, we have centralised the food chain. Now, there is a big demand for a return to local production, and county farm estates could help to develop that. Of course, that is difficult, because we have grown used to obtaining produce, whether it be bananas, oranges or other foods, at the drop of a hat. However, our farms can grow many vegetables that could be provided to children. Dare I say that we could understand and rediscover seasonality? Many of us grew up with that, but it is no longer part of people's dietary habits. People are now supposed to have everything whenever they want it.
Choice and the availability of provision are important issues that we cannot underestimate. There is something of a secret garden about the provision of food through the school meals service. I learned about that through my involvement with the Meat and Livestock Commission, which rightly argued with local education authorities and contractors for the restoration of beef to school menus. I tried to do what I could to help that process. I was involved because of my association with agriculture, and my involvement was interesting because it must have been the first time that a long-standing vegetarian had argued for the reintroduction of beef. Life is full of interesting asides. Some LEAs have been a bit negative and restrictive in their unwillingness to take beef back on to the menu. They should give children the choice. We should advertise the fact that our beef is the safest in the world wherever we can.
I am glad that the hon. Member for Guildford (Mr. St. Aubyn) has just returned. I concurred with much of what he said, but I disagreed about the suggested advantages of contractualisation and of producing food in one place for distribution elsewhere. The problem is that the facility is often lost to the community.
School canteens can be a useful community facility. If we have pre-school and after-school provision, those facilities—I do not like the word "canteen"—could be important in providing children with meals that would not otherwise be available. Those facilities are so important to rural areas, because they are the main areas that have lost them. That has led to two problems. First, there is less choice, because the meals that are brought in are not as varied as they could be. Secondly and more particularly, there are problems with free school meals, which we have often discussed. My experience is that it is even more difficult now to prevent segregation. It is blatantly obvious which children receive free school meals. If there is only cold provision, it is clear that the kids with the sandwiches laid before them are the ones who receive free school meals. That is absolutely awful.
Mr. St. Aubyn: Does the hon. Gentleman not recognise that if village schools had had to find the capital required to upgrade their school kitchens to meet modern requirements, it would have been too great a hurdle for some of them? I suppose that if those schools could not provide any meals, they would ultimately have had to close. The hon. Gentleman has described the

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disadvantages, but the current more efficient and economic approach means that there is still an option to have a village school.
Mr. Drew: I do not disagree entirely, but I am arguing that school canteens should not have been the first sacrifice. When schools need additional space to do other things, it is often the canteen facility that has to go, always because of the capital costs. I challenge my hon. Friend the Minister: the Government have said in response to the report that they want to use the new deal for schools money to help catering facilities. I genuinely hope that that will be the case and that we will move away from this nonsense that the food facility can be sacrificed. There is a downside to that.
I agree entirely with what a number of my hon. Friends have said, particularly my hon. Friend the Member for Bradford, North, about the importance of passported benefit. The kids who do not take up free school meals because of the problems often live in rural areas. I am not saying that such children do not live in urban areas. I accept that some of this is apocryphal, but we all know—I have seen it—that kids are sometimes listed on the register as receiving free school meals and their names are called out for that reason. As I have said, those meals are sometimes provided in a different way, and children are made to sit in different places.
That situation has improved, and it had to do so. As my hon. Friend the Member for Warrington, North (Helen Jones) said, teachers are much more sensitive and people are more attuned to the problem than they were previously. However, as my hon. Friend the Member for Bradford, North said, a child needs to experience such discrimination only once to remember it for the rest of his life, as my hon. Friend has remembered it. Quite simply, we must not allow that to happen. Anything that we can do to prevent such discrimination must be done.
This is a good report, with a lot of ideas. I hope that the Government will treat it seriously. For all sorts of reasons, we should provide children with decent school meals. For many children, the meal that they receive at school is their only substantial meal of the day. That is true in rural and urban areas. That situation may be getting worse instead of better, because people are less likely to eat together and know what their children are doing. A lot of good could come out of the report, and I hope that the Government will push it along. Criticism may have been voiced that that process is not moving quickly enough. My hon. Friend the Minister should take that on board, and I am sure that she will.
4.18 pm
Dr. Evan Harris: I, too, must confess that I was not a member of the Select Committee when the report was prepared. I joined just after the current Chairman, the hon. Member for Huddersfield (Mr. Sheerman), who spoke so eloquently. I watched the process of publication with a great deal of interest. I would have supported the report in its entirety, had I been on the Select Committee at that time.
My hon. Friend the Member for Harrogate and Knaresborough (Mr. Willis) was on the Committee. He is disappointed that he cannot be present, but he is
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speaking at an education conference in Harrogate today. However, he wants to join me in paying tribute to the members of the Education and Employment Committee, and to the previous and current Chairmen, for their work.
It was interesting to hear occasional attacks on the provision of fast food. As an eater of such food, I may be on the defensive, but there is no such thing as bad food, only a bad diet. On that basis, I hope that I can continue regularly to purchase fast food from the Burger King outlet at Paddington station, as I did on the way here today. The right attitude to nutrition should not be "ban this, ban that": it is all about balance. Whenever I consume a burger product, I try to eat several tangerines on the same day. It makes me feel better and full.
Mr. Sheerman: The hon. Gentleman knows that I, as Chairman, have sometimes referred to his hyperactivity: all is now explained.
Dr. Harris: I get criticised for hyperactivity and sometimes for the opposite in the Select Committee. A novel development has taken place at Thameside school in my constituency, of which I am a governor. The breakfast club for pupils—many of whom are on free school meals, come from deprived backgrounds and are not getting hot breakfasts—was sponsored by the local franchise holder for Burger King. He may regard me as one of his best customers, but he sponsored the club without any wish for publicity. I hope that my reference to Mr. Silver of the Oxford banqueting group will not be picked up by the media, but I nevertheless pay tribute to him. Sides should not automatically be taken on the issue.
The hon. Member for Bradford, North (Mr. Rooney) made an excellent contribution to the debate on free school meals. I am grateful to him for giving me the opportunity to apologise for the actions of the Liberal Government in 1906. I look forward to further opportunities to apologise for more up-to-date approaches with which he has difficulty. Both he and the hon. Member for Warrington, North (Helen Jones) mentioned the loss of free school meals when people move from welfare to work as a contributor to the poverty trap. I have noticed that problem in my constituency work too. The costs of £300 million to £400 million will give the Government pause for thought, but they may be maximum costs. It may encourage greater welfare to work by removing the poverty trap though, sadly, there may not be a full take-up of free school meals.
The allocation of funding would be redistributive. Perhaps we are not supposed to use that term, but the hon. Member for Bradford, North recognises that the Government could extend free school meals to people on working families tax credit, which would be highly redistributive. Recommendation 7 relates to the importance of taking steps to encourage school lunches to be taken together as a school community. Both the hon. Members for Staffordshire, Moorlands (Charlotte Atkins) and for Warrington, North spoke eloquently about that. I concur that it is an important part of social training. The Select Committee examined how care and education in the early years can encourage social behaviour. Meal times provide an excellent opportunity

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for such behaviour —the sharing of milk and other provisions during the part of the meal when people take from a communal source.
It is important that children who bring packed lunches to school, be it for religious reasons, preference or food allergies, should not be made to feel different and forced to sit apart. The report itself and contributions today point out that the size of the school dining hall can restrict that feeling of community. I saw the Minister raise her eyebrows when the hon. Member for Guildford (Mr. St. Aubyn) said that it was the legacy of previous decades of underspending on capital that our school buildings are not fit for the purpose in many cases. There are other drives to deal with the problem of inadequate school dining halls.
Mr. St. Aubyn: The period of underspending to which I referred was before the deregulation of the school meals system in 1980. It was a period under the Lib-Lab pact when there were budget cuts for schools around the country.
Dr. Harris: That is very amusing, but those of us who listened carefully to the hon. Gentleman's speech understood that the 20 years to which he referred were 20 years of Tory spending plans: 18 years under Tory Governments and two years under this Government. That trend has been reversed in the past two years, which is welcome. At Dunmore primary school in my constituency, a good proportion of the school dining hall has had to be taken over by desks for the computers that it has been given or has raised funds to buy. Excellent teaching is done there, but it further reduces the capacity of the dining hall and it affects the school's ability to be a community.
On the subject of packed lunches, I should like to draw attention to the excellent work on food allergy carried out by the Fair Play campaign in Harrogate, and in particular by Mrs. Johnson who has corresponded with my colleagues and me. She is concerned about the need for more allergy awareness among catering staff and the provision of adequate first aid for the very rare, but serious, anaphylactic attacks that can occur. She also wants to ensure that children, who because of allergy, particularly peanut allergy, bring a packed lunch when many of their friends have a school meal are not excluded or isolated. I pay tribute to her and the campaign. I hope that the Minister will pay careful heed to it.
There have been many helpful contributions about recommendation 3, which is about the low take-up of school meals and the wish to find mechanisms at least to research the reasons for it. Anecdotally we feel that it is because of the stigma, although the Select Committee found conflicting evidence about that. One can see why. I welcome the Government's acceptance of that recommendation and I look forward to hearing what funds they are putting into research on why that happens and on the identification of best practice, such as smart cards, to improve matters.
It was a helpful coincidence that the Government held their summit on body image for women and young girls yesterday. I entirely support that campaign. Some of the
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media criticism about some aspects of that campaign has been unfortunate. Clearly a balance needs to be struck, because part of the concern that forms in girls' minds about weight may result from the warnings about eating fatty foods. Prevention is better than cure. Our concerns about the health of young people refer to the particularly obese. Many of those affected by eating disorders, particularly the epidemic in bulimic disorders, are of normal weight. The perception of body image is at fault.
It is important that hon. Members recognise the fact that concern about obesity must be consistent with concern about body image problems. Manufacturers could play a role in achieving that. There is a profusion of diet this, diet that and diet the other. Why is Diet Coke not called sugar-free Coke? Pepsi managed to call its drink Pepsi Lite, a name not associated with diets. Pepsi Max is actually Pepsi Min in terms of some of its sugar and calorific content. Therefore, manufacturers can attract young people without appealing to the fad for diets.
I agree with the hon. Member for Stroud (Mr. Drew): many local education authorities have been too sensitive to public opinion on food content. At the first sign of trouble over beef, which was probably unwarranted, and because of the slowness to reassure about beef content in diets, political gestures were made and motions were passed. I may not be fully supported by all members of the Committee in my view that there is little scientific basis for similar action taken over food with genetically modified ingredients. However, I am not saying that there is no scientific basis for fears about the effect on health of the currently commercially available food with genetically modified ingredients.
Like other hon. Members, I shall focus on some of the history. The Tory Government's response to the 1982 Select Committee report that recommended that they introduce minimum standards enforceable by LEAs was remarkable. They said that
even if recommended standards were promulgated there is no evidence that they would result in pupils eating the food so prescribed: previous experience with national standards showed that much of the food provided was wasted.
That view was based on the idea that a child can be taken to good food, but she cannot be made to eat.
If one substitutes the idea of providing good nutrition with the idea of providing good teaching, one can see that such an approach is nonsense. All Governments need to uphold minimum standards of education. Not every child will learn as much as one hopes, but minimum standards and adequate training are a basis for levering up quality. It is illogical to say that we should not bother to set minimum standards because some children will not benefit.
On the subject of logic, I will expand on the point that I made in an intervention on the hon. Member for Guildford, who showed complacency on dental health. Dental health has improved, mainly through fluoridation—I know that merely by saying that, I shall receive a series of letters, many from members of my party—but despite that improvement, children's teeth still have severe problems, particularly in non-fluoridated areas.
Charlotte Atkins: I am glad to say that when the hon. Gentleman's constituents who are opposed to

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fluoridation write to him, he will be able to turn to the York university study, which will prove that fluoridation improves dental health.
Dr. Harris: I am in no doubt that fluoridation not only improves dental health, but tackles the problem of inequity in dental health. Young children from poorer backgrounds are particularly liable to have bad dental health. That is partly diet related, as dental health studies comparing areas of fluoridation and non-fluoridation have shown. The dental health profession is in no doubt that the increased consumption of soft drinks rows against the tide of improved dental health. As dental health has generally improved because of fluoride in toothpaste and fluoridation of water, we must be careful not to allow children in non-fluoridated water areas to have high-sugar diets.
Mr. St. Aubyn: Does the hon. Gentleman think that it is more important that children consume sufficient fluids during the day, or that they consume only fluids that will not damage their teeth, even if they drink too little of those fluids?
Dr. Harris: Clearly, a balance must be struck. The same applies to the argument cogently made by the hon. Member for Staffordshire, Moorlands about fruit. Given a choice at lunchtime between fruit and pudding, those without a guilty conscience will probably choose the pudding. However, people do not feel that need for choice at break time, and if something is offered, it may be taken up. I think that those fair concerns can be tackled in that way.
I share the concern of many hon. Members who have spoken and many members of the Committee, including the hon. Member for Huddersfield, about the Government's five-year delay in introducing standards. I think that those standards will be welcomed, but five years is a child's experience of primary school. There is an argument for prioritising child health issues, not only because of the health gain, but because people would otherwise miss out on an opportunity —a snapshot while children are growing and developing. The same arguments apply in education.
Hon. Members are used to the Government saying that they cannot do everything quickly, because they do not have the money. They find that hard to understand, particularly given the austerity of Labour's first two years in government. However, this is not a cost-related policy. It could have been, and could still be, introduced more urgently.
The Government's rejection of a nutrient-based approach to standards is regrettable, and I question whether the explanation in their response to the Committee's report is logical. In the words of one respondent —presumably specifically selected and possibly selectively quoted —nutrient-based standards can be a tyranny of numbers. However, we must not run scared of numbers, because numbers and data are the basis of a scientific evidence-based approach to policy. That is why I support the Minister and her colleagues in trying to obtain data on body image and people on television. It is no good seeking to obtain numbers and data on one issue that has caused criticism, while regretting that approach on another.
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I think that the Government are guilty of selectively quoting again in the draft regulations and guidance. In paragraph 24, which the hon. Member for Guildford mentioned, the Government point out that food versus nutrient-based standards was not an issue for consultation:
Many responses were, however, generally supportive of the Government's intention to introduce nutritional standards for school lunches and… raised no objections to setting food-based standards…Of these, over half (24) expressed explicit support for food-based standards, and the minority (20) for nutrient-based standards.
Surely the Government do not claim that that is a statistically valid sample. It is a selective sample of people who chose to respond. It would take only an advocate of food-based standards, perhaps someone in their office, to encourage five respondents to state that preference for that majority to exist. If an issue has not been consulted on formally, I question whether it is valid for the Government to mention it. If the evidence went the other way, they would be reluctant to do so.
In general, there is more to welcome in the Government's response than to challenge. Therefore, in welcoming the Select Committee's report, and with the qualifications that I have made, I look forward to the Minister's reply.
4.38 pm
Mr. James Clappison: I join those who have congratulated the Select Committee on its choice of subject and on the report, which has eventually been prepared. Going back to our early lives, we are all familiar with the subject, which is of everyday importance and of great importance to many people.
We have had a good debate on the report. I congratulate the present Chairman of the Committee, the hon. Member for Huddersfield (Mr. Sheerman) on the way in which he opened the debate. He certainly showed that he had done his homework on this subject even though he was not the Chairman of the Select Committee when it conducted the inquiry. Subject to the one reservation that I have already entered, I do not want to revisit the past, even the 1906 Liberal Government. I am happy to refer to that Government because they were returned with an extremely large majority, but became divided and were followed by a long period of Conservative predominance.
The hon. Member for Huddersfield opened the debate in a thoughtful, constructive and balanced way. As he made clear, the Government have accepted a number of the Committee's recommendations, but by no means all of them, and they have accepted them with a varying degree of commitment. The hon. Gentleman described some of their response as disappointing. It is important to consider the action that the Government propose to take in the light of those important recommendations.
There is a divergence of view between the Government and the Select Committee about the central recommendation contained in the conclusion of the report. In paragraphs 15 and 16 the report recommended that the compulsory element of the regulation should be based on scientific, nutrient-based guidelines, rather than the food-based approach taken by the Government. The hon. Member for Oxford, West and Abingdon (Dr. Harris) has commented on that, and in his opening remarks the Chairman of the Select Committee said that it was very disappointing.

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The hon. Member for Oxford, West and Abingdon spoke about the nature of scientific-based evidence. I note that the Select Committee preferred the evidence of the expert witnesses who appeared before it under the auspices of the National Heart Forum. They represented the health interest, and were in favour of the nutrient-based approach. We should bear in mind the Chairman's opening remarks about the link between diet in childhood and illness later in life, particularly coronary illnesses, cancer and other significant illnesses.
In the course of her evidence, Maggie Sanderson, the secretary of the National Heart Forum and a lecturer in nutrition, said that the food group approach, preferred by the Government, would be difficult to monitor. There appeared to be little in it to regulate the amount of fat and sugar in the menus, and the high fat intake among schoolchildren meant that obesity was increasing. Those are important points, given that that comes from an authoritative and expert source. The Government owe the Committee and the House an explanation of why they chose not to prefer the evidence that came from the health experts.
Whether one takes the nutrient based or the food group approach, we should remember that what is important is what is eaten, rather than what is provided. It is accepted on both sides and in the evidence that it is no use providing healthy food if it is not eaten. We are all familiar with the sight of children, especially older children of secondary school age, opting out of any form of school lunch and leaving the school often to visit shops where what they buy is not always good for their health.
The Select Committee was also reminded that some children who opt for school lunches leave most of it. I quote briefly from the evidence of Ms Pat Fellows of the Local Authority Caterers Association who described how
we cooked all this nutritional food all morning, and we spent the afternoon putting it in the pig bin.
The evidence from LACA contains some useful suggestions on the marketing of school catering and the ways in which schools could provide healthy and nutritious meals that appeal to children. The Committee deserves to be congratulated on opening up the subject. I hope that it can be taken forward.
I do not want to go through all that evidence, or through all the evidence and the recommendations in the report. In the time available I want to stress three points arising from the report and the Government's response.
The first is free school meals, a subject that has been raised by a number of hon. Members. Free school meals are likely to be particularly important for the nutrition of children from lower-income families, which is a major consideration. It is of concern that nearly one in five of the children entitled to free school meals do not exercise their entitlement, although it may be their one opportunity in the day to have a hot and nutritious meal. The Committee was right to reflect on that concern.
It is not clear why that should be the case. Hon. Members, among them the hon. Member for Bradford, North (Mr. Rooney), have suggested a number of
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reasons for that from personal experience. He and the other hon. Members who have said that it might be because of the stigma that attaches to free school meals may be right. I do not know whether that is the reason, and I know that the evidence presented to the Committee was conflicting. However, what is important is the Committee's recommendation that there should be research into the attitudes of children and their parents to claiming their entitlement. In the light of this debate that is a valuable recommendation.
I note that the Government accept the recommendation in principle. However, they do not give a commitment to funding such research. The hon. Member for Halifax (Mrs. Mahon) said that the Government's response was slightly disappointing. I hope that the Under-Secretary will be able to go further than that when she winds up the debate, because such research is justified. Life is a struggle for children and their families when the parents are on income support, and it is a shame if they do not take advantage of the opportunity of free school meals. We must discover why they do not, as it may have major implications for the rest of their lives.
My second point is the vexed question of persuading children to eat fruit and veg. We have heard a number of contributions on that, and particularly on the national fruit and vegetable scheme, which was mentioned by the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) and is contained in the report. We know that children from all social backgrounds do not eat enough fruit and veg. The Committee recommends that greater efforts should be made to provide an attractive choice of fruit at break times. That is welcome. It also recommends that the Department for Education and Employment should work with the Ministry of Agriculture, Fisheries and Food to introduce an expanded intervention stocks disposal scheme as the basis of a wider national fruit and vegetable scheme for schools. I note that suggestion, which I believe should be debated and possibly explored. In their response, the Government say that they accept the recommendation in principle, but it is noticeable that they give little detail about the use of intervention stocks in the way recommended by the Committee.
The Government's response has come more recently than a written answer on 19 July 1999 from the then Minister of State for Agriculture, Fisheries and Food, the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who said that
it is hoped that it will be possible to distribute fruit to schools in the coming season, following a recent change in the rules which allows transport costs to be claimed.—[Official Report, 19 July 1999; Vol. 335, c. 436W.]
It would be interesting to know whether any fruit has been distributed to schools in England and Wales since that reply was given. We understand that last month the Scottish Executive announced a pilot project, apparently based on a Finnish scheme, to provide free soft fruit for children at meal times in Scotland. Have Ministers any plans to do something similar in England, with fruit from European Union intervention stocks or any other source? That leads me to observe that a massive amount of such stock is disposed of in ways other than for the nutrition of children. Last year in the EU, 350,000 tonnes of apples were disposed of at a

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substantial cost to the taxpayer, without doing anyone any good. One wonders whether there is scope for a common-sense investigation into this matter.
Thirdly, it is important to note the Committee's recommendation that the Government should not be over-prescriptive in their approach to implementing minimum nutritional standards for school lunches. It would be all too easy for prescription in this area to go over the top and become impractical and unrealistic. There is a balance to be struck, and my hon. Friend the Member for Guildford (Mr. St. Aubyn) made some important comments about that. He made the case for realism in persuading children to eat the right things.
The Minister admitted that many respondents to the consultation found the Government's proposals too detailed, and said that the Government would bear that in mind. We hope that they will bear in mind the need to avoid over-prescription, and that some common sense can be brought to bear in this matter. We need common sense when deciding how to persuade children to eat healthy meals.
As the Chairman said in his concluding remarks, which I endorse, there is also a need for this important subject to be kept under investigation. This was a brief report on an important subject, and there is a case for keeping the matter under investigation to see what progress is being made. It is incumbent on the Government to give us a response to these points and, perhaps, to take a little further their response to some of the recommendations made by the Committee.
4.51 pm
The Minister for School Standards (Jacqui Smith): I am pleased that I ate a healthy and filling lunch before coming to this debate, because I shall clearly need all my energy to respond to the important points that have been raised. This has been a good debate, and I should like to congratulate the Select Committee on its work in gathering the evidence and producing a report on a matter that we would all agree is important. We all want a nation of healthy young people and the education service has a key role to play in promoting health among schoolchildren in a number of ways. As hon. Members have said, the knowledge, skills and attitudes learned at school stay with us for life and affect our health for life.
Naturally, I also want to do what I can in partnership with other Departments, agencies and external partners to remedy the deficiencies. I assure my hon. Friend the Member for Huddersfield (Mr. Sheerman), the Chairman of the Select Committee, that I have had detailed discussions with colleagues from the Department of Health on the recommendations on school meals and on a wide variety of other issues that I hope to have time to discuss later. I say to my hon. Friend, with a feeling of mild sadness, that the nature of joined-up government means that we can talk to each other as Ministers, and we do not necessarily need to line up in order to show that we are taking a cross-governmental approach. However, I assure my hon. Friend that we are.
I shall refer first to the need for compulsory standards for school lunches. In our consultations, there was overwhelming support from all quarters—including nutritionists, caterers and parents —for the
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reintroduction of nutritional standards for school meals. We believe that, in taking this action, we are trailblazing in the public sector, and putting back in place an important factor for children's health.
School meals are part of a wider picture of promoting better health, in which the education service has an important part to play. The standards, which are to be enshrined in law for the first time in almost 20 years, signal the importance that the Government attach to the health of our young people. I accept the point made by my hon. Friend the Member for Warrington, North (Helen Jones) that this is not only a health issue, but an educational standards issue. I accept the argument that well-fed young people are more likely to be well educated and well behaved.
On compulsory standards, many catering contracts already specify healthy food requirements, and many catering staff do a marvellous job in terms of the meals that they provide. I should like to take this opportunity to commend the work that goes on in many of our kitchens and catering companies and to thank their dedicated staff. However, practice does vary, and the new standards will ensure that a national minimum standard throughout the country is established in regulations.
As the hon. Member for Guildford (Mr. St. Aubyn) pointed out, we must not forget that school meals are optional. However, to suggest that enforceable standards could result in children not eating their meals is the wrong conclusion to draw. In my experience, parents who provide their children with a packed lunch do so because that is the only way to guarantee the standards that they expect. The standards that this Government will put in place will enable certainty about the nutritional value of school meals, which will help to boost take-up and provide an important opportunity for the school meals service.
My hon. Friend the Member for Huddersfield (Mr. Sheerman), the Committee Chairman, chided the Government about the timetable for introducing nutritional standards. He is right to say that May 2002 is our ultimate, published target, but he will be pleased to learn that we will lay regulations in respect of standards this Session. They will come into force in all education phases in April 2001, together with the new duty to provide paid meals. To help school caterers prepare, we will issue comprehensive guidance in the autumn. However, it is important to get matters right, and I should point out to those hon. Members who criticised the extent of the consultation process that we consulted on two separate occasions. The results of the first consultation were published in April 1999, and the results of the second—which hon. Members quoted today —were published recently.
Hon. Members have rightly pointed out that the way in which the standards were designed has proved controversial, and has given rise to the question of whether they should be food based or nutrient based. It is important to note that these are the first standards for school meals in 20 years, so it is not surprising that the form that they should take has been the subject of much debate.
The debate stems from the common objective that standards need to make a difference and improve nutrition for our children. The standards should provide

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a sensible basis for the caterers—who will be responsible for their implementation—to plan school meals and bring about an overall improvement in children's nutrition. They must also fit with other healthy eating messages given out by the Government in general and schools in particular.
We want flexible standards that will make a difference in schools. We believe that food-based standards will be easier for caterers to understand and interpret when planning menus, purchasing supplies and preparing meals.
Mr. St. Aubyn: In describing the standards, will the Minister explain how much the compliance costs associated with her system of regulation will add to the cost of the typical school meal?
Jacqui Smith: We believe that, in respect of monitoring, a food-based standard is more efficient than a nutrient-based standard. That conclusion was supported by the response to our consultation exercise, and I shall explain our thinking on that in a moment. More importantly, it is easier for pupils to identify with that—it fosters a wider understanding of food and is more meaningful to them.
Although we are to introduce minimum standards, schools and authorities will be free to exceed them if they choose. The proposed food-based standards, which are widely used by the Government in our messages about the need for a balanced diet, will be able to accommodate any nutrient-based standards that are already in place in local education authorities and schools. We are not trying to dictate or prescribe best practice, although we have clarified what should be promoted in schools. LEAs and schools should decide what works best for them, but they should operate within a minimal legislative framework that is understandable by all and, importantly, enforceable and deliverable.
Several people who lobbied me suggested that nutrient-based standards—in particular, those that were devised by the Caroline Walker Trust—are often used as an ideal to which we should aspire. I applaud the trust's good work; its guidelines contain important information and targets. Caterers will have to comply with our regulations. It will not be good enough simply to aspire to meet them, because those who do that will be breaking the law. The regulations must be designed so that caterers can comply with them.
Several hon. Members mentioned consultation. We have consulted widely on the draft regulations and the guidance on nutritional standards for school lunches. That consultation process showed that a majority supported the use of food-based standards. During the first round of consultation, we asked for comments on the use of food-based, rather than nutrient-based, standards.
The caterers who provide the school meals service are—naturally, one might say—more enthusiastic about the use of food-based standards. The school cooks who they employ do a terrific job, but they are not
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necessarily trained dieticians. Dieticians also support the use of food-based standards. For example, one dietician commented:
They are best simply because everyone understands them.
That is not to deny the importance of essential nutrients in a child's diet. I earlier discussed how our standards would fit in with a broader Government message about healthy eating. We believe that the use of food-based standards complements the Government's healthy-eating messages, which emphasise the need for balance and variety of foods in the diet, rather than specific nutrients. When making decisions about health diets, that is the easiest way to make the relevant choices understandable. That lesson has clearly been learned by the hon. Member for Oxford, West and Abingdon (Dr. Harris), who has an admirably balanced diet.
The hon. Member for Hertsmere (Mr. Clappison) raised a point that is contained in the Select Committee report, suggesting that our original proposals and guidance were too prescriptive and patronising. We have heard that criticism and reviewed the terms in which the regulations and guidance are couched. As I said, we want the regulations and guidance to make a difference, but they should do so in a way that involves flexibility for caterers and builds on current best practice.
My hon. Friend the Member for Huddersfield rightly said that it was important to monitor and review the success of standards. We shall introduce light-touch standards. Monitoring is important, but that, too, should be light touch. For example, our guidance to caterers will include simple checklists to help them ensure that they are meeting the standards. Local education authorities and schools will ensure that caterers comply with the standards set out in their contracts.
Dr. Harris: I read with interest that part of the Government's response that deals with this issue. It states:
Light touch standards will require light touch monitoring.
Why? I would have thought that the lighter the standards, the more important it is that the monitoring should be tough, to ensure that the standards are met.
Jacqui Smith: As I shall explain, the monitoring process has a range of prongs. I am sure that the Select Committee will agree with our approach, as we are emphasising the need for schools to concentrate on raising standards in a non-bureaucratic way. Anything that puts extra pressure on governing bodies and schools would be unsatisfactory. However, I recognise the importance of monitoring. Although we shall prescribe light-touch, day-to-day monitoring for local education authorities in respect of caterers, our guidance will include also details of the recommended weekly nutrient content for school meals. Schools, LEAs and caterers will decide how to monitor school meals, using those guidelines. As a result of my meeting with the National Heart Forum, I believe that we might be able to encourage schools and caterers to use information technology packages to help them. I am keen to pursue that.
The Government want to make a difference to children's nutrition. When the new standards have settled down, we shall undertake an evaluation of school

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meals, using sample school surveys. That could include nutrient analysis of food offered and consumed, as we recognise that food will be nutritious only if the children actually eat it. We would then consider the regulations again, in the light of the outcome of the survey. We want the standards to make a difference, but it must be possible for the people who deliver school meals to implement them. We will also work closely with the Food Standards Agency and other relevant bodies.
I thank my hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins) for her important contribution to the report. She referred to her own experiences in this area. I, too, was a governor and helped to determine a school meals contract. I taught and, as the mother of a six-year-old boy, I have a strong personal interest in the food that he will receive at school. My hon. Friend referred, rightly, to the way in which the expertise of school caterers can be used to provide healthy but enjoyable food that our young people will eat.
My hon. Friend gave the lie to the accusation made by the hon. Member for Guildford that healthier school meals necessarily would be more expensive. We do not believe that. My hon. Friend gave examples that showed that it was possible to provide healthy meals, such as cheese and tomato tagliatelle, curry and rice, shepherd's pie, pizza—which can, in fact, be healthy —cauliflower cheese and baked potatoes with various fillings. All of those are enjoyable, nutritious meals that can be provided by imaginative school caterers.
We have made significant progress with regard to the fruit and veg scheme. I have spoken to colleagues from the Department of Health not only about how we develop the MAFF scheme, but what we need to do, taking a common-sense approach, to ensure that children are able to eat more fruit and vegetables in school in a way that does not impose bureaucratic pressures on those schools. I assure hon. Members that we are actively working on plans to take that forward.
My hon. Friends the Members for Halifax, for Staffordshire, Moorlands, for Warrington, North and for Bradford, North (Mr. Rooney) eloquently expressed the importance of free school meals to many of our children. New nutritional standards will ensure that all children are able to have healthy and enjoyable school meals. Children from less well-off families, including those who receive free school meals, are likely to benefit most from new nutritional standards. Those standards thus play an important role in eradicating child poverty and in dealing with the issues that affect children from some of our poorest families.
A strong argument was made for the extension of eligibility for free school meals to the children of parents receiving working families tax credit. As my hon. Friend the Member for Bradford, North recognised, working families tax credit contains a provision for free school meals. People across Government will have heard the passion with which that case was made. However, it is an expensive option, and one that any Government would need to consider carefully.
Mr. Sheerman: My hon. Friend will probably cover this point, but the real passion arose because the Department could easily take the step of putting out an edict of anonymity in relation to free school meals. The
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Department already sends messages to schools and local education authorities, so why cannot there be such an edict? Would not my hon. Friend be proud if she managed to achieve that quickly?
Jacqui Smith: My hon. Friend is right. I was coming on to the important point that, for a variety of reasons, not all eligible pupils take up their free school meal entitlement. I am sure that hon. Members will therefore be pleased that, following the Government's response to the Committee's report, we are now providing funding for a research project with the Child Poverty Action Group. The project aims to identify the reasons for low levels of take-up of free school meals in some schools and high levels of take-up in others—in other words, as my hon. Friend the Member for Bradford, North pointed out, to identify the actions that schools can take to increase their take-up. The project also aims to highlight successful strategies for models of good practice employed by schools that are successful in increasing their take-up.
I assure hon. Members that the research project aims specifically to offer practical evidence on ideas to school meals providers on ways to maximise free school meal take-up. We intend that the project should be completed by February 2001, when we shall disseminate its results. It will be an important contribution, and a link to the Government's target on reducing child poverty.
Mr. Sheerman: I am sorry to press the Minister, but she did not answer my question. Research is not needed to prove that anonymity is important in terms of free school meals. She could achieve that much sooner than 2001; it could happen very soon indeed. Research is not necessary; many people whom we know in our constituencies have personal experience of the humiliation involved. If that could be eradicated one week or one month quicker, so much the better. Common sense should tell us that it is wrong to mark such people out.
Jacqui Smith: We already make it clear to LEAs that schools and LEAs should be taking such action to ensure that all children who are eligible to take up free school meals do so. One point that arose from the Select Committee report, as hon. Members have mentioned, is that there was no consensus in the evidence about the best way of increasing that eligibility. It is not enough simply to issue edicts from Sanctuary buildings. We must find examples of good practice and ensure that those are put into operation.
Dr. Harris: The Minister should understand that there are two issues. It may not be clear that the marking out of people reduces the take-up of school meals, but there is merit, as the hon. Member for Huddersfield (Mr. Sheerman) said, in not marking people out, regardless of what the research shows to be the effect on take-up. Surely, the Minister could agree to look at that.
Jacqui Smith: I shall certainly look at it, but if anonymity is not delivered because of different queues, raffle tickets and so on, schools should have the common sense to realise that they should not be doing that. We have told them clearly, but there may be a range of other issues. It is not helpful to jump in before the research

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backing and the good practice guidance is available to enable us to go further in ensuring that children who are eligible for free school meals take up their entitlement.
Mr. Clappison: I do not want to take the matter too much further, but is there not a case for the Department simply issuing an edict, as the hon. Member for Huddersfield suggested, to look at every way possible in which to disguise the identity of children who receive free school meals? Surely the Minister's Department could consider whether it is possible to issue general guidance along those lines without going into matters that may be subject to research.
Jacqui Smith: I shall certainly consider ways in which we can ensure that those messages get through to local education authorities and schools. We are not in the business of issuing edicts, but we are in the business of collecting good practice and ensuring that that is disseminated to schools.
I want to move on to whole-school approaches to healthy eating, which was helpfully raised by several hon. Members. Of course, school meals do not exist in isolation and we need to educate and encourage our children to be able to make informed food and life style choices. My Department is involved in a number of initiatives. We work closely with the Department of Health and we shall work with the Food Standards Agency and with external partners to promote good health and broader messages about food throughout schools.
For example, the Chairman of the Select Committee eloquently argued that we need to bring health and education together in the way in which we work in schools. I am sure that my hon. Friend knows about the close collaboration between the Department of Health and the Department for Education and Employment on the healthy schools programme, which now operates and is funded throughout England. The programme brings together health authorities and local education authorities in local partnerships to support schools in meeting standards laid out in the national healthy schools standard.
A key theme in the guidance on the standard relates specifically to healthy eating. It suggests that schools that will be recognised under the standard—all schools now have access to the support to enable them to do so —should present consistent, informed messages about healthy eating. For example, food on offer in vending machines, tuck shops and school meals should complement the taught curriculum. Various examples suggest that that is working.
Newall Green high school in Manchester, for example, decided as part of its local healthy schools work to improve the atmosphere in school during lunch time by boosting the uptake of healthy food in various ways. Pupils were surveyed, school kitchens were refurbished, teachers were encouraged to eat with pupils and organisers were trained in positive behaviour management. That returns us to the important points that were made by my hon. Friends the Members for Staffordshire, Moorlands and for Warrington, North about the relationship between behaviour, a child's social development and what happens during school meals.
152WH
Local sports celebrities were brought in to talk to pupils about the importance of healthy eating, and many positive messages were promoted, not least of which was the suggestion that healthy eating in pleasant surroundings can be fun. The results went beyond the school's expectations. The school cook could confirm that children were eating more healthy food options, and parents and children were impressed by the changes that resulted. We work closely with the Department of Health and various companies, including Kellogg's, to promote breakfast clubs in schools. The national curriculum gives lots of room to schools to promote healthy eating.
Helen Jones: Will the work that the Department for Education and Employment is carrying out with the Department of Health include a cost-benefit analysis of the effect of extending free school meals to families who are on working families tax credit? If we know the cost of treating future diseases, it should not be too difficult to carry out that analysis.
Jacqui Smith: Those arguments have been heard across Government. This matter is not solely the responsibility of the Department of Health and it could not be delivered by the joint effort of that Department and the DFEE; as my hon. Friend knows, Treasury decisions are also involved.
My hon. Friend stressed the importance of teaching children how to cook. That often helps children, when they become adults, to prepare healthy food. We are introducing food to the curriculum in various ways, including the Government's focus on food, which has given pupils hands-on experience of cooking with professionals. The programme has used a fully equipped bus, which has visited more than 100 schools and prepared food for a reception at No. 10 Downing street. The cooking for kids initiative, which has benefited more than 10,000 children since its launch in February 1999, is also significant. However, we still have further to go.
We should come up with new ways in which schools and external agencies can help children to learn the important skill of cooking. A whole-school approach to healthy eating and to life style is vital in the promotion of good health among schoolchildren. I hope that that is demonstrated by the initiatives in which we are participating. We want to play a full part in the new national task force for children's nutrition, which was recently announced by my hon. Friend the Minister for Public Health.
The hon. Member for Guildford had a bit of a cheek, dare I say it, when he emphasised the importance of increased capital spending on school kitchens. However, he has a point; we should compare this Government's approach to capital spending with that of the previous Government. We are already making money available through the new deal for schools. Kitchens and dining areas are important because children are more likely to eat a school meal if the dining area is pleasant and the kitchen provides good food.

153WH
Under the new deal for schools, the Department is currently funding 42 projects that involve a major kitchen or dining area component. That investment is worth more than £12.5 million, and 117 schools are benefiting.
To give just one example, in an infant school in Halton, new deal for schools money is funding the provision of a new kitchen, serving directly on to the dining area. The school, which has a high proportion of pupils on free school meals, will now be able to provide all its pupils with hot food in comfortable surroundings, whereas previously meals had to be imported from a nearby school.
Despite the significant increases in funding, it will not be possible for all schools to receive that amount of investment. Sometimes even a lick of paint or imaginative decoration by the children can make all the difference to a dining area. I agree that we must give children good surroundings if we are to encourage them to take their school meals.
Mr. Drew: The key point is access to the community. I know that there are health and safety issues and
154WH
environmental health issues, but if the facilities could be made more widely available, I am sure that we would all have the benefit of the virtuous circle.
Jacqui Smith: My hon. Friend is right. He will know that we are trying to promote access to school facilities for the community in a range of ways.
I welcome the opportunity that the debate has given us to talk about school meals and food issues in the education service generally. The ground-breaking introduction of nutritional standards for school lunches provides an exciting opportunity for the education service, in tandem with the opportunity provided by the delegation of school meal budgets. Caterers and all those involved in the provision of school food can use this opportunity to review and update their services. It is a focus from which I hope many new initiatives will spring, such as many of the good suggestions that have been made in the debate today, to improve the health and educational chances of our young people. I hope and believe that this work will herald a new, modern era for school meals.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Five o'clock.

TRADE AND INDUSTRY

  Chemical Weapons Act 1996
  Mr. Hoyle
  To ask the Secretary of State for Trade and Industry if he will make a statement about the operation of the Chemical Weapons Act 1996. [127693]

  Dr. Howells
  In accordance with the Act, I have today laid a copy of the report on its implementation during 1999 before both Houses.

  Company/market

  Date of loan

  Loan value (million)

  Lender

  Borrower

  Stirling International Civil Engineering Ltd.

  Lesotho

  18 November 1991

  £49.3

  Hill Samuel Bank1

  Lesotho Highlands Development Authority

  Lesotho

  14 December 1994

  £9.7

  Hill Samuel Bank1

  Lesotho Highlands Development Authority

  Kier International Ltd.

  Lesotho

  18 November 1991

  £49.3

  Hill Samuel Bank

  Lesotho Highlands Development Authority

  Lesotho

  14 December 1994

  £9.7

  Hill Samuel Bank

  Lesotho Highlands Development Authority

  Romania

  14 March 2000

  euro 88.3

  Deutsche Bank

  Ministry of Public Works and Territorial Planning

  Egypt

  12 November 1981

  £32.0

  HSBC

  Ministry of Development

  Kvaerner Roving Ltd.2

  Lesotho

  17 February 1994

  £4.7

  West Merchant Bank

  Lesotho Highlands Development Authority

  India

  2 November 1989

  £31.8

  West Merchant Bank

  National Hydroelectric Power Corporation

  India

  11 October 1996

  £20.4

  Barclays Bank

  Nathpa Jhakri Power Corporation

  Hong Kong

  4 August 1990

  £10.4

  J. Henry Schroder & Co.

  Castle Peak Power Co. Ltd.

  Balfour Beatty Ltd.

  Lesotho

  18 November 1991

  £49.3

  Hill Samuel Bank

  Lesotho Highlands Development Authority

  Lesotho

  15 December 1995

  £1.8

  Hill Samuel Bank

  Lesotho Highlands Development Authority

  Lesotho

  14 December 1994

  £9.7

  Hill Samuel Bank

  Lesotho Highlands Development Authority

  China

  18 March 1996

  £8.2

  West Merchant Bank Ltd.

  Bank of China

  Netherlands Antilles

  10 January 1991

  $18.0

  Barclays Bank

  Resort of the World NV

  Malaysia

  12 July 1991

  £305.0

  J. Henry Schroder & Co.

  Tenaga Nasional Berhad

  Thailand

  17 August 1994

  £15.0

  Australia and New Zealand Banking Group

  Provincial Electricity Authority

  Turkey

  30 July 1987

  $18.1

  Deutsche Bank AG

  Ministry of Housing and Reconstruction

  1 ABN AMRO Bank later took over the loan

  2 Now known as GE Energy (UK) Ltd.

  Inward Investment (Greater London)
  Mr. Cox
  To ask the Secretary of State for Trade and Industry what action his Department is taking to encourage inward investment into the Greater London area. [127139]

  Mr. Caborn
  The DTI's Invest in Britain Bureau (IBB) provides grant in aid funding to the London First Centre (LFC) to promote London overseas as a location for inward investment. LFC received grant in aid of £1.015 million in 1999–2000, increased to £1,065 million in 2000–01.

  LFC efforts are focused world-wide but investment is particularly encouraged, geographically from North America, and sectorally on functions such as European Headquarters, pan-European call centres and high value-added manufacturing. LFC is keen to emphasise

  Corruption and Bribery (Lesotho)
  Mr. Austin
  To ask the Secretary of State for Trade and Industry if he will list the loans underwritten by Her Majesty's Government to companies implicated in the current criminal trial concerning bribery and corruption in Lesotho. [127078]

  Mr. Caborn
  [holding answer 20 June 20001 Charges have been laid against various consortiums involved in the Lesotho Highlands Water Project. Kier International, Stirling International, Balfour Beatty, and Kvaerner Boving are UK members of consortiums involved in the project. All deny having been involved in any malpractice.

  From records readily available the following loans have been underwritten by Her Majesty's Government through, ECGD, to these companies:

  London's position as the centre of European e-commerce and a leading destination for projects in knowledge driven sectors.

  For the 12-month period ending 31 March 2000, LFC completed 115 projects resulting in 5,440 jobs created and 1,035 safeguarded.

  From 3 July 2000, responsibility for inward investment in London will pass to the Mayor and the London Development Agency.

  Maternity Pay and Parental Leave
  Mr. Miller
  To ask the Secretary of State for Trade and Industry what the terms of reference are for the review of maternity pay and parental leave. [127694]
  237W
  Mr. Byers
  The review will consider the steps needed to make sure that parents have choices to help them balance the needs of their work and their children so that they may contribute fully to the competitiveness and productivity of the modern economy.

  The review will seek:
  To examine how the economy is changing, particularly in relation to working patterns, and what the needs of the modern economy will be.
  To identify how competitiveness and productivity in this context can be enhanced through giving families reasonable choices to help them to balance the needs of their children and work.

  In doing so, it will take into account:
  The impact of maternity pay and parental leave on business, particularly SMEs, and families including whether it is possible to simplify the implementation of existing legislation.
  Best practice in business and its impact, including the extent to which employers currently offer additional entitlements or flexible arrangements.
  Factors affecting women's decisions to return to work after childbirth.
  Factors affecting the take up of parental and paternity leave.
  Impact of returning to work part-time, from home or on flexible hours.
  Reducing child poverty, including the particular problems faced by the workless and by parents receiving the Working Families Tax Credit.

  I will chair a Ministerial Group to help co-ordinate the work of the review. Other members of the group are listed in the table:

  Members

  Baroness Jay

  Leader of the House of Lords

  Lord Privy Seal and Minister for Women

  Andrew Smith

  Chief Secretary to the Treasury

  Lord Falconer

  Minister of State, Cabinet Office

  Tessa Jowell

  Minister of State, DfEE

  Margaret Hodge

  Parliamentary Under-Secretary, DfEE

  Baroness Hollis

  Parliamentary Under-Secretary, DSS

  Alan Johnson

  Parliamentary Under-Secretary, DTI

  David Irwin

  Chief Executive, Small Business Service

  There will be extensive consultation and detailed research to back up the review.

  Directors' Salaries
  Mr. Mudie
  To ask the Secretary of State for Trade and Industry what steps he is taking to enable shareholders to vote on directors' salaries. [125853]

  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.

  Aerospace Industry
  Mr. Gordon Prentice
  To ask the Secretary of State for Trade and Industry what assessment he has made of the use made by the United Kingdom aerospace industry 238W
  of outsourcing to non-EU based companies and locations of items previously manufactured in the United Kingdom. [126833]

  Mr. Alan Johnson
  I have not made any specific assessment of changes in the sourcing of aerospace items. However my Department is working closely with the Society of British Aerospace Companies on competitiveness improvement programmes for the aerospace industry. DTI funding for this work is helping to improve productivity and other aspects of competitiveness of UK suppliers which should ensure that the outsourcing of aerospace items is kept to a minimum.

  Export Promotion
  Mr. Prior
  To ask the Secretary of State for Trade and Industry if he will make a statement on the status of the Joint Directorate. [126752]

  Mr. Caborn
  The Joint Directorate was renamed in 1994 as the Joint Export Promotion Directorate, which was run and staffed jointly by the DTI and the FCO. It was also charged with providing a general policy framework for the export promotion work of those two Departments, which was branded as the Overseas Trade Services.

  My right hon. Friend the Foreign Secretary announced on 12 March 1999, Official Report, columns 399–400W, the Government's response to the Cabinet Secretary's Review of Export Promotion, the core of which was that all trade promotion development activities of the DTI and the FCO should be unified in a new joint operation, British Trade International, with a single Chief Executive, Sir David Wright. Copies of the report have been placed in the Libraries of both Houses.

  The Joint Export Promotion Directorate and its responsibilities were subsumed in the restructuring of British Trade International.

  Rogue Directors
  Mr. Mitchell
  To ask the Secretary of State for Trade and Industry if the DTI Hotline for reporting rogue directors is still operating; how many rogue directors have been reported on it since it was established; and what action has been taken and in how many cases as a result of reports received. [126047]

  Dr. Howells
  The Hotline continues to operate and, in the period from inception to 31 May 2000, it has received 2,067 inquiries either to its telephone answering machine, through correspondence or by the online submission of information via the Insolvency Service website. As a result, a total of 656 completed questionnaires/letters have been returned to the Insolvency Service concerning the activities of bankrupts and disqualified directors.

  The Prosecution Section of the Insolvency Service considers all completed questionnaires, obtains additional information from Official Receivers and Insolvency Practitioners and, where appropriate, submits reports alleging specific offences to Department of Trade and Industry lawyers.
  239W
  In the period to 31 May this year 181 cases have been referred to DTI lawyers and these have led to six convictions, the issue of 21 warning letters and a further seven defendants being charged with one or more offences. In 56 cases it was decided that no further action should be taken and the balance of the reports are still under consideration.

DEFENCE

  Defence Evaluation and Research Agency
  Mr. Robertson
  To ask the Secretary of State for Defence if he will make a statement on the type of projects which(a) New DERA and (b) Retained DERA will undertake following the division of the organisation. [126937]

  Mr. Hoon
  I refer the hon. Member to the answer I gave my hon. Friend for Huddersfield (Mr. Sheerman) on 17 April 2000,Official Report, columns 366–67W, which outlined our proposals for the DERA public private partnership. These are described in more detail in the consultation document, a copy of which can be found in the Library of the House and on the internet at www.mod.uk/commercial/ppp/dera/.

  Under our current proposals, we envisage that New DERA would continue to provide similar service to the Ministry of Defence (MOD) and other customers, working on a wide range of scientific and technical projects, providing advice, problem-solving, consulting, engineering and research services. It would, however, have much greater freedom to exploit its technology into broader markets, which in turn will have knock-on benefits for its core military business.

  RDERA will focus on activities that must be carried out in government plus it will support MOD in its Department of State functions. It will ensure that MOD has an impartial source of advice and systems research capability, providing high level assessment, integration and management of the research programme and international research collaboration. This will include, for example, continued development of MOD's protection measures against chemical and biological weapons and the maintenance and employment of operational analysis models used to underpin policy, operational concept and procurement decisions.

  Mr. Robertson
  To ask the Secretary of State for Defence what measures he will take to ensure that at both Retained DERA and New DERA there is no diminution in(a) the scientific qualifications of staff and (b) the ability to provide impartial advice, once DERA is divided. [126931]

  Mr. Hoon
  I refer the hon. Member to the answer I have given to his earlier question on the DERA PPP project, in which I have outlined our proposals for the future of DERA.

  (a) Under our preferred option, Core Competence, RDERA will focus on those activities that must be carried out by Government and to do so, we will need to retain those staff with the necessary expertise and qualifications to meet this role. The existing excellent system for recruiting, training and developing staff will be combined with a healthy interchange with industry, including NewDERA, and academia to give staff the opportunity for full and rewarding careers. Similarly,
  240W
  NewDERA will move into the private sector with the appropriate staff to maintain and, hopefully, develop its capabilities. NewDERA will have the freedom to attract and reward the best qualified staff to take it forward as a leading research and technology organisation.

  (b) NewDERA will remain a significant supplier of science and technology to the Ministry of Defence (MOD) for the foreseeable future. Consequently we will be putting into place measures to ensure that it continues to be an organisation with which MOD customers are happy to do business. NewDERA itself will be keen to satisfy the needs of MOD, which will continue to be its most important single customer. The provision of high quality, impartial and high integrity advice and services will be at the heart of its business for all customers, including MOD. The proposed constraints described in the consultation document, which include features such as a special share, approval of Directors and contractual constraints, have been designed to provide a balance between allowing NewDERA the freedoms it needs to grow in the private sector and ensuring that access is preserved to those capabilities needed for the effective operation of our armed forces.

  Mr. Robertson
  To ask the Secretary of State for Defence if he will make a statement on the expected relationship between Retained DERA and New DERA. [126933]

  Mr. Hoon
  I refer the hon. Member to the answer I have given to his earlier question on the DERA PPP project, in which I have outlined our proposals for the future of DERA.

  Under our preferred option, Core Competence, we expect that once bedded down, the relationship between New DERA and RDERA will be the same as the relationship between any private sector company and their main customer.

  Contractual frameworks will naturally need to be established to govern relationships between RDERA and New DERA to reflect the changes brought about by the PPP. But this is no different from relationships that currently exist between the Ministry of Defence (MOD) and other private sector organisations. MOD through RDERA would take the lead on all Government to Government collaborations and where necessary, and with the agreement of the other Government or Governments involved, RDERA would sub-contract elements of the programme to New DERA.

  Mr. Gerald Howarth
  To ask the Secretary of State for Defence what assessment he has made of the consequences for the development of future generations of military aero engines of the closure of DERA Ryestock's aero engine testing facilities. [127090]

  Mr. Hoon
  [holding answer 20 June 2000]On completion of the current engine programme for the Eurofighter project in 2002, there will be insufficient future work to justify the retention of the altitude test facilities at DERA Pyestock. There is no Ministry of Defence strategic requirement to retain the facilities. We are satisfied that there will be scope for engine suppliers to make appropriate alternative arrangements.

  Mr. Gerald Howarth
  To ask the Secretary of State for Defence what consultations his Department has had with the United States Government on the proposed reorganisation of DERA; what the most recent response of the US Government has been; and if he will make a statement. [127091]
  241W
  Mr. Hoon
  [holding answer 20 June 2000]Following the announcement in 1998 of a public-private partnership (PPP) for the Defence Evaluation and Research Agency (DERA), consultation has been an important and regular feature of the process. We have consulted with a wide range of key stakeholders, including international collaborative partners. Last year's consultation exercise on a potential PPP solution produced valuable responses, which have informed the most recent phase of work. The current consultation exercise, which I announced on 17 April 2000,Official Report, columns 366–67W gave all stakeholders the opportunity to submit their views on our revised proposals for the DERA public-private partnership.

  Consultation with the USA has concentrated on discussions between MOD officials and Ministers with counterparts in the US Administration, the DoD and other US authorities. As would be expected with such a complex and important process, senior officials have held numerous detailed discussions with their US counterparts. Although it is not practicable for us to keep records of all discussions that take place at senior official level, we can confirm that the Principal Finance Officer, the Chief Scientific Adviser, the Deputy Under Secretary for Science and Technology, the Deputy Chief of the Defence Staff for Equipment Capability and the Chief of Defence Procurement have all been in consultation with their US colleagues.

  Since the consultation was extended, as announced on 26 October 1999, Official Report, column 768W, discussions at ministerial level are recorded as follows:
  Secretary of State for Defence, the right hon. Geoffrey Hoon, met the Hon. John Hamre, the Deputy Secretary of State for Defense 27–28 January 2000.
  Minister for Defence Procurement, Baroness Symons, met the following US representatives to discuss the DERA public-private partnership proposals:
  Dr. C. Dorman, the Chief Scientist of the Office of Naval Research (ONR), on 22 November 1999, in London.
  Hon. John Hamre, the then Deputy Secretary for Defense in Washington on 29 February 2000, and then again in London on 22 March 2000.
  Under Secretary of Defense (Acquisition and Technology) Jacques Gansler on 29 February, and then again on 22 and 23 May 2000.
  Rudy de Leon, the Deputy Secretary for Defense in Washington on 2 May 2000.
  Baroness Symons has also met senior National Security officials and had telephone conversations with John Hamre, and David Oliver, the Principal Deputy Under Secretary of Defense Acquisition and Technology, on this subject.

  A team of UK Ministry of Defence officials led by the Director of the DERA Partnering Team, has completed a comprehensive series of briefings in the USA from 8 to 24 May 2000. This visit covered a wide range of US laboratories and sites as well as US officials from the US Department of Defense and the State Department.

  Responses from the US and our other allies have been generally supportive of the Core Competence approach. They have made it clear that they wish to continue collaboration with the UK and see no reason why this should not be possible along the lines we are proposing. In common with all our collaborative partners, they have welcomed our willingness to listen to their views and engage in genuine consultation. Naturally, they have emphasised that they wish to ensure that government-only
  242W
  information provided under existing arrangements and as part of future collaboration will be adequately protected. Following any decision to proceed with Core Competence we would obviously take forward detailed work on this issue.

  The current consultation period ended on 9 June. I can assure the hon. Gentleman that views expressed will be taken into account before a final decision is made.

  DSA 2000
  Mr. Alan Simpson
  To ask the Secretary of State for Defence if he will list the UK firms represented at DSA 2000 in Malaysia; what recent meetings Ministers or officials have had with such firms in respect of licensed production; and what products on display at DSA 2000 are(a) manufactured and (b) designed by UK firms. [126765]

  Dr. Moonie
  I will write to my hon. Friend and a copy of my letter will be placed in the Library of the House.

  Rifles
  Mr. Streeter
  To ask the Secretary of State for Defence what policy has been adopted with regard to the sale of self-reloading rifles no longer required by the British Army. [126461]

  Mr. Hoon
  [holding answer 19 June 2000]Our policy is that small arms (other than automatic weapons which are routinely destroyed) which are declared surplus by the Ministry of Defence area available only to Governments, including acceptable military, paramilitary and police organisations (either directly or through duly licensed entities authorised to procure weapons on their behalf), to meet their legitimate defence and security requirements. All such transfers are assessed on a case by case basis against the UK national export licence assessment criteria and the EU Code of Conduct on Arms Exports.

  In practice, few inquiries are received for the purchase of surplus small arms and the reality is that most are destroyed.

  Civil Servants
  Mrs. Ewing
  To ask the Secretary of State for Defence what plans he has for the further dispersal of MOD civil servants outside London to other parts of the United Kingdom. [126678]

  Dr. Moonie
  [holding answer 21 June 2000]The following planned moves will result in civil service staff being relocated from London to other parts of the United Kingdom:As part of the Head Office redevelopment the number of staff in London will reduce, fulfilling one of the aims of the Strategic Defence Review. Staff will move to a number of locations including York, Bath and Bristol;
  As part of the integration of the former Army Technical Support Agency (ATSA) functions into the Equipment Support (Land) organisation in the Defence Logistics Organisation (DLO), many of the 216 civilian posts at ATSA Woolwich will move to Andover in late 2002;
  48 civilian posts at the former Print and Distribution Function Woolwich are due to transfer to the Defence and Storage Distribution Agency (DSDA) at Llangennech.

  Other moves may be planned but the details are not held centrally.
  243W

  Sierra Leone
  Mr. Duncan Smith
  To ask the Secretary of State for Defence (1) what reports he has received concerning the well-being of Major Andrew Harrison, serving in Sierra Leone, following his involvement with the RUF; what assessment he has made of threats to Major Harrison and the Ghurkha detachment being held hostage by the RUF; and if he will make a statement; [127310]

  (2) what recent discussions he has had with the (a) UN peacekeeping force in Sierra Leone and (b) Revolutionary United Front concerning Major Andrew Harrison. [127311]

  Mr. Hoon
  I receive regular briefings on the situation regarding Major Harrison from civilian and military officials, who are in daily contact with him. I spoke to him myself by telephone on Monday 19 June. He is well and in good spirits, and is well protected by the Indian Gurkha forces at Kailahun. Although, because of the presence of RUF forces, the UN forces there are restricted in their freedom of movement outside the UN compound, they are not hostages and there is currently no direct threat to them or to Major Harrison. Although this is primarily a matter for the UN, we are liaising closely with them in Sierra Leone and New York in an effort to resolve the situation peacefully. I have not had any contact with the RUF.

  Mr. Key
  To ask the Secretary of State for Defence how many troops, and from which regiments, were affected by the failure to supply sufficient quantities of mefloquine in West Africa. [126054]

  Mr. Hoon
  [holding answer 15 June 2000]The number of personnel who deployed to West Africa on Operation Palliser without supplies of anti-malarial tablets, and the reasons for this, are currently being investigated by my Department. Supplies of the tablets were readily available and there are no known problems with the supply chain.

  Non-procurement Fraud
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what estimate his Department has made of the cost to its budget in each of the last five years in relation to non-procurement fraud; and if he will make a statement. [126686]

  Dr. Moonie
  The reported estimated annual costs of non-procurement fraud for the financial years 1995–96 to 1999–2000 inclusive are as follows:

  £

  1995–96

  217,000

  1996–97

  234,000

  1997–98

  98,000

  1998–99

  570,000

  1999–2000

  99,000

  No abatement is made for subsequent recoveries. These figures relate to a combination of suspected and proven frauds with estimated values refined from time to time as investigations, sometimes lasting a year or more, reach a conclusion.

  Parliamentary Questions
  Mr. Maclennan
  To ask the Secretary of State for Defence how many written parliamentary questions tabled to his Department between 19 October 1999 and 20 April 2000 have not received substantive answers, citing as the reason commercial or other confidentiality. [127340]

  Dr. Moonie
  I will write to the right hon. Member and a copy of my letter will be placed in the Library of the House.

  Trigat Programme
  Mr. Key
  To ask the Secretary of State for Defence if he will make a statement on the future of the medium-range Trigat programme. [125782]

  Dr. Moonie
  The MR TRIGAT Industrialisation and Production (I&P) Memorandum of Understanding (MOU) has been signed by Germany, France and the UK, but has not come into force because Belgium and the Netherlands have yet to sign. This has delayed the placing of the MR TRIGAT Industrialisation and Production contract by over 12 months. The situation has been further complicated by a request from Germany to reduce the number of equipments envisaged when that country signed the MOU. These uncertainties cast significant doubt on whether (and when) a contract based on the existing MOU will be possible.

  Our priority must be to deliver a cost effective anti-tank guided weapon capability with the minimum delay. To this end, we continue to liaise with the participating nations to resolve the current uncertainty and to agree a way forward.

  Arms Exports (Saudi Arabia)
  Dr. Lynne Jones
  To ask the Secretary of State for Defence what was the value of United Kingdom arms exports to Saudi Arabia in each of the past five years. [126251]

  Dr. Moonie
  I refer my hon. Friend to the 1997 and 1998 Annual Reports on Strategic Export Controls, which contain details of the value of arms exports to Saudi Arabia. Copies of these reports have been placed in the Library of the House. The 1999 Annual Report is due to be published shortly. Comparable information for other year could be provided only at disproportionate cost.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  General Permitted Development Order
  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to amend the General Permitted Development Order made under the Town and Country Planning Act 1995. [126284]

  Ms Beverley Hughes
  In February, my Department launched a research project which includes a review of the changes of use granted permission by the General Permitted Development Order 1995. In May, we announced in response to the report by the Independent Expert Group on Mobile Phones that the Government was
  245W
  minded to introduce a requirement for an application for full planning permission for all new telecommunications masts. However, we would need to consult widely on the principle and precise scope of any new arrangements, including the extent to which the existing permitted development rights in the Order might need to be amended. My Department also issued jointly with the Department for Culture, Media and Sport on 19 June a consultation paper which proposes that a planning application should in future be made for certain works within conservation areas that currently benefit from permitted development rights. Implementation of the proposal would require amendment of the Order.

  Transport Plan
  Ms Walley
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make it his policy to publish an environmental appraisal alongside the Government's Ten Year Transport Plan. [126852]

  Ms Beverley Hughes
  The Ten Year Plan will contain an assessment of the Plan's impact on key environmental indicators.

  Interactive Voice Response Systems
  Mr. Ben Chapman
  To ask the Secretary of State for the Environment, Transport and the Regions how many agencies of his Department use interactive voice response systems when dealing with telephone inquiries from the general public. [127113]

  Ms Beverley Hughes
  None of the Department's nine executive agencies currently offers telephone services that recognise and react to the spoken word.

  Departmental Accounting Office
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions what are the purpose and functions of his Department's additional accounting officer; and when this post was created. [127128]

  Ms Beverley Hughes
  The Department's additional accounting officer has direct responsibility for Class III Vote 4, Local government, England, and the White Paper account relating to the Pooling of Non-Domestic Rates and Redistribution to Local Authorities in England. This appointment was made following departmental restructuring on 1 April 1998. The Permanent Secretary, as principal Accounting Officer, continues to have personal responsibility for the overall organisation, management and staffing of the department.

  Parliamentary Questions
  Mr. Maclennan
  To ask the Secretary of State for the Environment, Transport and the Regions how many written parliamentary questions tabled to his Department between 19 October 1999 and 20 April 2000 have not received substantive answers, excluding those not answered on grounds(a) of disproportionate cost, (b) that the information is not available, not held centrally, or not held in the form requested and (c) of commercial or other confidentiality. [127098]
  246W
  Ms Beverley Hughes
  [holding answer 21 June 2000]I assume the right hon. Member is referring to parliamentary questions where Ministers indicate in their response that they will write to hon. Members to provide the information requested. If so, there have been 25 such cases, out of a total of 2,865 parliamentary questions answered by my Department in the period in question.

  Mr. Maclennan
  To ask the Secretary of State for the Environment, Transport and the Regions on how many occasions he has deposited papers in the Library in response to parliamentary questions tabled to his Department between 19 October 1999 and 20 April 2000. [127337]

  Ms Beverley Hughes
  For the period in question, my Department has deposited papers in the Library in response to parliamentary questions on 240 occasions.

  Air Traffic Control
  Mr. Brady
  To ask the Secretary of State for the Environment, Transport and the Regions what actions were taken by(a) his Department and (b) NATS between 9 June and 17 June in order to ensure that the breakdown on 9 June was not repeated. [127239]

  Mr. Mullin
  Following the computer problem at West Drayton on 9 June, the Department urgently requested: information from National Air Traffic Services Ltd. (NATS) on the nature and cause of the problem; and reassurance that immediate steps were being taken to rectify the fault to ensure that it would not happen again. When a further computer problem occurred on 17 June NATS contacted the Department with detailed information on this incident and the remedial action being taken.

  NATS has advised that the causes of the failures were two unrelated application software design faults triggered in established and hitherto correctly functioning systems. The incident on 9 June was traced to an application code which failed to correctly process an unusual flight plan dealing with a flight to Hamburg which required complex co-ordination with an adjacent air traffic control centre (Copenhagen). Immediate action was taken to issue an operational procedure to all units affected not to file flight plans which could cause this problem.

  The failure on 17 June resulted from a latent design fault in the flight strip printing system. The failure was cleared by reverting to a previous version of the software and as an additional precautionary measure a system message has been input which actively prevents the system from exercising the faulty code sequence.

  As a permanent solution NATS is producing design fixes for both faults. These are currently undergoing test and assurance processes with NATS' operational engineering staff as a matter of high priority.

  Mr. Leslie
  To ask the Secretary of State for the Environment, Transport and the Regions when his Department's latest Air Traffic Forecasts will be published. [127814]

  Mr. Mullin
  The air traffic forecasts referred to are published by my Department every three years and reflect the intention to monitor air traffic developments and to keep assumptions and methodologies under review.
  247W
  I have now approved the revised forecasts and agreed to their publication. Copies have been placed in the House Libraries and will shortly be on the DETR website.

  Index of Local Deprivation
  Ms Glenda Jackson
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the impact on the level of regeneration funding for London boroughs of the new index of local deprivation. [127161]

  Ms Beverley Hughes
  Decisions about the level of funding of domestic regeneration programmes is subject to the outcome of the spending review, which is expected to be announced next month. The index of local deprivation is still being finalised and is expected to be published later in the summer.

  Birmingham Northern Relief Road
  Mr. McCabe
  To ask the Secretary of State for the Environment, Transport and the Regions when work is to start on the Birmingham Northern Relief Road. [127787]

  Mr. Hill
  The Highways Agency is currently making progress with arrangements for the compulsory purchase of land. Work to clear the site will be undertaken in the autumn and will continue into next year in preparation for construction to start in the spring. A copy of an edited

  Number of fatal and non-fatal casualties and fires1 in dwellings2, 1994–98, UK

  1994

  1995

  1996

  1997

  19983

  Number of fatal casualties in dwellings

  488

  559

  564

  562

  506

  Number of non-fatal casualties in dwellings

  12,916

  13,108

  14,189

  14,896

  14,970

  Number of fires in all dwellings involving casualties

  9,008

  9,237

  10,033

  10,454

  10,463

  Number of fires in multi occupancy dwellings4 involving casualties

  3,861

  3,997

  4,551

  4,716

  4,724

  Percentage

  43

  43

  45

  45

  45

  1 Including late call and heat and smoke damage incidents (not recorded prior to 1994).

  2 Dwelling locations include caravans, houseboats and other non-building structures used as permanent dwellings.

  3 The 1998 casualty information is provisional and will be revised for later publication after death certificate information has been finalised.

  4 Multi occupancy dwellings are those in which the building has been subdivided into separate domestic living areas whether or not part of the building is used for a non-domestic purpose.

  Hunting with Dogs
  Mr. Sawford
  To ask the Secretary of State for the Home Department what was the total cost of the Burns Inquiry into hunting with dogs. [126901]

  Mr. Mike O'Brien
  I will write to my hon. Friend as soon as the final cost is known.

  Metropolitan Police
  Mr. Heald
  To ask the Secretary of State for the Home Department what is the(a) current strength and (b) number of officers actually available for duty in the Metropolitan Police Service. [127313]

  Mr. Straw
  I understand from the Commissioner of Police of the Metropolis that the strength of the force at the end of May was 25,484. This figure includes officers on secondment to The National Criminal Intelligence Service, the National Crime Squad and central services.
  248W
  version of the Concession Agreement prepared in accordance with the judgment of the High Court has been placed in the Library.

HOME DEPARTMENT

  Eurodac
  Mr. Bercow
  To ask the Secretary of State for the Home Department if he will make a statement on planned UK participation in the Eurodac system. [127196]

  Mrs. Roche
  My right hon. Friend the Home Secretary announced on 7 October 1999 that the United Kingdom was opting in the draft Regulation to establish Eurodac. The United Kingdom continues to play a full part in the discussion on this text, on which the European Parliament is now to be re-consulted.

  Domestic Fires
  Ms Buck
  To ask the Secretary of State for the Home Department how many people(a) died and (b) were injured in domestic fires in each of the last five years, and, of these, what proportion of the fires occurred in houses in multiple occupation. [127008]

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

  When these are excluded the strength of the Metropolitan Police is 24,966. The number of officers available for duty at the end of May was 24,966.

  These figures are not comparable with those for previous years because of changes to the boundaries of the Metropolitan Police District. Responsibility and resources for those parts of Essex, Hertfordshire and Surrey previously policed by the Metropolitan Police were transferred to the relevant county forces with effect from 1 April 2000.

  Prisons
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department how many(a) additional prisons and (b) additional prison places there were and what was their cost in each of the last five years; how many planned (i) additional prisons and (ii) additional prison places there are and what is their cost in the next three years; and if he will make a statement. [125322]
  249W
  Mr. Boateng
  [holding answer 9 June 2000]The information requested is set out in the table.

  Number of new prisons provided in each of the last five years

  Number of additional uncrowded prison places provided in each of the last five years1

  Cost of additional places in each of the last five years (£ million)2,3

  1996–97

  0

  1,857

  186

  1997–98

  4

  4,635

  211

  1998–99

  0

  1,697

  238

  1999–2000

  2

  2,071

  205

  2000–014

  1

  840

  244

  1 The number of new places includes those at new prisons and places provided at existing prisons by building houseblocks and Ready To Use units. It is the total of new places and does not take into account places taken out of use, for example by the closure of Aldington.

  2 The total cost of new places includes new prisons provided under the Private Finance Initiative.

  3 This is an estimate of the total capital and current cost as the Prison Service does not record separately the running costs of added accommodation at existing prisons.

  4 The new prison in 2000–01 is called Rye Hill and will open in January 2001.

  Note:

  A new prison called Dovegate (800 places) is planned to open in July 2001. Plans for 2001–02 are currently being considered as part of the Spending Review 2000.

  Global Cultural Diversity Congress
  Mr. Lidington
  To ask the Secretary of State for the Home Department if he will place in the Library a copy of the report to Creditors prepared by the liquidator of Global Cultural Diversity Congress 2000 Ltd. [127355]

  Mr. Mike O'Brien
  Disclosure of the Report of the Creditors is a matter for the liquidators of Global Cultural Diversity Congress 2000 Ltd. and so it is not my decision to do so.

  Immigration Detention Centres
  Mr. Lidington
  To ask the Secretary of State for the Home Department what the planned capacity is of each of the proposed detention centres at Thurleigh, Harmondsworth and Aldington; what criteria will be used to allocate(a) asylum seekers and (b) other immigrants to these centres; and if he will make a statement. [127354]

  Mrs. Roche
  It is proposed that there will be 900 places for immigration detainees at the detention centre at Thurleigh, 550 at Harmondsworth and about 300 at Aldington. People are detained under powers set out in the Immigration Act 1971. Although many have claimed asylum at some time they will be detained because of their status as inadmissible passengers, illegal entrants or people subject to deportation. The primary criterion is whether the person is unlikely to comply with conditions of temporary admission or their removal directions. No particular criteria will attach to these three new centres. The allocation of immigration detainees into a particular centre is primarily dependent on the availability of space and the location of the place of initial detention.

  Mr. Lidington
  To ask the Secretary of State for the Home Department what criteria will be used to select the asylum seekers to be detained at Lindholme; what his 250W
  target is for the average length of time for which an asylum seeker will remain at Lindholme; and if he will make a statement. [127356]

  Mrs. Roche
  Lindholme will be used as part of the detention estate, housing, principally, those immigration detainees apprehended in the North of England. The criteria for the use of Lindholme will be the same as for other centres. It will be for illegal entrants, inadmissible passengers and those subject to deportation who are detained under powers in the Immigration Act 1971. Many of these people have claimed asylum at some stage. Detention is used where it is believed a person is unlikely to comply with conditions of temporary admission or their removal directions.

  There is no target for the average length of time for which a detainee will remain at Lindholme. Detention must be proportionate and for the minimum period necessary.

  Equal Treatment Directive
  Mr. Lidington
  To ask the Secretary of State for the Home Department which organisations attended his consultative meetings about the EC Directive on implementing the principle of equal treatment between persons irrespective of racial or ethnic origin. [127352]

  Mr. Mike O'Brien
  In addition to the organisations that were listed in the reply I gave the hon. Gentleman on 8 June 2000,Official Report, columns 377–78W, the Government had consultative meetings with the following representatives of organisations:

  1. Sushi Sharma (Brent Council, Community Safety Team)

  2. Sofi Taylor (Greater Glasgow NHS Primary Care Trust)

  3. Bob Purkiss (Transport and General Workers Union)

  4. Pauline Granstan (Communication Workers Union)

  5. Jacinta J. Barker (Black and Minority Ethnic Community Safety Forum)

  6. Wali Tasar Uddin MBE (Commonwealth Society of Edinburgh)

  7. Selma Rahman (Fife Racial Equality Council)

  8. Sherry Peck (North Herts. Minority Ethnic Forum)

  9. Priscilla Marongwe (Edinburgh and Lothians Racial Equality Council)

  10. Farkhanda Chaudhry (Scottish Council for Voluntary Organisation)

  11. Jimshid Ahmadi (North Shields Peoples Centre)

  12. Anne Gaspard (United Kingdom Office of the European Monitoring Centre on Racism and Xenophobia—EUMC)

  13. Diya Muqit (Citizenship Foundation)

  14. Khalil Kazi (United Kingdom Migrants Forum)

  15. Claude Hendrickson (Youth Enquiry Service)

  16. David Hey (Salfia Association, Dewsbury)

  17. Ray Sefia (The Ceed Charity)

  18. Mohinder Chatrik (Indian Workers' Association, Huddersfield)

  19. John Creaby MBE (Tyne and Wear Racial Equality Council)

  20. N. Khan Moghal (Manchester Council for Community Relations)

  21. Bisi Akinwumi (Voluntary Organisation Internet Service)

  22. Geremy Phillips (Manchester Trades Union Council)

  23. Robert Cater (Race Equality First)

  24. Patrick Yu (Northern Ireland Council for Ethnic Minorities)

  251W

  25. Paul Winstone (Leicester City Council)

  26. Paul Auber (Chapelton Young Peoples 10–2 Club)

  27. Lee Jasper (The 1990 Trust)

  28. Harriette Campbell (African Caribbean Women's Association.)

  29. Judith Woodward (National Assembly Against Racism)

  30. Royana Meechan (Tribesnetribes)

  31. Kazim Khan (Tze UK Incorporating the Race and Drugs Project)

  32. Liaquat Ali (Council of British Pakistanis—Scotland)

  33. Sheila Rogers (Equality Commission for Northern Ireland Racial Equality Directorate)

  34. Dr. Jack Demaine (Loughborough University)

  35. Kristin Couper (Universite de Pans 8)

  36. Philip Mathew (Haringey Racial Equality Council)

  37. Fred Ellis (Haringey Racial Equality Council)

  38. Prof. Chris Mullard (Focus Consultancy)

  39. Kalpana Desai (Kirlees Asian/Black Women's Association)

  40. Mr. P. J. Smith (Labour Party)

  41. Laure Tsobgny (Millennium Experience)

  42. Mr. Akhtar Shah (Scottish Council for Minorities Rights)

  43. Corall Jenkins (Unison)

  44. Michelynn Lafleche (Runnymede Trust)

  45. Baroness Sarah Ludford (European Parliament—EP Rep. to European and United Nations Conferences Against Racism)

  46. Val Carpenter (National Coalition Building Institute)

  47. Rajinder Sohpal (Reading Council for Racial Equality)

  48. Jayne Done (Oldham Local Education Authority)

  49. Alan Corbett (Milton Keynes Council)

  50. Tara Mukherjee (European Multicultural Foundation)

  51. Stephen Pittam (The Joseph Rowntree Charitable Trust)

  52. Michael Head (European Commission Against Racism and Intolerance)

  53. Julia Kaufmann (BBC Children in Need Appeal)

  54. Jabeer Butt (Race Equality Unit)

  55. Leandra Box (Race Equality Unit)

  56. Dr. James Uhomoibhi (Multi Cultural Resource Centre, Northern Ireland)

  57. Rita Patel (Belgrave Baheno Women's Organisation)

  58. Karen Chouhan (Belgrave Baheno Women's Organisation)

  59. Sue Errington (Devon and Exeter Racial Equality Council)

  60. Mr. Lloyd Blake (African and Caribbean Peoples Movement)

  61. Mr. Abdulaziz Toki (Asian Support Group European Union Migrants Forum)

  62. N. Khan Moghal (Manchester Council for Community Relations)

  63. Aisling Bryne (Al-Hasaniya Moroccan Women's Centre)

  64. Sheila Rogers (Equality Commission for N. Ireland Racial Equality Directorate)

  65. Dr. Tony Langlois (Community Relations Council for Northern Ireland)

  66. Gerry Gable (Anti-racist and Violent Crime Task Force)

  67. Suzette Bronkhorst (I Care—Internet Centre, Anti-racism in Europe)

  68. Samir Sharma (Central Scotland Racial Equality Council)

  69. Mukami McCrum (Central Scotland Racial Equality Council)

  70. Mrs. Bilquis Ahmed (Azeemia Foundation)

  71. Margaret Donaghy (Traveller Movement N. Ireland)

  72. Dave Hey (Salfia Association, Dewsbury)

  73. Mr. Ahmad Fawzi (United Nations Information Centre)

  252W

  74. Namasiku Liandu (University of Abertay, Dundee)

  75. Victor Momodu

  76. Elizabeth Kayembe (Abantu—for Development)

  77. Gay Moon (Justice)

  78. Noel James (Law Society)

  79. Asad Rehman

  80. Julia Hausermann (Rights Humanity)

  81. Mrs. Couper (University de Paris 8)

  82. Sanjiv Verdi (Unison).

  Road Hauliers (Penalties)
  Mr. Lidington
  To ask the Secretary of State for the Home Department what payments have been received by his Department in respect of civil penalties imposed on road hauliers under the Immigration and Asylum Act 1999; and if he will make a statement. [127353]

  Mrs. Roche
  As at midday on 20 June, a total of £24,000 had been received in respect of civil penalties imposed under the provisions of the Immigration and Asylum Act 1999. In addition, a total of £137,829.70 had been received by way of payment as security in order to secure the release of vehicles impounded under the provisions of the Act, and a further £5,933.10 had been received in respect of detention of those vehicles and related expenses.

  Spiritual Healers Charitable Trust
  Mr. Tredinnick
  To ask the Secretary of State for the Home Department what discussions he has had with the Charity Commission about the proposed registration of the National Federation of Spiritual Healers Charitable Trust Ltd. as a charity; and if he will make a statement. [126472]

  Mr. Boateng
  None. The Charity Commission is answerable to the High Court for its legal decisions and its interpretation of charity law. Registration is not a matter for the Home Office.

  Home Detention Curfew
  Mr. Lidington
  To ask the Secretary of State for the Home Department how many category A prisoners were released on the home detention curfew scheme up to 31 May; what offences each committed and what was the(a) sentence received, (b) sentence served and (c) time spent on the scheme in each case; if any breached the conditions of the curfew, had their licence revoked or re-offended while on the scheme; and if he will make a statement. [126907]

  Mr. Boateng
  [holding answer 20 June 2000]As of 31 May 2000, no category A prisoners were placed on the home detention curfew scheme.

SOCIAL SECURITY

  Winter Fuel Payments
  Dr. Gibson
  To ask the Secretary of State for Social Security for what reasons 24 September was chosen as the cut-off for the winter allowance for 2000–01. [126045]
  253W
  Angela Eagle
  To ensure people receive their winter fuel payments in good time to contribute to winter fuel bills, the qualifying week must precede the onset of winter. The week of 18 to 24 September will be used as the qualifying week for the coming winter to ensure that the correct payments can be made before Christmas, in good time to contribute to winter fuel bills. The process for identifying eligible people and determining the amount payable takes around 10 weeks. This allows for completion of the enormous task whereby around 11.5 million people who are now eligible for winter fuel payments are either identified from our records, or through a claims process.

  If there were an entitlement provision for those people who had reached age 60 after the qualifying week, greater complexity would be brought to the scheme. The administration process of establishing the eligibility of all those who claimed, by checking age and household circumstances, would take a great deal of time and would add significant expense.

  The current approach ensures all those eligible, particularly the oldest, get a significant and well timed payment. Clearly, there will be people who just miss out, but this would happen even if both a qualifying week and mop-up period were used, since the mop-up period would need to end at some point. We believe it has struck the right balance between providing help to the great majority of older people and ensuring that the payments can be made in time for the coldest weather.

  Housing Benefit
  Ms Buck
  To ask the Secretary of State for Social Security what is his Department's estimate of the annual costs of increasing the earnings disregard for Housing Benefit claimants by(a) £5 per week for a single person aged under 65 years and (b) by £10 for a household with children. [126435]

  Angela Eagle
  The information is in the table.

  Estimated costs of increasing the earnings disregard for Housing Benefit claimants

  £ million

  Cost in 2000–01

  Increase the Housing Benefit earnings disregard by £5 per week for a single person aged under 65 years

  15

  Increase the Housing Benefit earnings disregard by £10 per week for a family with children

  70

  Notes:

  1. Based on the 1997–98 Family Resources Survey and Housing Benefit administrative/forecast data.

  2. Costs are rounded to the nearest £5 million.

  3. The estimates do not take into account any behavioural effect that may be caused by these measures.

  Ms Buck
  To ask the Secretary of State for Social Security what would be the annual cost of disregarding child maintenance from housing benefit calculations(a) for all claimants and (b) for claimants also receiving working families tax credit. [126434]
  254W
  Angela Eagle
  We estimate that the cost of fully disregarding maintenance payments in Housing Benefit would be about £20 million a year. This includes an estimate for the cost for cases who would become newly entitled as a result of the full disregard.

  The cost of fully disregarding maintenance payments in Housing Benefit (HB) for claimants who receive working families tax credit is also about £20 million a year.

  Notes:

  1. Cost for existing claims based on data taken from May 1998 HBMIS dataset, a 1 per cent. survey of HB claims.

  2. Cost for cases who become newly entitled is calculated from data taken from 1996–97 Family Resources Survey uprated to 2000–01 prices, benefits and earnings levels.

  3. Costs and Caseloads are calibrated to forecast caseloads for 2000–01. The cost has been rounded to the nearest £10 million.

  4. This cost will include a small element of spousal maintenance.

  Mr. Burns
  To ask the Secretary of State for Social Security, pursuant to his answer of 15 June 2000,Official Report, column 713W, on housing benefit, what average time is taken to process the housing benefit claims dealt with by Chelmsford Borough Council that are not dealt with within the 14 day guidelines. [127205]

  Mr. Rooker
  The information requested is not currently available. However, 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 new claims. The first figures are expected to be available to the Department by autumn this year.

  Single Payments
  Mr. Webb
  To ask the Secretary of State for Social Security if he will set out for each of the last three years before its abolition(a) the total amount spent on the single payments scheme and (b) the amount spent on each major category of item for which such grants were available. [125285]

  Angela Eagle
  Expenditure on the single payment scheme for the last three years before its abolition is given in the Annual Report on the Social Fund 1988–89.

  Statistical samples of single payments, by item, are given in the Supplementary Benefit Annual Statistical Enquiries, 1986 and 1987.

  The publications are available in the Library.

  Benefit Information
  Mr. Hancock
  To ask the Secretary of State for Social Security how he seeks to ensure easy access by all potential claimants to accurate benefit information; what assessment he has made of the effectiveness of the complaints handling system in each division within his Department; and if he will make a statement. [125443]

  Angela Eagle
  We are modernising the way DSS services are delivered and restructuring the Department to provide a comprehensive, dedicated service focused on the needs of our key client groups: pensioners, working age people and children. Our programme includes initiatives to provide better information and effective systems for complaints and redress, if things go wrong.
  255W
  Key improvements in quality and accessibility of information about benefits include:
  Benefits Agency leaflets have been redesigned making them clearer, easier to follow and more tailored to customers needs;
  information on benefits is now available in bilingual/Welsh, eight ethnic minority languages, large print, audiocassette and Braille;
  the new Pensions Direct teleservice means we can take claims and deal with queries over the telephone;
  through the New Deals and the ONE service we are providing one-to-one personal help and advice on jobs, training, child care and other services, as well as information on benefits;
  an improved Departmental website due to be launched shortly will provide customers with easy access to benefit information and in the future will enable them to contact us electronically.

  We are reviewing our complaints and redress systems, in relation to our main client groups. Considerable work on this is already underway in the Department's current Agencies, most notably:
  from July 2000 a new system will be introduced in Benefits Agency which will help us reduce complaints handling time;
  the Child Support Agency and War Pensions Agency have each recently introduced an independent body to review complaints.

  In addition to the Department's own complaints procedures the Parliamentary Ombudsman investigates complaints of maladministration. Since 1997, the Ombudsman's reports show a 25 per cent. reduction in the number of complaints made to him about Departmental Agencies.

  Income Support
  Ms Buck
  To ask the Secretary of State for Social Security what assessment he has made of the characteristics of households with incomes below the level of Income Support. [127005]

  Mr. Bayley
  Research has been, and continues to be, commissioned by the Department to examine the characteristics of the poorest groups and, where appropriate, to explore the reasons for non-take-up of benefits.

  A substantial programme of research was undertaken to examine the characteristics of the poorest pensioners and to explore their barriers to claiming Income Support. Ongoing surveys of low-income families with children also provide detailed information about Britain's poorest families. In addition, research was completed in 1999 that examined the circumstances of the lowest income households identified from the Department's Households Below Average Income (HBAI) series. This followed evidence that households reporting the lowest incomes in household surveys do not necessarily have the lowest living standards.

  All findings from research undertaken by the Department are published and placed in the Library.

  Expenditure
  Mr. Robertson
  To ask the Secretary of State for Social Security what is the level of social security expenditure as a percentage of GDP is(a) in the United Kingdom and (b) on average in the other EU member states. [126978]
  256W
  Mr. Darling
  Comparative data across European Union member states are published by the Statistical Office of the European Communities. It produces comparisons of expenditure on social protection using a broader definition than Social Security alone. The definition includes spending on health, social services, active labour market policies and public sector occupational pensions. The most recent figures are for 1997 and show that UK spending on social protection represented 26.8 per cent. of Gross Domestic Product, compared with an EU average of 28.2 per cent.

  Source:

  Social protection: expenditure and receipts, 1999 edition, Eurostat.

  Child Support
  Mr. Bob Russell
  To ask the Secretary of State for Social Security what plans he has to make it a criminal offence to give false information to the Child Support Agency. [126654]

  Angela Eagle
  Under proposals in the current Child Support, Pensions and Social Security Bill, we will introduce new criminal offences for providing false information in relation to child support and failing to provide information when required to do so. Any person who deliberately misleads the Child Support Agency or withholds information will be liable to a fine of up to £1,000 on conviction.

  Average Incomes
  Ms Roseanna Cunningham
  To ask the Secretary of State for Social Security what was the average income from state benefits for(a) pensioners, (b) pensioners over 75, (c) single parents and (d) the disabled (i) in cash and real terms and (ii) as a percentage of average earnings for (1) 1979, (2) 1984, (3) 1989, (4) 1994 and (5) for each year from 1994. [126682]

  Mr. Bayley
  Information on components of pensioners' incomes is published in the annual statistical publication, The Pensioners' Incomes Series, copies of which are in the Library. The latest available figures are for 1997–78.

  Benefits (Balkan Claimants)
  Mr. Lidington
  To ask the Secretary of State for Social Security how many nationals of each of the successor republics to the former Yugoslavia who are residing in the United Kingdom are claiming social security benefits in this country. [127350]

  Mr. Bayley
  The information is not available as details of a claimant's nationality are not routinely recorded. Benefit entitlement is dependent upon a person's immigration status rather than nationality.

SCOTLAND

  Caledonian MacBrayne
  Mr. Charles Kennedy
  To ask the Secretary of State for Scotland when he last discussed issues relating to Caledonian MacBrayne with the European Commission; and if he will make a statement. [125723]
  257W
  Dr. Reid
  My hon. Friend the Minister of State, Scotland Office, recently met with representatives of the European Commission to discuss a wide range of issues affecting transport in remote and peripheral regions in Scotland and elsewhere in Europe including ferry services. Responsibility for issues affecting the operation of Caledonian MacBrayne ferry services is devolved and therefore rests with the Scottish Executive.

  Parliamentary Questions
  Mr. Maclennan
  To ask the Secretary of State for Scotland how many of the written parliamentary questions tabled to his Department between 19 October 1999 and 20 April 2000 have not received substantive answers, citing as the reason that the information is(a) not held centrally, (b) not held in the form requested and (c) not available. [127333]

  Dr. Reid
  Four questions did not receive substantive replies because the information was not held centrally. Three questions could not be answered fully because some of the information requested was not held centrally.

  No question did not receive a substantive reply because the information was not held in the form requested.

  The information to answer one question was not available and some information requested was not available in respect of three questions.

FOREIGN AND COMMONWEALTH AFFAIRS

  Chevening Scholarships
  Mr. Baldry
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many Chevening scholarships have been awarded to(a) Kazakhstan, (b) Uzbekistan, (c) Turkmenistan, (d) Tadjikistan and (e) Kyrgyzstan. [R] [126430]

  Mr. Hain
  In 1999–2000 there were 11 Chevening Scholars from Kazakhstan, 13 from Uzbekistan, five from Kyrgyzstan, two from Turkmenistan, and one from Tadjikistan.

  Mr. Baldry
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the criteria are on which the number of Chevening scholarships are made available to different countries. [126431]

  Mr. Hain
  Chevening Scholarships funding is allocated to different countries each year in line with FCO Objectives. As the cost of academic courses varies, it is not possible to make a precise correlation between the funding available and the number of scholarships.

  Recruitment (Women Graduates)
  Mr. Baldry
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many female graduates were recruited by his Department, and, of these, how many are still employed by his Department, in each of the last 20 years. [126429]

  Mr. Hain
  The table shows the number of women recorded as having been recruited to the FCO through the fast stream competition where candidates are required to have a degree. The table also shows how many of these are still with the FCO for each of the last 20 years.
  258W
  Women graduates may have been recruited into other grades but in these cases information on whether or not they had a degree was not systematically recorded as possession of a degree was not a requirement for recruitment in most cases.

  Number Recruited

  Number still with the FCO

  1980

  0

  0

  1981

  5

  3

  1982

  5

  5

  1983

  5

  3

  1984

  2

  2

  1985

  12

  10

  1986

  12

  8

  1987

  8

  8

  1988

  12

  8

  1989

  6

  5

  1990

  12

  9

  1991

  14

  14

  1992

  3

  3

  1993

  4

  4

  1994

  6

  6

  1995

  10

  9

  1996

  9

  7

  1997

  10

  10

  1998

  11

  11

  1999

  11

  11

  Ministerial Visits
  Mr. Baldry
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many ministerial visits were made by United Kingdom Ministers to(a) Kazakhstan, (b) Uzbekistan, (c) Turkmenistan, (d) Tadjikistan and (e) Kyrgyzstan in
  each of the last three years. [R] [126428]

  Mr. Vaz
  The following Ministers have visited the countries of Central Asia in the last three years:Foreign Office Minister of State, Doug Henderson MP, visited Turkmenistan in May 1998;
  Doug Henderson's successor, Joyce Quin MP, visited Kazakhstan and Kyrgyzstan in October 1998; and
  the Minister for Construction (DETR), Nick Raynsford MP, visited Kazakhstan this month.

  More ministerial visits to the region are planned for the coming months.

  South Lebanon
  Mrs. Ellman
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made on the protection of civilians in South Lebanon following the Israeli withdrawal. [126438]

  Mr. Hain
  My right hon. Friend the Foreign Secretary and I have publicly called on all parties to exercise restraint. We have also, privately, raised our concerns with Lebanese, Syrian and Israeli leaders during recent visits to their countries. We continue to work hard with the UN to maximise calm and stability.

  Sierra Leone
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment the United Nations or its associated bodies have made of the role of Liberia in respect of the conflict in Sierra Leone; and what action is proposed as a result. [126771]
  259W
  Mr. Hain
  [holding answer 21 June 2000]The United Nations has made no formal assessment of Liberia's role in respect of the conflict in Sierra Leone. However, there is increasing international concern over reports of close links between RUF rebels in Sierra Leone and supporters in Liberia, and Liberia's alleged involvement in the illicit trade in Sierra Leone diamonds.

  We will be taking forward our discussions with international partners on these issues over the coming period. Meanwhile, we welcome the EU's decision on 13 May to delay signature of the National Indicative Programme for Liberia in the light of concerns about Liberia's current activities.

  Burma
  Ms Glenda Jackson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps are being taken to identify the location and value of assets held by the Burmese Government which have been frozen by the EU. [127160]

  Mr. Battle
  The Bank of England's Sanctions Emergency Unit, on behalf of HM Treasury, has issued a Notice to all financial institutions in the UK instructing them to freeze all funds belonging to those individuals subject to EC Regulation 1081/2000. UK financial institutions are required to report all such funds to the Bank of England.

  The Burma (Freezing of Funds) Regulations 2000 makes breaches of the EC Regulation a criminal offence and provides penalties for such breaches.

  Ms Glenda Jackson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to introduce investment sanctions against Burma. [127159]

  Mr. Battle
  I refer my hon. Friend to the answer I gave her on 20 June 2000,Official Report, column 156W.

HEALTH

  MRSA (Netherlands)
  Mr. Flynn
  To ask the Secretary of State for Health what assessment his Department has made of the incidence, control and reduction of MRSA in hospitals in the Netherlands. [126325]

  Mr. Denham
  [holding answer 19 June 2000]We are aware of the very strict protocols used for the management of MRSA in the Netherlands. Practice there and in other European Union countries is taken into account when formulating central policy. We have recently set national standards for the control of hospital acquired infections, including MRSA. These will be delivered locally and will be independently inspected and reviewed by the Audit Commission and the Commission for Health Improvement.

  Administrative Costs
  Mr. Harvey
  To ask the Secretary of State for Health what proportion of the budget for hospital and community health services of(a) health authorities and (b) primary
  260W
  care groups and primary care trusts was spent on administrative costs in the last year for which figures are available; and if he will make a statement. [126916]

  Mr. Denham
  [holding answer 21 June 2000]In 1998–99 £420 million was spent on the cost of managing health authorities, 1.15 per cent. of the £36,612 million total National Health Service expenditure (net).

  Primary care groups were not established until April 1999; therefore no figures on their management costs are yet available.

  Hospital Cleaning
  Dr. Tonge
  To ask the Secretary of State for Health what estimate he has made of the financial savings made by NHS trusts in(a) domestic services and (b) cleaning contracts in the last year for which figures are available. [126920]

  Mr. Denham
  [holding answer 21 June 2000]The information is not collected centrally.

  Voluntary Sector
  Dr. Desmond Turner
  To ask the Secretary of State for Health if he will list the voluntary sector organisations involved in(a) primary care groups and (b) healthy living centres. [126881]

  Mr. Denham
  [holding answer 21 June 2000]The names of all voluntary sector organisations currently working with primary care groups (PCGs) are not collected centrally. PCGs should work alongside voluntary organisations in identifying local priorities and developing the Health Improvement Programme (HImP).

  The New Opportunities Fund (NOF) who are running a programme to support the development of a network of healthy living centres (HLCs) collect information about partners involved in bids as part of the application process. I have placed in the Library a list of those voluntary organisations involved at the bidding stage in the seven NOF funded HLCs.

  Prescriptions (Incapacity Benefit)
  Dr. Gibson
  To ask the Secretary of State for Health (1) if he will estimate the cost of granting all those on Incapacity Benefit in the UK free prescriptions; [127240]

  (2) if he will estimate the costs of giving free prescriptions to all those on Incapacity Benefit in Norwich, North. [127241]

  Ms Stuart
  In England, it is estimated that the cost of extending entitlement to free prescriptions to all recipients of Incapacity Benefit would be around £120 million per year. Information is not available on a constituency basis.

  Repairs and Maintenance
  Mr. Harvey
  To ask the Secretary of State for Health what was the outstanding repair and maintenance backlog at NHS facilities in each health authority in each year since 1995; and if he will make a statement. [127164]

  Ms Stuart
  The table provides the details requested.
  261W

  Outstanding repair and maintenance backlog figures in each health authority in each year since 1995

  £000

  Health authority

  1995–961

  1996–97

  1997–98

  1998–99

  Avon

  39,962

  42,294

  58,610

  51,593

  Barking and Havering

  42,150

  49,631

  47,116

  13,317

  Barnet

  7,914

  7,904

  11,273

  15,683

  Barnsley

  3,582

  3,222

  2,931

  1,755

  Bedfordshire

  8,577

  13,671

  11,714

  14,762

  Berkshire

  33,958

  67,528

  75,670

  76,355

  Bexley and Greenwich

  18,807

  11,395

  1,930

  3,890

  Birmingham

  102,672

  120,034

  153,721

  178,950

  Bradford

  18,836

  36,871

  30,645

  29,800

  Brent and Harrow

  35,282

  58,428

  27,396

  32,231

  Bromley

  50,950

  54,288

  51,962

  14,881

  Buckinghamshire

  28,781

  45,548

  43,924

  26,399

  Bury and Rochdale

  11,330

  10,530

  18,155

  7,834

  Calderdale and Kirklees

  59,953

  64,495

  67,147

  76,827

  Cambridge and Huntingdon

  22,676

  17,633

  25,768

  32,539

  Camden and Islington

  97,610

  140,919

  105,889

  120,775

  Cornwall and Isles of Scilly

  12,450

  13,114

  8,690

  8,929

  County Durham

  35,383

  35,627

  35,745

  12,780

  Coventry

  36,280

  42,172

  40,196

  71,852

  Croydon

  21,997

  20,012

  28,547

  23,200

  Doncaster

  15,209

  18,188

  14,738

  13,772

  Dorset

  27,321

  10,339

  9,774

  7,036

  Dudley

  242

  14,815

  25,695

  28,916

  Ealing, Hammersmith and Hounslow

  64,250

  106,666

  99,863

  99,056

  East Kent

  39,664

  15,576

  13,583

  11,568

  East Lancashire

  14,995

  23,859

  26,710

  32,879

  East London and The City

  92,758

  90,396

  122,008

  102,314

  East Norfolk

  36,510

  33,243

  40,624

  27,038

  East Riding

  148,755

  44,409

  56,968

  63,735

  East Surrey

  6,420

  5,320

  5,005

  7,530

  East Sussex

  30,227

  17,185

  21,468

  19,552

  Enfield and Haringey

  6,716

  10,474

  11,847

  14,785

  Gateshead and South Tyneside

  8,899

  9,413

  9,907

  9,390

  Gloucester

  8,306

  20,126

  18,075

  17,150

  Herefordshire

  9,041

  8,532

  8,232

  8,552

  Hillingdon

  3,055

  6,823

  5,850

  5,482

  Isle of Wight

  1,340

  1,250

  1,162

  1,491

  Kensington, Chelsea and Westminster

  22,121

  47,840

  48,450

  48,742

  Kingston and Richmond

  6,264

  4,498

  3,893

  8,022

  Lambeth, Southwark and Lewisham

  81,945

  76,420

  75,975

  119,506

  Leeds

  67,622

  67,150

  73,377

  87,440

  Leicestershire

  62,994

  56,499

  56,925

  42,504

  Lincolnshire

  35,253

  37,053

  37,178

  103,810

  Liverpool

  11,148

  17,634

  23,231

  28,953

  Manchester

  42,325

  63,276

  71,840

  109,650

  Merton, Sutton and Wandsworth

  28,254

  30,022

  39,564

  24,540

  Morecambe Bay

  5,396

  4,822

  4,226

  14,318

  Newcastle and North Tyneside

  4,432

  23,068

  38,624

  52,426

  North and East Devon

  12,743

  13,086

  12,217

  8,034

  North and East Hertfordshire

  10,453

  11,114

  11,502

  44,057

  North and Mid Hampshire

  10,777

  24,201

  20,454

  14,838

  North Cheshire

  3,005

  2,484

  2,393

  5,657

  North Cumbria

  27,609

  24,935

  25,038

  12,994

  North Derbyshire

  5,530

  4,970

  5,441

  6,048

  North Essex

  71,095

  90,471

  66,814

  52,224

  North Nottinghamshire

  12,831

  12,440

  13,343

  12,550

  North Staffordshire

  16,080

  37,750

  35,055

  31,803

  North West Anglia

  3,679

  488

  13,436

  12,185

  North West Lancashire

  24,231

  28,332

  32,368

  30,463

  North Yorkshire

  10,100

  23,054

  23,187

  6,851

  Northamptonshire

  31,580

  29,364

  29,142

  27,400

  Northumberland

  6,390

  6,778

  6,828

  11,054

  Nottingham

  29,257

  38,951

  56,158

  51,046

  Oxfordshire

  20,466

  28,884

  29,697

  43,257

  Portsmouth and South East Hampshire

  11,346

  10,548

  48,329

  9,711

  Redbridge and Waltham Forest

  0

  27,423

  28,239

  14,268

  Rotherham

  2,850

  3,520

  5,975

  4,519

  Salford and Trafford

  30,951

  27,633

  29,899

  14,356

  Sandwell

  8,086

  7,431

  4,115

  4,596

  262W 263W

  Outstanding repair and maintenance backlog figures in each health authority in each year since 1995

  £000

  Health authority

  1995–961

  1996–97

  1997–98

  1998–99

  Sefton

  7,645

  6,165

  5,270

  11,746

  Sheffield

  14,048

  12,341

  22,181

  30,827

  Shropshire

  8,868

  28,482

  39,912

  26,974

  Solihull

  0

  245

  175

  1,770

  Somerset

  5,280

  5,073

  3,925

  5,786

  South and West Devon

  16,508

  12,428

  12,492

  12,458

  South Cheshire

  7,900

  6,153

  13,119

  14,681

  South Derbyshire

  6,896

  7,949

  7,577

  3,302

  South Essex

  17,931

  20,644

  17,013

  8,258

  South Humber

  3,866

  6,529

  6,423

  5,668

  South Lancashire

  9,301

  9,439

  9,118

  4,997

  South Staffordshire

  16,581

  6,829

  12,972

  10,553

  Southampton and South West Hampshire

  113,700

  19,571

  13,512

  10,863

  St. Helens and Knowsley

  8,915

  8,050

  7,688

  9,337

  Stockport

  14,558

  16,068

  12,858

  12,785

  Suffolk

  9,941

  15,252

  15,427

  32,900

  Sunderland

  6,182

  6,136

  6,326

  12,138

  Tees

  23,856

  28,723

  24,484

  26,446

  Wakefield

  18,919

  1,981

  21,316

  41,831

  Walsall

  2,346

  5,193

  5,397

  11,172

  Warwickshire

  11,574

  7,823

  9,620

  6,462

  West Hertfordshire

  34,619

  35,706

  28,316

  28,741

  West Kent

  57,073

  53,947

  73,113

  75,539

  West Pennine

  6,045

  6,650

  6,866

  11,348

  West Surrey

  12,185

  14,834

  13,059

  20,974

  West Sussex

  21,634

  24,438

  29,879

  23,973

  Wigan and Bolton

  15,290

  13,281

  15,428

  13,146

  Wiltshire

  25,414

  42,425

  47,719

  52,848

  Wirral

  7,207

  5,759

  9,505

  10,447

  Wolverhampton

  0

  22,842

  17,074

  18,560

  Worcester

  11,377

  14,883

  17,246

  17,688

  1 Fire safety backlog was not collected in 1995–96. The figures for the remaining years include all aspects of backlog repair and maintenance.

  Source:

  The figures are derived from the Estates Returns Information Collection (ERIC) collected annually by NHS Estates.

  Accident and Emergency
  Mr. Harvey
  To ask the Secretary of State for Health how many vacancies there were in medical posts in the specialty of accident and emergency in England in each of the last three years; and if he will make a statement. [127163]

  Ms Stuart
  Information about consultant vacancies in accident and emergency medicine is contained in the Department of Health Recruitment, Retention and Vacancies Survey, March 1999. Data are only available for that year and only for consultants in that specialty. The survey does not include information about other grades of medical staff in accident and emergency medicine. Copies of the survey are available in the Library.

  Spanish Medicines Law
  Mr. Hammond
  To ask the Secretary of State for Health what representations he(a) has made and (b) plans to make to the European Commission in respect of the December amendment to Article 100 of the Spanish Medicines Law. [126667]

  Dr. Howells
  I have been asked to reply.

  We have made no representations to the European Commission in respect of the Spanish law, and currently have no plans to do so.

HOUSE OF COMMONS

  Running Costs
  Mr. Flynn
  To ask the hon. Member for Roxburgh and Berwickshire, representing the House of Commons Commission, what the running costs of the House are on(a) sitting and (b) non-sitting Fridays. [126324]

  Mr. Kirkwood
  [holding answer 19 June 2000]It is not possible to distinguish running costs between sitting and non-sitting days because staff salaries are computed on an annual basis. Overtime figures for normal working days vary as a result of the unpredictability of adjournments; they are minimised wherever possible.

  Heating, power and other services costs are substantially unaffected by a non-sitting Friday as normal departmental activities still have to be carried out. It is not practicable to calculate the small volume savings associated with the absence of Members, which in any case will be partly compensated for by increased visitor requirements.

INTERNATIONAL DEVELOPMENT

  Rwanda
  Mr. Streeter
  To ask the Secretary of State for International Development what proportion of her Department's bilateral country programme aid for Rwanda is spent by the Government of Rwanda. [126456]

  Clare Short
  Of the £30 million committed in
  265W
  December 1998, £10.6 million has been used to help Rwanda service multilateral debt and £15 million has been provided as budget support to underpin Government of Rwanda's commitment to increase spending on health and education as a proportion of GDP.

  Nigeria
  Mr. Streeter
  To ask the Secretary of State for International Development what proportion of her Department's bilateral country programme aid for Nigeria is spent by the Government of Nigeria. [126453]

  Clare Short
  None of the bilateral programme is spent by the Government of Nigeria.

  China
  Mr. Streeter
  To ask the Secretary of State for International Development what proportion of her Department's bilateral country programme aid for China is spent by the Government of China. [126455]

  Clare Short
  Our programme in China is developed and implemented in full consultation with the Government of China. We do, however, work with and through a range of other actors, including non-governmental organisations and, increasingly, multilateral donors such as the World bank and the Asian Development bank.

  We estimate that about 30 per cent. of our total programme resources are channelled through the Government of China, under the strict controls applicable under Financial Aid. A detailed list of our activities in China, together with our Country Strategy paper, will be placed in the Library of the House.

  Departmental Publications
  Mr. Streeter
  To ask the Secretary of State for International Development if she will list the cost of her Departmental publications each year from 1992 to 1999. [126449]

  Clare Short
  The costs of Departmental publications since 1992 are as follows (costs are recorded on a financial year basis):

  £

  1992–93

  252,175

  1993–94

  248,710

  1994–95

  318,596

  1995–96

  351,867

  1996–97

  374,651

  1997–98

  381,638

  1998–99

  537,007

  1999–2000

  657,801

  Interactive Voice Response Systems
  Mr. Ben Chapman
  To ask the Secretary of State for International Development how many agencies of her Department use interactive voice response systems when dealing with telephone inquiries from the general public. [127392]
  266W
  Clare Short
  My Department has no interactive voice response systems that deal with telephone inquiries from the general public operational either within the Department or in use in any agencies thereof.

  Parliamentary Questions
  Mr. Maclennan
  To ask the Secretary of State for International Development how many parliamentary questions were tabled to her Department between 19 October 1999 and 20 April 2000 which requested information, pursuant to her previous answers. [127332]

  Clare Short
  Ten parliamentary questions were tabled to my Department between 19 October 1999 and 20 April 2000 requesting information pursuant to previous answers.

  Ghana
  Mr. Streeter
  To ask the Secretary of State for International Development what proportion of her Department's bilateral country programme aid for Ghana is spent by the Government of Ghana. [126451]

  Clare Short
  In November 1999, we committed £40 million in flexible budget support to the Government of Ghana for 2000–02. We anticipate that the larger part of this (£25 million) will be disbursed in 2000 to help Ghana recover from the economic shocks of 1999.

  Additionally, we anticipate that £7 million will be provided in flexible budget support specifically for social sectors in 2000–01. Up to £11 million is available for this purpose in 2001–02.

  In total, flexible budget support represents 55 per cent. of the total bilateral commitment to Ghana over the next two years.

CABINET OFFICE

  People's Panel
  Lorna Fitzsimons
  To ask the Minister for the Cabinet Office when she will publish results from the People's Panel Ethnic Minority Booster Research; and if she will make a statement. [127382]

  Mr. Ian McCartney
  Initial research has now been carried out using the People's Panel Ethnic Minority Booster to find out more about the experiences of people from an ethnic minority background in using a range of public services. An extra 830 people from ethnic minority communities were recruited to the original People's Panel to ensure that views could be analysed in detail. Results have been published today, and I have placed copies in the Libraries of the House.

  Mr. Jim Cunningham
  To ask the Minister for the Cabinet Office if she will make a statement on the progress of the People's Panel. [126104]

  Mr. Ian McCartney
  Four major waves of quantitative research and several qualitative research projects using the People's Panel have been carried out since it was set up in the summer of 1998. Summaries of the research results have been placed in the House Library and published on the internet. A fifth wave of research, which will set a baseline for the new consumer focus for public services announced on 9 February, is under way. This will measure
  267W
  satisfaction with and expectations of key public services. The results are expected to be announced during the summer. An additional 830 people from ethnic minority communities have been recruited to allow us to examine their views in detail. The results from the first research using this group will be announced shortly.

  An independent evaluation of the panel was published on 23 May 2000, Official Report, column 451W. Copies of the evaluation were placed in the Library of the House. The evaluation report concluded that the Panel had
  proved its worth as a vehicle to promote greater understanding, within local and national government, of public views, and of the need to obtain these views, and that the Panel has proved a valuable asset.

  The recommendations arising from the evaluation are in the course of being implemented.

  Government Annual Report
  Mr. Evans
  To ask the Minister for the Cabinet Office how many copies of the Government Annual Report have been(a) sold at full price and (b) given away free of charge, to date. [125745]

  Marjorie Mowlam
  Over 10,000 copies of the Government Annual Report 1998–99 have been bought by members of the public at full price. No figures are kept for copies requested by and supplied to members of the public from Departments or otherwise given away without charge.

  Government IT Projects
  Mr. Denzil Davies
  To ask the Minister for the Cabinet Office what is her estimate of the total cost to public funds of the work of the Steering Committee and Review Team engaged upon the review of major Government IT projects. [126417]

  Mr. Ian McCartney
  The estimated total cost to the public fund of the review of Government IT projects is £290,000.

  Expenditure in financial year 1999–2000 was £189,000 and in financial year 2000–01 it was £101,000.

  Volunteering (Civil Service)
  Dr. Desmond Turner
  To ask the Minister for the Cabinet Office what steps she will take to promote volunteering among civil service employees during the International Year of Volunteering 2001. [126880]

  Mr. Stringer
  Following on from the Prime Minister's recent initiative to promote voluntary activity in the community, the Cabinet Office has written recently to all Departments and agencies encouraging them to allow and support their staff to undertake voluntary work through the provision of designated paid leave for that purpose. We will continue to promote this initiative throughout the year and into 2001. We are currently in consultation with colleagues in other Departments over what we intend to do specifically during the International Year of Volunteering.

  Parliamentary Questions
  Mr. Maclennan
  To ask the Minister for the Cabinet Office how many written parliamentary questions were 268W
  tabled to her Department between 19 October 1999 and 20 April 2000; and how many of them have not received substantive answers, with disproportionate cost cited as the reason. [127336]

  Mr. Stringer
  Between 19 October 1999 and 20 April 2000, 238 written questions were tabled to my Department, of which two were replied to by stating that the information was not held centrally and could be obtained only at disproportionate cost. A further 13 questions received partial answers, with disproportionate cost cited as the reason why a complete answer could not be given.

EDUCATION AND EMPLOYMENT

  LEA Funding
  Ms Buck
  To ask the Secretary of State for Education and Employment what the value was of additional support to schools in(a) Westminster city council area and (b) the Royal boroughs of Kensington and Chelsea additional to revenue support grant since 1997 in respect of (a) the School Standards Fund, (b) section 11/ethnic minority achievement grant, (c) Excellence in Cities (d) education action zone and (e) other categories. [125417]

  Ms Estelle Morris
  The additional
  support provided for schools is contained in the table:

  £

  Westminster

  Kensington and Chelsea

  Standards Fund (Main)1

  1997–98

  865,543

  609,905

  1998–99

  1,697,559

  977,941

  1999–2000

  5,606,292

  3,190,611

  2000–01

  7,317,157

  23,585,179

  Section 11 (Home Office)

  1997–98

  1,363,058

  739,615

  1998–99

  1,398,498

  758,845

  Education Action Zones

  2000–01

  800

  0

  Special Grants3

  2000–01

  818,000

  494,000

  1 Includes Excellence in Cities and Ethnic Minority Achievement 1999–2000 to 2000–01.

  2 Offered £4.1 million initially 2000–01.

  3 Including School Budget Support and School Standards Grants

  Notes:

  1. NDS Capital excluded from figures.

  2. Standards Fund grants include the local authority contribution, where required.

  School Playing Fields
  Mr. Chidgey
  To ask the Secretary of State for Education and Employment (1) how many sales of school playing fields he has(a) approved and (b) rejected in each month since October 1998; [125928]

  (2) what the acreage is of the school playing fields whose disposal he has (a) approved and (b) rejected in each month since October 1998; [125929]

  (3) what has been the total sale value of school playing fields whose disposal he has (a) approved and (b) rejected in each month since October 1998. [125930]
  269W
  Jacqui Smith
  [holding answer 15 June 2000]Before October 1998, there was no regulation of the sale of school playing fields whatever. If a local authority wanted to sell a school playing field, there was nothing to stop it and it could spend the proceeds as it wished.

  To put a stop to the indiscriminate sale of school playing fields, the Government introduced Section 77 of the School Standards and Framework Act 1998. Section

  Sale of school sports pitches approved under Section 77 of the School Standards and Framework Act 1998 since 1 October 1998

  Number of sales

  Area (m2)

  Total sale value (£)

  Approved

  Rejected

  Approved

  Rejected

  Approved

  Rejected

  1998

  October

  1

  —

  16,000

  —

  2,414,000

  —

  November

  2

  —

  71,665

  —

  2,250,000

  —

  December

  4

  —

  51,780

  —

  1,283,000

  —

  1999

  January

  2

  —

  75,900

  —

  —1

  —

  February

  6

  —

  139,180

  —

  12,645,000

  —

  March

  6

  —

  171,100

  —

  6,670,000

  —

  April

  10

  —

  177,590

  —

  6,122,000

  —

  May

  7

  —

  93,450

  —

  13,430,000

  —

  June

  2

  2

  51,300

  51,500

  90,000

  516,000

  July

  2

  —

  82,500

  —

  5,160,000

  —

  August

  1

  —

  33,000

  —

  32,600

  —

  September

  1

  —

  9,000

  —

  650,000

  —

  October

  2

  —

  36,500

  —

  1,280,000

  —

  November

  2

  —

  56,800

  —

  2,180,000

  —

  December

  3

  —

  27,110

  —

  1,320,000

  —

  2000

  January

  2

  —

  14,360

  —

  806,500

  —

  February

  1

  —

  48,300

  —

  3,100,000

  —

  March

  1

  —

  5,880

  —

  150,000

  —

  April

  —

  —

  —

  —

  —

  —

  May

  4

  —

  41,780

  —

  12,520,000

  —

  June

  2

  —

  28,170

  —

  1,200,000

  —

  1 Not known

  Notes:

  1. All sale proceeds are used to provide new or improved sports or education facilities at maintained schools.

  2. 40 per cent. of applications are in respect of sports pitches at closed or closing schools.

  3. In 66 per cent. of cases at operating schools, the sale proceeds have been used to provide new or enhanced sports facilities, including sports halls, all-weather pitches or improved grass sports pitches.

  Standards Fund
  Mr. Clappison
  To ask the Secretary of State for Education and Employment if he will list(a) the education authorities which did not accept Standards Fund grants available through the provision of matching funding in each of the last two years and (b) the amount of grant involved in each case; and how the undistributed funds were used. [126319]

  Ms Estelle Morris
  The tables show the sums initially surrendered for the main Standards Fund programme. We cannot separately identify where this was due to difficulty in finding match funding. Most authorities accepted allocations in full in both years. The requirement for authorities to contribute to the 2000–01 Standards Fund of over £1.6 billion supported expenditure was allowed for in the 5.4 per cent. increase in education Standard Spending Assessment for 2000–01. Surrendered sums are re-used in full for supporting education priorities, mainly within the Standards Fund programme.
  270W
  77 requires a local authority, or the governing body of a maintained school, to obtain the Secretary of State's consent before disposing, or changing the use, of any school playing field. Local authorities are aware of the tough criteria against which their applications are considered and only put forward those applications they are confident will meet the criteria. The table shows the requested information.

  Standards Fund

  £

  Local education authority

  Initial DfEE grant

  2000–01 surrendered allocations

  302 Barnet

  1,972,471

  370 Barnsley

  183,866

  820 Bedfordshire

  365,107

  867 Bracknell Forest

  50,000

  304 Brent

  1,084,292

  846 Brighton and Hove

  114,685

  305 Bromley

  56,666

  351 Bury

  200,256

  875 Cheshire

  1,379,056

  801 City of Bristol

  473,857

  909 Cumbria

  469,808

  841 Darlington

  36,739

  878 Devon

  1,284,058

  835 Dorset

  79,418

  332 Dudley

  66,178

  840 Durham

  167,038

  811 East Riding of Yorkshire

  73,411

  308 Enfield

  200,610

  916 Gloucestershire

  163,112

  850 Hampshire

  303,731

  207 Kensington and Chelsea

  319,145

  271W

  Standards Fund

  £

  Local education authority

  Initial DfEE grant

  810 Kingston-upon-Hull

  24,500

  314 Kingston upon Thames

  169,515

  856 Leicester

  424,956

  855 Leicestershire

  325,750

  821 Luton

  37,571

  315 Merton

  40,055

  806 Middlesbrough

  150,216

  391 Newcastle upon Tyne

  700,740

  926 Norfolk

  120,006

  802 North Somerset

  43,118

  928 Northamptonshire

  755,049

  929 Northumberland

  1,407,923

  892 Nottingham City

  78,910

  891 Nottinghamshire

  637,089

  353 Oldham

  100,000

  874 Peterborough

  270,035

  879 Plymouth

  127,434

  870 Reading

  85,832

  807 Redcar and Cleveland

  41,956

  354 Rochdale

  274,135

  857 Rutland

  201,567

  333 Sandwell

  1,252,750

  343 Sefton

  15,319

  893 Shropshire

  424,384

  393 South Tyneside

  36,740

  342 St. Helens

  303,158

  356 Stockport

  52,500

  935 Suffolk

  390,455

  936 Surrey

  245,527

  880 Torbay

  59,090

  358 Trafford

  128,804

  937 Warwickshire

  50,000

  869 West Berkshire

  250,000

  359 Wigan

  214,004

  865 Wiltshire

  145,555

  872 Wokingham

  95,000

  816 York

  6,790

  Total

  18,729,923

  Standards Fund

  £

  Local education authority

  DfEE grant

  1999–2000 surrendered allocations

  Barnsley

  6,000

  Brent

  476,538

  Coventry

  101,580

  Devon

  47,260

  East Riding of Yorkshire

  87,750

  Greenwich

  25,000

  Hillingdon

  48,450

  Manchester

  18,750

  Newcastle

  31,792

  North Lincolnshire

  18,705

  North Somerset

  32,831

  Northumberland

  19,689

  Richmond on Thames

  20,000

  Salford

  16,004

  Solihull

  10,000

  Southampton

  34,000

  South Tyneside

  9,000

  Suffolk

  374,665

  Trafford

  20,000

  Wandsworth

  14,644

  Warrington

  5,500

  Total

  1,418,156

  Notes:

  1. Adjustments to 2000–01 are continuing. Once complete, they will result in reductions to the total allocations initially surrendered.

  2. Reasons given for the surrender by authorities include claim of difficulty with matching funding.

  School Instructors
  Mr. Willis
  To ask the Secretary of State for Education and Employment what guidance he gives to local education authorities on ensuring that instructors in maintained secondary schools have the same basic numeracy and literacy skills as those with qualified teacher status; and if he will make a statement. [126783]

  Ms Estelle Morris
  The Education (Teachers' Qualifications and Health Standards) (England) Regulations 1999 provide that it is for governing bodies acting with the consent of local education authorities to satisfy themselves as to the qualifications and experience of prospective instructors. This would include satisfying themselves as necessary that instructors whom they wish to employ have the requisite literacy and numeracy skills.

  Unit Costs
  Mr. Gerald Howarth
  To ask the Secretary of State for Education and Employment what was the average cost of educating(a) a primary and (b) a secondary school pupil in (i) 1970, (ii) 1980, (iii) 1990 and (iv) 1999; and what was the cost of educating a pupil excluded from school in each of those years. [126785]

  Ms Estelle Morris
  Unit costs based on net institutional expenditure for primary and secondary pupils in English maintained schools for the financial years 1979–80, 1989–90 and 1998–99 are set out in the following table. Figures on the same basis for 1969–70 are not readily available. Information about the cost of educating pupils excluded from school is not collected centrally.

  Primary

  Secondary

  1979–80

  430

  610

  1989–90

  1,210

  1,860

  1998–99

  1,882

  2,450

  Under this Government, funding per pupil has increased by over £300 per pupil. In this year alone it has risen by £180. And that does not even include capital expenditure. Under the last Government, spending per pupil fell by £60 in real terms between 1994–95 and 1997–98.

  Teachers (Absence and Resignations)
  Mr. Gerald Howarth
  To ask the Secretary of State for Education and Employment (1) how many teachers resigned from teaching in(a) 1970, (b) 1980, (c) 1990 and (d) 1999 citing stress-related reasons; [126786]

  (2) what the most frequently cited reasons were for teacher absence giving rise to the need for supply teachers in each of the last five years; [126788]

  (3) how many teaching days were lost at schools in England and Wales owing to absence of teachers because of stress-related illness in (a) 1970, (b) 1980, (c) 1990 and (d) 1999. [126787]

  Ms Estelle Morris
  This information is not held centrally.

  Teacher Training
  Mr. Willis
  To ask the Secretary of State for Education and Employment what is the total level of Government funding the current financial year for higher education institutions to support the training of teachers on PGCE courses in a subsidiary subject; and if he will make a statement. [126965]

  Ms Estelle Morris
  There is no separately identified funding for subsidiary subjects within initial teacher training (ITT) courses. The level of funding for individual courses, which varies between primary and secondary and between individual secondary subjects, depends only on the main subject of study. In 1999–2000 public expenditure to higher education institutions in England for secondary Post Graduate Certificate in Education (PGCE) courses was some £58.6 million, of which £46.5 million was distributed by the Teacher Training Agency (TTA) and £12.1 million paid through LEAs to cover tuition fees.

  Mr. Willis
  To ask the Secretary of State for Education and Employment what plans he has to offer financial support to higher education institutions that train teachers in a subsidiary subject; and if he will make a statement. [126964]

  Ms Estelle Morris
  Government funding covers all aspects of initial teacher training (ITT) courses. The level depends on the main subject of study. There are no plans to include any subsidiary subjects that providers might offer in determining the level of funding ITT providers receive. The Government pay the fees for home and European Union students on Post Graduate Certificate in Education courses irrespective of their subject of study.

  New Deal for Schools Programme—Bid Information

  NDS 1

  NDS 2

  NDS 3

  LEA name

  Number of projects

  NDS bid

  Number of projects

  NDS bid

  Number of projects

  NDS bid

  England

  1,138

  143,673,836

  2,407

  761,231,849

  6,753

  1,427,768,901

  Barking and Dagenham

  5

  210,520

  19

  1,548,000

  101

  21,097,222

  Barnet

  10

  370,300

  6

  1,610,071

  18

  5,967,682

  Barnsley

  1

  500,000

  2

  2,076,000

  24

  7,639,233

  Bath and North East Somerset

  4

  1,032,300

  11

  1,078,027

  43

  5,290,678

  Bedfordshire

  6

  1,950,190

  1

  1,382,000

  11

  4,698,729

  Bexley

  10

  572,000

  22

  984,375

  78

  3,228,916

  Birmingham

  8

  1,622,306

  279

  2,771,700

  24

  16,760,924

  Blackburn with Darwen

  —

  0

  21

  832,939

  35

  7,818,980

  Blackpool

  —

  0

  25

  667,395

  206

  8,855,600

  Bolton

  3

  647,925

  8

  1,497,039

  19

  17,725,984

  Bournemouth

  3

  418,000

  4

  855,091

  20

  5,859,788

  Bracknell Forest

  —

  0

  1

  745,500

  25

  6,100,413

  Bradford

  18

  1,135,308

  10

  1,895,300

  37

  27,026,971

  Brent

  7

  807,975

  2

  1,321,900

  30

  13,313,899

  Brighton and Hove

  1

  1,588,000

  9

  1,065,431

  27

  4,637,498

  Bristol, City of

  9

  619,515

  20

  12,286,387

  87

  9,471,973

  Bromley

  18

  304,700

  7

  582,700

  38

  3,357,485

  Buckinghamshire

  3

  564,365

  18

  1,081,883

  153

  13,138,480

  Bury

  3

  343,000

  26

  650,000

  44

  2,081,550

  Calderdale

  2

  842,970

  3

  2,969,980

  19

  3,241,146

  Cambridgeshire

  5

  598,000

  17

  2,375,468

  119

  24,241,315

  Camden

  8

  220,406

  8

  620,517

  46

  5,044,598

  Cheshire

  10

  971,903

  6

  1,566,890

  37

  9,684,187

  Cornwall

  2

  1,018,781

  29

  1,577,016

  148

  11,075,669

  Coventry

  3

  668,534

  20

  409,926

  58

  11,103,475

  Croydon

  26

  2,293,503

  9

  2,227,540

  54

  17,079,880

  Cumbria

  9

  655,000

  8

  1,632,666

  31

  3,115,942

  Darlington

  8

  320,340

  4

  185,775

  37

  5,506,754

  Special Educational Needs
  Dr. Cable
  To ask the Secretary of State for Education and Employment what action his Department has taken to help LEAs increase the percentage of statements of special educational needs issued within 18 weeks of application; and which LEAs have received specific support on this matter. [127141]

  Jacqui Smith
  In 1998, my Department provided good practice guidance to LEAs which were not producing at least 60 per cent. of their draft statements within 18 weeks. We have followed this up by asking for evidence of improved performance, and we are currently considering what action to take in relation to continuing poor performers as identified in the Audit Commission's performance indicators for 1998–99, the most recent available. We will continue to keep LEA performance in this area under review. It is encouraging to note that the Audit Commission's figures show a continuing improvement, with English councils overall preparing 67 per cent. of draft statements within 18 weeks in 1998–99, compared to 54 per cent. in 1997–98 and 48 per cent. in 1996–97.

  School Repairs
  Mr. Allan
  To ask the Secretary of State for Education and Employment if he will list for(a) England and (b) each local education authority, the number and value of funding bids made to his Department in each financial year since 1995–96 for the repair of school buildings. [126846]

  Jacqui Smith
  [holding answer 21 June 2000]: The following table shows the number and value of bids made under the New Deal for Schools programme. There was no equivalent programme prior to 1997–98.
  275W

  New Deal for Schools Programme—Bid Information

  NDS 1

  NDS 2

  NDS 3

  LEA name

  Number of projects

  NDS bid

  Number of projects

  NDS bid

  Number of projects

  NDS bid

  Derby, City of

  5

  555,848

  12

  1,149,812

  39

  5,727,180

  Derbyshire

  10

  1,125,000

  11

  2,677,488

  16

  11,834,372

  Devon

  7

  2,047,797

  21

  3,517,200

  40

  12,146,776

  Doncaster

  5

  419,000

  11

  446,900

  31

  9,250,567

  Dorset

  12

  1,637,808

  17

  2,645,000

  39

  18,231,100

  Dudley

  6

  278,432

  18

  66,739,238

  47

  30,513,213

  Durham

  14

  930,000

  20

  2,068,052

  58

  7,535,852

  Ealing

  7

  554,111

  5

  1,036,000

  19

  5,265,197

  East Riding of Yorkshire

  74

  1,187,400

  3

  1,508,680

  26

  15,186,328

  East Sussex

  24

  2,475,119

  5

  2,088,000

  13

  5,271,311

  Enfield

  9

  369,774

  8

  23,455,000

  30

  8,124,930

  Essex

  10

  1,479,192

  11

  2,556,250

  52

  12,771,860

  Gateshead

  5

  352,000

  3

  1,187,000

  23

  8,683,450

  Gloucestershire

  20

  1,618,041

  8

  4,000,210

  50

  6,843,046

  Greenwich

  7

  306,850

  5

  614,725

  44

  23,149,769

  Hackney

  —

  0

  2

  575,000

  45

  6,071,504

  Halton

  —

  0

  10

  723,500

  21

  4,481,894

  Hammersmith and Fulham

  2

  300,000

  3

  870,000

  36

  7,601,901

  Hampshire

  21

  7,232,201

  44

  27,277,610

  128

  20,070,199

  Haringey

  4

  556,000

  14

  2,125,160

  53

  7,861,247

  Harrow

  3

  188,500

  9

  1,057,300

  26

  7,419,442

  Hartlepool

  6

  412,500

  7

  426,728

  12

  2,822,244

  Havering

  6

  446,382

  3

  333,000

  66

  5,225,870

  Herefordshire

  15

  810,439

  9

  1,849,708

  101

  7,664,268

  Hertfordshire

  2

  1,529,000

  22

  3,461,399

  47

  21,453,011

  Hillingdon

  39

  1,341,306

  7

  1,392,630

  45

  4,683,851

  Hounslow

  33

  5,232,395

  10

  1,506,644

  149

  9,946,717

  Isle of Wight

  10

  232,075

  44

  5,301,971

  12

  4,486,077

  Isles of Scilly

  —

  0

  1

  52,550

  3

  57,596

  Islington

  2

  395,700

  8

  1,248,100

  30

  7,795,865

  Kensington and Chelsea

  1

  244,000

  5

  550,563

  13

  1,108,330

  Kent

  64

  3,342,344

  6

  7,064,000

  52

  34,169,038

  Kingston upon Hull, City of

  1

  590,000

  3

  503,195

  38

  10,099,179

  Kingston upon Thames

  2

  724,000

  2

  767,000

  56

  4,350,254

  Kirklees

  7

  660,045

  21

  768,528

  47

  5,379,495

  Knowsley

  4

  1,894,130

  24

  8,441,650

  9

  5,601,137

  Lambeth

  3

  361,475

  6

  2,291,688

  41

  13,508,349

  Lancashire

  6

  2,105,570

  7

  3,507,489

  36

  13,350,490

  Leeds

  5

  1,402,380

  18

  69,620,431

  38

  14,943,428

  Leicester, City of

  5

  589,000

  51

  48,287,830

  61

  9,961,677

  Leicestershire

  26

  795,216

  59

  7,177,112

  96

  14,221,370

  Lewisham

  5

  1,105,582

  7

  3,600,157

  18

  26,779,014

  Lincolnshire

  16

  1,545,614

  15

  1,259,945

  45

  8,359,932

  Liverpool

  17

  6,977,431

  4

  4,016,000

  15

  19,410,197

  London, City of

  0

  0

  0

  0

  0

  0

  Luton

  2

  345,000

  25

  397,000

  31

  5,589,822

  Manchester

  6

  1,447,600

  4

  2,829,300

  35

  13,567,400

  Medway

  —

  0

  13

  1,218,134

  34

  4,641,936

  Merton

  1

  1,828,547

  7

  1,288,311

  17

  7,562,704

  Middlesbrough

  2

  300,000

  4

  1,512,944

  26

  3,444,881

  Milton Keynes

  7

  271,000

  12

  926,520

  15

  2,182,980

  Newcastle upon Tyne

  7

  611,000

  4

  8,952,859

  15

  8,922,816

  Newham

  3

  482,643

  9

  1,306,430

  29

  6,435,236

  Norfolk

  2

  1,482,000

  7

  2,696,680

  46

  29,633,848

  North East Lincolnshire

  2

  328,437

  14

  1,471,655

  35

  8,129,485

  North Lincolnshire

  1

  143,260

  10

  1,320,263

  49

  11,603,862

  North Somerset

  1

  2,591,000

  4

  1,617,238

  7

  4,301,910

  North Tyneside

  2

  406,000

  9

  837,775

  64

  3,626,255

  North Yorkshire

  3

  962,000

  5

  7,374,000

  58

  56,602,284

  Northamptonshire

  21

  1,165,050

  60

  6,961,690

  77

  10,538,379

  Northumberland

  21

  541,500

  12

  2,022,500

  48

  14,313,550

  Nottingham, City of

  —

  0

  8

  2,619,700

  69

  19,920,230

  Nottinghamshire

  4

  3,533,651

  38

  14,643,648

  42

  22,630,536

  Oldham

  14

  784,323

  6

  2,591,367

  36

  9,455,699

  Oxfordshire

  1

  1,030,000

  66

  41,652,522

  111

  12,100,128

  Peterborough, City of

  —

  0

  15

  1,255,500

  84

  9,126,958

  Plymouth, City of

  —

  0

  14

  1,641,168

  16

  3,768,519

  Poole

  3

  241,000

  3

  905,310

  15

  2,415,718

  Portsmouth

  3

  1,901,000

  24

  740,800

  75

  10,017,757

  Reading

  —

  0

  1

  2,279,825

  14

  2,792,418

  276W 277W

  New Deal for Schools Programme-Bid Information

  NDS 1

  NDS 2

  NDS 3

  LEA name

  Number of projects

  NDS bid

  Number of projects

  NDS bid

  Number of projects

  NDS bid

  Redbridge

  2

  335,000

  13

  981,750

  44

  3,766,960

  Redcar and Cleveland

  3

  337,210

  7

  941,625

  30

  11,510,296

  Richmond upon Thames

  2

  317,100

  9

  218,500

  18

  2,163,900

  Rochdale

  2

  1,460,130

  4

  1,962,000

  15

  3,297,824

  Rotherham

  3

  817,000

  6

  2,183,864

  21

  18,139,193

  Rutland

  2

  340,450

  9

  1,127,200

  47

  4,779,155

  Salford

  4

  2,013,155

  34

  23,344,854

  50

  7,643,480

  Sandwell

  5

  914,125

  6

  16,563,955

  63

  12,807,740

  Sefton

  10

  836,000

  8

  442,204

  199

  20,032,123

  Sheffield

  2

  1,273,000

  1

  4,862,000

  21

  14,328,791

  Shropshire

  3

  1,277,908

  19

  1,184,252

  52

  7,615,357

  Slough

  —

  0

  13

  384,528

  40

  6,554,768

  Solihull

  6

  2,931,445

  1

  1,525,780

  115

  5,317,434

  Somerset

  5

  620,663

  9

  2,958,500

  26

  8,253,903

  South Gloucestershire

  2

  412,270

  9

  1,507,180

  19

  6,039,642

  South Tyneside

  2

  945,000

  55

  16,519,322

  19

  5,032,435

  Southampton

  3

  711,000

  24

  724,414

  90

  7,542,431

  Southend on Sea

  —

  0

  4

  598,117

  46

  2,007,530

  Southwark

  9

  381,747

  2

  770,350

  1

  280,000

  St. Helens

  2

  663,000

  1

  1,369,000

  5

  4,890,400

  Staffordshire

  16

  8,847,122

  269

  82,143,638

  145

  14,550,466

  Stockport

  22

  979,429

  13

  2,173,544

  70

  8,274,324

  Stockton on Tees

  3

  697,000

  15

  371,687

  31

  8,006,946

  Stoke on Trent

  2

  900,000

  3

  4,414,739

  12

  3,362,269

  Suffolk

  2

  1,065,000

  15

  1,578,900

  25

  4,457,500

  Sunderland

  2

  719,000

  2

  960,000

  36

  11,320,320

  Surrey

  13

  1,406,380

  33

  2,340,108

  82

  7,547,268

  Sutton

  6

  894,510

  4

  515,500

  72

  2,268,003

  Swindon

  11

  1,292,000

  4

  219,250

  11

  4,117,373

  Tameside

  5

  462,050

  4

  2,637,550

  38

  6,262,009

  Telford and Wrekin

  —

  0

  5

  675,200

  40

  5,861,218

  Thurrock

  —

  0

  8

  507,300

  22

  1,613,942

  Torbay

  —

  0

  14

  20,605,047

  27

  2,755,011

  Tower Hamlets

  3

  928,490

  5

  21,448,700

  25

  5,110,392

  Trafford

  3

  425,000

  6

  1,138,550

  22

  13,948,425

  Wakefield

  12

  600,225

  4

  1,923,650

  21

  8,364,798

  Walsall

  8

  682,250

  10

  1,805,100

  61

  11,112,860

  Waltham Forest

  2

  886,272

  3

  19,563,222

  12

  7,148,533

  Wandsworth

  4

  260,690

  5

  865,155

  10

  3,148,794

  Warrington

  —

  0

  26

  1,081,554

  149

  8,748,072

  Warwickshire

  2

  1,177,000

  3

  2,591,000

  17

  13,018,883

  West Berkshire

  1

  1,092,650

  13

  1,359,491

  16

  2,716,697

  West Sussex

  125

  3,021,104

  8

  2,130,522

  42

  6,818,827

  Westminster, City of

  1

  312,800

  7

  999,371

  52

  8,209,792

  Wigan

  3

  720,914

  3

  2,619,300

  19

  8,755,708

  Wiltshire

  7

  1,541,320

  7

  1,007,615

  47

  10,664,442

  Windsor and Maidenhead

  —

  0

  8

  635,300

  21

  3,780,690

  Wirral

  2

  500,000

  21

  1,901,900

  41

  14,537,717

  Wokingham

  —

  0

  3

  1,508,050

  44

  9,297,570

  Wolverhampton

  7

  475,803

  29

  760,948

  48

  5,636,120

  Worcestershire

  —

  0

  73

  16,582,464

  80

  11,690,306

  York, City of

  1

  180,115

  2

  691,000

  11

  5,751,458

  NDS 4

  All NDS

  LEA name

  Number of projects

  NDS bid

  Number of projects

  NDS Bid

  England

  4,963

  1,578,330,159

  15,261

  3,911,004,745

  Barking and Dagenham

  94

  15,240,538

  219

  38,096,280

  Barnet

  31

  21,453,457

  65

  29,401,510

  Barnsley

  31

  10,799,803

  58

  21,015,036

  Bathand North East Somerset

  23

  3,918,505

  81

  11,319,510

  Bedfordshire

  16

  3,103,705

  34

  11,134,624

  Bexley

  61

  5,286,907

  171

  10,072,198

  Birmingham

  62

  22,131,407

  373

  43,286,337

  Blackburn with Darwen

  47

  6,253,074

  103

  14,904,994

  Blackpool

  29

  4,597,791

  260

  14,120,786

  278W 279W

  NDS 4

  All NDS

  LEA name

  Number of projects

  NDS bid

  Number of projects

  NDS Bid

  Bolton

  12

  13,072,477

  42

  32,943,425

  Bournemouth

  21

  10,955,817

  48

  18,088,696

  Bracknell Forest

  9

  2,036,643

  35

  8,882,556

  Bradford

  51

  17,363,269

  116

  47,420,848

  Brent

  20

  16,875,729

  59

  32,319,503

  Brighton and Hove

  12

  2,989,677

  49

  10,280,606

  Bristol, City of

  15

  7,659,401

  131

  30,037,276

  Bromley

  9

  4,478,214

  72

  8,723,099

  Buckinghamshire

  56

  9,626,414

  230

  24,411,142

  Bury

  58

  2,452,095

  131

  5,526,645

  Calderdale

  32

  4,447,833

  56

  11,501,929

  Cambridgeshire

  111

  17,746,575

  252

  44,961,358

  Camden

  15

  1,974,604

  77

  7,860,126

  Cheshire

  88

  22,968,453

  141

  35,191,433

  Cornwall

  20

  7,522,815

  199

  21,194,281

  Coventry

  48

  15,356,820

  129

  27,538,755

  Croydon

  29

  6,617,510

  118

  28,218,433

  Cumbria

  41

  3,824,576

  89

  9,228,184

  Darlington

  29

  11,963,599

  78

  17,976,468

  Derby, City of

  19

  2,972,188

  75

  10,405,028

  Derbyshire

  23

  11,020,239

  60

  26,657,099

  Devon

  48

  23,214,431

  116

  40,926,204

  Doncaster

  31

  19,800,876

  78

  29,917,343

  Dorset

  20

  13,834,750

  88

  36,348,658

  Dudley

  16

  9,476,399

  87

  107,007,282

  Durham

  47

  6,315,317

  139

  16,849,221

  Ealing

  12

  3,507,648

  43

  10,362,956

  East Riding of Yorkshire

  18

  10,986,364

  121

  28,868,772

  East Sussex

  18

  4,826,272

  60

  14,660,702

  Enfield

  49

  16,606,730

  96

  48,556,434

  Essex

  57

  30,670,861

  130

  47,478,163

  Gateshead

  49

  8,061,963

  80

  18,284,413

  Gloucestershire

  27

  9,581,515

  105

  22,042,812

  Greenwich

  28

  10,492,818

  84

  34,564,162

  Hackney

  72

  12,833,120

  119

  19,479,624

  Halton

  34

  5,167,568

  65

  10,372,962

  Hammersmith and Fulham

  41

  9,595,337

  82

  18,367,238

  Hampshire

  98

  20,600,587

  291

  75,180,597

  Haringey

  38

  5,980,341

  109

  16,522,748

  Harrow

  29

  8,607,514

  67

  17,272,756

  Hartlepool

  21

  4,032,982

  46

  7,694,454

  Havering

  78

  11,476,617

  153

  17,481,869

  Herefordshire

  31

  5,630,030

  156

  15,954,445

  Hertfordshire

  25

  12,937,434

  96

  39,380,844

  Hillingdon

  12

  4,090,842

  103

  11,508,629

  Hounslow

  82

  16,846,310

  274

  33,532,066

  Isle of Wight

  18

  5,139,669

  84

  15,159,792

  Isles of Scilly

  5

  55,326

  9

  165,472

  Islington

  19

  11,231,566

  59

  20,671,231

  Kensington and Chelsea

  8

  1,103,275

  27

  3,006,168

  Kent

  20

  15,840,643

  142

  60,416,025

  Kingston upon Hull, City of

  31

  9,855,426

  73

  21,047,800

  Kingston upon Thames

  17

  3,799,051

  77

  9,640,305

  Kirklees

  51

  12,470,646

  126

  19,278,714

  Knowsley

  9

  3,857,597

  46

  19,794,514

  Lambeth

  30

  10,417,819

  80

  26,579,331

  Lancashire

  28

  16,362,366

  77

  35,325,915

  Leeds

  30

  14,692,588

  91

  100,658,827

  Leicester, City of

  10

  9,774,886

  127

  68,613,393

  Leicestershire

  80

  15,100,892

  261

  37,294,590

  Lewisham

  35

  29,074,518

  65

  60,559,271

  Lincolnshire

  26

  4,770,890

  102

  15,936,381

  Liverpool

  10

  33,102,065

  46

  63,505,693

  London, City of

  0

  0

  0

  0

  Luton

  9

  2,275,363

  67

  8,607,185

  Manchester

  24

  14,643,124

  69

  32,487,424

  Medway

  20

  4,088,953

  67

  9,949,023

  Merton

  25

  17,059,638

  50

  27,739,200

  Middlesbrough

  19

  4,698,723

  51

  9,956,548

  Milton Keynes

  20

  4,816,413

  54

  8,196,913

  Newcastle upon Tyne

  14

  47,077,611

  40

  65,564,286

  280W 281W

  NDS 4

  All NDS

  LEA name

  Number of projects

  NDS bid

  Number of projects

  NDS Bid

  Newham

  30

  4,984,823

  71

  13,209,132

  Norfolk

  29

  39,751,229

  84

  73,563,757

  North East Lincolnshire

  15

  8,193,255

  66

  18,122,832

  North Lincolnshire

  38

  13,756,693

  98

  26,824,078

  North Somerset

  15

  8,384,494

  27

  16,894,642

  North Tyneside

  9

  2,956,129

  84

  7,826,159

  North Yorkshire

  27

  10,761,617

  93

  75,699,901

  Northamptonshire

  77

  18,365,633

  235

  37,030,752

  Northumberland

  36

  15,286,701

  117

  32,164,251

  Nottingham, City of

  22

  6,148,460

  99

  28,688,390

  Nottinghamshire

  63

  61,138,652

  147

  101,946,487

  Oldham

  43

  8,863,589

  99

  21,694,978

  Oxfordshire

  28

  12,978,067

  206

  67,760,717

  Peterborough, City of

  68

  15,365,282

  167

  25,747,740

  Plymouth, City of

  17

  3,706,030

  47

  9,115,717

  Poole

  12

  4,823,309

  33

  8,385,337

  Portsmouth

  37

  10,836,597

  139

  23,496,154

  Reading

  20

  7,217,449

  35

  12,289,692

  Redbridge

  44

  4,915,155

  103

  9,998,865

  Redcar and Cleveland

  21

  9,774,307

  61

  22,563,438

  Richmond upon Thames

  21

  2,306,900

  50

  5,006,400

  Rochdale

  20

  7,135,981

  41

  13,855,935

  Rotherham

  5

  35,694,167

  35

  56,834,224

  Rutland

  36

  6,409,153

  94

  12,655,958

  Salford

  38

  4,238,528

  126

  37,240,017

  Sandwell

  66

  15,322,489

  140

  45,608,309

  Sefton

  122

  15,562,099

  339

  36,872,426

  Sheffield

  16

  9,055,560

  40

  29,519,351

  Shropshire

  31

  3,616,268

  105

  13,693,785

  Slough

  10

  4,466,849

  63

  11,406,145

  Solihull

  10

  3,314,400

  132

  13,089,059

  Somerset

  25

  6,808,108

  65

  18,641,174

  South Gloucestershire

  34

  14,395,265

  64

  22,354,357

  South Tyneside

  18

  3,734,149

  94

  26,230,906

  Southampton

  70

  5,275,710

  187

  14,253,555

  Southend on Sea

  27

  7,512,240

  77

  10,117,887

  Southwark

  21

  13,315,218

  33

  14,747,315

  St. Helens

  8

  4,413,355

  16

  11,335,755

  Staffordshire

  53

  8,994,369

  483

  114,535,595

  Stockport

  21

  9,629,519

  126

  21,056,816

  Stockton on Tees

  17

  5,303,280

  66

  14,378,913

  Stoke on Trent

  10

  4,656,877

  27

  13,333,885

  Suffolk

  56

  12,580,000

  98

  19,681,400

  Sunderland

  9

  5,164,736

  49

  18,164,056

  Surrey

  99

  12,878,258

  227

  24,172,014

  Sutton

  44

  1,734,470

  126

  5,412,483

  Swindon

  50

  15,237,262

  76

  20,865,885

  Tameside

  30

  10,954,379

  77

  20,315,988

  Telford and Wrekin

  47

  13,044,261

  92

  19,580,679

  Thurrock

  36

  1,800,063

  66

  3,921,305

  Torbay

  56

  6,462,291

  97

  29,822,349

  Tower Hamlets

  15

  9,060,712

  48

  36,548,294

  Trafford

  38

  12,120,431

  69

  27,632,406

  Wakefield

  8

  7,804,550

  45

  18,693,223

  Walsall

  48

  13,670,987

  127

  27,271,197

  Waltham Forest

  11

  2,698,057

  28

  30,296,084

  Wandsworth

  6

  4,650,522

  25

  8,925,161

  Warrington

  44

  6,302,252

  219

  16,131,878

  Warwickshire

  23

  13,011,898

  45

  29,798,781

  West Berkshire

  6

  1,200,308

  36

  6,369,146

  West Sussex

  35

  19,467,210

  210

  31,437,663

  Westminster, City of

  48

  5,162,836

  108

  14,684,799

  Wigan

  20

  7,554,932

  45

  19,650,854

  Wiltshire

  51

  14,822,736

  112

  28,036,113

  Windsor and Maidenhead

  10

  1,581,098

  39

  5,997,088

  Wirral

  32

  23,161,690

  96

  40,101,307

  Wokingham

  25

  4,374,055

  72

  15,179,675

  Wolverhampton

  35

  7,104,625

  119

  13,977,496

  Worcestershire

  90

  11,717,681

  243

  39,990,451

  York, City of

  10

  10,446,099

  24

  17,068,672

  282W

  Early Years Education
  Mr. Allan
  To ask the Secretary of State for Education and Employment if he will list for(a) the United Kingdom and (b) each local education authority, the number of three-year-olds with free early years education places providing five or more session of education per week in (i) 1979, (ii) 1990 and (iii) each year since 1992. [126845]

  Ms Hodge
  [holding answer 21 June 2000]: The information is not available in the form requested. Up to September 1999, 'free' places for three-year-olds were only available in maintained nursery and primary schools funded by local education authorities from their own budgets. Since September 1999 specific funding by the Government for three-year-olds has been introduced and is available to both maintained and private, voluntary and independent providers via the Early Years Development and Childcare Partnerships. From summer 2000 this extra funding will be available in all local authority areas.

  The available information on the numbers of three-year-olds in early-years provision for England and in each local education authority is contained in tables, copies of which have been placed in the Libraries. Table 1 gives the number of children in free early-years education places from 1996 to 2000. Table 2 shows the number of new funded places for three-year-olds being created in all sectors over the next year, including newly projected figures for summer 2000, autumn 2000 and spring 2001.

  The new places this year are supported by £100 million of funding. Half of all three-year-olds will have access to a free place by spring 2001, and the Government are well on track to meet the 2002 target of expanding overall nursery provision to 66 per cent. of three-year-olds.

  For information on three-year-olds with free early years places in Wales, Scotland and Northern Ireland, I refer the hon. Member to the Ministers in the Wales, Scotland and Northern Ireland Executives respectively.

  Paddy Ashdown
  To ask the Secretary of State for Education and Employment what estimate he has made of the number of free places available in early years education for three-year-olds in each year from 1996–97 to 2000–01, in each county and local eduction authority; and if he will make a statement. [126583]

  Ms Hodge
  The information is not available in the form requested. Up to September 1999, 'free' places for three-year-olds were only available in maintained nursery and primary schools funded by local education authorities from their own budgets. Since September 1999 specific funding by the Government for three-year-olds has been introduced and is available to both maintained and private, voluntary and independent providers via the Early Years Development and Childcare Partnerships. From summer 2000 this extra funding will be available in all local authority areas.

  The available information on the numbers of three-year-olds in early-years provision for England and in each local education authority is contained in tables, copies of which have been placed in the Libraries. Table 1 gives the number of children in free early-years education places from 1996 to 2000. Table 2 shows the number of new funded places for three-year-olds being created in all sectors over the next year, including newly projected figures for summer 2000, autumn 2000 and spring 2001.
  284W
  The new places this year are supported by £100 million of funding. Half of all three-year-olds will have access to a free place by spring 2001, and the Government are well on track to meet the 2002 target of expanding overall nursery provision to 66 per cent. of three-year-olds.

  Employment Action Plan
  Helen Jackson
  To ask the Secretary of State for Education and Employment if he will place copies of the United Kingdom's Employment Action Plan in the Library. [127788]

  Ms Jowell
  I have today placed in the Library copies of the UK Employment Action Plan, which sets out the Government's policies for implementing the 2000 Employment Guidelines agreed at the European Council held in Helsinki in December 1999. The Plan contains the latest information on policies for employment and employability, encouraging entrepreneurship and labour market adaptability, lifelong learning and equal opportunities.

  Child Care
  Ms Buck
  To ask the Secretary of State for Education and Employment what assessment he has made of the relationship between the costs of child care in London and the child care component of the Working Families Tax Credit. [127004]

  Dawn Primarolo
  I have been asked to reply.

  The child care tax credit within the Working Families Tax Credit is designed to help working families who incur eligible child care costs by providing a credit worth 70 per cent. of eligible child care costs of a maximum of £100 for families with one child and £150 for families with two or more children. Like all the other elements of the Working Families Tax Credit it is available at the same rates throughout the UK for to all families who qualify.

CULTURE, MEDIA AND SPORT

  New Millennium Experience Company
  Mr. Denzil Davies
  To ask the Secretary of State for Culture, Media and Sport if the payment of the additional aid to the New Millennium Experience Company has been authorised by the European Commission. [124133]

  Mr. Chris Smith
  No. The funding of the New Millennium Experience Company is not considered to be State Aid and therefore does not require notification to the European Commission.

  Digital Television
  Mr. Wigley
  To ask the Secretary of State for Culture, Media and Sport what proportion of homes in(a) Wales, (b) England and (c) Scotland receive digital television; and what his target is for increasing these figures. [126074]

  Mr. Chris Smith
  Most homes in Wales, England and Scotland are able to receive digital television through terrestrial, satellite or cable delivery platforms. The
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  Government's policy is that all viewers who receive analogue television should be able to receive the main free-to-air channels digitally before the analogue transmissions are fully switched to digital. At present, over 4 million people have subscribed to digital television.

  Ministerial Visits
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport what was the total cost to public funds of the recent visit of the Minister for Tourism, Film and Broadcasting to Las Vegas. [127307]

  Janet Anderson
  I visited Las Vegas as part of a wider visit to North America on official business as the Minister for Tourism, Film and Broadcasting. In Canada I represented the Government at the Banff International Television Festival, met the British Columbia Minister for Film to discuss current revisions to the film co-production Treaty between the UK and Canada, and undertook several engagements for the British Tourist Authority. In Nevada I made the Keynote Speech at the opening of the Annual Conference of the Institute of Travel and Tourism, had meetings with the Lt. Governor of Nevada, the Mayor of Las Vegas and with the Aladdin Project, the first major UK investment in the Las Vegas tourist industry. I attended 22 official engagements during my visit which was arranged jointly by my Department and the Foreign Office.

  I will write to the hon. Member shortly with details of the costs of the visit.

NORTHERN IRELAND

  Committees (Evidence)
  Ms Roseanna Cunningham
  To ask the Secretary of State for Northern Ireland what is his policy on(a) ministers and (b) officials from his Department giving evidence to committees of the Northern Ireland Assembly in relation to the impact of reserved matters on devolved policy areas. [126690]

  Mr. Mandelson
  The Government's approach on such matters is set out in Devolution Guidance Note 12 which is published by the Constitution Secretariat in the Cabinet Office.

  It is available on the internet at:
  www.cabinet-office.gov.uk/constitution/2000/devolution/ guidance/dgn12.htm

  Ms Roseanna Cunningham
  To ask the Secretary of State for Northern Ireland if he will list the occasions on which(a) ministers and (b) officials have been invited to give evidence to Northern Ireland Assembly committees; how many have been (i) accepted and (ii) refused, indicating the reasons for refusal; and what was the subject matter to be discussed in each case. [126691]

  Mr. Mandelson
  To date no NIO Ministers or officials have been invited to give evidence to Northern Ireland Assembly Committees.

TREASURY

  Pensioners (Tax)
  Mr. Edward Davey
  To ask the Chancellor of the Exchequer how many pensioners were sent a self-assessment tax form and were subsequently assessed as having no income tax liability in 1998–99. [125840]

  Dawn Primarolo
  I refer the hon. Gentleman to the answer I gave him on 5 June 2000,Official Report, column 81W.

  Inflation Forecasts
  Mr. Michael Jabez Foster
  To ask the Chancellor of the Exchequer if he will make a statement on the inflation forecasts set out in the Red Book. [125841]

  Miss Melanie Johnson
  Latest RPIX inflation outturns are in line with the Budget forecast. The monetary policy framework set up by this Government is delivering low and stable inflation. It is because of this that interest rates are historically low—less than half the level seen in the late 1980s and early 1990s.

  Married Couples (Taxation)
  Mr. Leigh
  To ask the Chancellor of the Exchequer if he will make a statement on taxation of married couples. [125842]

  Dawn Primarolo
  My right hon. Friend the Chancellor has affirmed our commitment to the principle that the tax system should treat people as individuals, each entitled to their own personal allowance.

  Mr. Bill O'Brien
  To ask the Chancellor of the Exchequer what representations he has received on the abolition of the married persons tax allowance; and if he will make a statement. [125854]

  Dawn Primarolo
  The Chancellor regularly receives representations on all aspects of the tax system.

  We have introduced a package of reforms designed to make work pay better and focus resources on families with children. As part of the package, we have increased Child Benefit to record levels of £15 a week for the first child and £10 for subsequent children from April 2000, and it will rise further to £15.50 and £10.35 respectively from April 2001. We are increasing the Working Families Tax Credit by £4.35 a week from this month for children under 16. And in April 2001 we are introducing the Children's Tax Credit which will be worth up to £442, over twice as much as the old married couple's allowance which it replaces. By 2001, personal tax and benefit changes in this and previous Budgets will mean that 1.2 million children will be lifted out of poverty.

  Landfill Tax
  Mr. Luff
  To ask the Chancellor of the Exchequer what discussions he has had with other Departments on the impact of the landfill tax on fly-tipping. [125843]

  Mr. Timms
  Treasury and Customs officials work closely together with those other departments that have policy interests on matters relating to waste disposal and
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  landfill tax. All evidence suggests that the majority of fly-tipping is by householders, who are not directly affected by the tax.

  Hypothecated Taxation (NHS)
  Tony Wright
  To ask the Chancellor of the Exchequer if he is undertaking studies on the role of hypothecated taxation as part of the Government's review of the NHS. [125844]

  Mr. Andrew Smith
  No such studies are being undertaken as part of the current review.

  Corporation Tax
  Mr. Derek Twigg
  To ask the Chancellor of the Exchequer if he will make a statement on the level of UK corporation tax in(a) the current financial year and (b) in 1997. [125845]

  Dawn Primarolo
  Corporation tax rates in the UK are at their lowest ever levels. The main rate of corporation tax for the current year is 30 per cent., and the small companies' rate is 20 per cent. Since 1997, the Government have cut these rates from 33 per cent. and 23 per cent. respectively. In addition, a new starting rate of 10 per cent. was introduced from April 2000.

  Climate Change Levy
  Mr. Brooke
  To ask the Chancellor of the Exchequer what recent representations he has received from businesses on the climate change levy. [125846]

  Mr. Timms
  The Government have developed climate change levy in an open and consultative way. Firstly through the work of Lord Marshall's Task Force and then through the extensive consultation exercises which followed the announcement of the levy in Budget 99. More recently the Government have consulted on the draft legislation underpinning the levy, on the support for energy efficiency measures under the levy package, and on the definition of "good quality" Combined Heat and Power plant.

  During this process, the Government have received many representations from business and other interested parties and these views have helped to refine the design of the levy.

  Working Families Tax Credit
  Mr. Russell Brown
  To ask the Chancellor of the Exchequer if he will make a statement on the impact of the changes to the Working Families Tax Credit announced in the Budget. [125847]

  Dawn Primarolo
  The impact of the changes to the Working Families Tax Credit, and the increase of the national minimum wage from October 2000 to £3.70 per hour announced in the Budget, will guarantee a family with children, with someone working at least 35 hours a week, a minimum income of £208 a week from October 2000 and £214 from April 2001. These, together with other measures the Chancellor announced in Budget 2000, will lift 1.2 million of the children out of poverty this Parliament.
  288W
  Mr. Ernie Ross
  To ask the Chancellor of the Exchequer what assessment he has made of the effect on family incomes of the changes to the Working Families Tax Credit he announced in his Budget. [125858]

  Dawn Primarolo
  The introduction of the Working Families Tax Credit, together with other measures announced in the Budget, means that from October 2000 the minimum income guarantee for a family with children and someone working at least 35 hours a week will be £208 a week. This figure will rise to £214 a week from April 2001. These measures, together with the other measures the Chancellor announced in Budget 2000 will lift 1.2 million children out of poverty this Parliament.

  Mr. St. Aubyn
  To ask the Chancellor of the Exchequer what has been the cost to public funds of the Working Families Tax Credit advertising campaign in(a) 1999–2000 and (b) 2000–01. [126179]

  Dawn Primarolo
  [holding answer 19 June 2000]: The total cost of the Working Families Tax Credit advertising campaign in 1999–2000 was £13.8 million. To date, the cost for 2000–01 has been £2 million.

  The freephone response line and the Tax Credits Office helpline have both performed extremely well and have now received over 3 million calls since September 1999.

  Drugs Seizures
  Mr. Dalyell
  To ask the Chancellor of the Exchequer what has been the value of drugs originating in South American countries seized by Customs and Excise in the last 12 months for which figures are available. [125848]

  Dawn Primarolo
  Customs do not have a comprehensive record of the origin of all drugs seized. Evidence shows cocaine is the drug most frequently seized from South America and that most of the cocaine seized by Customs is from there. In 1999, the estimated value at street price of Customs cocaine seizures amounted to over £250 million.

  ECOFIN
  Sir David Madel
  To ask the Chancellor of the Exchequer how many meetings of ECOFIN there have been since 2 May 1997; and how many he has attended. [125849]

  Miss Melanie Johnson
  Since 12 May 1997, there have been 32 meetings of the Economic and Finance Council of Ministers, of which the Chancellor of the Exchequer has attended 26. On other occasions Treasury Ministers and officials have represented the Government.

  Venture Capital
  Mrs. Curtis-Thomas
  To ask the Chancellor of the Exchequer if he will make a statement on the increase in the availability of venture capital in the United Kingdom from 1997 to 2000. [125850]

  Mr. Timms
  According to statistics published by the British Venture Capital Association, the amount of venture capital invested in the United Kingdom increased from £3,066 million in 1997 to £6,169 million in 1999, the latest year for which data are available. The fastest growth sector was investment in management buy-outs
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  and buy-ins, which now account for around three quarters of total venture investment in the UK. Start-up and other early stage investments grew strongly, but still account for only some 6 per cent. of total venture investment in the UK. The Government are concerned to improve the availability of small scale and early stage venture capital in the UK, as well as addressing access across the UK's regions and across technology sectors. To this end, the Department of Trade and Industry, through the Small Business Service and a new Small Business Investment Taskforce, is working to stimulate the creation of new public-private partnerships, within the framework of a new £1 billion target "umbrella" fund, to increase the supply of small scale venture capital. To better understand the factors affecting the UK institutions' decisions on investing in venture capital and other asset classes, the Chancellor has also commissioned Paul Myners, chairman of Gartmore investment managers, to conduct a review and report with recommendations in time for the Budget in 2001.

  Savings Ratio
  Mr. Collins
  To ask the Chancellor of the Exchequer what projection he has made for the savings ratio in the next quarter. [125851]

  Miss Melanie Johnson
  The Treasury do not publish quarterly projections of the saving ratio. Estimates for 2000 Q1 will be published by the Office for National Statistics on 29 June.

  Income Redistribution
  Mr. Boswell
  To ask the Chancellor of the Exchequer what his policy is towards use of the tax system for the redistribution of income. [125852]

  Dawn Primarolo
  Budget 2000 builds on the success of the last three years. It supports work, families and enterprise and it cuts poverty, helps pensioners, and delivers substantial new resources for schools and hospitals. By 2001, personal tax and benefit changes mean that a single earner family with two children on £12,500 will be £2,600 a year better off. On £25,000, they will be £370 better off.

  Environmental Targets
  Mr. Chaytor
  To ask the Chancellor of the Exchequer if he will make a statement on the contribution his Department is making to efforts to ensure that Britain meets its national and international environmental targets. [125855]

  Mr. Timms
  Recent Budgets have introduced many measures to help the UK to achieve its national and international environmental goals. Measures to tackle climate change include the climate change levy and reforms to vehicle excise duty (VED). They put the UK on track to meet its legally binding Kyoto target for a 12.5 per cent. reduction in greenhouse gas emissions and move towards its own more challenging domestic goal of a 20 per cent. reduction in carbon emissions. Measures to improve air quality, to help meet targets in the Air Quality Strategy, include cutting and freezing duty on road fuel gas, introducing a duty differential to encourage ultra-low 290W
  sulphur petrol, and extra incentives within the new graduated VED and company car tax systems for cars which use less-polluting fuels.

  Fuel Duties
  Mr. Paterson
  To ask the Chancellor of the Exchequer what assessment he has made of the impact of increases in fuel duties since May 1997. [125856]

  Mr. Timms
  Revenues from fuel duties are set out in table 2.1D of Financial Statistics and table K2 in the Customs and Excise Annual Report 2000.

  The Government are committed to appraising the environmental impact of all Budget measures and these assessments are published in Chapter 6 of the Economic and Fiscal Strategy Report 2000.

  Mr. Hoyle
  To ask the Chancellor of the Exchequer how standard temperatures are applied in the determination of volume on which motor fuel duty is paid. [127362]

  Mr. Timms
  When motor fuel passes the duty point both its actual volume and its temperature are recorded. Using internationally agreed conversion tables the volume of the oil, had it been at a temperature of 15°C, is calculated. These are the "standard litres" on which excise duty is charged and paid by the oil companies.

  Single Currency
  Mr. Amess
  To ask the Chancellor of the Exchequer what recent representations he has received about joining the single currency. [125857]

  Miss Melanie Johnson
  The Government's policy on membership of the single currency remains as set out by the Chancellor of the Exchequer in October 1997, and restated by the Prime Minister in February 1999. The Government have said they will recommend joining a successful single currency only if it is in our national economic interest to do so.

  Disadvantaged Areas
  Mr. Bradshaw
  To ask the Chancellor of the Exchequer what measures he proposes to promote enterprise among disadvantaged groups and in disadvantaged areas in the south-west. [125859]

  Mr. Timms
  The Government's aim is to help create a supportive environment for entrepreneurial activity in all sections of society. Long-term unemployed people who want to move into self-employment are being helped with support under New Deal options nationally; while the Employment Zone pilot in Plymouth has been helping long-term unemployed adults aged 25 plus to get back into work, including the opportunity to pool benefits, training and job search funds to help with business start-up costs, since April 2000. We will also be offering New Entrepreneur Scholarships in high unemployment areas, to equip potential entrepreneurs with the management and business skills needed to turn their aspirations into successful businesses. A pilot programme will be running in Cornwall (and London and Manchester) later this year, before a national roll-out in September 2001.
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  Moreover, the Government announced in November 1999 the creation of a new Phoenix Fund, with £30 million to invest over three years in promoting better access to business support and finance in deprived areas. This includes:
  a development fund to promote innovative enterprise support in deprived areas, including incubator units;
  a national challenge fund to help resource community finance initiatives, and to evaluate the variety of approaches and distil best practices;
  loan guarantee support for community finance initiatives borrowing from wholesale sources of finance, so that they can on-lend in deprived areas; and
  a network of mentors to pre and early phase business start-ups through a new Business Volunteer Mentoring Association, being run on a pilot basis until April 2001.

  The Department of Trade and Industry has lead responsibility for the Phoenix Fund, including the disbursal of funding and business support in the South West.

  The Government have also instigated a range of measures in recent Budgets, including cuts in capital gains tax and corporation tax, and enhanced capital allowances, which will benefit many of the 65,000 small and medium-sized enterprises (SMEs) in disadvantaged areas and the wider South West region. Moreover, the Government are currently financing a network of regional venture capital investment funds for early-stage SMEs, and contributing to a regional target of £85 million for the South West. The first steps towards this target are being taken now with the regional venture capital competition being run by the DTI.

  The Small Business Service is also tasked with the brief of reaching-out to start-up and existing enterprises in disadvantaged communities, to increase accessibility of business support.

  We are also bringing schools and businesses closer together, particularly those in high unemployment areas. We have already provided an extra £10 million nationally to boost enterprise skills in our schools. The new National Enterprise Campaign, launched this month, includes a particular focus on our high unemployment areas.

  Taxation
  Mr. Bercow
  To ask the Chancellor of the Exchequer what recent estimate he has made of the net increase in the amount of tax that will be paid in the current financial year as a result of his Budget. [125860]

  Dawn Primarolo
  Details of the Budget measures can be found in Table A.13 of the March 2000 Financial Statement and Budget Report.

  Employment Support
  Mr. Redwood
  To ask the Chancellor of the Exchequer what his policy is on supporting(a) manufacturing and (b) service employment in the UK economy. [125861]

  Miss Melanie Johnson
  The Government are pursuing a comprehensive range of policies which are helping to support both manufacturing and service sector 292W
  employment, including the Welfare to Work programme and tax and benefit reform. Since May 1997 UK employment has increased by over 900,000.

  Small Businesses
  Ms Keeble
  To ask the Chancellor of the Exchequer what fiscal measures he has taken to encourage small businesses. [125862]

  Mr. Timms
  The Government have dramatically improved the fiscal environment for investment in and by small businesses.

  Since May 1997, the smaller companies Corporation Tax rate has been reduced from 23 to 20 per cent., and a new starter rate of Corporation Tax has been introduced which benefits companies with profits of up to £50,000. Small and medium sized companies have also benefited from the abolition of Advance Corporation Tax and the payment of CT in arrears.

  To encourage investment by small and medium sized enterprises, the Government have now made permanent at 40 per cent. the enhanced first year capital allowances for plant and machinery, first introduced in the July 1997 Budget. This year the Government are also introducing a 100 per cent. first year allowance for small firms' investment in information and communication technology. This measure is designed to accelerate the take up of new e-commerce practices, and will operate for three years.

  To encourage small and medium sized companies to invest in innovation through research and development, this year's Finance Bill introduces a new R&D tax credit. This provides cash flow support to companies investing in R&D even before they are paying CT, and increases the tax allowance for current spending on R&D from 100 to 150 per cent.

  To encourage investment in the growth of small businesses, the Government have significantly enhanced the incentives for individuals to make such investments via reforms to Capital Gains Tax. Gains on any shareholdings in unquoted companies will now be taxed as business assets on a shorter four year taper, with the final effective rate for higher rate taxpayers now down to 10 per cent. This year's Finance Bill also introduces improvements to the operation of the Enterprise Investment Scheme and Venture Capital Trust scheme (notably reducing from five to three years the minimum holding period for access to income tax reliefs). These changes will further enhance the incentives for individuals to invest in smaller higher risk trading companies.

  The Government are also creating new fiscal incentives for UK companies to invest as corporate venturers in smaller growing companies. This year's Finance Bill introduces a new Corporate Venturing Scheme, which provides relief against Corporation Tax for minority equity investments made in eligible higher risk companies for a minimum of three years.

  Finally, to enable smaller higher risk trading companies to recruit and retain more easily the key employees which they need to deliver their growth potential, this year's Finance Bill introduces a new Enterprise Management Incentive scheme. Under this measure, eligible companies

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  will be able to offer tax-advantaged options over shares worth up to £100,000 (at the time of option grant) to up to 15 employees.

  Economic Convergence
  Mr. Fabricant
  To ask the Chancellor of the Exchequer if he will make a statement on his forecast for economic convergence of the British economy with that of those nations in the eurozone. [125863]

  Miss Melanie Johnson
  The Chancellor of the Exchequer has said we will make another assessment of the five economic tests early in the next Parliament.

  NMB Group
  Mrs. Gordon
  To ask the Chancellor of the Exchequer how many of the secured loans made by NMB Group plc's fully-owned subsidiary, Consumer Loans Company Limited, were redeemed during the Bank of England's ownership of NMB Group plc from 1994 to February 2000; in what proportion of the redeemed loans a charge for early settlement equal to six months' interest was levied; and in what proportion of the redeemed loans the charge for early settlement was calculated by reference to the Rule of 78. [125946]

  Miss Melanie Johnson
  During the period of the Bank of England's ownership, NMB was run on an arms length basis under its own board of directors. The overall policy was to run down the business. The Bank does not have details of loans and repayments, but asked NMB to responded positively to any approach by individual borrowers who wished to refinance their loan.

  Scottish Parliament Committees
  Mr. Welsh
  To ask the Chancellor of the Exchequer if he will outline his policy on(a) Ministers and (b) officials from his Department accepting invitations to give evidence to committees of the Scottish Parliament in relation to the impact of reserved policy matters on devolved policy areas; and if he will make a statement. [126674]

  Mr. Andrew Smith
  [holding answer 20 June 2000]: Decisions on whether Ministers or officials should accept invitations to give evidence to committees of the Scottish Parliament in relation to the impact of reserved policy matters on devolved policy areas depend on the circumstances of the case.

  Voluntary Giving
  Dr. Desmond Turner
  To ask the Chancellor of the Exchequer what progress he has made following his announcement at the National Council for Voluntary Organisations conference on 9 February concerning the Government's intention to initiate a national campaign to promote the giving of time and money in partnership with the voluntary sector. [126877]

  Miss Melanie Johnson
  [holding answer 21 June 2000]: When the Chancellor addressed the NCVO conference on 9 February, he said that he wanted to bring together all relevant parties to examine proposals for a national campaign based on a partnership with the
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  voluntary sector. The NCVO and the Charities Aid Foundation have made some proposals on a possible campaign, which we are discussing with them.

  Parliamentary Questions
  Mr. Maclennan
  To ask the Chancellor of the Exchequer how many parliamentary questions were tabled to his Department between 19 October 1999 and 20 April which requested information, pursuant to previous answers. [127343]

  Mr. Timms
  Seventy seven.

PRIME MINISTER

  Chief Press Secretary
  Mr. Baker
  To ask the Prime Minister under what circumstances the Chief Press Secretary is authorised to speak on his behalf when dealing with ministers. [126503]

  The Prime Minister
  [holding answer 20 June 2000]: The Chief Press Secretary always acts in accordance with the Prime Minster's wishes.

  Charter of Fundamental Rights
  Mr. Bercow
  To ask the Prime Minister if he will make a statement on the factors determining the number of delegates each political party was asked to provide for the drafting of the Charter of Fundamental Rights. [127184]

  The Prime Minister
  For the 30 national parliamentary delegates to Charter Convention, most parliaments, including the United Kingdom's, have selected one representative from each chamber and from each of the main political parties. The 16 members of the European Parliament were selected on a pro rata basis from among the European political groupings.

  Mr. Bercow
  To ask the Prime Minister if he will make it his policy to veto the inclusion of the Charter of Fundamental Rights in any treaty base. [127197]

  The Prime Minister
  The Government have made clear their view that the Charter should be a declaratory document, not incorporated into the EU Treaties. That position is shared by a significant number of our EU partners.

  Mr. Bercow
  To ask the Prime Minister if he will list by political party the number of UK delegates to the drafting body on the EU Charter of Fundamental Rights. [127190]

  The Prime Minister
  The United Kingdom delegates to the drafting body of the EU Charter of Fundamental Rights are:

  Lord Goldsmith QC (Labour)—Prime Minister's representative

  Win Griffiths MP (Labour)—Parliamentary representative

  Lord Bowness (Conservative)—Parliamentary representative

  Andrew Duff MEP (Liberal Democrats)—European Parliament representative

  David Martin MEP (Labour)—European Parliament
  representative

  Timothy Kirkhope MEP (Conservative)—European Parliament representative.

LORD CHANCELLOR'S DEPARTMENT

  Young Offenders
  Mr. Tony Lloyd
  To ask the Parliamentary Secretary, Lord Chancellor's Department what the length of time taken for young offenders' cases to reach a conclusion was in the courts in each metropolitan police authority area in the last year for which figures are available; and what the corresponding figures were for 1997. [126963]

  Jane Kennedy
  The exact information requested is not available. Information on the time taken in magistrates' courts proceedings is collected by the Lord Chancellor's Department's Time Intervals Survey. Figures on the

  Average number of days from first listing to case completion at youth courts1

  Survey2

  Greater Manchester

  Merseyside

  Metropolitan3

  Northumbria

  South Yorkshire

  West Midlands

  West Yorkshire

  June 19974

  62

  67

  50

  47

  50

  72

  55

  February 1999

  47

  62

  35

  48

  43

  86

  55

  June 1999

  48

  53

  40

  43

  37

  68

  39

  October 1999

  45

  53

  48

  51

  49

  75

  45

  February 2000

  49

  54

  51

  44

  50

  74

  46

  1From the start of 1999 analysis of the Time Intervals Survey has included certain longer cases lasting over a year that were previously excluded from the calculations. In this table however the results presented are calculated on the pre-1999 basis for comparability. On the new basis of calculation many of the figures for the February 1999 to February 2000 surveys would be a few days higher.

  2The first listing to completion period for all youth cases is believed to show some seasonal variation making figures from June surveys slightly lower than the underlying trend, and figures from February surveys a little higher than the trend. For this reason comparisons across time for figures in this table are best made between surveys a whole number of years apart, for example February against February or June against June.

  3Based on youth courts in the London area. Excludes cases dealt with at youth courts within the Metropolitan Police authority area but outside the London Boroughs. Includes youths apprehended by City of London Police and proceeded against in London Youth Courts (Youth Courts are not held at the magistrates' courts in the City of London).

  4In the June 1997 survey the sample sizes for Youth Court cases were less then 100 in Merseyside, South Yorkshire and West Yorkshire and due to the small sample sizes these figures should be treated with added caution.

  Source:

  Lord Chancellor's Department Magistrates' Courts Time Intervals Survey

  Parliamentary Questions
  Mr. Maclennan
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many written parliamentary questions tabled to his Department between 19 October 1999 and 20 April 2000; have not received substantive answers, with commercial or other confidentiality cited as the reason. [127339]

  Mr. Lock
  In the relevant period, there was one written answer which withheld information requested by an hon. Member on the grounds that it was commercially sensitive.

AGRICULTURE, FISHERIES AND FOOD

  Non-departmental Public Bodies
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what was the(a) budgeted and (b) actual expenditure of each of the non-departmental public bodies sponsored by his Department for each of the last three years, and the (i) budgeted and (ii) projected expenditure for this year and each of the next three years. [121423]

  Mr. Nick Brown
  [holding answer 9 May 2000]: The information requested has been placed in the Libraries of the House.
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  timeliness of cases dealt with at the Crown Court are not however available separately for adult and youth defendants.

  The table shows the average number of days from first listing to case completion at Youth Courts in Metropolitan Police authority areas from June 1997, February 1999, June 1999, October 1999 and February 2000 Time Intervals Surveys. The only survey to cover all Youth Court defendants in 1997 was the June survey, and the most recent results available are from the February 2000 survey. A degree of seasonal variation is believed to affect the figures shown in the table and therefore comparisons over time are best made between figures from surveys which are whole years apart, for example June against June.

  Irish Milk Quota
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his oral statement of 11 May 2000,Official Report, column 1031, concerning the Irish milk quota, if he will identify the agreement cited by the Irish Government; and on what basis it bound British negotiators, and those of other parties, to accept Irish demands on milk quota. [122971]

  Mr. Nick Brown
  [holding answer 22 May 2000]: The agreement that the Irish Government used in the Agenda 2000 negotiations was reached in the Agriculture Council of March 1984. This agreement stated that when distributing quota from the reserve, priority will be given to Ireland.

  Ireland was able to cite this agreement, to which the UK Government of the time had been a party, in its argument to negotiate an additional allocation of quota.

  Farm Incomes
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what effect the funding arrangements for the expansion of the agri-environment schemes will have on overall farm incomes. [122968]
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  Mr. Nick Brown
  [holding answer 22 May 2000]: Section 7 of the England Rural Development Plan describes the economic impact on farmers of the Rural Development Regulation and the mechanism for funding the measures. Copies of the Plan were placed in the Library of the House.

  Rural Development Scheme
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his oral statement of 11 May 2000,Official Report, column 1028, concerning the redistributive effects of the England rural development scheme, if he will provide estimates of the projected redistribution in each English region. [122967]

  Mr. Nick Brown
  [holding answer 22 May 2000]: Each English region is being allocated funds for the Rural Enterprise Scheme, Training measure and processing and Marketing Grants to enable them to identify projects which meet regionally identified priorities. Funds are being apportioned on the basis of objective criteria such as agricultural productivity and labour force.

  Crop Contamination
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will publish the advice he received about the contamination by GMOs of rape seed together with a list of all those who were consulted and the dates on which he first contacted them after 17 April. [123832]

  Mr. Nick Brown
  [holding answer 25 May 2000]: Since 17 April Ministers have sought advice on this matter from the Advisory Committee on Releases to the Environment (ACRE), the Food Standards Agency (FSA) and the Advisory Committee on Animal Feedingstuffs (ACAF). Ministers initially received informal advice from ACRE and the FSA, which was subsequently confirmed in formal advice. That advice has been published. Informal advice has been received from ACAF and formal advice is awaited. This will be published when it is received.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if the Government will restrict the import of crop seeds described as GM-free from countries in which separation distances between GM crops and GM-free crops are less than in the United Kingdom. [124157]

  Mr. Nick Brown
  [holding answer 22 June 2000]: The marketing of seeds imported into the EC from non-EC countries is governed by EC equivalence arrangements.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what information the Government have obtained from parties other than Advanta UK on the contamination of conventional Advanta rapeseed with genetically modified rapeseed; and when such information was received. [124148]

  Mr. Nick Brown
  [holding answer 5 June 2000]: Apart from that supplied by Advanta, we have received information on the GM rapeseed inadvertently planted in the UK from the Canadian authorities. On 25 May the Canadian Food Inspection Agency provided preliminary information about the production of the relevant seed in Canada. A Ministry official went to Canada on 26 May
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  to liaise further with the Canadian authorities, who are still investigating how the conventional rapeseed came to be affected. We remain in close touch with them on this.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his oral statement of 18 May 2000,Official Report, columns 473–74, what data he has collated on distances between fields that had been used to produce conventional Advanta rapeseed and the GM crops responsible for the cross-pollination of the conventional crop. [1241163]

  Mr. Nick Brown
  [holding answer 5 June 2000]: The Government have no data yet on distances between fields used to produce the conventional Advanta oilseed rape seed stocks and possible sources of cross-pollination. The Canadian authorities are currently investigating which fields were used in the production of the affected Advanta seed. My Department aims to obtain the results of these investigations at the earliest opportunity.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if the crop sites now growing GM oilseed rape as a result of the contamination of Advanta rapeseed with GM rapeseed will be subject to the same controls as crop sites intentionally sown with GM rapeseed for the purposes of a licensed crop trial. [124160]

  Mr. Nick Brown
  [holding answer 5 June 2000]: All releases of GMOs, whether deliberate or inadvertent, are subject to the provisions of Part VI of the Environmental Protection Act 1990.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what discussions he has had about liability in cases where(a) conventional crop seed is contaminated with GM crop seed, (b) conventional crops are cross-pollinated by GM crops and (c) conventional crops are contaminated with genetic material from GM crops as a result of other forms of gene flow. [124161]

  Mr. Nick Brown
  [holding answer 5 June 2000]: I have had discussions recently on various issues relating to GM crops. The question of liability is a matter of civil law and liability will depend on the specific circumstances of each case, including where relevant the contractual arrangements that have been entered into by the parties concerned.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what plans the Government had in place before 18 May to inform farmers of the contamination of conventional Advanta rapeseeds with GM rapeseeds; and what changes have been made to those plans since 18 May. [124167]

  Mr. Nick Brown
  [holding answer 5 June 2000]: After learning of the problem Ministers established the factual background and took advice on the health, environmental and legal implications, in order to be able to publish appropriate information. This was published on 17 May. Further information was published as soon as we were in a position to do so.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his answer of 8 June 2000,Official Report, column 359W, which Canadian seeds authority was responsible for ensuring the purity of the rapeseed involved in the Advanta GM contamination incident. [126854]
  299W
  Mr. Nick Brown
  [holding answer 22 June 2000]: Responsibility for the purity of certified seed exported from Canada to the UK rests with the Canadian Food Inspection Agency, reporting directly to the Minister of Agriculture and Agri-food.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his answer of 8 June 2000,Official Report, column 359W, if he will list the seeds authorities that have a legal responsibility for ensuring the purity of seeds exported from the UK; and which Government Department is responsible. [126853]

  Mr. Nick Brown
  [holding answer 19 June 2000]: The following departments are responsible for ensuring the certification of seeds, including those for export, as prescribed by the seeds regulations. The regulations do not prescribe purity standards for the presence of GM material.
  For England and Wales—the Ministry of Agriculture, Fisheries and Food (acting in relation to Wales on behalf of the National Assembly for Wales)
  For Scotland—the Scottish Executive Rural Affairs Department
  For Northern Ireland—the Department of Agriculture and Rural Development.

  British Cattle Movement Service
  Mr. Todd
  To ask the Minister of Agriculture, Fisheries and Food what the average(a) telephone response time and (b) failure rates were of calls to the British Cattle Movement Service in each month of this year to date. [125674]

  Ms Quin
  The average amount of time that callers to the BCMS helpline have had to wait between making a call and speaking to a operator, and the number of abandoned calls are as follows:

  Average response time (seconds)

  Number of abandoned calls

  January

  70

  3,210

  February

  42

  1,638

  March

  36

  2,132

  April

  76

  2,967

  May

  99

  4,549

  The number of abandoned calls equates to about 15 per cent. of all calls received by the helpline. Most of these calls would have been made during peak periods.

  The increase in May corresponds with the Spring calving peak. In addition, some experienced call centre staff have recently had to be re-deployed to other priority work and new staff are currently undergoing training.

  The BCMS is considering an industry request for changes to the call centre work patterns with a view to increasing the number of staff during peak hours. This would result in off-setting reductions in opening hours at night and weekends.

  Vessels Satellite Monitoring
  Mr. Mitchell
  To ask the Minister of Agriculture, Fisheries and Food what the compliance rates are of vessels registered in other EU member states which are obliged to carry operational satellite monitoring equipment. [125699]
  300W
  Mr. Morley
  The Ministry does not have detailed information about the compliance rates of vessels registered in other member states obliged to carry satellite monitoring equipment. Such information would be held by the relevant flag state authorities. However, we understand that the position in other member states is similar to the UK. Compliance by vessels from other member states operating in British Fishery Limits has been good. Action will, and already has been taken against EU vessels fishing in UK waters that are not complying with the directive on satellite monitoring equipment.

  Water Level Management
  Mr. Brake
  To ask the Minister of Agriculture, Fisheries and Food which completed Water Level Management Plans include actions to eohance biodiversity on sites of special scientific interest. [125780]

  Mr. Morley
  MAFF encourages flood and coastal defence operating authorities to enhance biodiversity where possible when preparing Water Level Management Plans (WLMPs). Operating authorities have not hitherto been required to report biodiversity gains.

  MAFF is aware of biodiversity gains at a number of sites where WLMPs have been implemented, but information is not generally available on the sites where there has been a gain.

  The High Level Targets issued in November 1999 require operating authorities to report biodiversity losses and gains annually from 1 April 2001. Further information should then be available.

  Organophosphates
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what research his Department has(a) undertaken and (b) evaluated on the relationship between arhythmic heart conditions and the use of organophosphates in sheep dip. [126822]

  Mr. Nick Brown
  [holding answer 19 June 2000]: As research relevant to OP sheep dips is published, it is evaluated by the Medical and Scientific Panel, a sub-committee of the Veterinary Products Committee. The Panel considered evidence that exposure to OPs could cause heart problems but concluded that such problems were unlikely to occur at the levels of exposure to OPs experienced during dipping operations. Following a Scientific Workshop on 28 March 2000, which was organised by the Government, we hope shortly to call for proposals for further research which could include the effects of OPs on the heart.

  Fur Farming
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what definition he uses of public morality in his policy on banning fur farming in this country. [126862]

  Mr. Nick Brown
  [holding answer 19 June 2000]: "Public morality" is not susceptible to an absolute definition: it inevitably involves subjective judgment. The expression is relevant to consideration of the proposed ban under Community law. The European Court of Justice

  301W
  has held that in principle it is for each member state to determine in accordance with its own scale of values the requirements of public morality in its territory.

  In the Government's view, fur farming is not consistent with a proper value and respect for animal life. Animal life should not be destroyed in the absence of sufficient justification in terms of public benefit. The Government believe that the rearing of animals solely or primarily for slaughter for their fur fails this test. The position of fur farming is quite distinct from that of food production. Where the primary purpose of keeping an animal is the production of food, that purpose provides a sufficient public benefit to justify breeding the animals for slaughter. This is so even where the production of fur or hide is a secondary purpose of keeping the animal.

  For the reasons set out, the Government believe that a total ban on fur farming is justified.

  Land Drainage
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on charges for land drainage. [124141]

  Mr. Nick Brown
  [holding answer 5 June 2000]: Within their districts, internal drainage boards require the payment of (a) drainage rates by occupiers of agricultural land (including buildings) and (b) special levies by local authorities in respect of developed areas and other non-agricultural land.

  The income from the general drainage charge contributes to the costs of the Agency's flood defence functions in the area concerned.

  The Environment Agency charges a fee of £50 to persons applying for land drainage consents under section 109 of the Water Resources Act 1991, the sum being prescribed under section 110 of that Act.

  Special Advisers
  Mr. Tyrie
  To ask the Minister of Agriculture, Fisheries and Food on how many occasions since 31 March 1999(a) departmental and (b) non-departmental special advisers have travelled abroad in an official capacity. [124110]

  Mr. Nick Brown
  [holding answer 5 June 2000]: Departmental special advisers have travelled abroad in an official capacity on eighteen occasions since 31 March 1999. There has been no occasion when non-departmental advisers have accompanied me on visits abroad.

  Farm Production
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what assessment the Government have made of the relationship between level of production per unit of area and farm size in each of the major livestock and arable sectors. [126864]

  Mr. Nick Brown
  [holding answer 19 June 2000]: The relationship between production per unit area and farm size is monitored through the annual Farm Business Survey. Detailed results of the survey are published in "Farm Incomes in the United Kingdom", available on the Internet at www.maff.gov.uk/esg/.

  Interactive Voice Response Systems
  Mr. Ben Chapman
  To ask the Minister of Agriculture, Fisheries and Food how many agencies of his Department use interactive voice response systems when dealing with telephone inquiries from the general public. [127121]

  Mr. Morley
  As far as I am able to ascertain, without an expensive investigation, no agency of this Department uses interactive voice response systems in their dealings with the public.

  Mr. Ben Chapman
  To ask the Minister of Agriculture, Fisheries and Food how many telephone lines to his Department used by the general public are responded to by interactive voice response systems. [127120]

  Mr. Morley
  As far as I am able to ascertain, without an expensive investigation, none of the telephone lines in the Ministry that are used by the public are equipped with interactive voice response systems.

  Fisheries
  Mr. Nicholls
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the capacity of EU institutional structures to accommodate regional fisheries councils. [127001]

  Mr. Morley
  The capacity of the EU institutional structure to accommodate regional fisheries councils will depend on the role and powers envisaged for such bodies.

  Mr. Nicholls
  To ask the Minister of Agriculture, Fisheries and Food what discussions he has held with representatives of the European Commission on initiating consideration at EU level of proposals for zonal fisheries management. [126926]

  Mr. Morley
  My officials and I regularly discuss with the European Commission and colleagues from other member states ways of improving fisheries management at the regional and zonal level. Most recently, I made clear at the Fisheries Council on 16 June that we welcomed recent moves to enhance the regional dimension of the Common Fisheries Policy through, for example, the extension of regional workshops and the regional consultations on the Irish Sea cod recovery programme. These helpfully bring together fishermen, scientists and administrators to consider together improvements in the management of specific stocks in particular areas.

  Mr. Nicholls
  To ask the Minister of Agriculture, Fisheries and Food what discussions he has held with the National Federation of Fishermen's Organisations and the Scottish Fishermen's Federation on the Hull University report, "Regional Management of European Fisheries". [126924]

  Mr. Morley
  Neither my right hon. Friend nor I have met the NFFO or SFF to discuss the Hull University report. Officials are to have an initial meeting with the NFFO and SFF on 29 June to discuss their joint document, "Zonal management: a new vision for Europe's fisheries".

  Mr. Nicholls
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the effectiveness of zonal fisheries management in relation to(a) overfished stocks, (b) excess fishing capacity and (c) discard. [126927]
  303W
  Mr. Morley
  The National Federation of Fishermen's Organisation and the Scottish Fishermen's Federation (NFFO/SFF) document, "Zonal management: a new vision for Europe's fisheries", is now being studied and officials will be meeting the NFFO and SFF on 29 June to discuss it.

  Mr. Nicholls
  To ask the Minister of Agriculture, Fisheries and Food what further meetings he has planned with(a) the National Federation of Fishermen's Organisations and Scottish Fishermen's Federation, (b) European Commission officials, and (c) representatives of EU member states to discuss regionalisation of fisheries policy. [126928]

  Mr. Morley
  Officials will be meeting the NFFO and SFF on 29 June to discuss their joint document, "Zonal management: a new vision for Europe's fisheries".

  My right hon. Friend expects to meet Commissioner Fischler shortly to discuss the 2002 CFP review, in the course of which we will make clear the Government's desire to secure a stronger regional dimension for the CFP and to involve fishermen more fully in fisheries management. We will also continue to make the same point in our regular contacts with colleagues in other member states.

  Mr. Nicholls
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the state of preparations for the 2002 CFP Review; and if he will identify the key issues for the UK. [126925]

  Mr. Morley
  The European Commission has indicated that it will shortly begin preparing a Green Paper on the 2002 review, to be issued early in 2001. My right hon. Friend expects to meet Commissioner Fischler in the near future to discuss this matter. He will emphasise that the UK wishes to maintain key features of the present arrangements such as national quotas based on relative stability and access restrictions within national 6/12 mile limits; and that we wish to secure improvements to make the CFP a more effective instrument for conserving fish stocks, including enhancing the regional dimension and integrating environmental considerations more fully.

  Mr. Nicholls
  To ask the Minister of Agriculture, Fisheries and Food what representations he has received from relevant parties on treaty changes required for 304W
  zonal fisheries management; and if he will publish the external legal opinion he has received in respect of these matters. [126923]

  Mr. Morley
  Neither my right hon. Friend nor I have received any such representations or external legal opinion.

  Mr. Nicholls
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of trends in the fishing industry with regard to(a) recruitment and retention of staff, (b) profitability and (c) employment levels. [126930]

  Mr. Morley
  The Sea Fish Industry Authority published in 1999 a Labour Market Survey National Report, which evaluates employment trends, skill shortages and training needs. The Authority also publishes periodically data on the costs, earnings and profitability of a number of categories of vessels in the UK fishing fleet. Each year, MAFF publishes the United Kingdom Sea Fisheries Statistics, which contains information on numbers of fishermen.

  Correspondence
  Mr. Kaufman
  To ask the Minister of Agriculture, Fisheries and Food when he intends to reply to the letters dated 3 February, 9 March and 13 April from the right hon. Member for Manchester, Gorton with regard to Ms R. Barraclough. [124465]

  Mr. Nick Brown
  [holding answer 5 June 2000]: I replied to my right hon. Friend on 21 June, and apologise for the delay.

WALES

  Parliamentary Questions
  Mr. Maclennan
  To ask the Secretary of State for Wales how many of the written parliamentary questions tabled to his Department between 19 October 1999 and 20 April have not received substantive answers, excluding those not answered for reasons of(a) disproportionate costs, (b) information not available, not held centrally, or not held in the form requested and (c) commercial or other confidentiality. [127342]

  Mr. Paul Murphy
  Five. 97.5 per cent. of written PQs tabled to this Department between 19 October 1999 and 20 April 2000 have received substantive answers.

Preamble
The House met for Judicial Business at two of the clock: The LORD BINGHAM OF CORNHILL on the Woolsack.
Prayers—Read by the Lord Bishop of Oxford.

Statement—Royal Commission on House of Lords Reform
Lord Bingham of Cornhill: My Lords, with the leave of the House, before the reports from the Appellate Committees are considered, I should like to make a Statement on Recommendation 59 of the Royal Commission on the Reform of the House of Lords. That recommendation is that:
"The Lords of Appeal should set out in writing and publish a statement of the principles which they intend to observe when participating in debates and votes in the second chamber and when considering their eligibility to sit on related cases".
I should tell the House that my noble and learned friends have considered this recommendation and have agreed on the terms of a Statement to give effect to it. I will now read the Statement which has been agreed by all the Lords of Appeal in Ordinary:
General Principles
"As full members of the House of Lords the Lords of Appeal in Ordinary have a right to participate in the business of the House. However, mindful of their judicial role they consider themselves bound by two general principles when deciding whether to participate in a particular matter, or to vote: first, the Lords of Appeal in Ordinary do not think it appropriate to engage in matters where there is a strong element of party political controversy; and secondly the Lords of Appeal in Ordinary bear in mind that they might render themselves ineligible to sit judicially if they were to express an opinion on a matter which might later be relevant to an appeal to the House.
"The Lords of Appeal in Ordinary will continue to be guided by these broad principles. They stress that it is impossible to frame rules which cover every eventuality. In the end it must be for the judgment of each individual Lord of Appeal to decide how to conduct himself in any particular situation.
Eligibility
"In deciding who is eligible to sit on an appeal, the Lords of Appeal agree to be guided by the same principles as apply to all judges. These principles were restated by the Court of Appeal in the case of Locabail (UK) Ltd v. Bayfield Properties Ltd and others and four other actions [2000 1 All E.R. 65 (CA)]."
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My Lords, that concludes the Statement. I recognise, of course, that this is a subject on which noble Lords may wish to express a view, but I hope that the House will agree that it would not be appropriate to enter into a debate now, at a judicial sitting. What I have done is to report to the House what the Lords of Appeal in Ordinary have agreed. If any noble Lord wishes to explore the matter further, then I am sure that a debate can be arranged through the usual channels.
[The House then considered and agreed to the reports from the Appellate Committees in the Causes Wildtree Hotels Limited and others (Appellants) v. London Borough of Harrow (Respondents) and Regina v. Z (Respondent) (On Appeal from the Court of Appeal (Criminal Division)). The sitting was then suspended until three o'clock.]
The LORD CHANCELLOR on the Woolsack.

NHS: Additional Resources
Lord Clement-Jones Lord Clement-Jones asked Her Majesty's Government:
What proportion of the additional resources allocated to the National Health Service by the Budget have been devoted to the accumulated deficits and debts of health authorities and trusts.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, it is not the case that the additional resources provided are being used to clear past deficits. The new resources will help the NHS achieve financial stability and provide additional services as part of the Government's agenda to develop the NHS.
Lord Clement-Jones: My Lords, I thank the Minister for that reply. In light of the fact that we expect shortly a new national plan for the NHS, it is vital to be clear about the state of NHS finances. It is estimated that the current accumulated deficit of the NHS is between £500 million and £1 billion. If, as the Minister states, the deficit is not being paid off by the new resources, how is it being paid off? Was it paid off last year by cutting services?
Lord Hunt of Kings Heath: My Lords, no. The £1 billion, to which the noble Lord refers constantly, is, as I have said on many occasions, a gross over-estimate. The fact is that the accumulated deficit to which he refers is not a debt payable on demand. It is a product of good accounting practice that requires the NHS to recognise future liabilities. Much of that liability arises in relation to potential clinical negligence liability.
As regards the position this year, the injection of the first £600 million of extra resources will ensure that we have financial stability, meet identified pressures and develop services for the public.
Baroness Gardner of Parkes: My Lords, can the Minister tell us how many individual trusts and health authorities are in deficit?
Lord Hunt of Kings Heath: My Lords, the position with regard to individual organisations for the past financial year will not be clear until the autumn when we have their accounts fully to order. I understand that at the end of the last financial year, the deficit is estimated to be approximately £200 million. But we need to put that in perspective. The amount of additional resources that we are putting into the health service this year is £1.424 billion.
Lord Clark of Kempston: My Lords, does the Minister agree that, if the debts remain, presumably those trusts are paying interest on them? That decreases the amount of money available for health services. If there is a debt it is surely good accounting practice that some plan should be evolved in order to eliminate that debt and the liability for interest?
Lord Hunt of Kings Heath: My Lords, I thought that I had made it clear that the accumulated debt to which the noble Lord, Lord Clement-Jones, refers is not a debt payable on demand but an understanding that we have to recognise potential future liabilities such as clinical negligence.
Lord Swinfen: My Lords, what is the position when no allowance is made for future payments which might have to be made? What is the actual financial position of the National Health Service?
Lord Hunt of Kings Heath: My Lords, the financial position of the NHS is healthy due to the resources that we have put into the health service as a result of the last Budget. In terms of the announcement made in the Budget for the financial years 2001–02 to 2004–05, the additional resources amount to 6.3 per cent real term growth. At the end of that four-year period, that will allow the health service to have grown by an additional one third in real terms. That surely is the point. That is the recognition which the Government have demonstrated in their additional finances for the health service.
The Countess of Mar: My Lords, is the Minister saying that it is a paper debt rather than a real debt? If that is so, what is the National Health Service doing to make doctors safer and so reduce prospective claims for clinical negligence?
Lord Hunt of Kings Heath: My Lords, the noble Countess is right to refer to the worrying rise in clinical negligence liabilities. This has to be tackled in a number of ways: by the strengthening of clinical governance, as we have done; and the combined effect of the establishment of the Commission for Health Improvement and the National Institute for Clinical Excellence which will help to drive up standards.
I refer also to the new statutory duty of quality on the chief executives of NHS trusts which ensures that the chief executives and the boards have responsibility
422
not just for management and financial issues, but for the overall quality of service within an individual NHS organisation.
Lord Crickhowell: My Lords, does the financial information that the Minister gave us apply to England, or to the health service in England, Scotland and Wales? We had an Answer yesterday indicating that the noble Lord was not responsible for Wales. We should be able to ask questions concerning the health service as a whole and to be clear on whether the answers represent only part or the whole of the United Kingdom.
Lord Hunt of Kings Heath: My Lords, the answers I have given today relate to England because that is my responsibility.
Earl Howe: My Lords, the Minister was unable to give a precise answer to my noble friend Lady Gardner. Has the noble Lord figures for the previous financial year?
Is the noble Lord aware that the Answer he gave to the noble Lord, Lord Clement-Jones, will baffle many people. Has the Minister read, as I have, interviews with doctors from numerous PCGs around the country all telling the same story: that a large part of the £600 million which the Secretary of State said would tackle waiting lists, winter pressures and prevent bed blocking has been swallowed up by paying off hospital debts? How does he explain those statements?
Lord Hunt of Kings Heath: My Lords, that is not the case. Some of that £600 million has been used to fund the provision of care which might have been financed from running up debts because of the pressures on the health service. However, the additional resource has enabled agreement at local level as to how those services are to be provided. It has also enabled us to meet identified pressures for the winter and to develop many of our services.
I think that noble Lords are being somewhat churlish in relation to the issue when one considers the extraordinary amount of additional resources that this Government are putting into the National Health Service.

Army: Response to Bullying Complaints
3.8 p.m.
Lord Ashley of Stoke Lord Ashley of Stoke asked Her Majesty's Government:
What evidence they have of bullying in the Army; and what steps they are taking to eliminate it.
The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean): My Lords, the Army does not tolerate any form of harassment. All allegations of ill treatment are thoroughly investigated with appropriate disciplinary action taken. A number of

423
measures have been introduced to enforce the policy of zero tolerance, including information on how to complain, a confidential telephone support line and equal opportunities material to explain the position of the Army on these issues. These measures are, of course, kept under review and are re-focused as necessary.
Lord Ashley of Stoke: My Lords, I am grateful to my noble friend for that reply. Does she agree that a call to tackle bullying is not a call for "soft soldiers"? Perhaps I may ask her a question of which I have given notice. Is she aware of the statement made to me in a Written Answer on 7th June 1988 in the other place to the effect that the Ministry of Defence was introducing a comprehensive programme in regard to bullying? Some 10 measures were involved, including the formal banning of improper initiation ceremonies. Has that programme been implemented? If so, in view of the fact that allegations of bullying and brutality are still being made, what further steps can the Government take?
Baroness Symons of Vernham Dean: My Lords, I agree wholeheartedly that such measures are not ones that will lead to "soft soldiers", to use my noble friend's term. I am aware of the statement made in 1988, as the noble Lord was kind enough to give me notice of his question.
In addition to the banning of initiation ceremonies, we have established additional posts in training organisations to allow officers and NCOs to devote more time to their supervisory role. There is guidance on how to complain about bullying. People can go not only to the commanding officer but to equal opportunities officers, the medical officer or the padre, and in the past 18 months a confidential telephone line has been introduced so that individuals can discuss these issues and seek advice. In addition, in February we published two booklets for all ranks providing specific advice, inter alia, about bullying.
Lord Chalfont: My Lords, does the Minister agree that it is possible to go slightly "over the top" on this matter? Life in the Army—I do not know why, of the three services, the Army has been selected for this Question—has always been fairly rugged. There has been a certain amount of what the Americans call "hazing", which is not quite the same as bullying as we understand it. Does the Minister further agree that, in contemplating this issue, if we are talking about actual ill-treatment and denial of human rights, we can take a little too tragically the subject of so-called bullying in the services?
Baroness Symons of Vernham Dean: My Lords, in theory the noble Lord has to be right. It is possible to go over the top about virtually anything. The use of physical strength or the abuse of authority to intimidate or victimise others or to give unlawful punishment is unacceptable behaviour which will not be tolerated in the Army. That is very different from a regime which allows for operational effectiveness,
424
which—I agree wholeheartedly with the noble Lord— is essential. Those in the Army do have to be physically robust and, where necessary, to display controlled aggression. I believe that those factors are properly spelt out in various ways, particularly in the Values and Standards pamphlets that have been circulated round the Army. If the noble Lord wishes, I will send him copies of those pamphlets; and I hope he will agree with me that they certainly do not go over the top.
The Lord Bishop of Oxford: My Lords, I wonder whether there is any evidence of an actual increase in bullying in the armed services since the time when many noble Lords served in Her Majesty's Armed Forces, or whether, today, we simply have a heightened consciousness of bullying that has always taken place in some form or another. If there is evidence of an increase, do we have any understanding of the causes?
Baroness Symons of Vernham Dean: My Lords, alas, I am not able to tell the right reverend Prelate how the statistics are moving because statistics relating to this matter were not kept until December 1997. However, I can supply figures for the complaints investigated since that time. In 1997 there were 118 complaints; in 1998, 100; and in 1999, 51. So far this year 16 complaints have been investigated. That indicates a downward trend in investigations, but not necessarily in complaints. We know, for example, that there have been over 3,000 calls to the telephone hotline in the past 18 months—although they may not all be about bullying. There is a means for people to make complaints and seek advice. I hope that the statistics now being kept will allow us to track what is happening as regards bullying.
Lord Ashley of Stoke: My Lords, I apologise for intervening again, but does my noble friend agree that it is nonsensical to claim that it is going over the top simply to ask for investigations into bullying? Will my noble friend tell the noble Lord, Lord Chalfont, that when I was campaigning on this issue in the House of Commons there was evidence and proof before courts martial: men in the British Army were found guilty of appalling conduct. There was evidence of men being tied up, stripped, having their genitals painted and being beaten and gagged. All these things are happening in the British Army, and the noble Lord says, "Don't go over the top". I did not go over the top. I simply asked the Minister to look into the whole question.
Baroness Symons of Vernham Dean: My Lords, I rather thought that the noble Lord, Lord Chalfont, considered that I was going over the top rather than my noble friend. To be fair to the noble Lord, I do not think he said that we were going over the top; he said it was "possible" to go over the top—as it is in any matter. I hope that I have made the position of Her Majesty's Government abundantly clear. The practices in initiation ceremonies to which my noble friend has alluded have been illegal in terms of Army

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discipline since the 1980s. It is now spelt out clearly to all Army personnel that what is expected in the Army is mutual trust and proper respect for individuals.
Noble Lords: Next Question!
Lord Chalfont: My Lords, perhaps I may—
Noble Lords: Chalfont!
Lord Chalfont: My Lords, as I heard my name mentioned a moment ago, I crave the indulgence of the House to say that I did not suggest that the noble Lord, Lord Ashley, was in any way going over the top. I know the noble Lord far too well for that. Nor was I suggesting that the noble Baroness was going over the top. She gave a good, straight Answer to a straight question. Although neither did so, it is possible to go over the top; many people do, and I wish they would stop.

Developing Countries: Tied Aid
3.17 p.m.
Baroness Whitaker Baroness Whitaker asked Her Majesty's Government:
What progress they have made towards phasing out tied aid to developing countries.
Baroness Amos: My Lords, discussions have been going on in the OECD for over two years to reach an agreement on the multilateral untying of development assistance to the least developed countries.
Despite considerable efforts by the UK, other like-minded donors and the Secretariat of the Development Assistance Committee, I am sorry to report to the House that, yesterday, a small minority of countries continued to block progress towards an agreement. We do not accept that this should be the end of the matter, and the Government will pursue all avenues to secure an early and meaningful agreement.
Baroness Whitaker: My Lords, I thank my noble friend the Minister for that inevitably depressing Answer. Bearing in mind that an astonishing 71.6 per cent of American aid is tied to American products, so that the receiving countries cannot use their own procurement strategy or indeed local procurement, can the Minister say with more precision what can be done to hasten agreement over untying?
Baroness Amos: My Lords, given the difficulties in agreeing a text at the recent OECD meeting, it must now be a question of political will. We shall continue to use our influence. Discussions will have to be undertaken at the highest levels, including at the forthcoming G8 summit in Okinawa. I hope that like-minded countries within the OECD will also use their influence. The outcome has been extremely disappointing. The last two G7 summits, in
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Birmingham and Cologne, urged action to secure early agreement on untying. This failure threatens the credibility of the OECD to deliver, and also sends mixed messages to G8 members who urge liberalisation on developing countries but cannot break the link between trade and aid in their own bilateral programmes.
Lord Howell of Guildford: My Lords, is not the problem that, while several important countries are refusing to play the same game, in principle we are all broadly in favour of untying aid, although I can see that not everyone's record is perfect? However, given the determination of some countries to continue to tie aid, will the Minister reassure us that British business and British exporters will not be placed in an unfair or disadvantageous position by premature unilateral decisions by the British Government and that she will work through multilateral decisions to see that everyone plays the game together?
Baroness Amos: My Lords, I assure the noble Lord that we take this matter extremely seriously and have been at the forefront of discussions in the OECD. However, we feel that the issue needs to be taken forward by all OECD countries. It has never been the intention of this Government to undermine the position of British business.
Lord Redesdale: My Lords, can the Minister say what action DfID has taken in building capacity in the procurement area so that countries can spend their budgets wisely rather than according to the size of the bribes being offered?
Baroness Amos: My Lords, DfID has taken action with regard to its own local procurement policies. I am pleased to be able to report to the House that, in the countries where we have piloted such initiatives, since 1997–98 the amount of local procurement has increased from 5 per cent to 12 per cent. We aim also to strengthen the capacity within developing countries for competent and honest procurement. In Tanzania, for example, we have a procurement consultant who is working with the ministry of health. We have taken a similar initiative with the forestry commission in Ghana, and we shall continue to examine the question of assisting developing countries in the whole area of procurement and corruption.
Lord Tomlinson: My Lords, as well as the OECD inquiries to which she referred, is my noble friend aware that a European Commission inquiry is being held into tied aid practices in EU member states? Will she encourage the Commission to conclude that inquiry as quickly as possible, especially in relation to EU competition and internal market policies? In that respect, is my noble friend in a position to say anything about DfID procurement policies in addition to that which she has already said about the local element of procurement?
Baroness Amos: My Lords, we are aware of the European Union action. We welcome any action

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which the European Commission can take in securing agreement across Europe on the issue of untying aid. My noble friend may be aware that such action is being taken by the Commission following an initiative by Action Aid and some 900 European NGOs on the issue of tying bilateral aid programmes. My right honourable friend Clare Short raised the issue at the development council of the European Union. She pressed the European Commission to take a much closer interest in the matter and we have been looking to the Commission for early action. Therefore, we are very pleased that it has now decided to take that action.
With regard to DfID's own performance, noble Lords may be pleased to hear that, in addition to the points that I made to the noble Lord, Lord Redesdale, in 1998 80 per cent of the UK bilateral aid programme was untied.

Zimbabwe: Elections
3.23 p.m.
Lord Howell of Guildford Lord Howell of Guildford asked Her Majesty's Government:
What consultations they have had with the United Nations authorities concerning the elections in Zimbabwe.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, we have been in regular contact with the UN over a period of months with regard to the elections in Zimbabwe. We are dismayed that the Government of Zimbabwe have not allowed the United Nations Development Programme to co-ordinate the activities of the various observer missions, a role that UNDP does well. However, we understand that a good degree of informal co-ordination takes place between the observer teams and we look forward to hearing the results of their endeavours.
Lord Howell of Guildford: My Lords, given the very unsatisfactory situation which the noble Baroness describes, can she tell us a little about what the Government believe will develop after the weekend? Is not the problem that, if Mugabe wins, he will have done so by thuggery, rigging, deceit and brutal murder? If the courageous MDC wins, nevertheless he will be president and there is a real danger of colossal violence. Can she tell us what the Government's policy will be next week when it will be vitally important to ensure that the whole international community moves in to support the forces of law and prevents this fine country descending still further into darkness and despair?
Baroness Scotland of Asthal: My Lords, although I endorse the concerns expressed by the noble Lord about the dire position in Zimbabwe, it is of the utmost importance that we await the outcome of the elections and also the outcome of the reports from the observers
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who are on the ground. They will be able to provide the best intelligence about how the elections have proceeded. It would be premature to say anything at this stage about what we plan after the elections.
Lord Marsh: My Lords—
Lord Avebury: My Lords—
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, I believe that there is plenty of time for both the noble Lords, Lord Avebury and Lord Marsh. I believe that I heard a request for the noble Lord, Lord Marsh, to speak first.
Lord Marsh: My Lords, I express gratitude to my sponsors. Can the Minister conceive of any circumstances in which the outcome of the election could be regarded as the process of a democratic free election? Does she not consider there to be a very real danger that at the end of this phoney exercise all that the observers will have been able to provide is a cloak of respectability for a ruler who does not deserve it?
Baroness Scotland of Asthal: My Lords, the most important matter is to know the outcome of the election. I do not like to speculate, but if we were to find that the opposition was successful and that, notwithstanding the appalling situation in Zimbabwe, the turnout meant that Mr Mugabe was no longer in power, very few people would say that the election should not have some cogency and be given recognition. Therefore, I believe that we must stand ready to make an accurate and clear-sighted assessment. We know the extent to which people have suffered in the interim. That will probably influence our judgment when we come to decide what to make of the elections once they are completed.
Lord Avebury: My Lords, can the Minister confirm that a consortium of local NGOs has been formed to monitor not only the elections but the observation or otherwise of freedom of expression and of assembly during the run-up period? As the international community has not been able to monitor the election satisfactorily, will the Government discuss with the United Nations the advantages of disseminating the report which will be produced by that local consortium and which will be of greater interest in view of the difficulties experienced by the United Nations?
Baroness Scotland of Asthal: My Lords, I am quite confident that all parties will want to garner as much information as possible about what has occurred on the ground during the elections. Therefore, I am relatively confident in saying that we shall look with great interest at the intelligence that has been garnered by the non-governmental organisations.
Baroness Young: My Lords, can the noble Baroness tell us whether the Government are in close discussion

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with other members of the Commonwealth, particularly African countries, about what might be done in the light of the outcome of this election?
Baroness Scotland of Asthal: My Lords, much vigorous debate has taken place with various members of the Commonwealth. Many members have taken an intimate interest in what is happening. As noble Lords already know, the UN has a presence there. Therefore, I can reassure the noble Baroness that we are very open to working with our partners—the Commonwealth, in particular—and they have all expressed a keen interest in what is occurring in Zimbabwe.
Lord Acton: My Lords, I have many relatives and masses of friends in Zimbabwe. Following on from the question of the noble Lord, Lord Marsh, does the Minister believe that the presence of the international observers has probably done something to reduce the violence slightly?
Baroness Scotland of Asthal: My Lords, we certainly hope so. We also hope that the presence of the international observers will give courage to the people of Zimbabwe so that they will at least attempt to register their view on how their country should properly be managed.
Baroness Park of Monmouth: President Mbeki was present at the summit in Feira, where there was a meeting on Africa. What did the Government and the other European Union powers do to persuade him to take more positive action than he has done so far, given the awful effects for South Africa as well as for Zimbabwe of the Mugabe policies?
Baroness Scotland of Asthal: My Lords, I cannot give the noble Baroness specific details, but I can reassure her that discussions about Zimbabwe have exercised the minds of all those who are aware of the election. We are very much in the forefront on that. I am sure that South Africa will be intimately interested in the outcome of the election in Zimbabwe.

Child Support, Pensions and Social Security Bill
3.30 p.m.
Report received.
Lord Northbourne Lord Northbourne moved Amendment No. 1:
Before Clause 1, insert the following new clause—
("THE BASIC PRINCIPLES
THE DUTY TO MAINTAIN
.—(1) The Child Support Act 1991 shall be amended as follows.
(2) In section 1, for subsection (1) there shall be substituted—
"(1) For the purposes of this Act, notwithstanding any other rights of the child or duties of his parents, each parent of a qualifying child is responsible for maintaining him."").
The noble Lord said: My Lords, in Committee, I expressed concern that the narrow emphasis of the Bill and of the Child Support Act 1991 on the financial responsibilities of a non-resident parent could well be misleading, by suggesting that they were the only important obligations on a non-resident parent. In their White Paper, the Government say:
"As explained in the Green Paper, we are convinced that one of the reasons for the failure of the existing child support arrangements is that they do not work properly with other family responsibilities".
However, the Bill perpetuates that situation, not making the slightest reference to other responsibilities, such as nurture, love, care, guidance and education.
In Committee, I suggested that we should use the Bill as a vehicle to define the obligations and responsibilities of the absent parent. That suggestion was rejected by the Minister. I now accept that she was right. With the help of the Library, I have done a lot of research and I now realise that the law of parental responsibility in this country is in a state of chaos compared with even such a near neighbour as Scotland. The Minister is right to say that to attempt to define parental responsibility in the Bill would be too ambitious.
However, there remain two things that we need to do in the Bill. The first is to ensure that it is crystal clear what the word "maintenance" means in the Bill—that it means only financial maintenance, because that is what the Government want it to mean. Secondly, we should make it clear in the Bill that neither it nor the 1991 Act in any way subsumes or reduces the responsibilities of a non-resident parent, other than the financial responsibilities to the child.
Section 1(2) of the 1991 Act absolves the absent parent of any responsibility for maintenance beyond paying over the money laid down in the Act. The Bill does not change that situation; it merely alters the basis for the calculation of the sums to be paid.
That is why the definition of the word "maintenance" is very important. I have found no definition in the Bill or the 1991 Act. The Government want the word to mean no more than financial maintenance, but is that really what it means? If "maintenance" were to be held by the courts to mean more than financial maintenance, it could seriously prejudice a child's right to other forms of care from the absent parent. There are grounds for believing that the Government's assumption about the meaning of the word could be challenged.
The Oxford English Dictionary gives nine meanings or usages of the word and 16 meanings for the word "maintain". These include two usages that support the interpretation of providing financial support, but there are several others that support other interpretations. They include
"The action of giving aid, countenance or support"
and
"To keep up friendly relations or correspondence with".
It would be useful to have a definition in the Bill. I have suggested one possible formulation in my Amendment No. 3.
My other two amendments address my concern that the 1991 Act does not make it explicitly clear that the Government and Parliament intend that the financial maintenance that is dealt with in the Bill is still only one part of the totality of a non-resident parent's obligations. My Amendments Nos. 1 and 2 are suggestions for achieving that objective. They would not detract from the Government's purpose or intentions for the Bill, but they would make a point that needs to be made—a point that I believe has the support of all sides of the House. I beg to move.
Lord Higgins: The House will have listened with respect to the noble Lord, Lord Northbourne, given his experience of social security matters. He has raised some broad questions that it is appropriate to address at the beginning of our debates. There is an argument for clarifying the definition of the word "maintenance". It will be of considerable relevance when we come to debate issues such as whether the absent parent's income should be taken into account. In Committee, the Minister and I had some discussion and dispute about the position of a particular parent without care and the extent to which they—and the parent with care—were contributing, other than in financial terms.
I shall listen with interest to what the Minister has to say about the other amendments. The noble Lord pointed out to me a few days ago that the preamble in the original Bill in 1991 was also deficient in a number of respects. Those of us who tried to work with the 1991 Act in another place over several years will feel that that is not the only deficiency in it. That is why we are now trying to improve it. This is a useful preamble to the discussions that we are going to have.
Baroness Carnegy of Lour: My Lords, I support the noble Lord, Lord Northbourne. In Committee, we had a general discussion on the noble Lord's amendment and whether or not it was a good idea to have a declaratory statement at the beginning of the Bill. I believe that Amendment No. 1 is a rather more limited declaratory statement which would be of assistance to lawyers when they are interpreting the Bill to clarify precisely what is the responsibility of both parents.
I also feel strongly that the noble Lord is right to say that it would be helpful to define what "maintenance" means. On this subject, it is extremely easy to talk round all the figures and relate them to the word "maintenance", with different ideas in our minds as to what is meant by that. Clearly, the Government mean something different for the resident parent than for the non-resident parent in terms of finance, although they believe that it will balance the whole thing out if the Bill as it stands were to be enacted.
I believe that this proposal is very helpful. I hope that the Minister will say something good about this, whether she accepts the amendments as they are worded or whether she agrees to bring back amendments which achieve the same end.
The Earl of Listowel: My Lords, I too support my noble friend's amendments. It should be made clear
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that discharging one's financial duties towards one's children is only one, and by no means all, of the duties that a parent owes a child.
3.45 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I know that the noble Lord, Lord Northbourne, met officials in the Lord Chancellor's Department yesterday and will be meeting the Lord Chancellor to discuss his longstanding concerns on the care of children and young people. His wider concern that fathers should have a role in the nurture of their children, whether or not they live in the family home, is of course being addressed in the Ministerial Group on the Family, chaired by my right honourable friend the Home Secretary. I have the pleasure to represent the DSS on that committee. Therefore, I am actively engaged in those discussions.
Amendments Nos. 1, 2 and 3 seek to clarify the scope of the Child Support Act 1991 by stating on the face of the Bill that a non-resident parent's obligations to his children go beyond the obligation to maintain children financially when the parents live apart. Amendment Nos. 1 and 2 make no difference to the effect of Section 1 of the Child Support Act 1991 but have the unfortunate consequence, I am sure unintended by the noble Lord, of obscuring the clear unambiguous language of the duty to maintain there set out. Section 1(2) of the Act states:
"For the purposes of this Act, an absent parent shall he taken to have met his responsibility to maintain any qualifying child … by making periodical payments of maintenance … of such amount … as may be determined in accordance with the provisions of this Act".
That means that maintenance is clearly defined as being about money and child support. Section 1 makes it clear that that is his responsibility. The wording of the provision,
"For the purposes of this Act",
makes it clear that the duties referred to are in no sense intended to override other parental duties. Amendments Nos. 1 and 2 obscure the language but do not add to it and Amendment No. 3 is unnecessary.
There are many other Acts of Parliament which set out the responsibilities of parents. As the noble Lord will be aware, the Children Act 11989 provides generally for the responsibilities of parents, as well as providing a means of determining financial support for children. I believe that those words may lead the courts to try to put a new, different and possibly more purposive construction on the wording which would not necessarily improve the operation of the Child Support Act.
We covered much of this ground when we had what was almost a Second Reading debate in Committee. It was accepted all round the House, and certainly on the Government Benches, that children have a right to emotional and financial support from both their parents. But this Bill, which amends the 1991 Act, focuses solely on the provision of financial support. While we share the noble Lord's desires to encourage

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wider parental responsibility, this Bill is not the place for such a provision. Although we absolutely support the noble Lord's concern that fathers should play an active part.
However, within this Bill, we are developing matters in ways which will help to meet some of the noble Lord's concerns: for example, by developing the face-to-face service, which allows local interviews with parents, including fathers; by signposting, which means our staff will be trained to refer both parents on to other organisations, including welfare agencies, Relate and so on. We are working with the National Council for One Parent Families, Parentline Plus and the Department for Education and Employment to ensure that the message gets across to young people—young men in particular—about what being a parent involves and the life-time commitment which having a child entails.
This Bill is about the child support rates which will make likely financial commitment clear to all. As I said, we shall be working across government, through the committee chaired by my right honourable friend the Home Secretary, to ensure that the wider concerns which the noble Lord has aired today are followed through. Therefore, we do not need the amendments because they will in no sense affect the wording of the Act but may cut across some of the wording in other legislation to the greater obscurity of all. With that explanation, I ask the noble Lord to withdraw his amendment.
Lord Northbourne: My Lords, I am grateful to the noble Baroness for her very full reply. I cannot deny that I am disappointed that she did not feel that she could be more positive. I do not accept that Clause 1(2) of the Child Support Act 1991 adequately defines the responsibility to maintain. It suggests one item—the paying of maintenance—which could be a part of the responsibility to maintain. There are other parts.
It is difficult to follow exactly what the noble Baroness said and the legal implications of it as we listen in the Chamber. I shall read what she said but I by no means undertake not to come back to this matter on Third Reading. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 2 and 3 not moved.]
Clause 1 [Maintenance calculations and terminology]:
Baroness Buscombe Baroness Buscombe had given notice of her intention to move Amendment No. 4:
Page 2, line 28, at end insert—
("( ) Any change in the nature and qualification of maintenance variations shall be agreed and ratified by Parliament before a change can be implemented.").
The noble Baroness said: I shall not move this amendment but I shall move Amendment No. 26 when we reach that point.
[Amendment No. 4 not moved.]
Schedule 1 [Substituted Part I of Schedule 1 to the Child Support Act 1991]:
Lord Higgins Lord Higgins moved Amendment No. 5:
Page 98, line 15, at beginning insert ("Subject to sub-paragraph (3)").
The noble Lord said: My Lords, Amendment No. 5 is a paving amendment. We then come to Amendment No. 6 which suggests that there should be an upper limit to child maintenance of £200 per week for each qualifying child.
We debated this at some length on 8th May in Committee. It seems to us very important indeed that there should be some limit on the extent to which the absent parent, whether it be male or female, should contribute to the provision of maintenance of each child, which we were discussing only a moment ago.
In this Bill, we are creating something, as I understand it, which does not exist at all in law generally; namely, that the child has a right to have a share of a parent's income. While we wholeheartedly support the basic objectives of the Bill and that both the parent with care and the parent without care should have responsibility for the maintenance of the child, we believe that it is appropriate that the amount which is transferred from the absent parent to the parent with care for use in providing for the children of the relationship should take into account the extent to which the absent parent of whatever sex has income and the extent to which that income should be, as of right, the child's.
If we do not do that, one would imagine that there is clearly a limit which the parent with care could spend on a particular child. In this amendment, we have suggested a precise figure of £200 per week for each child. Of course, that amounts to a considerable annual amount of transference of income from one parent to the other for looking after the child.
However, it is the case that if one goes far beyond that limit—at present the sum involved is completely unlimited—what we would get to a considerable extent is a form of espousal maintenance rather than child maintenance. That gives cause for concern.
The Select Committee in another place considered this issue. The chairman's draft of the report stated:
"In the final analysis, the child support formula should be clearly seen to be related to the cost of bringing up children and not as a straightforward 'tax' levied on a non-resident parent. We recommend that the Government should re-examine the possibility of inserting in the legislation an upper limit on the automatic application of the revised CSA formula".
As I understand it, in its final report the committee did not reach that conclusion. However, I think there is a great deal to be said for it; otherwise, we would see the transfer of considerable sums from one parent to the other. When one reaches a certain limit, one is bound to have doubts as to whether it would even be possible, let alone appropriate, for the parent with care to spend that particular amount on the child.
I pointed out in Committee that the situation is even more complicated if several marriages are involved, or some marriages and different relationships between a particular individual and a series of partners, married

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or not. I know only too well, from my own constituency experience, that that can give rise to considerable difficulties—not least because there is often a great deal of bitterness between the first and second families. Such difficulties are sometimes exaggerated. Not infrequently, in fact nearly always, the second family finds that the main earner is earning more than he did when he was with the first family. It is rare that the reverse is true. Therefore, the second family tends to think that it should receive more, which complicates matters.
I hope that we might have a sympathetic response from the Minister on this point. Overall, we strongly believe that it is not the task of this legislation to allocate income from one partner to the other. There is the question of whether adequate maintenance is provided—we are talking here in financial terms, not in the terms in which the noble Lord, Lord Northbourne, spoke a moment ago—and of whether it is appropriate that without limit the income of the parent without care should be redistributed to the single-parent family which exists at that stage. I hope that the Minister will respond favourably.
There are other complications. My understanding is that if that is not so, particularly in situations where the parent without care has an extremely high income, there may be repercussions in terms of what the appropriate marital settlement will be and so forth, and whether that will affect that situation. On this occasion, I shall not go into that kind of complication, which can be considerable. The simple point is the one I have already made. I hope that your Lordships will be prepared to agree to it.
Lord Northbourne: My Lords, I support the noble Lord, Lord Higgins, and should like to comment on an interesting and important amendment which relates to the issue of what is meant by the word "maintenance". Is it money being paid over for the maintenance of the child, or for the maintenance of the spouse who is looking after the child? Does the spouse or partner who is looking after the child have any obligation to spend the money on the child? I can think of several cases which have come to me in the context of a small charitable trust with which I am involved in which a deserted mother comes and says, "Here is my child. He is in a fee-paying school and is happy there"—he may be a child who needs special education—"but I do not have enough money to pay for his education".
One can also envisage a situation where a wealthy absent parent pays over a large sum of money. It is possible to conceive of a mother (or indeed of a father who is the resident parent) not spending it on the child. I repeat the question which I launched in connection with my own amendments: what does the word "maintenance" mean?
Earl Russell: My Lords, perhaps I may briefly restate the position of these Benches. After a good deal of discussion we arrived at the common general principle that children should be entitled to share in the increasing wealth of their parents. That means that we cannot support the noble Lord, Lord Higgins, on
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this amendment. However, were he to choose to press Amendment No. 8, he might receive a different answer.
Perhaps I may raise a slight query about the statement made by the noble Lord, Lord Higgins, that there is nothing in law to say that a child is entitled to a share in the income of its parents. I know of at least one court judgment which appears to me to rest on the contrary principle. However, as I have never been able to find a lawyer willing to expound the principles of that judgment, I cannot clarify the point. Before we return to this matter, as we undoubtedly will, perhaps it would be worth while for all of us to try for a clearer understanding of the legal position than we have at present.
Baroness Carnegy of Lour: My Lords, it appears that the noble Earl's party has changed its mind on this point, or at least that the noble Earl has changed his mind.
Earl Russell: My Lords, I thank the noble Baroness for giving way. From when does she think that I have changed my mind or that my party has done so?
Baroness Carnegy of Lour: My Lords, I have not had time to read again exactly what was said by the noble Earl. However, I believe that he began his comments on this amendment by stating that the problem the noble Baroness has is that the Government are adopting a formula-based sense of justice. The more I contemplate it, the more it seems that the Government are saying, all through the Bill, that they have an idea of what a family should be; of what should happen when the family splits up and of the responsibilities of the non-resident parent. They are led to the conclusion that, as the noble Lord now says, the child is entitled to the growing wealth of both parents.
Earl Russell: My Lords, I am grateful to the noble Baroness. That principle was stated by my party before the Bill left the Commons with my prior knowledge and approval. So far as know, it has never varied.
Baroness Carnegy of Lour: My Lords, I apologise if I misunderstood the comments of the noble Earl. The noble Earl is absolutely delighted with the Liberal Democrats and I can see the Government backing them in this respect. However, for my part—
Baroness Hollis of Heigham: My Lords, I thank the noble Baroness for giving way. I was not backing the statements of the noble Earl, Lord Russell. I was merely confirming his account of what he had already said.
Baroness Carnegy of Lour: My Lords, that is great! I believe that what the Government are doing is not at all sensible. It is extraordinary to say that if a family which has broken up is, on both sides, increasing in wealth, the child is, therefore, entitled to a transfer of wealth far beyond the maintenance of that child.

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In this regard I remember the comments of the noble Lord, Lord Stoddart, from the Labour Benches. I am sorry that he is not in his place to endorse this. The noble Lord stated that he could not contemplate that a child should necessarily be entitled to the increased wealth of its parents. I believe he also said that he felt that until he was 60 he was better able to look after his own wealth than were his children who might be his heirs. He was the voice of common sense in this matter.
The Government have got this very wrong. I believe that once the public realise what can happen to an absent parent who has done very well and who loses much of his wealth to the spouse he has left at the expense of his new family, they will not think that this provision is sensible. However, I shall not go on because I think I have lost the attention of the Minister.
4 p.m.
Lord Renton: My Lords, I, too, support these two amendments. Amendment No. 6 is really of great importance. Indeed, I understand that those members of the legal profession, both barristers and solicitors, who have a great deal of experience in the practice of family law have made representations to the Government about this matter without any effect.
Quite frankly, I think that Amendment No. 6 is vital. Without it there would be a chaotic situation and it may cause serious injustice. The trouble is that the matter is presented in an over-simplified way in the Bill. It overlooks various factors; for example, a man may have two families or a man may be very prosperous but in declining health. One could enumerate the various factors.
Under the Bill as its stands in Schedule 1, paragraph 2, where there are three or more qualifying children, 25 per cent of the net weekly income of the non-resident parent will have to be paid for the support of the children. In the case of men who are less prosperous a similar position will arise with smaller figures, but the hardship could be greater. But in the case of a man who has an income of £100,000, he will be obliged, if he has three children to maintain, to pay £25,000; that is to say, 25 per cent of his net weekly income. In some circumstances that may not be too bad, but I should have thought that it is more than is needed for the maintenance of the children in ordinary circumstances, even in a prosperous family. Therefore, it could create a very high burden.
The amendment goes a good way in that direction but is not quite so burdensome. The amendment's suggestion of £200 a week would produce not £25,000 but a maximum of £10,400 a year per child. That is reasonable for the maintenance of the three children. If the question arises of their going to fee-paying schools that is a matter which should be dealt with separately, and I hope will be. So it seems to me that this is really one of the most important situations that arises under the Bill and I strongly support the amendment moved by my noble friend.
Baroness Hollis of Heigham: My Lords, I listened carefully to the points made by the noble Lord, Lord Higgins, and others. The noble Lord, Lord Higgins, explained the argument for a maximum level of maintenance liability with characteristic clarity and precision. I accept that the arguments on this point are finely balanced; that there are good arguments for and against setting a cap on the level of child support to be paid by wealthy parents.
The noble Lord argued, with support from others in your Lordships' House, that child support liability should be limited to a level which meets the needs of children, and that where maintenance exceeds a certain level it inevitably becomes spousal maintenance. Our child support rates are based on the view that non-resident parents have a duty to put their children's best interests first. This means that they, like resident parents, should pay what they can reasonably afford. Our judgment is that 15 per cent of net income for one child, 20 per cent for two children and 25 per cent for three children or more is reasonable, and reflects the level of support provided by parents in intact families for their children.
Of course, this means that children of wealthy parents will receive a higher level of child support than children of poorer parents. But that reflects the position of children living with both their parents. There is no intention that child support should provide maintenance for the parent with care, only to put children living apart from a parent in broadly the same position as they would be were they living with that parent.
However, I accept that there are difficulties with this approach where non-resident parents have very substantial assets or, indeed, as the noble Lord, Lord Renton, said, where there may be a second family and other dependants. In such cases, the parent may derive substantial income from a wide range of sources, and, equally, a regular salary may be less likely to reflect the true income available to support the child than is the case for other parents.
In addition, as your Lordships made clear, it is the case that financial arrangements for very wealthy families on divorce or separation can be substantially more complex than for other families—a point that has been put to us, as the noble Lord, Lord Renton, said, particularly by the family solicitors. I should emphasise here that we have no intention of forcing wealthy families to come to the CSA. Where maintenance arrangements for the children are such as to obviate the need for income support payments, parents will be free, as now, to make maintenance agreements and the courts will be able to make orders for child maintenance based on those agreements. In general, we expect these agreements to shadow the child support rates.
However, as your Lordships will be aware, we are providing, in Clause 2 of the Bill, for either parent to have the option of coming to the CSA if court-based arrangements are unsatisfactory. But, while the courts are able to make sophisticated judgments on the level of available income, the CSA will operate a relatively

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simple set of rules for determining net income. This can mean that the courts could have difficulty in shadowing the CSA rates where the parents are wealthy and have complicated financial arrangements. The noble Lord, Lord Higgins, is nodding. This is a point that he also made. If either parent can unpick complex financial arrangements where there are high levels of income by coming to the CSA, it may be that in these extremely unusual and rare cases the job of the courts becomes very difficult if not impossible.
Given that these concerns apply only to wealthy non-resident parents, I am prepared, without commitment at this stage, to consider whether setting a maximum liability at a relatively high level would assist. It may be that with a fixed limit and the ability of the parent with care to apply to the courts for a top-up—as he or she now can—the courts would find it easier to settle the other parts of the financial package. This, in turn, would mean that we were able to address many of the apparent difficulties associated with giving parents the option of using the CSA even though they have gone through the courts for their broader financial package.
If that is helpful to your Lordships, I am willing—as I say, without commitment—to take this away. Bearing in mind the arguments that have been raised today I should obviously come back to the matter at Third Reading. That being so, it may be that the noble Lord, Lord Higgins, will withdraw his amendment.
Lord Higgins: My Lords, one knows that the Minister has herself been heavily engaged in the preparation of this particularly difficult Bill, certainly so far as concerns the Child Support Agency side, and has obviously given it considerable thought. Therefore, we welcome her response. It was perhaps a little uncertain. She began by saying "without commitment" and then later said that she would return to the matter at Third Reading.
Baroness Hollis of Heigham: My Lords, I said I hoped to come back. Perhaps I may make my position clear. I am clear in my mind—and this has been reinforced by the points made by the noble Lord, Lord Renton, today—that this matter is embedded in wider complex issues involving the courts. What I am saying to the noble Lord, Lord Higgins, is that if there is a way in which we can make the broad arrangement satisfactory, I am happy to reflect on the matter and seek to be helpful.
Lord Higgins: My Lords, over the years one has had to assess whether or not the reply by a Minister on a specific amendment is sufficiently watertight to be accepted. On this occasion the Minister has been very helpful. There is obviously a question as to the numbers involved and that is something we shall need to consider. We shall table an appropriate amendment at Third Reading but hope it is pre-empted by a satisfactory amendment from the Minister. I thank her for giving great thought to the issue. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins Lord Higgins moved Amendment No. 7:
Page 100, line 14. at end insert—
("(3) Where the shared care ceases, amendments to maintenance shall be backdated to the date of cessation of shared care.").
The noble Lord said: My Lords, Amendment No. 7 is one of the more simple amendments, certainly in relation to the wording. It suggests that, on occasion, the arrangements for maintaining the child are shared and that, in some cases, shared care ceases. It is important to be able to specify the date when that change comes into effect because, generally, it has repercussions on the financial arrangements between the parties involved.
We feel that the appropriate moment is the date when the cessation of shared care takes place. I hope that this amendment is not controversial in the general atmosphere of goodwill generated by the Minister's previous reply. I hope therefore that she is able to accept the amendment. I beg to move.
Lord Renton: My Lords, I support my noble friend on this amendment. I hope that the Minister will welcome it. It dovetails completely with what appears to be the Government's intention as stated in the Bill.
Baroness Hollis of Heigham: My Lords, Amendment No. 7 relates to cases where the non-resident parent has a nil rate of liability because he is receiving a social security benefit and shares the care of the child.
As noble Lords will know—we have repeated this to the level of boredom—we want to encourage parents to share the care of the child and intend to introduce provisions to support that. I shall not trouble your Lordships by going through the details again. Briefly, instead of an abatement of maintenance occurring after 104 nights of care a year, it will now kick in after 52 nights a year, thus being every other weekend and thus encouraging that support.
That is the general principle. We are saying that non-resident parents who receive social security benefits will have a nil liability where they have any element of shared care. In the interests of the children we feel it right that in those circumstances shared care should lead to the removal of maintenance liability.
Perhaps I can remind your Lordships that a non-resident parent on a benefit such as JSA would normally pay £5 in contribution to child maintenance which, under our scheme, would go to the parent with care. We believe that to be a reasonable abatement if he is sharing care of the child for part of the week. Where the shared care arrangement ceases and the NRP is on benefit, instead of flat rate liability becoming due from the date when the agency is notified of the change, the revised liability will be back-dated to the time that shared care ceased; in other words, it is a timing amendment.
We want to make sure that maintenance due becomes maintenance paid. This means that maintenance levels should be stable and predictable and that we do not needlessly create maintenance debt.

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As now, we intend that the agency should conduct periodic case checks to ensure that the maintenance calculation is based on up-to-date information. Those case checks should happen on average every two years, although we expect the agency to check more frequently if benefit is being paid for the children and the facts of the case appear likely to change quickly.
No change will normally be made to the maintenance calculation between case checks unless the parents report a substantial change in the facts on which the calculation is based. In those circumstances, the new maintenance calculation will normally take effect from the date when the change is reported. That means both that parents continue to be clear about how much maintenance is due and that the new liability does not carry with it substantial debt for past periods. In that way we can support our key aim of maintaining compliance with maintenance responsibilities.
Since the effect of other changes will not normally be backdated in the new scheme, we can see no case for making special provision for changes in shared care, which is what the amendment asks us to do. Such an exception would add administrative complexity and is hardly necessary as the ending of shared care arrangements in particular would normally be reported straightaway by the parent with care. Obviously she has a financial interest in reporting the change because she would then receive the £5.
Our view is that we have struck the right balance on shared care and, with that explanation, I hope the noble Lord will withdraw his amendment.
4.15 p.m.
Lord Higgins: My Lords, it is perhaps rather typical of debates on this Bill that one tables a nice simple amendment and receives an unbelievably complicated reply.
I gather that the Minister is not proposing to accept the amendment. That much is clear. I partially understand her reasons for not doing so, not least because, apparently, the situation is only appraised every so often rather than continuously in relation to the shared care arrangements.
I wish to study exactly what the Minister said—as I am sure do other noble Lords—and if necessary return to the matter at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins Lord Higgins moved Amendment No. 8:
Page 100, line 32, at end insert—
("(3) The regulations shall in any event provide that the net weekly income of the non-resident parent shall be reduced in the circumstances mentioned in sub-paragraph (4) and by the method mentioned in sub-paragraph (5), but subject to the limit mentioned in sub-paragraph (6).
(4) The circumstances referred to in sub-paragraph (3) are where the parent with care has a gross annual income from all sources for the most recently completed financial year of more than £25,000.
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(5) The method referred to in sub-paragraph (3) is that for every pound by which the gross annual income of the parent with care exceeds £25,000 the net weekly income of the non-resident parent shall be reduced by one penny.
(6) The limit referred to in sub-paragraph (3) is that the net weekly income of the non-resident parent shall not be reduced by more than 50 per cent.
(7) The regulations shall in any event provide that net weekly income shall include both earned and unearned income.").
The noble Lord said: My Lords, Amendment No. 8 is concerned with the income of the parent with care. This is clearly an important amendment. In our view, it is unreasonable, in the circumstances described in the Bill, for the income of the parent with care not to be taken into account. It is quite possible, and perhaps not unusual, for the income of the parent with care to be significantly in excess of that of the absent parent. Therefore, in deciding how much of the absent parent's income should be allocated to the maintenance of the child, the income of the parent with care should be taken into account.
It is absurd, if the income of the parent with care averages around £200,000, that the absent parent on a very low income should continue to pay a significant amount to the parent with care without any adjustment. We are not suggesting that he should not pay anything. But allowance should be made for the income of the parent with care.
In the other place there was a great deal of discussion on the situation in Australia and so forth. But the argument is fairly straightforward. As your Lordships will see from Amendment No. 8, we put specific figures into the provision and suggest that the circumstances where we envisage this kind of situation developing are where the parent with care has a gross annual income from all sources for the most recently completed financial year of more than £25,000, and then we add a tapering arrangement. We are going back almost to the point of the noble Lord, Lord Northbourne, that it is a question of overall equality of the contribution made by each of the parents. We feel that that situation would not be achieved if no account at all were to be taken of the income of the parent with care, which is the situation at the moment in the Bill.
I gather from what the noble Earl, Lord Russell, said earlier that he is of a similar view to my own and I look forward to hearing what he has to say. I beg to move.
Earl Russell: My Lords, I shall not detain the House long. We are prepared to offer our support for this amendment. We did not find the Minister's arguments against it in Committee entirely convincing. We understand the principle that care is to be set against contribution. That has not at any stage been disputed. However, where there is gross inequality of wealth, which neither the Minister nor I view with any great degree of favour, the inequality may be so great that the care is not sufficient to be set in the scale against it.
These are the only circumstances to which the amendment as drafted were intended to apply. It is a very modest amendment. It is designed to deal with a

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principle which is big in theory but applies to only a small number of cases. We also think that acceptance of the principle is probably vital to consent being accorded the legislation outside, which I imagine the Minister wishes to see. If the noble Lord, Lord Higgins, wants to take the matter further, we will support him.
Baroness Gale: My Lords, this amendment argues the case that if the income of the parent with care, who in most cases will be the mother, is more than £25,000—only a small number of women would come into that category—the absent parent should pay a lower amount towards the maintenance of the child. It would be extremely unusual to have a situation in which the father earned less than the mother.
It has been argued that surely the needs of the child must be paramount and that the child should share in the wealth of both parents. However, the child would be penalised, and it is the child about whom we should be caring, rather than the absent parent. It is said that because the mother happens to be earning a large amount, then the absent parent should pay less. That means that the absent parent would be a beneficiary and the child would lose.
Baroness Carnegy of Lour: My Lords, I think the noble Baroness has misunderstood the amendment. No doubt my noble friend will confirm that when he replies. Sub-paragraph (4) of Amendment No. 8 refers to,
"a gross annual income from all sources".
It therefore includes income from savings. One has to remember that quite often a mother who is the parent with care may have inherited money from her family or married somebody with just an earned income, and the family is set up in a way which reflects the mother's circumstances as a result of inheritance. Not an enormous amount of money is required to produce such an income; it could well happen.
I believe that the Bill as it stands will result in a perception of unfairness. The concept of fairness is, of course, very important. That is because the events surrounding the break-up of a family will inevitably attract discussion. Other people will talk about them; the circumstances will be known. In my opinion, therefore, it would be a great mistake to allow the Bill to remain in its present form because, if it is seen to be very unfair, it will bring the whole measure into disrepute.
Baroness Hollis of Heigham: My Lords, Amendment No. 8 seeks to change the way the maintenance liability of a non-resident parent is calculated in cases where a parent with care has a gross annual income, from all sources, in excess of £25,000. I am not even sure whether, for example, "all sources" includes a new partner's income or whether it refers only I o that parent's earnings.
None the less, the amendment provides for the net weekly income of the non-resident parent (upon which child support liability is based) to be reduced by a
444
penny for each pound by which the gross annual income of a parent with care exceeds £25,000, subject to there being a limit which would prevent the non-resident parent's net income being reduced by more than 50 per cent. That would lead to a consequential reduction in the amount of maintenance payable in affected cases. The amendment also provides for the calculation of a non-resident parent's net income to include income from both earned and unearned sources. I hope that the House will not support this move.
The amendment replaces the current complex child support scheme with a radically simpler system of rates which will be easier for parents to understand. One of the main reasons for the failure of the existing scheme, and why this legislation is necessary today, is that the current scheme depends on a vast amount of information being needed to work out liability. As a result, assessments take 26 weeks to make. As a result, before he starts to pay a penny, his payments are already in arrears. As a result, an adversarial relationship develops from the start with the CSA when it seeks to collect his maintenance because he is already substantially in arrears.
We are seeking to keep it simple. One of the key simplifications is that no account will be taken of the income of the parent with care. Our position is based on two grounds. The first is the question of principle. In that connection, I dispute the contention of the noble Baroness, Lady Carnegy, that her argument is fair and that the Government's position is unfair. Our first argument is one of principle and fairness. Our second argument is one of practicability. I shall deal with both of those points.
I deal first with the argument of principle. We say that the parent with care already contributes in kind. Who else pays the bills for the child's food, housing, clothing, schooling and, if that is what they have chosen, holidays, toys and equipment? The parent with care pays the bills. If she is earning a gross income of £25,000 a year and is asked to pay cash as well, your Lordships would be saying that she should pay twice, first by providing care and, secondly, by an additional cash levy. Yet everyone in this House knows that a child living with a parent with care on an income of £7,000 a year will inevitably have at least a financially very different and lower standard of living—I am not referring to emotional support—than a child living with a parent with care on an income of £25,000 or £30,000 a year. As the income of the parent with care increases, so does the child's standard of living, irrespective of the contribution from the non-resident father. Therefore, to ask her not only to allow the child—
Earl Russell: My Lords, is the Minister really saying that if the parent with care earns £25,000 and the non-resident parent is £1 or so above benefit level, the care on its own is sufficient to balance that inequality?
Baroness Hollis of Heigham: My Lords, yes. I shall return to that argument. I was about to say that I believe that the father's contribution of 15 per cent,

445
irrespective of whether he is £1 above £100—which is the correct figure, not £1 above benefit income, because up to then he pays £5, as I am sure the noble Earl knows—should be independent of what the mother brings to it. That is his responsibility as a father.
The position of the noble Earl, Lord Russell, and perhaps of the noble Lord, Lord Higgins, is that the father's contribution, whether it be 15 per cent, 10 per cent, 14 per cent, 22 per cent, or whatever, according to the number of children, should fluctuate up or down, not according to his income but according to whether the mother's income goes up or down, according to whether or not she is in work, or indeed according to whether, though she is not in work, she happens to have snared a rich partner.
We believe that the father's contribution should vary only according to his income and his second family, and not hers. Otherwise, it would create a gross unfairness between two fathers, both of whom may be £1 over the benefit level, in the words of the noble Earl, Lord Russell, but one of whom, whose ex-partner may have married a rich man, pays less than the other, whose ex-partner still remains on benefit. That is deeply unfair, and I hope that the noble Earl, Lord Russell, will recognise that. It is deeply unfair between fathers with the same income and the same responsibilities, but whose contribution on this formula would vary according to what the mother has done.
4.30 p.m.
Earl Russell: My Lords, the Minister says that this proposal is deeply unfair. But has she heard of the principle, "To each according to his need"?
Baroness Hollis of Heigham: Yes, my Lords. But this is a case of, "From each according to his needs"—in other words, from each person according to his ability to pay. But the needs here are those of the child. The noble Earl would construct a situation where the parent with care is contributing in kind through maintenance support and in cash, especially if it has come from a husband—she does not necessarily need to have earned it. The noble Earl seems to be espousing a situation where a non-working parent with care may be getting her money and be supported by a new partner, whose income would, therefore, allow the biological father of the child to reduce his financial responsibilities to that child. Does the noble Earl really think that that is right? I do not.
The father's obligation to his child is independent of what the parent with care may be doing—whether she is on benefit, married, in work or not in work. His should be an ongoing commitment that reflects his income and his responsibilities, not hers. She is already contributing to the well-being of the child through her support in kind.
The first argument is one of fairness. Noble Lords opposite wish to make the parent with care pay twice over, especially if she is fortunate enough to have
446
married a wealthy man. The second argument is one of practicality. It is hard to imagine that there will be many parents with care with incomes of £25,000 within the CSA system. As far as we know, the number is about 200 out of a caseload of 1.2 million. In order for the CSA formula to work, all we take into account at present is the income of the fathers, because we are saying that the parent with care is contributing in kind through her support of the child. So the agency is making 1.2 million assessments of the income of the fathers—the non-resident parents.
If we were to accept the amendment, we would have to double the number of those assessments because we would need to assess the income of the parent with care. Therefore, instead of 1.2 million assessments, we would be assessing 2.4 million incomes. But what about the situation as regards the stepchildren in the second family? If there are stepchildren in the second family—who, in all decency, we are treating in exactly the same way as the biological children of the non-resident parent—we then have to look at the capacity of the non-resident parent's new partner to support the stepchildren. Well, half of them have remarried and one-quarter of them have stepchildren, so not only would we have 2.4 million examinations of income; we would also have something like 3 million examinations of income to consider.
Equally, the parent with care may have more children in her new relationship. So we would have to offset that against this whole formula in the same way as we are doing for the non-resident parent. This means that we would then have to look at her partner's new income and thus would have carry out up to 3.5 million, perhaps 4 million, assessments of income, instead of 1.2 million assessments, just to pick up 200 parents with care. Instead of making an assessment of one person—namely, the non-resident parent—based on his earnings in a simple ready-reckoner form, we would, under the amendment, have to assess not only that income but also her income, his new partner's income and, possibly, the income of the parent with care's new partner just to catch the income of 200 parents. Moreover, as a result of having done so, the abatement in his formula—the payment that he makes—is likely to be trivial.
We would have to assess 4 million people in order to catch 200 parents. As a result, judging from what we know of those parents' income, the total effect on the non-resident parent's payments would be trivial. Perhaps I may give your Lordships an example. The woman earns £28,000 a year. Very few non-resident parents with care have earnings of £28,000 a year. He earns £15,000 gross—that is, about £10,000 to £12,000 net and has one child. Under the Government's scheme, he would be paying £38 a week, but under the formula proposed that would be abated by just £5 a week. However, another father on similar income and living in similar circumstances with the parent with care on an income of £20,000, rather than £28,000, would pay £38 a week.
So we would have assessed the income of 3.5 million or perhaps 4 million people to pick up 200 incomes of parents with care. As a result. we would have to spend

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another £10 million on technology and there would probably be several weeks of delay and complexity because of possible arrears or possible errors. At the end of the process, we would get just a trivial reduction in the maintenance that the non-resident parent would pay. It is neither practicable nor fair. Therefore, if the noble Lord wishes to test the opinion of the House, I hope that noble Lords will not support these amendments.
Baroness Carnegy of Lour: My Lords, has it occurred to the Minister that a very rapid increase may develop in the prosperity of women as against men in earnings, as well as in income from savings? This whole argument is based on a certain formula and on the Treasury's fear of the complication of the exercise. I am concerned about fairness for individuals. People matter. Does the noble Baroness realise that the situation may change and that those figures may not remain relevant?
Baroness Hollis of Heigham: My Lords, I do not want to be discourteous to the noble Baroness, but this is the Report stage. We had a very full debate on the issue in Committee. I am trying to keep my remarks tight because there are many amendments to deal with tonight. I very much hope that the noble Baroness is right; indeed, I expect it to be the case that women's prosperity will grow. But any woman who is not on benefit does not need to contact the CSA. I hope that the noble Baroness understands that. As far as we are concerned, women who are not on benefit are private cases and do not need to approach the CSA. The more women's prosperity grows, the less likely they are to turn to the CSA. Therefore, the issue raised by the noble Baroness simply does not apply.
Lord Higgins: My Lords, I listened with great care to the comments made by the Minister. What the Government now propose is a very major simplification. But throughout this matter, which goes back to 1991, it has been a question of balancing simplicity against fairness. The same is true as regards our tax system: we have developed a tax system that has become increasingly complicated in order to achieve a greater degree of fairness. However, the point made by my noble friend Lady Carnegy—namely, that what is important here is the perception of whether it is fair—is also of some significance. Great difficulty will be experienced in getting people to accept that it is fair to take into account the income of the absent parent only and not that of the parent with care.
There has, I believe, been some difficulty in making contact—if I may put it that way—on part of the argument, which was also true of the Committee stage. At the beginning of her remarks, the Minister said that the parent with care is the one who is paying the bills. Yes, that is true. But the question is: who is providing the money to pay those bills? In this case, it is, generally speaking and to a significant degree, the absent parent—
Baroness Hollis of Heigham: No, my Lords. I am sorry—I am breaking my own conventions here—but
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what the noble Lord says is not true. The average contribution of a man in full-time employment will he £31 per week under our scheme. Perhaps I may tease your Lordships and say that only a bloke could think that you can bring up a child and pay for clothes, food, housing, heating, utilities, cleaning, toys, holidays and school expenses on £31 a week.
Lord Higgins: My Lords, those parents are quite clearly making a contribution. But, given their relative circumstances, the question is whether it is an appropriate contribution for one to make as against the other. We accept that there is a relatively small number of parents with care in these circumstances, but we are saying that it is appropriate to take into account both sets of income, even though that may involve a greater degree of complexity. The Minister referred to adversarial relationships. Our amendment would not increase the degree of an adversarial situation between the CSA and the absent parent. The latter will obviously feel that it is fairer if the income of the parent with care is taken into account.
It is also true to say that the parent with care with an income over the levels we have specified may feel that that results in a degree of conflict between her and the CSA. We are not asking the CSA to assess anything extraordinarily difficult—certainly not at these levels of income where, presumably, the figures are already prepared by the individual concerned for other purposes.
I have listened with great care to what the Minister said. However, I feel that this is a matter on which we should test the opinion of the House, given the arguments which have been put forward on both sides.
4.39 p.m.
On Question, Whether the said amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 94; Not-Contents, 124.

Division No. 1

CONTENTS

Addington, L.

Courtown, E.

Alderdice, L.

Craigavon, V.

Alexander of Weedon, L.

Cranborne, V.

Allenby of Megiddo, V.

Darcy de Knayth, B.

Anelay of St Johns, B.

Denham, L.

Astor of Hever, L.

Dholakia, L.

Attlee, E.

Dundee, E.

Avebury, L.

Falkland, V.

Barker, B.

Feldman, L.

Beaumont of Whitley, L.

Fookes, B.

Blaker, L.

Gardner of Parkes, B.

Boardman, L.

Geraint, L.

Brabazon of Tara, L.

Goodhart, L.

Bradshaw, L.

Goschen, V.

Brougham and Vaux, L.

Greaves, L.

Burnham, L.[Teller]

Harris of Greenwich, L.

Buscombe, B.

Harris of Richmond, B.

Butterworth, L.

Hayhoe, L.

Campbell of Croy, L.

Henley, L.[Teller]

Carnegy of Lour, B.

Higgins, L.

Clement-Jones, L.

Hogg, B.

449

Hooson, L.

Rees, L.

Howe, E.

Rennard, L.

Hylton-Foster, B.

Renton of Mount Harry, L.

Jenkin of Roding, L.

Renton, L.

Jopling, L.

Roberts of Conwy, L.

Knight of Collingtree, B.

Rodgers of Quarry Bank, L.

Lester of Herne Hill, L.

Russell, E.

Liverpool, E.

Seccombe, B.

Lucas, L.

Sharman, L.

Luke, L.

Sharp of Guildford, B.

McColl of Dulwich, L.

Shrewsbury, E.

McConnell, L.

Shutt of Greetland, L.

Mackay of Ardbrecknish, L.

Skelmersdale, L.

Mar and Kellie, E.

Smith of Clifton, L.

Marlesford, L.

Soulsby of Swaffham Prior, L.

Methuen, L.

Taveme, L.

Miller of Chilthorne Domer, B.

Taylor of Warwick, L.

Mowbray and Stourton, L.

Thomas of Gwydir, L.

Murton of Lindisfarne, L.

Thomas of Walliswood, B.

Northbrook, L.

Thomson of Monifieth, L.

Northover, B.

Tordoff, L.

Norton of Louth, L.

Trumpington, B.

Park of Monmouth, B.

Vivian, L.

Plumb, L.

Wallace of Saltaire, L.

Plummer of St. Marylebone, L.

Walmsley, B.

Razzall, L.

Warnock, B.

NOT-CONTENTS

Acton, L.

Goudie, B.

Ahmed, L.

Gould of Potternewton, B.

Alli, L.

Grabiner, L.

Amos, B.

Graham of Edmonton, L.

Andrews, B.

Greengross, B.

Archer of Sandwel, L.

Grenfell, L.

Bach, L.

Harrison, L.

Berkeley, L.

Haskel, L.

Bernstein of Craigwell, L.

Hayman, B.

Billingham, B.

Hilton of Eggardon, B.

Blackstone, B.

Hollis of Heigham, B.

Bragg, L.

Howells of St. Davids, B.

Brennan, L.

Hoyle, L.

Brett, L.

Hughes of Woodside, L.

Brookman, L.

Hunt of Chesterton, L.

Bruce of Donington, L.

Hunt of Kings Heath, L.

Burlison, L.

Hylton, L.

Carter, L.[Teller]

Irvine of Lairg, L. (Lord Chancellor)

Chandos, V.

Christopher, L.

Jay of Paddington, B. (Lord Privy Seal)

Clarke of Hampstead, L.

Cledwyn of Penrhos, L.

Jenkins of Putney, L.

Clinton-Davis, L.

Judd, L.

Cocks of Hartcliffe, L.

Kennedy of The Shaws, B.

Cohen of Pimlico, B.

King of West Bromwich, L.

Craig of Radley, L.

Lea of Crondall, L.

Crawley, B.

Levy, L.

David, B.

Lipsey, L.

Davies of Oldham, L.

Lockwood, B.

Desai, L.

Longford, E.

Diamond, L.

Lovell-Davis, L.

Donoughue, L.

Macdonald of Tradeston, L.

Dormand of Easington, L.

McIntosh of Haringey, L.[Teller]

Dubs, L.

McIntosh of Hudnall, B.

Elder, L.

MacKenzie of Culkein, L.

Evans of Parkside, L.

Mackenzie of Framwellgate, L.

Evans of Temple Guiting, L.

Massey of Darwen, B.

Evans of Watford, L.

Merlyn-Rees, L.

Falconer of Thoroton, L.

Milner of Leeds, L.

Farrington of Ribbleton, B.

Mishcon, L.

Faulkner of Worcester, L.

Mitchell, L.

Filkin, L.

Molloy, L.

Gale, B.

Morris of Castle Morris, L.

Gavron, L.

Morris of Manchester, L.

Gibson of Market Rasen, B.

Murray of Epping Forest, L.

GIadwin of Clee, L.

Nicol, B.

Goldsmith, L.

Paul, L.

450

Peston, L.

Strabolgi, L.

Ponsonby of Shulbrede, L.

Symons of Vernham Dean, B.

Prys-Davies, L.

Tomlinson, L.

Puttnam, L.

Turnberg, L.

Ramsay of Cartvale, B.

Turner of Camden, B.

Randall of St. Budeaux, L.

Uddin, B.

Rea, L.

Warner, L.

Rendell of Babergh, B.

Warwick of Undercliffe, B.

Richard, L.

Weatherill, L.

Scotland of Asthal, B.

Wedderburn of Charlton, L.

Serota, B.

Whitaker, B.

Shepherd, L.

Whitty, L.

Shore of Stepney, L.

Wilkins, B.

Simon, V.

Williams of Elvel, L.

Smith of Gilmorehill, B.

Williamson of Horton, L.

Stone of Blackheath, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.50 p.m.
[Amendment No. 9 not moved.]
Clause 2 [Applications under section 4 of the Child Support Act 1991]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 10:
Page 2, line 41, leave out subsection (2).
The noble Baroness said: My Lords, in moving Amendment No. 10, I shall speak also to Amendments Nos. 11 to 20.
Perhaps I may begin by reaffirming that our overriding interest—which I believe is shared by all Members of the House—is the welfare of children. With that priority in mind, we are very concerned to see significant improvements in the CSA. We listened with care to what the Minister had to say in Committee and, notwithstanding her very clear and full reply, we have felt it nevertheless necessary to revisit the issues at Report stage. It is necessary because we believe that the provisions in Clause 2 will have an enormous impact upon the system—an impact that will not necessarily improve the CSA.
The provisions in the Bill as currently drafted mean that any party, whether or not on benefit, in receipt of a court order after the commencement of the Act will be able to approach the Child Support Agency to have their child maintenance reassessed after 14 months. This may and will cause many problems.
It will see the end of clean-break settlements between husband and wife which provide certainty to both parties and, vitally, to the children of the relationship. It will tie the hands of the courts, which will be forced to assume child maintenance in line with the CSA's formula, even when it is totally inappropriate and unjust to do so. It will make the negotiation of a package of measures almost impossible, as each party will refuse to agree terms knowing that this sword of Damocles will be hanging over their heads with the potential to undermine completely an agreement made in or out of court. It will result in a more confrontational process, with the risk of domestic violence.
The Bill will limit the ability to achieve resolution through mediation, or orders by consent through the new ancillary relief scheme. It will also increase

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spending on legal aid. It will skew maintenance agreements, with the non-resident parent likely to want to pay spousal maintenance purely as a bargaining mechanism, to be traded off against an increase in child maintenance brought about by a referral to the CSA. It will increase the use of sales and charge back and other arrangements relating to the family home, which will be detrimental to children and ex-wives.
The provision runs counter to the fundamental principles of mediation and negotiation that have guided family law reform for more than a generation—principles that complement the general direction of European law and practice.
How do we respond? It is widely felt that, at present, the jurisdiction of non-benefit cases, including top-up, should remain with the courts. Parties must be able to make their own binding agreements. Subsequent referral to the CSA, as now, should be possible only if one of the parties claims benefit or if the parent with care wishes to use the powers of the agency to enforce collection. In the latter case, the agency should be able to collect the maintenance level agreed by the court.
Our amendments seek to respond to these proposals. In our efforts to allay some of the concerns I have raised, I should like to draw the Minister's attention to Amendment No. 15, which was tabled only a few days ago prior to Report stage. It is a probing amendment designed to gain clarification of the Minister's statement in Committee on 8th May regarding the provisions in Clause 2, which are recorded in Hansard at cols. 1301 to 1309. The Minister indicated that,
"Very simply, no private cases need ever come to the CSA…Only those cases where the parent with care is on a prescribed benefit—normally, income support—would come to the CSA".—[Official Report. 8/5/00; col. 1305.]
Amendment No. 15 is designed to confirm that cases in these circumstances will be accepted by the CSA, as well as cases where maintenance payments are not being paid reliably and the parent with care wishes to approach the CSA.
If cases need only come before the CSA 12 months after a court order is made where the parent with care goes on to a prescribed benefit, couples who agree financial arrangements that are subsequently converted into court orders will continue to be able to do so in the future. The courts will be able to regulate and vary where necessary the maintenance agreement over the following years.
Parents will also have a wide ability to make agreements between themselves. They could, for example, trade off capital or spousal maintenance in return for differing levels of maintenance for the children. The freedom to do this would be lost if either party were able to renege on an agreement by approaching the CSA after 12 months in the belief that they could better an agreement that was fairly made between them previously. Neither party would be prepared to make concessions or a trade off if they thought it could be overridden in a year's time by the
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CSA, which would make a completely fresh assessment and completely ignore the concession or trade-off which was made 12 months previously.
Clause 2 would also undermine government policy on family matters—which is, wherever possible, that parents should be encouraged to enter into mediation and discussions in order to settle spousal maintenance. There are circumstances where parents may wish to make agreements without involvement from the CSA, and these could include the following.
First, the parents could agree that the payments for the children will be greater than the CSA would assess. The most common reason for this is likely to be in return for a trade-off—for example, the mother will agree to make no maintenance claims for herself (known as a clean break) in return for a better level of maintenance for the children. This can have benefits all round. The non-resident parent is happier to pay the money because it is deemed to be going to the children, and it gives a definite length to the maintenance obligation. In turn, the mother no longer has to concern herself about forming new relationships and the effect that that could have on the maintenance.
Secondly, parents could agree to a lesser sum than the CSA would assess. Again, this will often be as a result of financial trade-off. For example, the non-resident parent may transfer capital or the house to enable the mother and child to remain housed, with the mother accepting a lesser level of maintenance for the children in return. The scope for this kind of settlement is likely to increase under the new CSA where the resident parent's income is no longer taken into account. One could have situations where the resident parent works and has sufficient income, but there is a need for capital to secure accommodation for the children.
To benefit from these exemptions the parents need to have their agreements approved by the courts. This provides an important protection against a parent being pressurised into unsuitable agreements, while, at the same time, providing a straightforward and established procedure. It is a procedure that is frequently used when divorcing parents have been able to reach agreement on general financial aspects, because it enables them to ask the courts to confirm the terms of an overall settlement that may well include spousal maintenance and capital at the same time as child maintenance.
The effect of allowing the CSA to consider cases that were decided in the courts 12 months previously would mean that either parent could call upon the state to intervene and override an agreement that they had reached, even if that agreement had been reached after full advice and after a court had approved the terms. On the other hand, one can see many benefits in allowing the current situation to continue, which enables separating parents to agree their own financial arrangements, subject to the protection of court approval, which will ensure that those arrangements are both reasonable and realistic.
Finally, I should like to turn in particular to Amendment No. 20, where the court is to consider a variation. Briefly, the new arrangements will allow a

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court order to be assessed after it has been in force for 12 months, although the assessment will in fact take place after 14 months—12 months plus two months' notice. At present, this assessment cannot take place, but a court can vary an existing order. Under the new arrangements, it will not be possible to apply for a variation, even if both parents wish so to do. If they can agree, they will have to go through the rigmarole of discharging the old order and making a new one, which is all grist to the lawyers' mill. If they cannot agree, they will be forced to go to the CSA. I beg to move.
5 p.m.
Lord Goodhart: My Lords, I rise to support what has been said by the noble Baroness, Lady Buscombe. We have always held the position that the child support system is basically crude and formulaic. It is far less effective in reaching fair and balanced arrangements than maintenance orders made by the court on the basis of the facts of the individual case or, even better, agreements reached between the parties and approved by the court.
The only advantage offered by the child support system is its cheapness, although even that seems to be a matter of considerable doubt. Our view, therefore, is that it is both wrong and counter-productive, where it is possible for orders to be made by the court or by agreement between the parties, for the result which will have been worked out based on the individual circumstances to be capable of being overridden on application to the CSA by whichever party feels that they would do better out of it, thus applying this very crude child support formula. For that reason, we feel that these amendments are plainly a move in the right direction and we support them.
Baroness Hollis of Heigham: My Lords, this group of amendments, so clearly and ably spoken to by the noble Baroness, Lady Buscombe, concerns the relationship between the courts and the CSA and their relative jurisdictions in the context of child maintenance. It is important that the reforms we are proposing provide a service for all parents and children who need to settle child maintenance issues. The new relationship between the CSA and the courts provided by Clause 2 ensures that this will be a reality.
The simple and predictable rates of child support liability will help parents, regardless of whether they are on benefit, earning modest wages or are extremely wealthy. We are determined to ensure that there is no "two-tier" child maintenance system—namely, one for the rich and one for the poor—in which wealthy non-resident parents would be able to impose child maintenance arrangements that would not be in the interests of their children and would take no account of the child support rates.
Too often in the past—this is the precise reason why the party opposite established the CSA under the 1991 Act, with our support—that is exactly what happened in the courts. Inconsistent and unpredictable rates of child maintenance were imposed. There was an
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increasing trend for "clean-break" settlements where regular maintenance payments were traded for property or capital transfers. But the central point of our position is that non-resident parents cannot make a "clean break" from their children.
We accept entirely that there are conflicting principles in this area, but the result of those arrangements was that, too often, non-resident parents were able to avoid any ongoing responsibility for their children because once they had made over capital in the form of the matrimonial home, the taxpayer then had to pick up the benefit bill. It is for this reason that we propose to change the system.
Provisions in the Child Support Act 1991—which, as I have said, we supported—established an administrative mechanism for setting levels of child maintenance and, where required, for collecting maintenance payments on behalf of the children concerned. When the previous government introduced that Act, they clearly envisaged a time when all child support matters would be settled by the agency; that is, the agency would oversee all child support decisions and impose that figure on the courts. However, it quickly became clear to the Conservatives that the CSA was struggling to keep up with its caseload. As a result, in 1995 the then government deferred indefinitely the take-on of court cases, but the long-term aim was still that the CSA should eventually take away from the courts all jurisdiction for child maintenance matters.
Whether we should return to that principle—namely, that the CSA could present a fait accompli to the courts—was something that was raised during the consultation process on the child support Green Paper. Some respondents feared that this would create one law for the rich and another for the poor. Furthermore, we had our own concerns. While it is right that, in cases where arrangements for supporting the children do not involve the taxpayer—so-called "private" cases—the parents should be able to choose whether to apply for child support, equally, we could not allow parents with care on income support to regard child support as voluntary; otherwise the taxpayer would be supporting reluctant and irresponsible fathers. But—this is the key point here—every year at least 10 per cent of private cases move on to benefit and something of that percentage on benefit become private cases. It is clear that it is impossible to run parallel jurisdictions.
There is a great deal of movement in this area. Given our proposal that low earners—those on working families' tax credit—will in future be private cases, we must anticipate that during each summer holiday, some of those parents will need to move back on to income support because they cannot sustain their jobs. As a result, we are likely to see the movement between private and benefit cases increase rather than decrease. That would mean that in many cases—although obviously it will be less likely as regards the low paid—maintenance arranged by the courts would have to be overturned by the CSA as benefit became payable for the children.

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We also listened carefully to the views of lawyers, judges and others who wanted court jurisdiction in this area to remain as now. Some wanted more powers to be given to the courts. Many others wanted the courts to Operate the child support rates, but to have the discretion to move away from them. In the end, we came to the conclusion that giving back to the courts some of the jurisdiction that they had lost, or alternatively the total removal of court jurisdiction (imposing a flat-rate CSA system on them), would be unsatisfactory as regards what we are seeking to do.
Following the original Conservative line and removing all power to set child maintenance from the courts would deny parents the right to agree to depart from the child support rate if that is in the children's best interests (where benefit is not involved) and to have the agreement converted to a court order, perhaps along with other financial arrangements. Parents could well propose to pay above or below the figure, for example, in order to meet school fees and so forth, which would be in everyone's best interests. Alternatively, they may wish to accept other financial responsibilities in lieu. If such arrangements can be agreed amicably so that neither side feels, so to speak, hard done by, that would, of course, be a proper way forward and the state would have no interest at stake as regards the taxpayer. We did not want to undermine the capacity of parents to come to a different arrangement where consent for that different arrangement remains in place because both sides see it as in the best interests of the children. That is why we are not seeking to impose CSA rates a priori directly on to the courts.
However, while consent remains, either parent will be able to apply to the CSA to calculate and collect child maintenance if court-based arrangements prove to be unsatisfactory. They can return to the CSA and accept instead the CSA-calculated formula. Crucially, Clause 2 will not apply to existing court orders and use of the CSA's child maintenance service by such parents will not be available until after a new court order has been in place for at least a year. Parents who wish to transfer to child support will have to give at least two months' notice. Picking up the point identified by the noble Baroness, Lady Buscombe, we want to allow parents and their lawyers time to mediate and renegotiate new voluntary agreements which are satisfactory to all involved.
The trigger might be that one partner or the other has new family arrangements and as a result agreements are no longer satisfactory. They may want to return to the CSA being unable to resolve the matter by mediation. Knowing that either party can go to the CSA, the additional two months' grace might allow them to go to mediation and not involve the CSA. That is the point of the provision.
We believe that it is a sensible proposal which will encourage parents, lawyers and the courts to come to child maintenance arrangements in the shadow of the CSA. All parties will know that either parent, having been to court, can turn to the CSA in future and that
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it would therefore be sensible to determine child maintenance broadly in line with the simple and predictable child support rates.
In response to the noble Baroness, Lady Buscombe, perhaps I may ask what the lawyers would advise their clients to do in such a case. The lawyer of a non-resident father would say to him, "Don't go below the CSA rate and reduce your property or spousal maintenance because if she becomes greedy"—and I use that word advisedly—"she will up the child maintenance by going to the CSA". He will advise the father not to go below the CSA rate because if he does the settlement may be revisited. What will the mother's lawyer say to her, the parent with care? He will say, "Don't go for more than the CSA rate and reduce your spousal maintenance or property accordingly because if he becomes greedy he will go back to the CSA".
So what have we done? Instead of arguing between the two of them about child maintenance, it will become "forgiven" because both lawyers will know that, unless they can be absolutely confident that their clients will continue to agree into the far distant future, they protect their clients' best interest by adopting the CSA rates and debating all the other elements; for example, the property, the pension, spousal maintenance, the savings, the PEPs and the TESSAs. They will depart from the child support arrangement only when both parties agree and when both lawyers are confident that they will remain in agreement. The result will not be more conflict, as the noble Baroness, Lady Buscombe, suggested, but less. There will be more mediation rather than less: more negotiation rather than less.
In Committee, I said that we were trying to set up a Mexican stand-off. Yesterday, I was talking to some senior family lawyers who gave—I was going to say "support", but that might be too strong; they accepted the basis for the provision and made it clear to us that with certain conditions they could make it work. They said to me, "You said that you were setting up a Mexican stand-off. We have decided that you are setting up a Mexican wave!" I thought that was rather nice and I agreed entirely. All parties will agree a common basis.
Clause 2 will ensure that a two-tier system between the courts and the CSA will not develop. It will encourage courts in the future to make consent orders in the shadow of our rates because after a year either parent will have the option of turning to the CSA. I am sure that as a result their lawyers will agree to stick with it. Amendments Nos. 10 to 14 would take us back to the past and therefore I hope that the noble Baroness will accept our arguments.
The noble Baroness went on to explain Amendment No. 15. It appears to be designed to remove a non-resident parent's ability to apply for a child support calculation if there is a court order, made after the reforms are introduced, in force. Parents with care would still be able to apply to the CSA, but only where the non-resident parent was not complying with the court order in terms of regular, reliable maintenance. It cannot be right to give access to child support solely

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to a parent with care; and why should she be prevented from seeking a child support calculation when the non-resident parent continues to make payments under a court order which she now thinks is unfair?
However, I should like some elucidation from the noble Baroness. Is she suggesting that the CSA must collect whatever formula the courts have determined for child support? If that is what she is proposing—and I believe that it is—every person who comes to the CSA from a court settlement will have applied to him or her, not the CSA rate, but an individually determined CSA figure which the CSA will have to chase. Arrears must be calculated, as must any other considerations which come into play; for instance, another child. I believe the noble Baroness is saying that for a raft of cases manual transactions must be done. Whereas everyone else will receive 15, 20 or 25 per cent, this person will receive 8 per cent, this person 10 per cent, this person 16¼ per cent and that person 18¾ per cent, according to whatever the courts have decided. The staff of the CSA would have to chase those percentages on the basis of an income which may continue to change because of the court agreement. That would totally undermine the simplicity of the CSA in collecting its rate; the 15, 20 or 25 per cent.
The amendment seeks to limit the role of the CSA to a collection agency, including collecting amounts which we do not believe are adequate and which the parent with care may not believe to be adequate, resulting perhaps in unreliable payment.
5.15 p.m.
Baroness Buscombe: My Lords, I thank the Minister for giving way. My understanding of the amendment is that if the parent with care is dissatisfied with the court arrangements because payments are not being reliably made, he or she can have the option of going to the CSA to have the court order overturned. That is the meaning behind Amendment No. 15.
Baroness Hollis of Heigham: My Lords, is the noble Baroness saying that the court order would be overturned and the CSA order would replace it?
Baroness Buscombe: My Lords, yes.
Baroness Hollis of Heigham: My Lords, it would also mean that no matter how inadequate the level of maintenance, the parent with care would always be prevented from applying to the CSA if the non-resident parent paid up. The noble Baroness appears to be saying that if the non-resident parent paid maintenance, but at a level which the parent with care later thought was inadequate, the latter would have no right to go to the CSA. It is precisely in such cases, where the maintenance is inadequate because it is low, where the non-resident parent is most likely to be paying in full.
Given all of that—we are getting into further complexities and I do not want to rely too heavily on them—the amendment is defective. It achieves the
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opposite effect. It prevents parents with care, with a court order with which the non-resident parent is not complying, applying for child support. Even if the noble Baroness's arguments were persuasive, the amendment does not achieve that result.
Amendment No. 16 seeks to change the 12-month waiting period to six months instead. We know that new court orders for child maintenance can be made only where the parents have previously consented to a written maintenance agreement. With that in mind, we have decided that any new "consent" order should be in place for at least 12 months to give it time to bed in. We believe that six months, which the amendment proposes, is too short. We do not want to encourage a knee-jerk reaction; we want time for reflection and mediation and not possibly vindictive behaviour. We want fairness between the parties in that if one party can go to the CSA, so can the other.
Amendment No. 17 seeks to address a particular problem which was a feature of court-based maintenance in the past; the risk that parents with care were forced to accept lower maintenance under duress, causing the children to lose out. But the CSA would be placed in an impossible position in trying to decide whether a court order, perhaps made several years previously, should fall within this provision. The CSA would inevitably have to take the parent with care's word for it, leading to endless litigation. I really do not think that we should go down that path.
Amendments Nos. 18 and 19 would, if enacted, give back to the courts the power to set levels of child maintenance in any case where they were making other financial arrangements, such as a property settlement or an order for spousal maintenance. These amendments give the courts an increased jurisdiction by allowing county courts to change a court order where an application for financial relief, such as spousal maintenance, is already before them. This means that both the courts and the CSA could potentially be involved in assessing child maintenance for the same child. That form of parallel jurisdiction is confusing, unhelpful and, we believe, not in the best interests of the child.
All of these amendments fly in the face of our plans to reform the child support scheme. We have moved a long way from the starting point of the Conservative government, which was that the CSA figures should apply to all arrangements, including those of the court, without any discretion at all. We have listened to the lawyers and Members opposite. As a result, we have decided that where the parties agree they need never come to the CSA. The CSA is there as a fallback. Both lawyers know that if either party is unhappy he or she can return to the CSA. Therefore, each lawyer knows that it is not in his client's interests to seek to exploit the other—whichever way it goes—on the issue of child maintenance because ultimately the aggrieved party can have recourse to the CSA. Therefore, that issue will no longer be subject to conflict and the whole debate will be on the other elements.
Finally, the noble Baroness addressed at some length Amendment No. 20 which seeks to ensure that the courts retain the power to vary new court orders

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which are made after the reforms have been introduced and have been in place for at least a year. As drafted the amendment does not achieve that aim. However, having listened to the arguments of the noble Baroness, I understand the case for such a provision. If it was clear that any order which had been in place for at least a year and then varied would not preclude either parent at any time from applying to the CSA for a child support calculation because of dissatisfaction with the varied order, I would not be unsympathetic to tabling a government amendment to achieve that at Third Reading. We have talked to family lawyers about it and listened to the noble Baroness today. I should like to be helpful because I believe that the noble Baroness has put forward some good arguments. If the rest of the package gains the approval of the House at Third Reading, the Government will table an amendment to that effect. Given what we have said, it would make the scheme work better. Of course, if we ended up with a different scheme I would not be so helpful.
The protection of children is at the heart of our child support scheme. We believe it is right that maintenance proposals should be as simple as possible and that parents should have discretion to make alternative arrangements as private cases if they wish. If those arrangements come unstuck, they can turn to the CSA. Because they have recourse to the CSA those arrangements are less likely to come unstuck. Therefore, we hope that child maintenance will become less adversarial and flow more regularly, which is in the best interests of the child. With that, I hope that the noble Baroness will withdraw her amendment.
Baroness Buscombe: My Lords, I thank the Minister for her very full response to my plea in relation to these amendments. We have had a full debate. The Minister has been made aware of the concerns in your Lordships' House, in another place and among a number of different organisations. We understand the intention of the Government to improve the CSA and its working. However, I am still unable to understand how that will assist with caseload. The caseload has been one of the reasons for the problems with the CSA in terms of breakdowns, delays and lack of communication. The noble Baroness called it "the Mexican wave"; I call it "forced mediation", but I take her point, sexist though it sounded.
As to the two-month period, that is for mediation and the proverbial wet towel on the head. I hope that in practice that will be enough time for the parties to reconsider any disagreement or breakdown in the court arrangements. I am grateful to the noble Lord, Lord Goodhart, for his support for these amendments. There is no question but that most of the arrangements executed by the courts are good, effective, and stem from the involvement of people of experience and expertise who are very flexible in their approach.
I also thank the Minister for her response to Amendment No. 15. I apologise for my suggested confusion in that case. The effect of the amendment is that, in private cases where the parties are not on
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benefit, they will be able to reach an agreement and have that incorporated in a court order. That agreement will remain binding unless the receiving party goes on benefit or the paying party does not make the payments in a reliable way, in which case the court order can be overturned by the CSA. I accept the other points made by the Minister which I shall read with care in Hansard.
Finally, I thank the Minister for her response to Amendment No. 20. I understand that, as currently drafted, it is not acceptable to the Government. Nevertheless, I thank the Minister for her positive response and look forward to the proposed amendment to be tabled at Third Reading. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 11 to 20 not moved.]
Clause 3 [Applications by persons claiming or receiving benefit]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 21:
Page 3, line 12, leave out ("may") and insert ("shall").
The noble Baroness said: My Lords, in moving Amendment No. 21, I should like to speak also to Amendments Nos. 22 to 24. These are probing amendments. I begin by confirming our support for the Government's proposals in Clause 3. The purpose of the amendments is to extend further the provisions in the clause by providing that the Secretary of State should not be constrained or controlled as currently proposed. With regard to applications by those who claim or receive benefit, the proposed new Section 6(5) provides that,
"The Secretary of State may not act under subsection (3) if the parent asks him not to".
In tabling these amendments we seek to highlight a difficult area; namely, those cases in which there is a history of violence. On the face of it, these amendments may be surprising. It may appear to make sense that, as currently drafted, the Bill should not exert any pressure on a claimant to produce information where that may hurt a former partner. But we believe that it is important for an aggrieved parent to be secure in the knowledge that a non-resident parent, who may be overbearing and aggressive, cannot benefit by physical intimidation or unpleasant or unreasonable behaviour and so, by persuasion, prevent the agency from gathering the necessary information. I beg to move.
Baroness Hollis of Heigham: My Lords, at the beginning of this process we faced a basic dilemma. We did not at any stage want to endanger the safety or mental or emotional health of women and children. Clearly, we could have gone down one of two paths. One was to say that good cause should be extended. As to that, our fear was that as a result maintenance could be a voluntary payment. Alternatively, to a degree we could have followed the path described by the noble Baroness and tightened up the procedures dramatically so that no non-resident parent who was abusive, emotionally or physically, could be rewarded for that bad behaviour by being able to apply duress to the

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parent with care. We were tempted by that second path. The reason we did not go down it was that we thought that it would, understandably, be misunderstood in today's climate. It might be thought that we were not being sufficiently protective of women at risk. There was a real and difficult debate as to what behavioural consequences there would be.
As a result we tightened up the administrative procedures. Instead of the parent with care having to opt into the collection of child maintenance—to begin with we had only a 30 per cent co-operation rate—we established a system where she had to opt out, and with a tighter timetable. Already that, together with our other changes in procedure, is establishing greater compliance.
Under the scheme a lone parent who claims income support or income-based JSA must make an application for child maintenance but is not required to do so if there is good cause: that there is risk to her or any child living with her suffering harm or undue stress as a result.
The changes to be introduced in the new scheme will mean that parents with care who make a claim for income support or income-based JSA will be treated as having applied for child support unless they specifically request that child support should not be pursued.
We then have the definition of "good cause". We are doing that not only to speed up procedures but because we do not want to increase the risk of parents with care having to be seen to seek child support which might give signals to an abusive partner that he can bully her out of so doing. Our new approach makes it clear that child support action is linked to the benefit claim and that it is not a separate process for which the parent with care must apply. We think that that process will be not only more streamlined but safer for her because it leaves her less vulnerable to harassment and bullying. We are sending a clear signal to the parent with care and the non-resident parent that maintenance is not an optional extra. They must pay unless there is good cause or good reason why they cannot.
Amendment No. 21 seeks to toughen up the good cause provisions by removing the Secretary of State's powers not to treat the benefit claim as an application to child support in certain circumstances. This amendment would have the effect of delaying the process of deciding whether or not to take child support by not allowing the CSA to make the judgment that the parent with care is clearly at risk. As well as causing unnecessary distress to vulnerable parents with care, this amendment does not help children.
Amendment No. 22 similarly requires that the Secretary of State will act to recover child maintenance unless the parent with care asks him not to do so. This has the effect of placing more onus on the parent with care to opt out of claiming child support. We believe that it is important that we should not pursue maintenance at the outset if we know that the parent with care would then be at risk.
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It would be wrong to assume that all parents with care who do not opt out will want to claim child support. In some circumstances the parent with care may be in emotional turmoil or under threat and unable to take the necessary action to opt out. Amendment No. 22 would have the effect of forcing the Secretary of State to recover child maintenance in these cases where she did not opt out and would put pressure on the parent with care to have to opt out in what may be difficult circumstances.
I am aware that the noble Baroness is concerned that we might not be doing enough to discourage fraud; or that we might encourage aggressive behaviour against the parent with care. In the usual Ministers' phrase, we think that we have got the balance about right.
We are satisfied that the policy has already gone a long way to discourage fraud and collusion and to encourage parents with care to co-operate with the CSA. About 85 per cent of parents with care choose now to apply for child support which compares with only 30 per cent a few years ago. But there will always be a small minority of parents who do not want to co-operate with the CSA—for example, women who have done an informal deal with their ex-partner so that he gives cash but pays less than if he had been assessed by the CSA. To some extent the previous system encouraged this. By having the maintenance disregard, and so on, we hope that we have a system which builds out that type of fraud and collusion.
On top of that, the new scheme will mean that the CSA provides a more streamlined service better able to meet customers' needs. As a result, we hope that a parent with care who has maintenance collected through the CSA will benefit from being able to use the CSA and will receive the money to which she is entitled.
Amendment No. 23 requires the parent with care to opt out within 14 days of being notified of her right to do so. This amendment has the effect of adding a further 14 days to the initial stage. Setting a formal time-scale of 14 days to respond will build unnecessary delays into the process. In the new scheme, benefit claims are treated as a claim for child support unless the parent with care decides to opt out. This provides the Secretary of State with the power to start the recovery of child maintenance as soon as it is feasibly possible.
Normally when a parent with care makes a claim for benefit, an interview will take place. If she is happy to receive child maintenance, her claim will be processed straightaway. If the parent with care wants to opt out, she may give her reasons immediately and, if they are accepted, the case will be closed and reviewed at a later date. So in many cases child maintenance can be processed immediately.
However, there may be times when the parent with care may be unsure about claiming child support and may want extra time to consider her options. We want this discretion and flexibility to continue in the new scheme. We think that a period of two weeks is normally sufficient. But we would not want a statutory

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waiting period to be built into every case, in particular where the parent with care has already made up her mind and given her reasons; nor do we want to prescribe on the face of the Bill how long that period should be. It will depend on the circumstances of the case and in some cases no extra time will be given. This amendment would only act to slow down the recovery of maintenance as it would give all parents with care up to 14 days to decide whether to make a claim for child support. At present 85 per cent of parents with care are content to make a child support claim immediately. We do not need to build in that 14-day delay with the slippage that would result.
I turn now to Amendment No. 24 which relates to subsection (7) of Clause 3. This requires the parent with care to provide information for a child support assessment even if she has opted out. The amendment would have the effect of forcing all parents with care and claiming benefit to provide details of the nonresident parent, regardless of whether they had opted out of child support. In practice, the CSA would have to obtain information about non-resident parents, even though in some cases the information could not be acted upon. This amendment would have the effect of forcing the CSA to waste vital resources in collecting and chasing information in cases where it was not going to collect maintenance. This would not be sensible. The information would not be used; it would soon become out-of-date; and the efforts by the CSA would have been pointless.
The amendment could also cause some distress to those parents with care who have good cause, who would be asked to give information even it were not necessarily followed up—for example, where the child was conceived after a case of rape—at a sensitive and difficult time.
I am sorry to have taken so long but these are technical issues. It is right to probe them. All the amendments in this group would introduce more complications and delay in the recovery of child maintenance. We are trying to eliminate that; we are trying to get the balance right between protecting the parent with care, without at the same time giving perverse signals to an abusive non-resident parent. We have taken a great deal of advice. All the advice given throughout our consultation period—we have had a Green Paper and a White Paper—suggests that we have now got the balance about right. I hope that my answer may have persuaded the noble Baroness of that.
5.30 p.m.
Baroness Buscombe: My Lords, I thank the Minister for her full and clear response to these probing amendments. I am glad that the noble Baroness agrees that it is right to probe these arrangements which have caused concern among many in different organisations. All of us have been consulted on these issues.
In tabling these amendments, safety of the aggrieved parent with care and the children is our primary, overriding concern. I hope, therefore, that the
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Government have got the balance right. It is a difficult issue. It is difficult to get it right. I hear what the Minister says with regard to the proposed time-scales which could mean more delays and problems. I shall read with care in Hansard what the Minister said. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 22 to 24 not moved.]
Clause 4 [Default and interim maintenance decisions]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 25:
Page 4, line 38, at end insert—
("(6) The regulations shall make provision for the calculation of the difference between the amount of child support maintenance paid by the non-resident parent pursuant to any default or interim maintenance decision and the amount of child support maintenance which would have been payable by the non-resident parent had the Secretary of State completed a maintenance calculation at the time of that default or interim maintenance decision."").
The noble Baroness said: My Lords, this amendment relates to default and interim maintenance decisions under Clause 4. As drafted, the Bill lays down a penalty while proposing that where a non-resident parent has been overpaying, that payment should not be returned. The Explanatory Notes state that this is necessary because it will encourage people to fill in the forms expediently. On the face of it that might seem a good idea. However, is it fair? Is it reasonable?
Perhaps I may use an analogy. If one overpays one's taxes, for whatever reason, that overpayment is returned—eventually and without interest! We are concerned that the approach in Clause 4 is too draconian and will not help in the Government's real efforts to build the credibility and esteem of the Child Support Agency. I beg to move.
Baroness Hollis of Heigham: My Lords, currently we have a system of punitive interim maintenance assessments which are imposed where full information cannot be obtained or the non-resident parent fails to co-operate with the Child Support Agency. However, this scheme does work. Assessments arc generally very high (averaging nearly £90 a week) and the vast majority of non-resident parents due to pay an interim maintenance assessment pay nothing at all (almost 90 per cent). This allows large arrears to build up, making enforcement difficult. This is a particular problem where the non-resident parent is self-employed. It was a scheme introduced by the previous administration in the hope of being punitive and therefore encouraging people to apply. But it had the reverse consequence of arranging such high levels of maintenance that none of it could ever be collected. As a result, arrears mounted.
We believe that the key factor in the low level of compliance is that non-resident parents know that they will often have to pay substantially less when a full maintenance assessment is completed. That is because, when the required information is finally provided, the interim maintenance assessment is replaced by a back-dated full assessment—usually at a substantially lower rate. So the incentive effect of the interim maintenance

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assessment is lost and those irresponsible parents who wish to delay meeting their responsibilities to their children are free to do so at no cost to themselves. It is a mess.
The new, simpler scheme will mean that in most cases we shall be able to make decisions about maintenance in a matter of days. Where a non-resident parent refuses to provide information about his income, we shall be able to obtain it either direct from his employer or, in self-employed cases, via the Inland Revenue. Parents who refuse to provide information can face fines of up to £1,000.
It is important to get maintenance flowing quickly, so where a final decision on liability cannot be reached straightaway, and where the non-resident parent refuses to provide enough information to allow his earnings to be estimated, we are introducing a simple system of default rates to get maintenance flowing.
Default rates of maintenance will allow the CSA, as a last resort, to get maintenance flowing at a "safe rate". Rates will be set at a level broadly reflecting the average income of the non-resident parent, with rates of £30, £40 or £50 a week according to whether one, two, three or more children are to be maintained. This will prevent large amounts of arrears building up and, because default rates will be put in place quickly, they will be easier to enforce.
If I understand its purpose correctly, Amendment No. 25 would provide that, when a final assessment is made following a default or interim maintenance decision, and the assessment is lower, the non-resident parent would be able to recover the overpayment. Where the final assessment is higher, and there is an underpayment, the parent with care would be able to recover the underpayment. We do not believe that it is appropriate to provide this retrospective supersession of all decisions made under Section 12 of the Act.
In the case of default decisions, we intend that when full information is available the full liability will be put in place from the date when the information was obtained. Maintenance liability for the past period will be recalculated only if the full assessment is higher than the default rate. We have adopted this approach because we want parents to provide information quickly and to pay the default rate in the meantime, but also not to gain any advantage by delaying the process. As I said earlier, this is the key reason why, currently, most interim maintenance assessments fail to result in any maintenance payment at all.
So, if someone has a default rate of £30, and it turns out that the full assessment should have been £50, we shall collect arrears for the past period. However, if the full amount turns out to be £20, we shall put that assessment in place only from the date when the full information becomes available.
The CSA will impose default rates only as a last resort—in those cases where the non-resident parent refuses to co-operate. If a non-resident parent genuinely does not know his level of income, and co-operates with the agency, we shall be able to use estimated earnings to arrive at a full calculation of
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liability. That is why the analogy is not exact with the system applied by the tax authorities. In proposing the amendment, the noble Baroness basically assumes that a default rate is somehow neutral, and the underpayments and overpayments should be treated in the same way as in the tax system. No, the default rate, which we expect to be a rarity, is still a rate that is set because the non-resident parent is defaulting. It is meant to focus his attention on paying his maintenance. It is not meant to be punitive; it is meant to be realistic.
Earl Russell: My Lords, does the Minister have information to hand as to what proportion of the alleged defaults result from the inefficiency of the CSA?
5.45 p.m.
Baroness Hollis of Heigham: My Lords, under the new system we are expecting the assessment to be made, on average, in six days and the money to be flowing in six weeks. I realise that all the noble Earl's amendments would so complicate the formulae that we should not have a hope in hell of meeting those timetables. But the rest of us believe that, providing the Government hold to their clear, simple, clean, decent, transparent and right approach, we shall have the money flowing, there will not be the errors that the noble Earl anticipates, and, as a result, questions of default will arise only where the non-resident parent wilfully fails to co-operate. If he co-operates but does not have exact information, as I say, we shall do a rough assessment of his estimated earnings.
So the default rate is a rate that is set because he is defaulting. It is not meant to be punitive. It is realistic, but it is meant to discourage what could be described colloquially as "messing the agency around". If he has paid more than he would have done had he responded promptly, that is a consequence of his delay and his failure to co-operate. If he has paid less, we shall chase up the shortfall so that he is not rewarded for delaying his maintenance payments and so that we see the children getting the money. As I say, this approach is not punitive. It is based on average earnings or average income of non-resident parents, unlike the scheme introduced by the previous administration. But there must be an incentive for non-resident parents to supply information quickly and to co-operate. Although I am sure that it is not the noble Baroness's intention, Amendment No. 25 would remove that incentive and might actually encourage the non-resident parent to play the system. I am sure that she does not want to see that happen. Given that explanation, I hope that the noble Baroness will withdraw her amendment.
Baroness Buscombe: My Lords, I thank the Minister for that response. Perhaps I may make it clear that there is no question of our wanting anyone to be rewarded for delay or default. However, we have already spoken about balance. I remain concerned that there is a question of balance here. I am very excited about the proposed timetable for the future. I hope that we shall soon know when that will become

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a reality. Obviously, it will make a big difference to the number of cases which might be termed cases of default. I shall read the Minister's response carefully in Hansard. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Departure from usual rules for calculating maintenance]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 26:
Page 5, leave out lines 17 to 21 and insert ("shall make the application in writing").
The noble Baroness said: My Lords, this amendment is concerned with applications for the variation of the usual rules for calculating maintenance. Under the Bill as presently drafted, a person who applies for a variation,
"need not make the application in writing unless the Secretary of State directs in any case that he must".
Why not? While not wishing to be bureaucratic for the sake of it, variations are important matters; they can have long-term consequences. We believe that there should be a permanent record in the form of a signature as opposed to an informal telephone conversation or meeting, where details may be misinterpreted or simply forgotten. I beg to move.
Baroness Hollis of Heigham: My Lords, I am now slightly baffled, and perhaps I may check this point with the noble Baroness. As I understand it, she did not move Amendment No. 4 and she is now moving Amendment No. 26. Is she speaking also to Amendments Nos. 27, 30 and 31?
Baroness Buscombe: No, my Lords, I shall not move those amendments.
Baroness Hollis of Heigham: My Lords, I shall not spend a great deal of time on this matter. What the amendment would do is require all applications to be made in writing rather than allowing straightforward applications to be taken over the telephone. Additionally, applicants would not have to specify the ground on which they are applying.
Two recurring complaints made about the existing scheme surround its complexity and the fact that it takes the agency so long to notify non-resident parents of their liability. A recent survey undertaken by the CSA indicated that use of the telephone is considerably faster: 79 per cent of the CSA's clients positively preferred it; and approximately only 2 per cent of them were hostile to it, and that may have been because we telephoned them at work, or for a similar reason. They liked the use of the telephone because it allows discussion and a better understanding of what is going on. Certainly, when I listened in on client helplines, I realised that both parents with care and non-resident parents found the personal contact over the telephone to be valuable. By virtue of use of the telephone, maintenance becomes more reliable.
Under the current departure scheme that we are proposing, it is clear that most of the applications can be dealt with satisfactorily over the telephone because the information is simple and straightforward. We do
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not believe that in the reformed scheme the information should be put in writing. Use of the telephone avoids unnecessary delay and use of paper, and possibly also allows us to ensure that maintenance flows more quickly.
However, an exception would be made—I believe that this point is important and may reassure the noble Baroness—where, for example, the application raised particularly difficult or complex issues. Such applications would not be dealt with by staff on a straightforward administrative basis. However, when a simple piece of information is placed on the record— for example, where the flow of earnings is different just before Christmas—the form can be adjusted and that is that.
However, a typically difficult application would be one where the parent with care alleges that the income that he has declared is inaccurate because he is living a different lifestyle and there is a considerable variance. Where there is such a dispute, if I may express it that way, the case is likely to go to a tribunal. In difficult and complex situations, we would require all applications to be made in writing in order to furnish the basis of an appeal to go to the tribunal. In such a case, we would also require the applicants to specify the grounds upon which they were applying. The system would not be effective if we ended up with a mountain of correspondence saying, "I want a variation because my liability is too high"—or too low.
In complex situations, our view is that it is only sensible to require applicants to state the grounds upon which they are applying for a variation. That will allow the CSA to distinguish applications which have been made on recognised grounds from those which, for example, are spurious in the sense that they cannot be met within the formula. That would avoid delays.
I hope that I have assured noble Lords that most cases can be dealt with by telephone but that in exceptional cases involving dispute, which are likely to go forward to a tribunal, we would want to ensure that there was a paper base. I hope that with that assurance the noble Baroness will feel able to withdraw her amendment.
Baroness Buscombe: My Lords, before the Minister sits down perhaps she can reassure me as to where that is stated. I do not believe it is stated on the face of the Bill that more complex cases will be written down.
Baroness Hollis of Heigham: My Lords, this issue comes under the territory of regulations rather than on the face of the Bill.
Baroness Buscombe: My Lords, I thank the Minister for her response, which gives me some reassurance. In a way, I regret that it is not stated on the face of the Bill. I am concerned about the more complex cases which involve dispute, such as the example that she has given. I believe that it is crucially important that in those cases the written word is there for everyone to see.
Baroness Hollis of Heigham: My Lords, I should be very happy to write to the noble Baroness and give her

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what I might call a "route map" of how the matter would be dealt with. That may reassure her that the matter is being pursued properly. If she has any concerns, we could have a discussion on the matter.
Baroness Buscombe: My Lords, I thank the Minister for that response. I would very much appreciate such a letter. On that basis, with pleasure I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 27 not moved.]
Baroness Buscombe Baroness Buscombe moved Amendment No. 28:
Page 6, line 2, leave out ("one of the conditions) and insert ("the condition").
The noble Baroness said: My Lords, in moving Amendment No. 28, I wish to speak also to Amendment No. 29, which concerns the departure from usual rules for calculating maintenance. In our view, these amendments are straightforward. If an application for variation were made and, after preliminary assessment, the Secretary of State concluded that there was some merit in the application, the non-resident parent would still have to pay either the full or a lower rate at the discretion of the Secretary of State. Given that the new variation scheme is being introduced because the existing formula may not be fair, we believe that it is right that that parent should have to pay only the default rate until the appeal is determined. I beg to move.
Baroness Hollis of Heigham: My Lords, as we have heard, both the amendments relate to the intention to allow the Secretary of State in appropriate circumstances to require the non-resident parent who has applied for a variation to make regular payments of child support at a pre-agreed level as a condition of having his application considered.
In the reformed scheme, applicants will be able to apply for a variation before, as well as after, a final maintenance calculation has been made. Where a variation application is made before a decision has been reached on the original maintenance application, the Secretary of State may make either a final maintenance calculation which takes account of the outcome of the variation application or an interim maintenance decision under Section 12(2) where he is unable to deal with the variation application straight away.
The amount of child support fixed by an interim maintenance decision will be calculated in exactly the same way as a final maintenance decision, had no application for a variation been made. The interim decision will, in effect, amount to an unvaried maintenance calculation. Where an interim decision is made, new Section 28C provides that, where the applicant for the variation is the non-resident parent, the Secretary of State may require him or her to make regular payments of maintenance while the application is being considered.
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Similar provisions will apply where the non-resident parent makes a variation application at any time after a maintenance calculation has been made. In either circumstance, the intention is that, where the reasonable expectation is that the application will fail, the non-resident parent will be required to continue to pay the amount previously calculated—that is, the interim amount or the final amount, as appropriate.
If, on the other hand, it appears likely that the variation application will succeed—for example, where there is agreement on both sides as to who has incurred contact costs in terms of traveling—the effect on the interim maintenance decision or the final maintenance calculation, as applicable, will be anticipated and the non-resident parent will be asked to pay the appropriate reduced amount.
Your Lordships will appreciate that on this basis no non-resident parent will ever be asked to pay more under the regular payments condition than he would otherwise be paying under the normal rules, or the amount which the Secretary of State anticipates would be payable were he to agree to the variation.
However, the amendments before us seek to ensure that the non-resident parent would be obliged to make regular payments at one of three fixed rates. We acknowledge that the proposal has merits of transparency and simplicity. However, the problem is that the fixed sum in any particular case is likely to bear little or no relationship either to the maintenance calculation which has already been made, based on the information which the non-resident parent has already provided, or to the amount which he might be expected to pay if the variation were to be agreed.
The intention of the regular payments condition is to ensure that child support continues to flow while a variation application is being examined. However, it is only right that the amount payable should be set in a way that reflects the non-resident parent's circumstances. In our view, the inflexibility of the amendments—there may be a wide gap between what the amendments lay down and what we expect a non-resident parent eventually to pay—could produce an outcome which is unfair.
It would mean that non-resident parents with existing liabilities for amounts which were lower than the suggested set amounts would be penalised unreasonably. The Secretary of State would be requiring them to pay more maintenance at a time when they were asking him to agree that in their particular circumstances they should be paying less. Perversely, it could encourage non-resident parents with higher liabilities to apply for a variation on spurious grounds simply as a means of securing a temporary reduction in the amount that they have to pay.
The whole purpose of the provision in question is to ensure that unnecessary debts are not built up during the variation process. We want children to receive their maintenance reliably. We do not want non-resident parents to use variations as a reason to delay the payment of the ultimate maintenance. However, we are concerned to ensure that the amount payable

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under the regular payment condition is set on a reasonable basis which bears some relation to what we expect the parents to pay.
We believe that the approach that we are taking delivers an outcome which is fair and reasonable. I hope that, on reflection, the noble Baroness will not press her amendments.
Baroness Buscombe: My Lords, I thank the Minister for her response and beg leave to withdraw the amendment
Amendment, by leave, withdrawn.
[Amendment No. 29 not moved.]
Schedule 2 [Substituted Schedules 4A and 4B to the 1991 Act]:
[Amendments Nos. 30 and 31 not moved.]
6 p.m.
Lord Higgins Lord Higgins moved Amendment No. 32
Page 102, line 34, leave out from ("means") to ("expenses") in line 35 and insert ("any").
The noble Lord said: My Lords, it may be convenient to discuss with this my Amendments Nos. 33 to 46, as well as Amendment No. 47, tabled by the noble Earl, Lord Russell, and also included in the list, which appears much later in our proceedings than I had expected, given the initial grouping.
The amendments are about variations. It is common ground across the House that there is an overwhelming case for simplifying the Child Support Agency arrangements. However, the more simple one seeks to make the system, the more important become the variations, or departures, as they are also called. The amendments spell out various items that need to be considered. Our aim is to enable the House to take a view on whether each item is an appropriate one to take into account.
I am confused by the lay-out of the Bill on page 102, where,
"Part II
Substituted Schedule 4B"
appears above,
"Schedule 4B"
I presume that that is because of subsequent amendments at an earlier stage.
Amendment No. 32 deletes,
"'special expenses' means the whole, or any amount above a prescribed amount, or any prescribed part, of expenses"
and replaces those words with,
"'special expenses' means any expenses".
The other amendments specify what those expenses might be. The question is what one should deduct from the income of the absent parent when deciding how much he ought to contribute towards maintenance before arriving at the percentage that he will pay for each child.
Amendment No. 33 refers to,
"exceptionally high travel costs, exceptionally high housing costs, travel to work costs, illness or disability costs."
Some of those items are reflected in later amendments, such as Amendments Nos. 34 and 35. A number of those who have been asked to contribute to the maintenance of a child under the existing legislation have stressed that to earn enough to pay for that maintenance they have to travel to work. On some occasions, that can involve considerable cost. The question is whether those costs should be taken into account. I should be grateful for the Minister's views.
Amendment No. 36 would take account of relatives such as elderly parents and Amendment No. 37 relates to payment by the absent parent towards the education of children from the first or second marriage. The Bill says that the absent parent's income can be adjusted to take account of school fees, but only for boarding school education. No doubt the Minister will comment on that.
Another important issue is whether mortgage payments should be taken into account, even if the non-resident parent keeps a less than 50 per cent. interest in the matrimonial home. Expenses relating to handicapped children or debts incurred by the parents before the relationship broke up are other items that could be taken into account.
Our aim is to list the various circumstances that could be taken into account. Obviously, if they were all taken into account, we would almost be back where we started. Some of the possible items have greater merit than others. Debts incurred during the previous relationship and the situation with regard to the matrimonial home are two important examples.
At this stage, I am merely asking for the Minister's reaction to the various items that are specified. In the light of what she says, we shall consider whether we ought to return to the matter on Third Reading. I beg to move.
Earl Russell: My Lords, a good many years ago I had to attend a conference in the middle of Windsor Great Park. My host had obligingly provided me with a map, on which the route appeared to be easy to follow—it was a matter of first right and first left. After several hours driving round Windsor Great Park, I finally succeeded in arriving very late, very hungry and very irritated. I tackled my host about the map. He said, "Oh, but I left out all the turnings that you did not need to take for the sake of simplicity."
Lord Higgins: That sounds somewhat like the political thread that the Liberal party has pursued over a number of years, going left, right and left again.
Baroness Hollis of Heigham: And none of the electorate has been able to follow the map.
Earl Russell: None of the electorate?
Baroness Hollis of Heigham: Only a very modest proportion of the electorate.
Earl Russell: At the last local elections, it happened to be just about as big a proportion of the electorate as voted for the noble Baroness's party. Is not that also significant?
Baroness Hollis of Heigham: But most of the electorate decided that the maps produced by all the parties were not worth reading or studying.
Earl Russell: And that is a reproach to us all, which we must all accept equally. I am sure that the Minister

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understands the point of my story about simplicity. I have noticed over the years that governments get into trouble whenever they set out to produce a Bill that is driven by a single, isolated purpose. I think of football spectators and dangerous dogs. The Minister has explained today and on many other occasions that the whole of the Bill is driven by the desire for simplicity. It will not achieve that.
I have put my name to this group of amendments and tabled my own Amendment No. 47, which I understand to be consequential on Amendment No. 46, tabled by the noble Lord, Lord Higgins, which authorises the taking into account of any other circumstances. It is the proverbial "some other reason why".
In Committee, the Minister said:
"We believe that parents should put children, not other expenses, first".".—[Official Report, 8/5/00; col. 1333.]
I do not think that she will dispute that that is a fair summary of her view. However, the situation is not that simple. In present law, we are legally obliged to put debts to the Crown before debts to anything else. That has been a legal principle since the reign of King John. I hear of no proposal from the Treasury that it should be changed. Frankly, I should be extremely surprised to hear of any such proposal.
If a parent owes a back payment of income tax of many thousands of pounds, they are not legally allowed to put their child's maintenance before it.
Baroness Hollis of Heigham: I am sure that the noble Earl will confirm that on every occasion I have said that people should pay their taxes and their national insurance first and then pay their child support from the net income. There is no difference between us on that.
Earl Russell: The Minister certainly did not say that on the occasion that I quoted. I invite her to check it. I hope that she will repeat what she has just said on every occasion in future.
The other exception is expenditure that is necessary to earn the income out of which the maintenance shall be paid. Someone who cannot earn an income cannot pay maintenance. The Minister knows as well as I do that there were a considerable number of such cases under the 1991 Act. We hope that there may be slightly fewer under the Bill, because the level of maintenance has been set lower for everybody, regardless of whether they have special expenses, in the hope of covering any special expenses. Of course, that means less money for children in some cases where it would not have been necessary. But it will not necessarily cover the special expenses of those who have them. For example, some people who commute to work in London have to commute considerable distances. Their expenses are not necessarily on a level with those who walk to work.
There is no allowance for payment for elderly relatives, and I am extremely glad that the noble Lord, Lord Higgins, has included that in an amendment.
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Beyond a point, very elderly relatives may be as totally dependent as children. It is not self-evident that the children necessarily, in all cases, come above the elderly relatives. There are many people, known personally to me, on whom it would be extremely difficult to enforce any such principle because they would believe that they were being asked to do something morally wrong.
Beyond that, there is the fact that circumstances may arise, as they have done since 1991. which no one now foresees. It is in the essence of the principle of the Bill that no variation may be prescribed unless it has already been set out in regulations. Anything which has not been foreseen by those who draft regulations cannot be responded to.
I am sure that the Minister remembers a case about which we corresponded. When we last heard, the facts were in dispute. But let us assume that they were as alleged, because in some cases, they could be. This was a woman, with a daughter, who had remarried. Her daughter eloped with her second husband, or so it was alleged. She felt a conscientious objection to paying maintenance in those circumstances.
Let us take the case of the man who made a large capital settlement on his wife. She remarried. Her husband invested in property bought at the peak of the boom in 1988 and then went bankrupt. The first husband was dunned a second time. I had a long correspondence about that with the Minister who was entirely sympathetic. But the legislation allowed no discretion. It was impossible to respond to the unforeseen circumstance. That simply is not the real world. If we do not delete that provision in Schedule 2, which says that nothing may be prescribed unless it is included in regulations, the Minister will find herself in Windsor Great Park without a map.
6.15 p.m.
Baroness Hollis of Heigham: My Lords, the amendments which we discussed earlier surrounded the more technical aspects of variations. These amendments relate to the grounds on which a variation from the normal rules may be agreed. We discussed many of them in Committee so I am rather surprised that some of the amendments have been retabled. However, I am happy to try to respond to your Lordships' queries.
We are replacing a complex formula with a simple system of rates which will lead to a better, faster, fairer and more transparent support system. A calculation will be provided in which we recognise that every parent has different kinds of commitments. But the new rates will leave most with at least 75 per cent and on average more like 80 per cent—given that the average lone-parent family consists of under 1½ children—of their net income to meet those expenses.
But we recognise that there will always be cases where it is inappropriate to apply the normal rules without some flexibility. Therefore, it may be worth reminding your Lordships what we are seeking to do.
Essentially, we are saying that there are to be two broad grounds for variations. One is where the information given to the CSA on the non-resident

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parent's income is incorrect and invalid and needs to be corrected. There may or may not be fraud. The second is where there are exceptional costs in supporting the children of the first family and where the maintenance payment, were that to come on top, unabated, would be unfair. There are those two simple grounds.
In other words, we are determined to keep a tight rein on the grounds on which that variation can be agreed. A shopping list of amendments has been suggested this evening—that is, to look at travel-to-work costs, housing costs, the costs of supporting elderly relatives, and other costs. It was said in the other place that,
"if they load a new set of variations on to the simplified formula, the system will quickly revert to something approximating the present highly complex system".
That was said not by my right honourable friend Mr Jeff Rooker or my honourable friend Angela Eagle, who are the Ministers, but by a Conservative Member of the Committee, Edward Leigh. The noble Lord, Lord Higgins, made the point tonight that if the Government were minded to go in that direction, we should have taken all of the complexity out of the assessment and put it back in again in the form of variations or appeals. A very high proportion of current cases would thereby go on to appeals or variations because different assessments would come into play.
What is the point? Why bother with reforms of the agency at all if all we are doing is displacing complexity from the entry, which is assessment, to an exit point, which is variation? Why bother? Why not stay with the existing complexity of the current scheme? That is what it would mean. Let us be in no doubt. If you take into account housing costs, you must also take into account travel-to-work costs. We shall be reinventing the present complexity. For example, there are 50 different mortgage systems. Every time the rate changes, all those calculations will need to be redone. As a result, delays, errors and arrears will creep into the system. Why bother? We would be chasing paper rather than chasing the parents who should be paying the maintenance.
Lord Higgins: My Lords, the noble Baroness is making it black and white. There is obviously an intermediate stage. Some variations may be desirable. They would obviously increase the complexity but would not take one back to the kind of complexity which exists at present. One cannot simply say, "Either we have no variations at all or we have masses of variations". There are intermediate stages and the particular items specified need to be considered on their merits.
Baroness Hollis of Heigham: My Lords, the variations explained in this shopping list of amendments take more factors into account than is currently the case. The noble Lord said that there is an interim stage. But he has made the system more complex even than that which we currently have. That
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is no interim or half-way house. That is 120 per cent of what we currently have. That cannot be the position which the noble Lord wants to adopt.
I am not saying that there will be no variation; there are two broad grounds on which there will be variation. There has been consultation on this proposal which has received broad support. One ground is where there is misinformation, whether deliberate or otherwise, which needs to be corrected. Therefore, there can be variation. The second ground is where the cost of maintaining the child of the first family is already being incurred in some form or other by the non-resident parent and therefore should be taken into account when the amount of maintenance is determined.
We have considered carefully what should be the nature of those exceptional cases and circumstances. We do not suggest that the expenses and costs to which the noble Earl, Lord Russell, and the noble Lord, Lord Higgins, referred are not proper items of expenditure. We are saying that they are costs and expenses which the non-resident parent should meet from his income after meeting his primary responsibility to his children, and not before. Variations must be genuinely exceptional.
What are we suggesting? We want to give more help to non-resident parents who keep in touch with their children. To that end, we are extending the nature of the contact-related expenses which we are prepared to recognise. At present, it is only the travelling costs. We shall allow overnight stays as a more reasonable estimate of the costs incurred in maintaining contact. We believe that that is positive.
But Amendments Nos. 33 and 34 would allow the non-resident parent who maintained contact with his child to claim a variation in respect of any and all his expenses, regardless of whether or not they are in any way related to the contact arrangements. That would mean that he could include his housing costs, his travel-to-work costs and, indeed, any other costs. So we should be back to complexity.
I turn to Amendments Nos. 35, 41 and 43. As I said earlier, the position here is that under the new percentage-based approach, non-resident parents will normally be left with at least 75 per cent of their disposable income out of which to meet other costs, including the costs of housing and travel to work.
If we were to introduce an allowance on the grounds of long-distance travel to work, we would also have to recognise the opposite aspect, as Amendment No. 43 suggests. Travel to work tends to be a rural problem. We would therefore have to recognise higher housing costs for those non-resident parents who live close to work but in an expensive area. As I have said, all of that reinvents the complexity of the current system.
As regards the income of the person with care, this House has already disposed of that matter in a vote tonight, so we shall not revisit it. However, the noble Lord, Lord Higgins, said that the two variations with which he was most concerned were associated, first, with debts incurred in the previous marriage and, secondly, where a parent was paying the mortgage on

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the matrimonial home but where, for example, there was no equity remaining to him. I would be grateful if the noble Lord would confirm that that is where his concerns are most focused. Although, for obvious reasons, I cannot touch on the rest of the concerns he identified, I think I can be helpful to the noble Lord here. Indeed, we intend to provide for both such variations. I am glad to have the opportunity to expand on that.
The amendments are unnecessary. We are already providing for debts of the relationship to be recognised as special expenses. This ground is included on the face of the Bill at paragraph 2(3)(c) of Schedule 4B to the Act, as amended. That appears at the top of page 103. As a mortgage is a debt, where the non-resident parent has retained a liability to pay the mortgage on the property where he used to live with the parent with care but is not retaining equity, we are already intending to recognise those payments as legitimate exceptional expenses.
I hope that the noble Lord, Lord Higgins, will think that we are already meeting the major variations on which he has focused tonight—his intermediate stage, let us say—and that he will be content with that reply.
The effects of Amendments Nos. 37, 44 and 45, however, would be to allow the non-resident parent to offset part of any costs he incurs in providing an education for his child against his ongoing maintenance liability for that child. We believe that it is reasonable that the costs of maintaining the child—the boarding part of school fees, for example, where a child attends a boarding school—should be taken into account because the boarding, that is, the food, housing, heating and so forth would otherwise have to be provided by the parent with care. To some degree, he is abating her outgoings. That is why we believe that it is reasonable. However, the same does not apply to school fees.
Paying educational school fees, whether for a day or boarding school, is a choice made by the parents. It comes within the same category as choices on expenses of elderly relatives and the like. They are free to make that choice but they pay for it out of their income. In our view, it is not an allowable expense or variation that should be included at this stage. Why should private education for a child take priority over, say, the care of an elderly parent? We do not believe that is right. We find ourselves unable to accept that.
Amendment No. 46 seeks to ensure that the Secretary of State may agree to a variation in any case where the income to which he has had regard in his maintenance calculation does not reflect the financial circumstances of the non-resident parent. In summary, the effect would be to allow a variation wherever there is a mismatch between the current and planned definitions of assessable income.
Again, I think we can help the noble Lord, Lord Higgins. The provisions already provide for a variation to be agreed where the lifestyle of the non-resident parent is inconsistent with the declarations made to the agency. We have every intention of
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allowing parents with care to apply for a variation where the rules of the new scheme, insofar as they relate to the calculation of the non-resident parent's income, have significantly short-changed them. That is covered in paragraphs 4(2)(a) to (d) of Schedule 4B to the Act, as amended, at the top of page 104.
I turn to Amendment No. 32. The position is that non-resident parents who apply on the grounds of certain of the prescribed special expenses will need to establish, as now, that the costs they are incurring exceed, either singly or in aggregate, a threshold below which a variation cannot be considered. That ensures that only unusually high costs should be considered a good enough reason for a parent to reduce his child maintenance payments. Again, I hope that your Lordships will agree that we are meeting that.
As your Lordships will recall, the threshold under the departure scheme is £15 per week. In the new scheme, however, we plan to apply a threshold on a two-tier basis: £15 per week for parents with a net income of £200 per week or more, but a lower threshold, which we think decent and fair, of only £10 per week for parents with lower net earnings; that is, below £200 per week. We think that that will positively help parents who are less well off to get more help towards their special expenses.
I turn finally to Amendment No. 47. The position is that we intend to provide in regulations that once a variation has been agreed, maintenance calculations will be varied in a consistent way. Although the exact intent behind the amendment is not fully clear, the effect will be to remove the power to provide this in regulations. That could lead to inconsistency and inequality of treatment between one case and another. We do not believe that that is right.
Earl Russell: My Lords, I thought that I had explained the purpose of Amendment No. 47; that is, to allow a variation for something which had not been foreseen when regulations were drafted.
Baroness Hollis of Heigham: My Lords, as drafted, our regulations allow for two broad grounds. The first is where there has been a mis-statement of income. I have been trying to give assurances on that. The second is where a non-resident parent is contributing to the maintenance of the child in other ways than direct maintenance payments. I refer, for example, to paying for the mortgage; continuing to pay for the debts incurred in the previous relationship, and in terms also of providing maintenance. We do not conceive of any other circumstances. Therefore, we do not envisage the need for the amendment.
I re-state that we want to move to a child support system that is simple, efficient, easy to understand, of minimum complexity and with as little scope for dispute as possible. I hope that the noble Lord, Lord Higgins, will agree that we are able to address the areas he highlighted, including variation in income, debts

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and the matrimonial home. With that, I hope that the noble Lord, Lord Higgins, will feel able to withdraw his amendment.
Lord Higgins: My Lords, I am grateful to the Minister for that explanation of the principles which have determined a selection of variations which the Government feel is appropriate. We shall need to consider the various possibilities against the two criteria she has outlined. I have slight doubts about some of the points made. I refer to education, for example. One does not live on bread alone. If a marriage is intact, the parents would certainly regard the provision of expense on education as leading, in the broader sense, to the maintenance of the child. That is a specific point.
As regards debts, and so forth, the Minister has largely reassured me. However, we shall need to consider the various possibilities. Clearly, one cannot be at one end of the extreme or the other with regard to no exemptions at all or some exceptions. It is a question now of striking the right balance at the margin. In the light of what the Minister has helpfully said, we shall consider whether the marginal balance is in the right place. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 33 to 47 not moved]
Clause 10 [Appeals to appeal tribunals]:
6.30 p.m.
Baroness Buscombe Baroness Buscombe moved Amendment No. 48:
Page 9, line 38, leave out ("an appeal tribunal") and insert ("a county court").
The noble Baroness said: My Lords, in moving Amendment No. 48 I shall speak also to Amendments Nos. 49 to 55. The amendments relate to Clauses 10 and 11 and refer to appeals to appeal tribunals and the re-determination of appeals.
In tabling Amendments Nos. 48 to 52, we are highlighting our concern that the levels of maintenance are vitally important to all parties and to the children. There needs to be a system of appeal where appropriate cases can be reviewed. We believe that such appeals should be to district judges at county courts who are already experienced in dealing with maintenance and have an existing and well-used procedure. District judges are not only well experienced in this sort of work but are given a wide discretion to take into account all the circumstances, including, for example, earning capacity of an absent parent, to ensure that justice can be done.
It would be possible for the regulations to make clear that the formula would normally apply and exceptional circumstances would be needed before a court would adjust the formula. Even in criminal matters, citizens are entitled to appear before the court to ask that their individual circumstances be taken into account before a fine is imposed. Here, we are talking about assessments which may involve a person paying up to a quarter of their income for 16 years. We believe that it must be right that they have an opportunity to
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be heard in appropriate cases. An application to court would also enable the applicant to apply for funding by the Legal Services Commission, so that they could be assisted if that was appropriate or necessary.
Although it is suggested by the Government that this would result in a significant increase in the work of the county court, we believe that that is unlikely. Ten years ago, before the CSA started, all maintenance matters were dealt with through the courts, and the courts were quite capable of coping. We are only talking here about the courts looking at a minority of matters where there are good grounds to appeal against an unfair assessment. The absence of such a right has led to much of the resentment that has undermined the current CSA, and the Bill before us now does not address that.
I turn now to Amendment No. 53. The effect of this amendment is to provide that civil legal aid is available in certain circumstances for proceedings before the child support appeal tribunal. Briefly, while supporting the provision in relation to appeal tribunals—in speaking to this, as is suggested and made clear in the proposed amendments, I am speaking to the situation as it pertains in Scotland—we question whether a right of appeal can be considered as a substantive right if it is not accompanied by a mechanism to ensure that adequate representation can be provided. This amendment extends the provision of legal aid to child support appeal tribunals to ensure access to justice.
I now turn to Amendments Nos. 54 and 55. These amendments refer to the report on the number of appeals completed and the publication of key decisions. The Social Security Select Committee published a report on the benefit appeals system on 24th May of this year. The committee said:
"The Committee's fourth report … reveals a disturbing culture of delay in the system of appeals to the Social Security and Child Support Commissioners. The Committee also found a chaotic and clearly unacceptable situation in the publication of decisions of the Commissioners, described by the chairman as, 'typically British, amateur, worst practice'".
The committee also said:
"On the availability of Commissioners' decisions, it was apparent long before we completed our inquiry that the Departments had acknowledged the extraordinary lack of information and agreed to improve the situation. We welcome this, but conclude that more definite plans should be made in order to assist appellants to find out what legal precedents there might be"
The report criticised the fact that only around half of the key decisions of the commissioners are selected for reporting each year, and the committee called for a new system of publicising judgments. On that matter the report said:
"We were astonished and alarmed at the chaotic and almost laughable situation which applies to the availability of Commissioners' decisions".
The committee wants its conclusions to be implemented without delay.
The Government, as we understood it, were supposed to be taking action in this area. The Social Security Act 1998 was supposed to simplify decision-making and appeals regarding social security, child

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support and vaccine damage payments. Many of the provisions were based on proposals made by the previous government.
Last year, the Under-Secretary of State, Angela Eagle, in another place said:
"The changes we are making will enable the Benefits Agency, Child Support Agency and Employment Service to provide a more helpful and accessible service to the public".—[Official Report, Commons, 2/3/99; col. 708.]
More recently the Under-Secretary of State said that,
"improvements have been made, but we are never complacent and will continue to do what we can to improve the accessibility of the system and its effectiveness".—[Official Report, Commons, 19/6/00; Col.9.]
The amendments tabled implement the Select Committee's key recommendations on reporting and publicising, and decisions of the Social Security and Child Support Commissioner. If the Government are really committed to making the appeal system more accessible, they should give their support to these commonsense amendments that provide freedom of information about the decisions of the commissioner. I beg to move.
Earl Russell: My Lords, I congratulate the noble Baroness, Lady Buscombe, on tabling those amendments. That Select Committee report is a powerful document. I hoped that we would do something with it. I had not worked out what; I think she probably has. We view these amendments with a great deal of sympathy, and I hope the Minister will do likewise.
Baroness Hollis of Heigham: My Lords, we discussed assessment earlier today. Then we discussed variations. A comment I meant but failed to make in response to Amendment No. 47 was that if unforeseen circumstances crop up in the future we can respond by making regulations under existing powers in the Bill, which I think was a point that the noble Earl, Lord Russell, thought I might clarify by placing it on the record. We now, of course, are on to the third step, which is appeals.
Amendments Nos. 48 to 52 relate to Clause 10. That clause sets out clearly the child support decisions which carry a right of appeal. Our intention is that in the reformed child support scheme liability will be established quickly. We want the agency, wherever possible, to settle disputes without the need for a formal appeal. That is why we hope to put in place an effective disputes service for parents who think a particular decision about their liability is wrong. However, we recognise the need for a right of appeal to an independent body with legal expertise to ensure that decisions are made fairly, and that parents' concerns can be given a full hearing if issues cannot be settled in discussions with the agency. The kind of issue I am referring to is where there is a dispute about whether his or her income as reported affects his or her lifestyle.
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As is the case now, in the reformed scheme appeals may be made against decisions relating to child support liability; where a benefit penalty is imposed, because a parent with care claiming income support opts out of child support without good cause, a right of appeal will still arise. There will also be rights of appeal against financial penalties for late payment of maintenance and—if and when these are introduced—fees. The proposals in the Bill build on changes to the appeals system for child support introduced from June 1999. These changes were part of the move to a simpler, more streamlined decision-making and appeals process across the DSS.
Let me turn to Amendments Nos. 48, 51 and 52. These amendments would give child support clients the right of appeal to a county court, rather than an appeal tribunal. I do not accept that this is the right way forward. The court system failed parents in the past. There were real difficulties in getting maintenance orders enforced and non-resident parents were often able to avoid paying maintenance, with the result that children were left in poverty. The courts were widely perceived as having failed to protect children's rights. The court system is adversarial. I think that parents, particularly parents with care, are more likely to feel at ease in an informal tribunal setting. It could result in further delays and may cause confusion because we are crossing between jurisdictions; for example from the CSA to the courts. The courts would also be substantially more costly—around £20 million a year compared with £5.5 million for the appeals service.
The tribunal system, on the other hand, provides parents with an impartial re-examination of the decision under appeal. A tribunal reaches its decision by establishing the facts of the case and applying the law to those facts. Tribunals comprise only those people with the qualifications and expertise required properly to determine the appeal. Every tribunal will include, or be chaired by, a legally qualified person. Where individual appeals involve points of special difficulty tribunals will have access to expert advice.
I turn now to Amendments Nos. 49 and 50. These seek to place on the face of the Bill a right of appeal to a tribunal against the level of the maintenance assessed. These amendments are unnecessary. Parents already have a right of appeal against a decision about whether any child support maintenance is payable and, if so, how much.
Amendment No. 53 seeks to extend legal aid in Scotland to people with child support cases being heard by appeal tribunals. The amendment is not appropriate for inclusion in the Bill as responsibility for legal aid in Scotland has been devolved to Scottish Ministers and to the Scottish Parliament. It would be a breach of the convention agreed during the passage of the Scotland Act for this House to be involved in that debate.
The design of the appeals system, which applies throughout Great Britain, recognises that the majority of appellants do not have a detailed knowledge of the legislation. Proceedings before appeal tribunals and

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commissioners are, therefore, inquisitorial in nature, unlike the court-based adversarial system. Appeal tribunals and commissioners do not rely solely on the evidence presented by the parties to the appeal, nor do they expect the appellant to point to the law in support of their appeal. Therefore, they would not normally be in receipt of legal aid. Legally qualified panel members and commissioners provide the necessary legal input.
The role of departmental officers, including lawyers, in proceedings before tribunals and commissioners is to act as an amicus curiae. They inform the tribunal or commissioners of any evidence which is relevant to a decision, irrespective of whether the evidence assists the appellant or the department. They do not assume a defensive role. The use of legal aid as a matter of routine would alter the fundamental informal nature of appeal tribunal hearings.
I turn finally to Amendments Nos. 54 and 55, which seek to place obligations on the Chief Commissioner of the Office of the Social Security and Child Support Commissioners to provide, yearly, detailed statistics on the disposal of appeals and to arrange for the publication of key decisions. While it seems to be reasonable to expect such information to be provided, this Bill is not the right place to do so; its scope is not wide enough.
The Government are already considering a number of recommendations made by the Select Committee on Social Security in another place and will consider carefully the provision of statistics on disposal of appeals before the commissioners. There is no reason at all why we should wish in any sense to make that information obscure, opaque or hard to get at.
Following the recent report of that committee, an undertaking has already been given to arrange for the publication of the key decisions of commissioners. The Government will be responding to the committee's recommendations in the usual way. Given that these are quite technical amendments, and having given that explanation, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Buscombe: My Lords, I thank the Minister for her response to the amendments and to our concerns with regard to what we saw as only a minority of cases that would wish to go to court where a good chance of appeal existed. We are sorry that the Minister suggested that the courts would fail. If that was so, we would not have tabled the amendments. We cannot agree that the courts have failed to the extent she suggested; quite the contrary. However, we must agree to disagree on that point.
With regard to Amendment No. 53, I thank the Minister for her explanation in relation to devolved powers to Scotland. That was extremely helpful. I am sure that those who have been in touch with us on that matter will be pleased to see that confirmed in Hansard.
Finally, I hear what the noble Baroness says in relation to Amendments Nos. 54 and 55. It may be that in some ways this Bill is not the proper place to address those issues. But the points we raised tonight were of
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such importance that we felt it necessary to table the amendments and I thank her for her response. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 49 to 55 not moved.]
6.45 p.m.
Clause 13 [Information—offences]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 56:
Page 12, line 5, at end insert—
("(4A) It is a defence for a person charged with an offence under subsection (3) that he has reasonably refused a scientific test to prove that the alleged parent is a parent of the child.").
The noble Baroness said: My Lords, Amendment No. 56 is a probing amendment which we tabled fully to understand the implications of Clause 13. The effects of that clause may be quite far reaching in that the burden of proof upon the person charged with an offence under subsection (3)—that he has reasonably refused a scientific test—is onerous. Amendment No. 56 offers a lower burden of what is reasonable.
Clause 13 will clearly make it tough for those not wishing to have a DNA test to prove that they have a reasonable excuse. That may be a good thing in principle. However, it raises a number of important questions which we hope that the Minister will be able to answer tonight. Will DNA testing, in practice, become routine? Do the Government intend or envisage that becoming the case? Who will pay for the test? We are concerned to ensure that a responsible approach attaches to the use of DNA testing; that DNA tests will be used properly by the Child Support Agency; and that the cost, when it is material to the outcome of a case, will be met by the CSA. We believe that, whatever their circumstances, it should not be assumed that fathers should meet the cost. I beg to move.
Baroness Hollis of Heigham: My Lords, Amendments Nos. 56 and 58 relate to the determination of paternity by means of scientific testing. Our reforms are intended to streamline the process of determining whether or not an alleged non-resident parent is in fact the parent of the child. The noble Baroness talks of routine testing. It may be worth pointing out that around 2,000 people go all the way to the courts to dispute parentage and in all but 100 cases they are found to be the parent of the child. I doubt therefore that the test will be routine.
We seek to ensure that maintenance can be sorted out quickly and effectively. Clause 13 makes it an offence to fail to provide information or to give false information to the CSA. There is a fine of up to £1,000 on conviction. Amendment No. 56 seeks to provide that the criminal offence of failing to supply information in Clause 13 will not apply to an alleged parent who has reasonably refused to take a DNA test intended to establish parentage.
Non-resident parents must meet their obligations to their children. These new criminal sanctions will ensure that children receive the financial support due

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to them and make sure that money flows. We intend, through Clause 15, to allow the CSA to presume that a man is the father of a child where he has refused to take a scientific test aimed at establishing parentage. That means that a refusal to take such a test will not normally stop the child support process. This will bring to an end a way of delaying the payment of child support that is prevalent in the current scheme.
However, any man who is presumed to be the father of a child can apply to the courts for the presumption to be rebutted. That presumption will be applied only on a case-by-case basis and will not be automatic. In other words, if the Secretary of State feels that there is a reasonable reason, such as religious grounds, for an alleged parent to refuse to take a DNA test, he will not assume that the alleged parent is the child's father; instead, an application will be made to the courts for a declaration of parentage. In those circumstances the Secretary of State will not pursue information until such time as the courts have established parentage. Action under Clause 13 would not therefore be appropriate.
Clause 13 was not intended to settle parentage disputes; that is for Clause 15. Clause 13 was designed to make it a criminal offence to fail to provide information or to give the CSA misleading information required to calculate or collect child support. If a non-resident parent refuses to take a DNA test, without good reason, he will be presumed to be the parent. In that respect, no further information will be required and there will be no prospect of prosecution. The Secretary of State will, however, then take action to ensure that the information needed to complete the maintenance calculation is provided. If it is not, criminal action may be taken. It is not right that parents are able to thwart the assessment of maintenance by failing to provide information. We believe that Clause 13 provides the correct approach.
Amendment No. 58 would change the provisions of Section 20 of the Family Law Reform Act 1969, as amended by Clause 83, so as to make the Secretary of State for Social Security responsible for accrediting laboratories to carry out court-ordered tests to determine parentage, rather than the Lord Chancellor who is currently responsible for that area. The Government do not believe that that change would be appropriate. I do not know whether the noble Baroness would like me to go into why we should not change who is responsible for regulating laboratories. I shall duck that. If it is necessary, I shall write to the noble Baroness. I hope that, as a result of my explanation, that she will not move the amendment relating to the Lord Chancellor, because he has overall responsibility for the court system. In view of that, and the limits which exist to the Secretary of State's interests in the area, the Government believe that it would be appropriate for responsibility for the accreditation of laboratories under the new system to remain with the
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Lord Chancellor. In the circumstances, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Buscombe: My Lords, I thank the Minister for her response. As I said, this is a probing amendment. It is an important point and we were right to probe those questions. I take her point. We would appreciate her writing to us in more detail. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 [Inspectors]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 57:
Page 12, line 16, after ("inspector") insert ("shall receive full training and").
The noble Baroness said: My Lords, I rise to speak to Amendment No. 57, which is again a probing amendment. It responds in a practical and, we feel, helpful way to what is already set out in the Explanatory Notes regarding the necessary expertise or qualifications required by an inspector properly to fulfil his or her function in what can often be difficult and delicate circumstances.
Paragraph 152 of the Explanatory Notes states, inter alia:
"Given the substantial training, which is required to make an inspector fully effective …".
We are asking for a reassurance that the necessary training of inspectors will be compulsory, given the nature of the task that they will have to undertake. Inspectors will regularly find themselves coping with the assessment of complex accounts, explaining their presence at a non-resident parent's place of work, a presence which often will only reluctantly be acceded to, and reassuring all concerned of the privacy of all the circumstances surrounding that particular case and the financial affairs which are examined in relation to it.
In the circumstances, we do not understand why the Government have not placed on the face of the Bill a stipulation for compulsory training to demonstrate their intention to ensure that all the workings of the CSA are approached in a professional and objective manner. I beg to move.
Baroness Hollis of Heigham: My Lords, I am slightly puzzled. I realise that we were under pressure at Committee stage. However, if amendments are said to be probing amendments, it would perhaps be preferable if they were dealt with at Committee stage rather than at Report stage. Secondly, although I stand to be corrected, I do not recall any Bill—
Baroness Buscombe: My Lords, if I may interrupt the Minister, the only reason for raising it at Report stage is because time was not with us at Committee stage, and we therefore felt that we should not move it at that stage.
Baroness Hollis of Heigham: My Lords, I understood that that was the purpose of Committee

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stage. However, we can possibly take up this argument through the usual channels. It was the choice of the Members opposite.
On the more substantive point, I am not aware that Bills usually specify the level of training for the staff employed by the Government. I can give assurances. I can give descriptions. But one does not put on the face of the Bill the fact that every CSA inspector will receive this amount of training, as the noble Baroness suggests. What would happen if one wanted to increase it, reduce it or change it? It is quite inappropriate for this kind of measure to be dealt with as an amendment on the face of the Bill.
We know that it takes about six months for CSA staff to be fully trained and become properly effective. In addition, specialist roles, such as child support inspectors, require extra training focused on specific skills and knowledge. The officers are of at least executive officer grade. They have a wealth of interviewing experience behind them. Before they undertake their duties as inspectors of the CSA, they must attend appropriate courses, including a course on conducting interviews under caution and the Police and Criminal Evidence Act 1984. This course also deals with what is considered to be "obstruction" of inspectors in the course of their duties. They will also have had experience of dealing with potentially aggressive situations and a knowledge of interviewing and negotiating skills.
We consider that the current training programme is sufficient for part-time inspectors. However, we are developing a full training needs analysis, which will be carried out as part of the preparation for and development of the new scheme. This analysis will take account of revised job design and more effective use of child support inspectors' powers and will ensure that an appropriate level of training is delivered in all cases. We are seeking to work in partnership with other departments, such as the Inland Revenue, in order to benefit from their experience and knowledge. We shall carry out training and we shall conduct a training needs analysis to ensure that our inspectors receive complete and appropriate training, because we obviously want the scheme to succeed.
As a result, I hope that the noble Baroness will recognise that this amendment is not an appropriate matter for the face of the Bill. It is appropriate to the internal organisation and training patterns of an agency in terms of its operational deployment of staff. With that explanation, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Buscombe: I thank the Minister for her response. I cannot agree with her that it is not appropriate to probe such an important subject at this stage. We have tabled this amendment to demonstrate the importance that we attach to the professionalism and the function which will have to be fulfilled by these inspectors. We are very glad that we have given the Minister an opportunity to respond and, therefore, reassure us that there will be proper training for what will amount to a function which will sometimes be
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difficult and will have to be handled in a delicate and firm way. On that basis, I beg to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 58 not moved.]
Clause 16 [Disqualification from driving]:
Earl Russell Earl Russell moved Amendment No. 59:
Leave out Clause 16.
The noble Earl said: My Lords, I do not expect the Minister to have any difficulty in understanding the purpose of this amendment. Whether or not she will like it any better for that is quite another question.
The purpose of the amendment is to leave out of the Bill the clause which authorises a court, when people are reported to it for not paying child maintenance, to deprive them of their driving licence or deprive them of the right to apply for one. We believe that this is an inappropriate penalty. In terms of the Government's own objectives, it will prove to be counter-productive.
When this Government came into office—and have heard this quite often from the Minister—one of their big objectives was to rearrange the social security system to remove barriers to employment. This measure creates a barrier to employment. It does so, notwithstanding subsection (3) of the clause, which asks the court to investigate whether the person concerned needs a driving licence to earn a living. The court can only investigate whether that is so at the moment of investigation. But the Minister knows as well as I do that in the flexible labour market which we now have people cannot count on remaining for a long period of time in the same job. When they lose a job and are required by the actively seeking work rules to look for another, in many parts of the country they simply cannot do so unless they are able to drive. Therefore, they will not be able to work or pay their maintenance.
The application of this clause will be an obstacle to the payment of maintenance. It will reduce the amount of maintenance paid because it cannot be paid without earnings. It will be a case of killing the gander that lays the golden eggs. This measure defeats, first, the principal object of the Government's own social security policy and, secondly, the principal object of this Bill. In terms of shooting oneself in the foot, I think that is a notable right and left.
It is not, of course, just a matter of work. For anyone living in a rural area, and for a good many people who now live in suburban areas or who need to make radial journeys across large towns, the lack of a car is a very ysignificant obstacle to a lot of the other daily necessities of living: for example, shopping, taking children to school—and, since this Bill involves provision for shared care, that may well involve those children whose maintenance we are discussing—visits to the dentist, or, if I may say so, attendance at Labour Party meetings, which, if I read today's Guardian correctly, is not as easy to bring about as it used to be.
About two weeks ago, the Chancellor of the Exchequer floated the possibility of using the employment and social security system to provide

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unemployed people involved in job search with the use of a car during the period of their search. That was a very interesting suggestion. It suggests that the Chancellor of the Exchequer recognises the case that I have argued for some time, namely, that there are numerous areas of this country in which one cannot actively seek work unless one can drive, but it suggests a very limited consultation between the Chancellor of the Exchequer and those involved in the drafting of this Bill. We usually hear quite the opposite story—that the Chancellor of the Exchequer is too much involved in making social security policies. Perhaps on this issue he has been too little involved. It does not sound to me like particularly joined-up government.
There are also quite considerable problems about the notion of read across from one area of penalty to another. I am sure that the Minister will have the read the warnings about this problem on the subject of Sure Start in the latest report of the Social Security Advisory Committee. I do not have it with me but, as I have quoted from it previously, I do not think that the noble Baroness needs to be reminded of it. When we get into the area of read across, we must ask: why this read across and not any other? Why is this the only offence that will lead to the deprivation of a driving licence? Indeed, is it the only offence that will carry such a penalty, or will people be deprived of driving licences for any sort of behaviour of which the Minister—the Secretary of State for the time being—does not approve?
Why only driving licences? Would it not be just as logical to deprive people of, say, the right to play cricket? The problem of which read across is appropriate applies both ways. Why should it not apply to cycling or, indeed, to walking? It leaves me with the words of Belloc:

"Is it true? It is not true.

If it were, it would not do

For people such as me and you,

Who pretty nearly all day long

Are doing something rather wrong".

If we have this sort of read across, we shall have all sorts of apparently illogical restrictions being put in many inappropriate places.
We heard a number of government arguments—
Lord Higgins: My Lords, I apologise for interrupting the noble Earl, but there is rather a nasty symmetry about what is now happening. First, we have a penalty affecting the Department of Social Security that has nothing to do with it; and, secondly, the deprivation of social security benefits is being considered in other areas that have nothing to do with the department.
7 p.m.
Earl Russell: My Lords, I am most grateful to the noble Lord for raising that point, which is entirely valid.
I turn now to some of the Government's arguments. To begin with, they say, "All they need to do is to pay". If I were not a generous person, I would let them go ahead and say it—because every time they did, they would put extra votes into my lobby. But that is the argument of the Mafia godfather, "You'll comply if you know what is good for your health"—
Baroness Hollis of Heigham: No, my Lords, "You will comply if you know what's good for your children".
Earl Russell: My Lords, it was also very much the argument of inquisitors in the days of religious persecution. They, too, put upon it the gloss that the Minister used—
Baroness Hollis of Heigham: My Lords, the noble Earl, Lord Russell, ought to withdraw that remark. We are not talking about examining people's souls or about putting fires under their consciences in order to bring them to one form of faith rather than another; we are talking about ensuring that children in this country receive the maintenance to which they are entitled—a million of them do not. If fathers can but will not pay, we shall ensure that we have the penalties available to make sure that they do, without sending them to prison which, in turn, may damage the child.
Earl Russell: My Lords, in some cultures and religions that are represented in this country, the point I mentioned earlier about the comparative respect for elderly relatives and for children is a matter of faith. I did not intend to argue that the Minister was actually a persecutor. If I made any such innuendo, I withdraw it. However, in turn, the Minister should allow that there may be consciences involved: people may occasionally believe that they have reason for doing something other than what the Minister requires of them.
Baroness Hollis of Heigham: My Lords, can the noble Earl give me an example of any occasion where it would be in someone's conscience that he should not support his child? I can believe that people may feel that they should also support an elderly parent, but are we saying that someone's entire income would be taken up in supporting a child and an elderly parent? No. We are saying only that 15 per cent, 20 per cent or 25 per cent will go on the children, leaving ample to support an elderly parent and to meet any of the other moral obligations illustrated by the noble Earl.
Earl Russell: My Lords, until the Government take action on the report of the Royal Commission on long-term care, I believe that I can make those comments. The costs of keeping an elderly relative in a residential home may be considerable. Yes, I can imagine people saying that, in conscience, they cannot turn their

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parents out of a place where they are receiving care in order to provide a better standard of maintenance for their children. The Minister may say that that is wrong; but she cannot tell me that no one will ever have a conscience to that effect, because many people do.
Baroness Hollis of Heigham: My Lords, this is not really appropriate for a Report stage. None the less, the noble Earl is not describing either fairly or decently the present system for supporting people in residential care. If an elderly person has no resources, he or she will be supported through payments from the state and not necessarily from their relatives. The noble Earl may be concerned that the relatives may seek to hang on to the house and, therefore, prefer to pay the cost of residential care. In that case, they would be trading current revenue against future capital. That is their choice.
Earl Russell: My Lords, we must leave the House to judge between us on the matter.
I shall not deal with the Minister's other arguments at any great length. However, she talked about a penalty like tagging disgracing the parent before the child and argued that the loss of a driving licence would not do so. The noble Baroness does not seem to understand that, for many children, the chief purpose of a father is to act as a magic carpet. That should not perhaps be so, but it often is in practice. I believe that this penalty will disgrace the father before the children a great deal more than a penalty like tagging.
The Minister also argued that this penalty would produce increased compliance. She used evidence from the United States, with which the noble Lord, Lord Higgins, dealt extremely effectively. In the United States, you cannot move or even do your weekly shopping without a driving licence. It is not like that in this country. As the noble Lord, Lord Higgins, also said, it is much more likely that those affected will drive without insurance. Therefore, if they have a crash, the penalties in this clause might fall upon innocent people who just happened to be travelling the other way. I declare an interest in the hope that I shall not be one of them. I beg to move.
Lord Higgins: My Lords, by a curious coincidence, the closing remarks of the noble Earl are relevant to my opening remarks. If one believes that one may have an interest that is relevant to a debate, I have always regarded it as paramount that one should declare it. During the Committee stage, I unexpectedly received a brief from the RAC Foundation, which made exactly the same points that I made on Second Reading regarding this matter. I thought that I might have some indirect connection with the foundation and, therefore, rightly drew it to the attention of noble Lords. However, it turns out that I have absolutely no connection with the foundation, which, I understand, is an independent charitable body. So I suppose that I must "undeclare" my interest, if that is possible. I apologise for detaining the House on that point, but it is curious that the noble Earl declared an interest just before my opening remarks.
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The issue now before us is an important one. The noble Earl outlined many of the relevant arguments. I fear that the problem of the disconnected penalty is becoming increasingly fashionable. There is no connection between the offence—namely, not paying one's child support, which we all agree should be done—and the penalty of withdrawing someone's driving licence. If anything, as the noble Earl pointed out, such a penalty may prove to be counter productive in as much as the withdrawal of the licence may make it more difficult for the individual concerned to produce the resources required. However, I accept the provision in the Bill which states that the court may consider, and take into account, whether withdrawing the licence would result in the person losing his livelihood. Indeed, the noble Earl dealt with that aspect.
A further issue arose in Committee. The noble Baroness, who is always preoccupied with the record of the previous government, pointed out that the Crime (Sentences) Act 1997 included such a provision. She also mentioned that it proposed pilot schemes, but did not tell us the results. I make one major point in that context. The proposal in that legislation related to criminals; it did not relate to those who have not paid their child allowance. While we may deplore that fact, those people are not—at any rate for the moment—defined as criminals. Therefore, there is a big difference between those two sets of people.
That Act was passed under the previous government. A Home Office press statement by the present Government was published on 1st January 1998 announcing its implementation. This made the point I have made; namely, that criminals could be deprived of their driving licences. It also mentioned pilot studies. In Committee, I asked the noble Baroness about the results of the pilot studies but she was unable to give me an answer. Subsequent research has failed to produce an answer but I am glad to note that the Minister nods and therefore it appears that at least the Government have that information. No one else appears to have it and the matter seems to be shrouded in secrecy. It would be interesting to have that information in the context of this debate.
People who do not pay their child maintenance and have their driving licence withdrawn—even though they may not be criminals—might then drive while uninsured. That matter has serious consequences and is a relevant consideration.
The Government appear to have been inspired by experience overseas, and in particular by that of Texas. We carried out a quick survey. However, I admit that it involved just one person! One does not have that many Texan friends! The results were illuminating. When asked how life would be in Texas without a driving licence, the answer was that it would be tough. We asked whether people in Texas had to carry their licence all the time when driving. The answer was "Yes". We asked whether a penalty would be imposed on someone who was stopped while driving and did not have a licence on them. We were told that one was fined in those circumstances. We asked whether the licence served as an ID card. The answer was "Yes".

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Driving licences there have one's picture and can be used to cash cheques and to perform many other transactions. That is not the case in this country. I shall not ask how many noble Lords have been asked to show their driving licences recently. I see that one hand has gone up. Driving licences are normally asked for in this country only if one has committed some traffic offence.
Baroness Crawley: My Lords, I thank the noble Lord for giving way. I was asked to show my driving licence because my car was stolen.
Lord Higgins: My Lords, I commiserate with the noble Baroness. However, the inconvenience of being deprived of a driving licence is nothing like as severe for someone in this country as it would be for someone in Texas.
7.15 p.m.
Baroness Hollis of Heigham: My Lords, I am now baffled by this argument, which was also deployed by the noble Earl, Lord Russell. Is the noble Lord saying that the Government should not deprive certain people of their driving licence because that would not cause them the same degree of inconvenience as it would for people in the States? Is he saying that the loss of a driving licence is such a severe penalty for people in the States that it acts as an effective deterrent, whereas in this country it would be too mild a deterrent to be included in the shopping list of penalties given that alternative forms of transport such as buses are available and people do not have to use their driving licences as ID cards? Is the thrust of the noble Lord's argument that we should not use this deterrent as it is not tough enough for people in this country? Which argument is the noble Lord deploying?
Earl Ferrers: My Lords, I hope that I may interrupt this jolly conversation between the two sides of the House. If I am correct, we are at Report stage. I believe that on the previous amendment the noble Baroness had about five chips at the cherry. We ought to follow the rule that we speak only once.
Baroness Hollis of Heigham: My Lords, I do not believe that the noble Earl was present for the rest of the debate.
Lord Higgins: My Lords, the noble Earl has far more experience of the proceedings of the House than I.
I say to the noble Baroness that, on the whole, we think that this proposal is pretty silly and is not likely to be effective. We have mentioned the danger that people whose driving licences are withdrawn may drive while uninsured. It is not at all clear whether the Government regard this as a lesser penalty. Ministers have said that this penalty is less severe than some others. On the other hand, it was announced with a great fanfare as if it was the flagship proposal of the Bill. That no longer appears to be the case.
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Other bodies have expressed concern at the proposal. The Law Society of Scotland states:
"the Society does question the proportionality of the disqualification provisions which appear in Clause 16(3) which provide that in the event that the Court is of the opinion that there has been wilful refusal or culpable neglect to pay, it may order the non-payer to be disqualified 'for such period specified in the order but not exceeding two years' … from holding … a driving licence.
The proportionality of this disqualification period may be out of kilter with current road traffic law. For serious contraventions of the Road Traffic Act 1988, such as Section 5(1)(a) (driving whilst under the influence of alcohol), the penalty can be disqualification for a period of only 12 months and in practice, the disqualifying period will only exceed this if there are aggregating factors".
The noble Baroness asked whether this was a severe penalty. It seems to be regarded as more severe than the penalty imposed for driving while under the influence of alcohol. We need to consider whether the proportionality of the penalty is appropriate.
As I say, we on this side of the House regard the proposal as silly in some respects. However, it has potentially dangerous consequences. In our view, it is not an appropriate penalty to impose in this area. That does not mean that we are not anxious to ensure that those who ought to pay child maintenance do so. We have generally welcomed the provisions of the Bill. However, we do not think that this proposal is appropriate. If the noble Earl seeks the opinion of the House, I believe that we on this side ought to support him.
Baroness Massey of Darwen: My Lords, I have read the Committee stage debate on this issue. Having listened carefully to the comments of the noble Earl, Lord Russell, and of the noble Lord, Lord Higgins, I ask myself what sanctions we should apply, how we should apply them, and how we can support civil liberties while at the same time encouraging civil responsibilities.
Those of us who condemned the behaviour of English soccer hooligans may have wondered how we could have prevented that behaviour from happening in the first place. I should have thought that tough deterrents could have prevented it. I refer, for example, to the withdrawal of passports. I regard the threat to withdraw driving licences as a deterrent. The lack of a car can sometimes constitute an obstacle. However, that obstacle can be avoided by complying with certain rules. I suspect that more people drive than play cricket. They certainly do not play cricket in Texas. We should remember that the courts can take into account whether someone needs a driving licence to enable him or her to earn a living.
Only 66 per cent of the maintenance that is due is paid. What can we do to remedy that situation? What can we do to support children? What can we do to tackle child poverty? The payment of maintenance forms part of the solution. If the threat of removing a driving licence results in more people paying maintenance, surely that is a valid approach.
Lord Mackenzie of Framwellgate: My Lords, I declare an interest as a patron of the charity, Kidscape. A prime consideration of that charity is the welfare of children.
I oppose the amendment. Recently the Chief Rabbi, Dr Jonathan Sacks, wrote that most people accept the values of honesty, of not committing crimes, of parental responsibility and fidelity. He wrote that people's general instinct is not to harm neighbours, partners or children. The noble Lord, Lord Higgins, and the noble Earl, Lord Russell, said that if the clause was retained, people would break the law through driving without insurance. If we applied that argument across the board we would not make it illegal to commit burglary because people might well commit burglary and break the law. It is a nonsense. There is, of course, the Motor Insurance Bureau, which looks after the interests of people injured by people driving without insurance. It is a non-argument. One has only to stand in a pub and listen to people talking about the football hooligans in Belgium to understand that, generally speaking, we still have decent values in this country.
As a former police officer, I was often accused of being perhaps a little hard on offenders; that I was too quick to recommend custodial measures without first trying other alternatives such as community sentences. Perhaps that is true. It has to be said that the record of prison is not good, but neither is the record of other forms of non-custodial treatment.
In my former life I always tried to achieve justice for the victim of crime. That does not always mean imprisoning the offender; it could mean paying compensation, or even a restorative justice measure such as meeting the victim and apologising for the offence. In other words, we seek to achieve the best outcome for the person wronged. That is the way we should approach this measure.
I spent many hours persuading people who were acting anti-socially of the error of their ways. I have used humour, threats, promises and, yes, deception on occasions—although I will not go into details—to deal with the myriad of situations with which a police officer is confronted. I was always told—and, indeed, always practised—never bark unless you are prepared to bite. In other words, if you threaten to arrest someone, always be prepared to carry it out in the final analysis, and have the lawful powers to do so.
The law should use every means at its disposal to ensure that decisions made by the law are enforced. It is rather like golf; we should have a range of clubs at our disposal, even if we do not use them all. I know the salutary effect that the threat of losing one's driving licence has on the vast majority of drivers. It is very important; it makes them think twice before they continue a course of conduct which they know will attract disqualification. In other words, it concentrates the mind.
If the threat of being disqualified from driving corrects driving behaviour, why should we not use it to correct social behaviour? We are talking simply of another club being used which is available to the court.
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I am sure the fact that such a measure is available will cause many absent parents to stand up to their social responsibilities. As an alternative to imprisonment it is a perfectly legitimate non-custodial sanction.
I remember that a few years ago the former Home Secretary, Michael Howard, used this idea as a sanction against criminal offenders under the Crime (Sentences) Act 1997—and why not if it deterred offenders and reduced the number of victims of crime? It seems to me to be perfectly legitimate.
Magistrates do what magistrates do best—that is, they apply common sense. Clearly they will not impose a ban if it means that a person's job would be affected. The ideal would be for such driving bans not to be needed at all. It is to be hoped that compliance will he achieved by simply having the ban available and the non-compliant person realising that.
This is a last resort measure. The public of this country are fed up to the back teeth with people evading their social responsibilities. It is a sanction that has worked well in other jurisdictions and we should learn from that. There is very little logic in saying that driving bans should be used only to promote safer driving. It is an effective sanction; let us use it to achieve compliance. The beneficiaries will be justice and, in the long term, children.
Baroness Hollis of Heigham: My Lords, Amendment No. 59 relates to the power to introduce a new civil penalty that will enable an order to be made by magistrates disqualifying a non-resident parent from holding or obtaining a driving licence as an alternative to committal proceedings. I am aware—if I was not aware before, it has been made clear to me today—that the penalty of disqualification from driving for failure to pay child support causes concern to some noble Lords on the Opposition Benches.
Clause 16 will enable an order to be made by magistrates disqualifying a non-resident parent from holding or obtaining a driving licence. As my noble friend Lord Mackenzie said, it will exist partly as an alternative to committal proceedings—that is, to imprisoning the offending person. It will be imposed—like imprisonment—very much as a last resort on those parents who have resisted every attempt over so me period of time to get them to meet their responsibilities to their children. At this stage, the non-resident parent will have had every right to dispute his liability or to appeal it to an independent tribunal. The money owing will be money legally determined on the basis of child support legislation.
Our provisions require the courts—not the CSA.—to consider all the circumstances of the case when deciding whether disqualification from driving or imprisonment is the appropriate penalty. To help with this decision it is only right that the court should inquire into whether the licence is needed to earn a living, as well as into the non-resident parent's financial circumstances. It does not mean that where the liable person needs a driving licence to earn a living the licence can never be removed, but it is one of the circumstances that the court must take into account—

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and I am sure will take into account—before imposing the penalty. So the court will have all the information before it. It will know that the person has wilfully and consistently refused to pay child maintenance, and that the CSA is now bringing that matter to court.
At the moment the courts have two broad sanctions—a fine, which usually fails to bite on someone failing to pay money, and imprisonment. To those sanctions we are adding one of removal of a driving licence. The courts will be able to impose a disqualification for a period of anything up to two years.
We are also proposing that the order disqualifying a non-resident parent from holding or obtaining a driving licence can be lifted or amended when the debt has either been cleared in full or a specified part payment has been made. So where a non-resident parent makes a genuine effort to pay off the debt, consideration will be given to giving him his licence back; it will be for the courts to decide. In other words, if the non-resident parent wishes to keep his driving licence, he pays for the support of his children; if, having lost his driving licence because he had failed to support his children, he then starts paying for his children, he will get his licence back.
Noble Lords on the Opposition Benches should make up their minds whether they object to this measure because it is too effective—which is the position of the noble Earl, Lord Russell—or it is so ineffective as to be silly—which is the word used by the noble Lord, Lord Higgins—compared to that of Texas.
We know that when somebody fails to pay it is right that society should use such sanctions as it can to ensure that fathers support their children. If they will not pay the money and not pay a fine, if they will not respond to a garnishee or a distraint order, the alternative facing the magistrates is imprisonment. We are offering the magistrates an alternative and lesser penalty than imprisonment, and one which is less likely to bite on the child.
The noble Earl, Lord Russell, asked how will this person be able to earn a living; how will he be able to do this; how will he be able to do that? The answer is quite simple: he pays his child maintenance and the situation does not arise. All that man has to do—I am assuming it to be a man for these purposes, but it could be a parent of either gender if it is the non-resident parent—to keep his licence is to pay the maintenance. Once that maintenance is paid, the licence can be restored. If a period of disqualification ensures that maintenance is paid, then the scheme will have worked.
Under the current collection enforcement arrangements, the CSA will have offered the non-resident parent every opportunity to pay. He will have had the choice of a variety of payment methods,
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including direct debit, standing order or a deduction from earnings. If talking to him and trying to arrange alternative methods of payment has failed, we go on to the next stage—which is to go for a liability order, and this can be followed up with bailiff action or garnishee orders. Even at that stage it is not too late for the non-resident parent to become a regular payer. He can stop enforcement action at any time by making adequate payment arrangements.
However, those non-resident parents who can pay but wilfully—I stress, wilfully—deliberately, knowingly and repeatedly refuse to support their children, but are happy for other fathers to do so, will now face an application by the CSA to the courts for the most severe sanction. In the past that meant committal to prison. The removal of the driving licence—this is the third stage—gives the courts an alternative final penalty, one that may allow the non-resident to continue working and so pay the maintenance that is due. It will be for the courts to decide whether the non-resident parent is deliberately refusing or neglecting to pay. If the magistrates decide that the penalty is appropriate, they will be able to consider all the relevant circumstances to ascertain whether that penalty is the right one.
I shall not trouble the House with the statistics from Norfolk and Manchester. I wrote to the noble Lord, Lord Higgins, and the noble Earl, Lord Russell, about them. However, those pilots revealed that out of a total of 84,000 fines issued under the pilot scheme, 155 fine defaulters received driving disqualification: 12 in Norfolk and 143 in Manchester. The pilot schemes—introduced by the noble Baroness, Lady Blatch—showed that, where driving licence disqualification was used selectively, it appeared to be extremely effective.
At the end of the day, we believe that fathers should support their children. Children are entitled to that support. As I have said, every opportunity will be given to non-resident parents to enable them to make arrangements to pay. That is the kind of acceptable behaviour that we want to see. If they do not do so, they must be encouraged and persuaded. They have to be persuaded. Their children are entitled to support. Furthermore, that support should not be dumped on to other men and other fathers. If that means that the sanction of the loss of a driving licence as an alternative to imprisonment needs to be used, and as determined by magistrates rather than the CSA, that appears to the Government to be appropriate.
We know that it will have a severe effect, in particular on those living in rural areas. That is why we have provided that magistrates can take such considerations—in particular the ability to continue earning a living—into account. However, no non-resident parent, whether he lives in a town or in the countryside, needs to lose his driving licence. It is up to

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him. If he chooses to support his child—as he should—he does not need to lose his licence. If the licence is removed but the non-resident parent then starts to support his child, the licence will be restored.
However, to argue that we should knowingly not introduce a penalty which has been used effectively in the United States and which falls short of committal to prison—where the parent most certainly will not have any capacity to earn a living to support his child—is wrong. We should not knowingly put a non-resident parent's right to drive a car ahead of a child's right to support from his father. I regard that as an improper moral position.
As a result, if this amendment is pushed to a vote, I hope that noble Lords will support the Government by deciding that children must come first and the right to drive a car must come second. If a non-resident parent supports his children, then of course he may enjoy his right to hold a driving licence. It will not be under threat. I hope that your Lordships will not support this amendment.
Noble Lords: Hear, hear!
7.30 p.m.
Earl Russell: My Lords, before I reply, I should like to express my sympathy for the noble Baroness, Lady Crawley, on the theft of her car. I hope that she has recovered from the experience.
Needless to say, the cleverest argument against this amendment was put forward by the Minister. What else would one expect? I refer to the argument about whether the sanction will be too effective or ineffective. In her academic capacity, the Minister will be familiar with the procedure of ducking witches. They used to throw the witch into the water. The innocent witch was received by the holy element, and thus sank. The guilty witch was not received by the water, and thus floated. That is what we believe will happen here. The procedure will be draconian in its effectiveness against the honest and will be totally ineffective against the dishonest. We think that that is the wrong way round. The honest, who will not be prepared to drive uninsured, will suffer severely, while the dishonest, who will drive uninsured, will cause a good deal of damage.
After the exchanges that have already taken place, I was a little surprised to note that the Minister saw fit once again to repeat the argument: "All he has to do is to comply". I do not wish to visit painful territory, but perhaps the Minister will agree that that threat—for that is what it is—can be repeated in support of any requirement, however justified or unjustified. The Minister said that: "this is what will happen if he does not support his child as he should". We agree that he should, but that he should do so as required by this Bill. That is quite another proposition.
By no means everyone in this country believes the matter to be morally, politically, practically, philosophically or in any other way right. The Minister
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repeated, over and over again, the words, "wilful refusal". I have reminded the Minister in the past of the problems we encountered with the poll tax; namely, "can't pay" or "won't pay". The Minister refuses to believe that there may be anyone caught under this legislation who might be genuinely unable to pay. That, I believe, demonstrates a great simplicity of mind.
The noble Lord, Lord Mackenzie of Framwellgate, said that the court uses every means at its disposal. Yes, but it begs the question which is before us now: whether these means should be at the disposal of the courts? I think it is important to keep in the minds of all those who have anything whatever to do with motor vehicles that the qualification for driving a motor vehicle is that of being safe while one handles it. As soon as we produce the sanction of disqualification for any other reason whatever, we will be diluting that principle. To me, the principle is important.
I recall that, when we discussed this matter in Committee, the noble Lord, Lord Stoddart of Swindon, said that he would call a Division even if he had to do so entirely on his own. However, it appears that the noble Lord is not in a position to do that. Perhaps, as an act of generosity, I should do it for him. I shall not ask for a show of hands; I shall ask for a show of feet. I wish to test the opinion of the House.
7.37 p.m.
On Question, Whether the said amendment (No. 59) shall be agreed to?
Their Lordships divided: Contents, 66; Not-Contents, 104.

Division No. 2

CONTENTS

Addington, L.

Higgins, L.

Alderdice, L.

Howe, E.

Anelay of St Johns, B.

Knight of Collingtree, B.

Astor of Hever, L.

Lester of Herne Hill, L.

Attlee, E.

Liverpool, E.

Avebury, L.

Luke, L.

Barker, B.

Lyell, L.

Bradshaw, L.

Mackay of Ardbrecknish, L.

Brougham and Vaux, L.

McNally, L.

Buscombe, B.

Maddock, B.

Clement-Jones, L.

Mar and Kellie, E.

Colwyn, L.

Methuen, L.

Cope of Berkeley, L.

Miller of Chilthorne Domer, B

Craigavon, V.

Moynihan, L.

Darcyde Knayth, B.

Northbrook, L.

Dholakia, L.

Northesk, E.

Dixon-Smith, L.

Northover, B.

Elton, L.

Oakeshott of Seagrove Bay, L.

Ezra, L.

Park of Monmouth, B.

Falkland, V.

Rennard, L.

Flather, B.

Roberts of Conwy, L.

Fookes, B.

Rodgers of Quarry Bank, L.

Gardner of Parkes, B.

Russell, E. [Teller]

Geddes, L.

Seccombe, B.

Goodhart, L. [Teller]

Shrewsbury, E.

Greaves, L.

Shutt of Greetland, L.

Hamwee, B.

Skelmersdale, L.

Harris of Greenwich, L.

Skidelsky, L.

Harris of Peckham, L.

Stoddart of Swindon, L.

Henley, L.

Taverne, L.

501

Thomas of Walliswood, B.

Vivian, L.

Tope. L.

Wallace of Saltaire, L.

Tordoff.L.

Walmsley, B.

NOT-CONTENTS

Acton, L.

Hayman, B.

Ahmed, L.

Hilton of Eggardon, B.

Alii. L.

Hollis of Heigham, B.

Amos, B.

Howells of St. Davids, B.

Andrews. B.

Howie of Troon, L.

Archer of Sandwell, L.

Hoyle, L.

Bach, L.

Hughes of Woodside, L.

Berkeley. L.

Hunt of Chesterton, L.

Bernstein of Craigwell, L.

Hunt of Kings Heath, L.

Billingham. B.

Jannerof Braunstone, L.

Blackstone, B.

Jay of Paddington, B. (Lord Privy Seal)

Borrie, L.

Bragg, L.

Jenkins of Putney, L.

Brennan, L.

Joffe, L.

Brett, L.

King of West Bromwich, L.

Brooke of Alverthorpe, L.

Lea of Crondall, L.

Brookman, L.

Lipsey, L.

Burlison, L.

Macdonald of Tradeston, L.

Carter, L. [Teller]

McIntosh of Haringey, L. [Teller]

Chandos, V.

Christopher, L.

MacKenzie of Culkein, L.

Clarke of Hampstead, L.

Mackenzie of Framwellgate, L

Cocks of Hartcliffe, L.

Massey of Darwen, B.

Cohen of Pimlico, B.

Mitchell, L.

Crawley, B.

Molloy, L.

Currie of Marylebone. L.

Morris of Castle Morris, L.

David, B.

Murray of Epping Forest, L.

Davies of Coity, L.

Nicol, B.

Davies of Oldham, L.

Pitkeathley, B.

Desai, L.

Plant of Highfield.L.

Donoughue, L.

Ponsonby of Shulbrede, L.

Dormand of Easington, L.

Prys-Davies, L.

Dubs, L.

Ramsay of Cartvale, B.

Evans of Parkside, L.

Randall of St. Budeaux, L.

Evans of Temple Guiting, L.

Rendell of Babergh, B.

Evans of Watford, L.

Renwick of Clifton, L.

Falconer of Thoroton, L.

Richard, L.

Farrington of Ribbleton, B.

Rix.L.

Faulkner of Worcester, L.

Sewel, L.

Filkin, L.

Shepherd, L.

Gale, B.

Simon, V.

Gavron, L.

Smith of Gilmorehill, B.

Gibson of Market Rasen, B.

Symons of Vernham Dean, B.

Gladwin of Clee.L.

Tomlinson, L.

Goldsmith, L.

Turnberg, L.

Goudie, B.

Uddin, B.

Gould of Potternewton, B.

Warner, L.

Graham of Edmonton, L.

Warwick of Undercliffe, B.

Greengross, B.

Wedderburn of Charlton, L.

Grenfell, L.

Whitaker, B.

Harris of Haringey, L.

Whitty, L.

Harrison, L.

Wilkins, B.

Haskel, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.46 p.m.
Baroness Amos: My Lords, I beg to move that further consideration on Report be now adjourned. Perhaps I may suggest that the Report stage should begin again not before 8.46 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Mutual Companies
Lord Faulkner of Worcesterrose to ask Her Majesty's Government what they consider to be the role of strong mutual companies in promoting a healthy and competitive market in financial services.
The noble Lord said: My Lords, I start by thanking those of your Lordships who have put their names down to speak in this short debate, which has the virtue of being remarkably timely because the deadline for postal votes for the Standard Life demutualisation proposals is little more than four hours away. I should declare an interest at the outset as a Standard Life policy holder.
The purpose of my Unstarred Question is to make the case for consumer choice and competition in the provision of financial services. In preparing for tonight, I had meetings with the chief executives of Standard Life and the Nationwide Building Society. While there are obvious differences between building societies and insurance companies, they share a common philosophy. At the top of the list is their personal commitment to their members. Both chief executives made the point that they can devote their working day to thinking exclusively about their customers and the long-term prospects for their companies.
The chief executive of a financial PLC, on the other hand, has primarily to consider his shareholders and will be expected to spend a lot of time in the City talking to analysts, financial institutions and others who can influence the share price. There is nothing wrong with that, but surely it is sensible for both kinds of company to co-exist and for customers to have a choice, as indeed my noble friend Lord McIntosh of Haringey indicated in answer to a question from the noble Lord, Lord Higgins, on 19th April, when he said that,
"a variety of different kinds of governance in the insurance industry is a good thing".
My noble friend went on to say:
"Therefore there is a place for both mutual companies and for shareholder-owned companies".—[Official Report, 19/4/00; col. 703.]
I entirely agree. But I believe that more needs to be done to protect the mutuals from the unwelcome attention of carpet-bagging predators of the kind that currently circle round Standard Life and continue to stalk other mutual prey, including two recent goes at the Nationwide.
Let us remind ourselves about some of the advantages that mutual companies enjoy. For one thing, profit is not the first item on their agenda. They do not have to maximise short-term profits for the benefit of outside shareholders because they simply do not have any. On the other hand, most of the building societies which have converted to plcs pay out more than one-third of their profits in dividends to shareholders, who are made up largely of city corporations, not individuals or former members of a society.

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Instead of paying dividends, the profits made by a mutual are put back into the organisation to benefit its members through interest rates which are higher for savers and lower for borrowers and through better services, such as lower charges, free ATM machines, the sustaining of branch networks and so on. A good way to judge the value that a customer gets from a financial organisation is to look at the difference between the interest rate that he receives for his savings and the interest rate that he pays on his mortgage. The narrower the margin between the two the better the deal the customer gets. Traditional banks have margins of about 3 per cent or higher and converted institutions operate on margins above 2 per cent, but for many building societies the margins are less than 1.5 per cent.
Plcs must charge customers for the use of shareholders' capital. Demutualisation gives ownership of the capital to the present generation of customers. They take for themselves the right to charge future customers for the use of capital which has been passed to them as a benefit in trust. By contrast, the board of a mutual company has a responsibility, as the Minister said in answer to a supplementary question from me on the same day in April,
"to a number of different stakeholders, including current policy holders, the employees and prospective policy holders".
Given management of equal quality, mutuals should have an advantage over plcs in terms of superior investment returns and other financial service products. Certainly, in the case of Nationwide and Standard Life that is undoubtedly the case. Nationwide claims—I have no reason to disbelieve it— that over the past three years a customer with a £50,000 mortgage and £5,000 in an instant access branch-based savings account would be better off with it than any of the five leading former building societies which converted to plcs by amounts ranging from £739, compared with the Halifax, to £1,081, compared with Northern Rock.
There are similarly interesting comparisons in the returns on life and pension policies. The magazine Money Management has calculated that payouts by mutuals have been around 4 per cent higher on average for policies maturing over the past 15 years. Compared with the average plc, Standard Life's payout record is 9 per cent better. The record is also better when it comes to endowments and pension payouts.
As Professor David Wilkie said in an article in the Daily Telegraph on 3rd June,
"Demutualisation is trading future security for the quick buck".
In effect it is future pensioners who ay for the dividends which go to shareholders.
In every debate about demutualisation much is made in the media about the size of possible windfalls for policy holders. That is particularly so in the current battle for Standard Life. Mr Fred Woollard, who has emerged from his home in Monaco as the leader of the pro-plc campaign, claims that flotation of Standard Life would value it at between £12 and £15 billion. He says that that would produce average payouts of
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between £5,000 and £6,300 for qualifying with-profits policy holders. On the other hand, the company says that, with a valuation of £12 billion, 50 per cent of policy holders would get less than £2,500, 30 per cent would get between £2,500 and £6,000 and only 20 per cent would get more than £6,000. Undoubtedly, one of those would be Mr Woollard himself. He admits to having bought up enough second-hand endowment policies to put himself in the frame for a payout of £150,000.
That is very nice for Mr Woollard, but it is important to recognise the difference between an average and a typical windfall. It is like a lottery prize fund of, say, £5 million in which one winner gets £4 million and 100,000 get just £10. Therefore, the average prize is just under £50 but £10 is the typical prize.
An interesting comment on Mr Woollard is made by a Standard Life employee, Mr Garry Morrison, in the company's document on demutualisation. Mr Morrison points out that he has worked for Standard Life for more than 20 years,
"helping to build a company that has delivered significant benefits to members. Unlike Mr Woollard, who by his own admission, has worked on Standard Life for at least a year—which says it all".
Ninety per cent of all staff polled recently by MORI were against demutualisation, despite the promise of financial benefits made by Mr Woollard's action group.
The talk of "windfalls" is rather confusing. In this context a windfall is simply the conversion of a long-term benefit into a short-term one. What do windfalls do? They drop to the ground, bruised and often unripe. One may get the fruit earlier but it would he much better, and more tasty, if it was left on the tree to mature properly.
The Treasury Select Committee in another place carried out an examination of demutualisation in the previous Session. Its report largely supported mutuals and employed a number of the arguments that I have adduced tonight. The committee wanted to make it harder for carpet-baggers and to increase safeguards, particularly so far as concerns the 1986 Act. One of its recommendations—that, for future members, windfalls would be assigned to charity—has been followed by a number of societies. That has largely discouraged the carpet-baggers, who are interested only in short-term gains.
But there remains the problem that mutuals can face the disruptive and costly challenges of contested elections for members of boards year after year. It is, as Nationwide says,
"the equivalent of a government having to face a general election every year".
While I understand that the Government are unwilling to find time for primary legislation to implement those of the Select Committee's recommendations with which they agree, I hope that they will bear in mind the need to reduce the uncertainty and disruption caused by potential carpet-baggers.

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Finally, can the Minister inform the House whether the Treasury is yet in a position to respond to the letter which Mr Davis of the Nationwide sent to the Economic Secretary on 26th May about the relative unfairness of the new all- employee share scheme? This centres on the point that mutuals are not able to take advantage of the share-based tax incentive schemes for their staff which featured so much in the Chancellor's Budget. It puts them at a disadvantage compared with their competitors. Clearly, it is unfair and anticompetitive because plcs enjoy tax breaks which are not available to mutuals. A positive response to these points would be seen as an indication of a real commitment by the Government to ensure fair competition between mutuals and plcs. That is what I hope to hear reiterated by my noble friend when he replies to the debate.
7.57 p.m.
Lord Shutt of Greetland: My Lords, I am grateful to the noble Lord, Lord Faulkner of Worcester, for introducing this debate. I wonder whether it is 15 years too late. Several horses have bolted and few are left in the stable. The Trustee Savings Bank Act 1985 was perhaps the start when that cousin of the building societies was allowed to float. The Building Societies Act 1986 has seen the shedding of the mutuality of Abbey National, the Cheltenham & Gloucester, Halifax/Leeds Permanent, Woolwich, Alliance & Leicester, National & Provincial, Bristol & West, Northern Rock and Birmingham Midshires building societies. Fifteen of the top building societies in 1984, amounting to 70 per cent by asset value, have now demutualised. If Bradford & Bingley, which is in the wings, also does so, that figure will increase to 73 per cent.
We have seen the same process in insurance with Norwich Union, Scottish Amicable, Clerical Medical & General, and Scottish Widows, with Friends Provident in the wings. We have seen it happen to the AA and the RAC. We have witnessed the decimation of the mutual family.
This matter has been of some concern to me. Four years ago I arranged for Demos to publish a little booklet entitled Building Society Bounty: The Case for Member Philanthropy which hit on the notion of inter-generational equity.
The situation as regards mutuals has been rather like the parlour game of pass-the-parcel. When the music stops and the windfall drops, it is those of this generation who benefit. There is a moral case for charitable foundations to be created to honour those mutual years and to look carefully at those communities where the mutuals have been based. There is a further opportunity later: there are often substantial unclaimed or orphan shares.
What do many mutuals have in common? One of the major features of mutuals is their non-London base. Standard Life is based in Edinburgh. Unusually in this case, the directors want to retain mutuality; and I wish them well. Most directors' leadership has been to move
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away from mutuality. I am delighted that those directors are pro-mutuality. One of the great fears is that demutualisation means centralisation, if not in the early stages then perhaps later.
It was announced on Tuesday of this week that 250 to 300 high quality jobs will be lost with the Halifax. I regret that I have to declare an interest: my daughter is affected. That announcement came after I had put down my name to speak in this debate. It is interesting to note that although it was the main story in the Halifax Evening Courier, there was not a mention of it in the London Financial Times.
Why has there been this rush to demutualise? One of the problems has been that the relationship towards members has not been understood properly. Perhaps they have been considered as just customers. What does membership mean? The remaining mutuals may have a chance, but they need to cherish their members and to give meaning and purpose to membership. Within the past few days we hear that water companies are thinking of becoming mutuals. Does that indicate that mutuals are all right if there is no money in them? We have also seen the new mutuals, the credit unions.
I look forward to the Minister's response. I recognise the general case for the mutual: that there are no dividends to be paid out; the mutuals are not worrying every day about the share price. However, where mutuality is to cease—there may be good reason in some circumstances—will the Government encourage the creation of a charitable foundation at the time of demutualisation? Will they seriously consider "gifting" orphan shares? Will the noble Lord indicate the Government's view on regional identity in financial services provision and the role of mutuals in sustaining a regional financial presence? In particular, do the Government wish to encourage the cherishing of the members?
8.3 p.m.
Lord Haskel: My Lords, I congratulate my noble friend Lord Faulkner on his timing. It really is split second stuff! I support what he says. Mutual companies used to dominate the building society and insurance businesses. The purpose of mutuality was to enable low earners to own their homes and to enjoy the security of insurance. Mutual companies were more concerned with the less affluent and, indeed, the rich were charged more.
The purpose was not profit, as my noble friend pointed out. Mutuals had a social purpose. Indeed, a well-run mutual offered a better deal than a well-run shareholder company because the mutual did not pay dividends. However, along came an era of short-term market economics and there was significant change. Conversions took place and reserves built up over many years which really belonged to the past members who were no longer around to claim them. They were shared out among the current members. Plcs gave a better deal to the bigger customers and their justification of the "trickle down" effect has not taken place.

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Why is demutualisation a matter for the Government? Is it not simply a matter of market forces in the private sector? I do not think so. There are occasions when the task of government is to promote the general good over the private interests of individuals or groups. In recent years, leaving decisions to the market has been a manifestation of that. However, there are occasions when market failures need to be put right. The markets in water and electricity are recent examples where the Government have had to become involved.
The gradual disappearance of mutuals is, I believe, another case of market failure. The market has failed, not because the mutuals are poorly managed or their time has run out, but because their rules are outdated and a small group with short-term interests—the carpet-baggers to whom my noble friend referred— can take advantage of that. If our mutuals disappear, our choice will be eliminated.
The argument for maintaining mutuals is one of choice and competition. After all, if members of mutuals have free use of the company's capital, this must give them some competitive advantage, and that should be available to their customers.
There are also social reasons for correcting this market failure. If the market economy becomes a market society, I believe that our society will change for the worse. We shall all be the losers. Almost every day now the Government have to decide where the market economy ends and where society begins. Mutuality is another such decision. And the decision should not wait long because as the assets of the mutuals increase, so the incentive for demutualisation becomes greater.
I welcome the battle waged by Standard Life and the Nationwide Building Society. I congratulate the managers on their principles. If nothing else, this is proven by the fact that in previous flotations of mutual companies the biggest beneficiaries have sometimes been the managers by virtue of the large salary increases and share option schemes which accompany the changing status.
More seriously, I welcome the sense of responsibility mutuals show in trying to look after the interests of future members. If future members do not have to pay the cost of capital, they must be better off. Some say that shareholder ownership is a spur to better management. This means the threat of hostile takeover. But these takeovers also have disadvantages. Few have created the so-called shareholder value which was promised. Many have done more harm than good. They destroy valuable relationships and the implicit contracts built up over many years. Just because this kind of damage is unrecorded by conventional accounting and so does not show up in the financial cost of takeovers does not mean that it has not happened. The competitive cost is there. I believe that that is an argument that mutuals must consider.
In view of those wider considerations, I hope that the Government will take this opportunity to indicate support for the continued existence of mutuals.
8.8 p.m.
Baroness Gardner of Parkes: My Lords, I congratulate the noble Lord, Lord Faulkner of Worcester, on his Question. I look forward to the Minister's Answer.
Like the noble Lord, I must declare an interest as a Standard Life policy holder. I must also say that I am totally confused and have made a conscious decision not to vote either way in the current vote, not only because of this debate but also because I do not know which way to vote. I am in favour of mutuals. However, I do not understand the case for insurance companies as well as I do for building societies.
I was a board member of the Woolwich for some years. In those days, we took conscious decisions again and again to remain mutual. Times have moved on, and I now find myself a Woolwich shareholder. I am sorry to say that the value of the shares has gone down since they were handed out to me, which is rather disappointing. Based on my experience, I do know a little about building societies.
A point that I have made many times to Dr Davis of the Nationwide and to others who have come to speak to the Building Societies All-Party Group was raised in this debate by the noble Lords, Lord Haskel and Lord Shutt. It relates to reserves built up over many years, to quote the noble Lord, Lord Haskel. That is what is wrong with mutuality. The reserves that are held by building societies are too great. The pot of gold at the centre is what is attracting people. If the societies were giving a greater degree of benefit to their members all the time, no one would be carpet-bagging, because the pot of gold would not be there. That is the point on which the societies should take action.
I was pleased when the Nationwide Building Society recently introduced a good savings account yielding interest of 7 per cent. I have money in the Nationwide; however, I was just on the point of taking it all out. Interest rates had gone up and up, and the Nationwide's rates had hardly moved at all. It seemed to me that that was wrong.
I appreciate that no mutual can afford to offer savings at a loss, as has happened with Egg. A mutual must have adequate reserves. But there is no reason for the mutuals to build such enormous reserves that they cannot make use of them and they form nothing but an attraction, a honey-pot, a pot of gold. I give way to the noble Lord, Lord Haskel.
Lord Haskel: My Lords, I thank the noble Baroness for giving way. The existence of such reserves is what enables mutuals to give free use of their capital to new members.
Baroness Gardner of Parkes: My Lords, I thank the noble Lord for that comment. It is true. That is why I make the point about sufficient reserves—but excessive reserves are a different matter. Some building societies have built up huge reserves, and the hand-outs have been huge when they have been disposed of.

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I always remember Lord Houghton of Sowerby telling us in this Chamber how the building society movement started. I do not know whether he was referring to his father or his grandfather, but he said that a group of men got together and each put in a small amount of money until one man was able to buy a house. After that, they continued to put in small amounts, and the next man bought a house, and so on. It was a marvellous scheme, which grew into a huge success. The building society movement has provided housing for thousands, if not millions, in this country.
Mutuality should be the best approach. It is good that dividends do not have to be paid to shareholders and that shareholders' interests do not have be watched over. The point was made that mutuality constantly has to be defended. That is cause for concern. The fight to keep an organisation mutual is a huge expense in itself, and it is not good enough. I have in front of me a cutting from today's Evening Standard about a company wanting to "hand back" the water supply because it is no longer profitable. There is something wrong if people want to provide the benefits of mutuality only because it is unprofitable and unattractive. That is not good. In its hand-out, Standard Life said that it had been a company for 100 years before it became a mutual. That is an interesting history in itself.
I am typical of the many people who do not know where they stand on this issue. No one would refuse a nice little hand-out. Yet one does not want to lose the benefits and see these institutions destroyed. I am a supporter of mutuality and I should like to place that on record.
8.13 p.m.
Lord Lea of Crondall: My Lords, this is a timely debate and we are indebted to my noble friend Lord Faulkner of Worcester for introducing it. I share the thrust of his analysis and indeed that of the noble Lords, Lord Shutt and Lord Haskel. I shall also turn shortly to a point made by the noble Baroness, Lady Gardner.
My central concern is that the financial services revolution is going too far and is destroying some of the best traditions of our institutions, which, as history shows, have made a unique contribution to the social dimension of our lives and to society as a whole.
This is not an occasion for specific legislative proposals. Already in the past year there has been some secondary legislation which has made modest improvements. The House of Commons produced an interesting report in July last year, as my noble friend Lord Faulkner mentioned—to which the Treasury made what might be described as a minimalist response in November.
Perhaps I may quote one sentence from the Treasury response which I should like to query. Paragraph 8 of the Treasury special report states:
"It would not be right to remove the right to demutualise enshrined in the 1986 Act or simply to increase the rights of those who want their society to remain mutual at the direct expense of the rights of those who wish to demutualise".
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My response to that is: well, yes, but I am not quite sure that we do not want a public policy bias in favour of protecting mutual and co-operative organisations. Even a level playing field is not always sufficient for some people—as Kevin Keegan's squad found the other night. In this context, we must decide what a level playing field is. The Government are asked to tell us about,
"the role of strong mutual companies in promoting a health and competitive market in financial services".
I spent my working career as a trade union official. As John Monks recently pointed out, Britain's trade unions and mutual organisations, including, for example, building societies, share a long history. They began as friendly society functions. They were established by the underdog to protect and advance the interests of the underdog. That function is still necessary. There are underdogs in need of mutual self-help and protection. We need a public policy bias in that direction. Otherwise, in the next 20 years we shall go round reinventing the wheel. John Monks states that,
"Mutuals have always played a vital role in this country. They provide financial services to wide groups who are not well served by banks. They were set up to serve the community, and they still do. Their first loyalty is to their members, not their shareholders. And as they have no need to generate profits, over the long term they are guaranteed to beat any bank".
One of the tests as to whether the Government are really committed to helping the underdog in this area is whether, in practice, they are making sufficient connection between social and financial exclusion and the problem of many of our inner cities, and indeed rural areas.
There is a further point which has not been made in this debate. Never was there a time when trust in people's motives in financial services was at more of a premium. In a pub the other day, I heard someone say, "Independent financial adviser? You must be joking". That is the kind of comment that is widely heard at the present time. There is a need for trust in the financial institutions. There is a need for decentralisation. I cite just two examples: when the Town and Country Building Society closed its head office, that had a major effect on Clacton; when the Gateway closed, the impact was felt in Worthing.
That kind of philosophy must he contrasted with the role of the carpet-bagger in investing a small amount of money in a mutual and then forcing it to distribute the assets. I echo what has been said about Standard Life. In the past few days I have heard it said on two occasions on the BBC that "today is the last chance for people to vote to get £6,000". We really must be careful about the media projection of some of these issues.
I could say much more but time does not permit. I hope that my noble friend the Minister will give us a rather philosophical overview of where we are going in this field.
8.19 p.m.
Lord Joffe: My Lords, I, too, am grateful that the noble Lord, Lord Faulkner, has raised this important

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issue, and I support the powerful case that he has made for the Government to take action. At the outset, I declare an interest as a policyholder of Standard Life.
The issue has two dimensions: first, a moral dimension; and, secondly, one of competition. It is unusual to concern oneself with morality in financial matters. However, as the noble Lord, Lord Haskel, outlined, mutual organisations were set up for the benefit of their members and not for profit. Therefore, in my submission morality plays a very important part.
The effect of demutualisation is simply that current members will appropriate for their own benefit the reserves created by previous generations of members. It could not possibly have been contemplated by those previous generations that that would happen to the reserves that they had a part in building. In so doing, the current members are depriving future generations of the benefits of mutualisation. They are also imposing additional expenses on future generations. Therefore, although it is perfectly legal, it is certainly not particularly moral. On the question of morality, it is also relevant to applaud the integrity of the managements of Standard Life and of the Nationwide, who, against their personal interests, support the continuation of mutualisation and the purpose for which the organisations were set up.
I turn to the matter of competition. By and large, the products of good mutuals must be better than the products of good profit-making organisations. That is for the simple enough reason that there is no profit loading. The result of demutualisation is that consumers must pay more for the same products. In my view, it is the interests of consumers that are paramount in relation to the competition aspects. If consumers have to pay more because there is no competition from the most efficient organisations in the field, it is self-evident that government should intervene to protect them from unnecessarily high charges. Government should at least take action to ensure that the most competitive organisations do not disappear.
It is relevant to consider the action taken by government thus far in relation to mergers and monopolies. If, for example, Prudential and Standard Life decided to merge, there is every possibility that the Government would say that that was contrary to the interests of consumers because it created a monopoly situation and distorted the market and, as a result, consumers would be overcharged in the future. Yet, if Standard Life demutualises, competition will disappear and, again, consumers will be prejudiced. I shall be interested to know whether the Minister can provide the rationale for the protection given to consumers as a result of mergers and monopolies legislation and the lack of protection which exists currently in relation to consumers who suffer from the effects of demutualisation.
We know how easy it is for the current members of mutual organisations to be bribed to give up the benefits of mutualisation without regard to the future. We know how easily they overlook the fact that it may not be in their best interests from the long-term point
512
of view. Because of that, if the Government consider that there is a role for strong mutual companies in promoting a healthy and competitive market, they had best take action soon because after the next three or four years there will be no strong mutuals to protect.
8.25 p.m.
Lord Graham of Edmonton: My Lords, I congratulate my noble friend Lord Faulkner, not only on initiating the debate but on doing a first-class job in exposing the issues both for and against. In effect, this debate is a defence of the mutual principle. I applaud the principle of mutuality. The concept of "all for one and each for all" appeals to my political background and is the bedrock of a great deal of good.
In practical terms, the benefits of mutuality have been sketched ably by my noble friend Lord Faulkner. I welcome the opportunity to restate the value of mutualisation and to plead with the Government. The noble Lord, Lord Shutt, tellingly told us that the stable door has almost been bolted. However, the stable door was opened by a government not of my political persuasion and for very good reasons. Their political philosophy saw the great opportunity that existed in the locked-in assets of building and insurance societies.
My background is the Co-operative movement. In 1844, when the Rochdale pioneers began their sterling work, they produced, with the trade unions, the friendly societies and a great many others, the concept of helping each other. The great stakeholder was the member. I am delighted at the emphasis that has been placed by the noble Lord, Lord Shutt, on the value of member and consumer participation.
It is only a few years since a predator decided that the Co-operative movement, through the CWS, which was the central federal organisation, was ripe for a takeover. It is due only to a vigorous defence of the CWS, the Co-op and the mutual idea, led by my noble friend Lord Fyfe, the chairman of the CWS, and by its chief executive, Graham Melmoth, that the Cooperative movement is as healthy today as it was then. These attacks come and they will go. We must acknowledge that the jungle in which we walk and try to survive has had predators for a very long time. The principle of "dog eat dog" is well established.
In my view, it is terrible that the appeal to greed and avarice which has been launched in the past few years has found a resonance among so many people. I believe that it is immoral that the assets and prizes, which could have been distributed but which have been kept in the business to make it stronger, are now seen by the present generation as its entitlement. The Co-operative movement is no different. The asset base of the movement substantially comprised the untapped dividends of the members. The members left their dividends in place. Quite frankly, I believe that we should recognise that what we are seeing now could lead to something worse.

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However, it is not the end of the world. Reference has been made to Standard Life, and I wish its directors well. Hitherto, the motivating force for demutualisation has been the directors of the companies who stood to gain the greatest benefit. They knew that once the companies demutualised, there were rich pickings. The first fat cats in our society were the directors of demutualised businesses.
The noble Baroness, Lady Gardner, makes a valid point that the retention of assets can be taken too far, but I would much rather have them prudently managed in that way, particularly if members are being looked after by better terms.
The Minister can do the House a service. The stable door has not been bolted completely. There is still a battle to be fought and won. The Co-operative movement has 8 million members and 30 or 40 big regional co-operatives. They will resist any such move this time, next time and whenever it comes. The Co-op will fight, fight and fight again to retain the principles on which it was established.
The last time that I spoke in a debate on this subject was the day that the Link building societies put forward a scheme to attach excessive charges to hole-in-the-wall machines. I got my debate on an important day, just as my noble friend, Lord Faulkner, was lucky to get this debate tonight. The battle is worth fighting, so I congratulate my noble friend on giving us the opportunity to put in our two pennyworth.
8.31 p.m.
Lord Northbrook: My Lords, I congratulate the noble Lord, Lord Faulkner, on securing this debate. Like other noble Lords, I should declare my interests, first as an investment manager investing in quoted UK life, banking and building society companies, among other UK plcs, and, secondly, as a holder of mutual and non-mutual insurance policies.
I take as my starting point a helpful comment by the Minister. As the noble Lord, Lord Faulkner of Worcester, said, on 18th April, in response to a question from my noble friend, Lady Knight of Collingtree, the Minister advised the House that,
"The Government's view is that a variety of different kinds of governance in the insurance industry"—
which I assume that we can read as the financial services industry more generally—
"is a good thing. Therefore there is a place for both mutual companies and for shareholder-owned companies".—[Official Report, 19/4/00; col. 703.]
That makes sense and is important. As Charles Leadbeater, writing in the Guardian a year or so ago, put it:
"Putting all our organisational eggs into a single basket threatens disaster. We need a healthy ecology of competing organisations and that requires a variety of forms—traditional companies, partnerships, mutuals, co-operatives, social enterprises—to choose from".
At least in part, that is the appropriate answer to the question posed by the noble Lord, Lord Faulkner, about the role of strong mutual companies in
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producing a healthy and competitive market in financial services. We support that. It underlies the point that while, according to the Financial Times,
"The 'mutual vs plc' argument is sexy—and easy to write about",
it is far too simplistic to perceive the issue merely in those terms. The merits of both sides of the argument are well rehearsed. The noble Lord, Lord Faulkner, and others have enunciated them again tonight most eloquently and I do not need to labour them. However, it is too easy for the debate to become polarised. It is right for the adherents of each side to fight their respective corners, but we have to bear in mind that if competition is to be enhanced and diversity maintained, it is in the interests of the industry and the consumer that mutuals and plcs—and other organisational forms—should co-exist.
What are the strengths and weaknesses of mutual companies? A well run mutual life company, for example, has certain key advantages over its quoted public rivals. It does not have to pay a dividend, and therefore will have more of its surplus to pay out to policy holders. It does not have a share price to be concerned about, and therefore can be less concerned about short-term fluctuations in profit. The mutuals can also make use of a strong local identity to promote themselves.
However, mutuals can have disadvantages. First, due to their size, many may not be able to compete in the long term with their larger quoted brethren. That can be a particular problem in the mortgage market where the size of the market leaders, such as the Abbey National, the Halifax, the Cheltenham and Gloucester and the Woolwich, can lead to greater competition in the setting of rates which the smaller companies may not be able to match over a long period.
Secondly, because of their structure, mutuals can be less able to react to problems within the company, such as additional competition or poor investment performance. Whereas the stimulus of outside shareholders can force change for quoted companies, there is no such mechanism for the mutuals under their existing status.
Some commentators argue that the greatest threat to the survival of mutuals is the management deciding to change to plc status rather than the investors in the company's products.
In summary, neither type of organisation is intrinsically better or worse than the other. What really matters is that the best run of each brings its own benefits to the needs of financial services product consumers.
8.36 p.m.
Lord McIntosh of Haringey: My Lords, I, too, congratulate my noble friend, Lord Faulkner, on introducing this timely debate. I have scored the debate at six in favour and two don't knows. I have counted the noble Lord, Lord Northbrook, and the noble Baroness, Lady Gardner, as don't knows.

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I have been asked by my noble friend, Lord Lea, to give a philosophical overview. I do not think that I shall be able to do that in the 10 minutes at my disposal, particularly as I have to start by declaring an interest, as others have, as a policy holder of Sun Life of Canada and Scottish Widows, both of which have recently demutualised against my vote. That is my starting point.
Let me start with building societies, as the noble Baroness, Lady Gardner, did, remembering a dear friend, Douglas Houghton. Most of the building societies started with as few as 10 friends putting money aside and using the funds to buy one house, then buying more for other members in turn. They dissolved when they had achieved their objectives. A century ago, there were 2,000 of them. Now mergers—-a much more significant phenomenon in a sense than demutualisation—mean that there are only 68, of which only nine have converted to plc status. I agree that those nine are among the biggest.
The first legislation for building societies was enacted in 1874. The Building Societies Act 1986 was the first substantial revision of it.
Building societies work on a one-member, one-vote basis. The board is elected by the members to act in their interests. Only the board can propose conversion to or takeover by a plc bank. A vote requires 75 per cent. of saving members on a 50 per cent. turnout and a simple majority of borrowing members. Borrowing members have a veto, regardless of the strength of support among saving members. Those are rightly high thresholds for change.
Despite those high thresholds, when boards have proposed conversion, the votes in favour have frequently been in excess of 95 per cent. on a 75 per cent. turnout. In 1997, the Halifax, the Alliance and Leicester, the Woolwich and Northern Rock got 98 per cent. votes in favour. That is quite a facer for those who want higher thresholds still.
I shall not go into the history of insurance societies, except to say that mutuals and non-mutuals both have long traditions. Demutualisation has happened not only in the United Kingdom but also in Canada and Australia, and it is not one-way traffic. This year, the Royal London took over United Assurance, which is a plc, and as we have been reminded, Standard Life was a shareholder company for 100 years until it mutualised in 1925.
There are over 100 mutual insurance companies. Many are small; for example, provident and mutual health insurance specialists. Most mutuals are general insurance businesses and demutualisation is focused largely on large life mutuals. But even there, some significant players such as the National Farmers Union and Wesleyan Assurance are still mutual companies.
As for the procedures for the demutualisation of insurance companies, there is no legislation governing voting because many are mutuals registered under private Acts. So the business and commitments have to he transferred to a company limited by shares created for the purpose.
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The Insurance Companies Act 1982 sets the framework for that and the regulator, the Treasury—in practice, the Financial Services Authority—has a say in the way in which that is done. Those who believe that they may be adversely affected may make representations to the court.
A number of noble Lords, notably my noble friend Lord Faulkner and the noble Lord, Lord Joffe, have said that other things being equal, mutuals should have an advantage. Indeed, that should be the case. But it is very difficult to prove that. One can almost always find figures to prove either case. Past performance may not be a guide to the future, as it always says in the small print in the advertisements. Payout performance data on policies that run their full term are unhelpful if many are terminated or surrendered early. One can make comparisons between different forms of policy, on the length of policy, on surrender values and on termination values. Those are too complicated from which to draw simple conclusions about which is better. Some companies may be building reserves which may restrict pay-outs. Are they performing less well? It is extremely difficult to say.
On the one side is the theory that, as a company owned by shareholders, management will be driven to perform better. On the other side there is the undoubted fact that mutuals do not pay dividends to external shareholders. However, there is not enough empirical evidence yet, if there ever will be, to test either theory.
Reference has been made to the Treasury Committee report last year which proposed a number of primary legislation changes: aligning the voting thresholds for borrowing members with saving members; applying the same thresholds on members' resolutions proposing conversion; preventing members of less than two years' standing from receiving a share distribution on conversion.
The Government's view is that although, of course, we believe that variety in the market-place is healthy, there are difficulties with the Treasury Committee's view. We must remind the House that borrowers have a veto although they have only one-seventh of the membership. So against the principle of one-member, one-vote, they already have more than their natural share of voting power. When we are looking at the interests of consumers, borrowers, the policyholders, are the consumers for those societies. Experience shows that borrowers vote in the same way as saving members. That may not be a pleasant thought but that is the truth of the matter.
I remind the House that members' resolutions do not have any statutory force. It is the board which must act and the members cannot require the board to do so. Those votes are effectively opinion polls. Imposing voting thresholds does not make any difference to the strength of members' views.
I heard what the noble Lord, Lord Shutt of Greetland, said about charities. All large societies have charitable assignment schemes in place. I heard what has been said about the two-year rule. But that would

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mean that only longstanding members, rather than charities, would receive windfalls and that would not affect the voting. When Lloyds took over the Cheltenham & Gloucester, the two-year rule applied and 95 per cent voted for demutualisation on an 84 per cent turn-out.
Of course, we recognise the intergenerational equity issue. We believe that the boards should take account of future customers; that is, potential policyholders. In the case of insurance companies, the regulator must have regard to the ability of the business to fulfil reasonably expectations of policyholders and potential policyholders.
We have taken action ourselves. We increased the turn-out threshold on conversion votes in 1977 and we have encouraged the Building Societies Commission to increase the number of backers required to nominate board candidates, propose members' resolutions and requisition general meetings.
The Question on the Order Paper asks the Government what they consider to be the role of strong mutual companies in promoting a healthy and competitive market in financial services. Obviously we consider that role to be important. We agree with the thrust of the Question. The subtext is whether we are going to do anything else to prevent demutualisation. I have explained what we have done to make demutualisation more difficult. The problem we have is that the pressure for conversion comes from the members. If we were to support proposals for legislative change, we should risk destroying the very essence of mutuality in an attempt to protect it.
High hurdles are in place before institutions can convert. But in the end, the only way for societies to ensure their own future is to convince their members of the benefits which mutuality can bring. Many societies are doing so through the rates and returns they offer and the quality of service they provide. In the end, the future of those societies is in their own hands, and that is the way it should be.

Child Support, Pensions and Social Security Bill
8.46 p.m.
Consideration of amendments on Report resumed.
Clause 18 [Financial penalties]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 60:
Page 18, line 15. leave out ("in his absolute discretion").
The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendment No. 61. These amendments are minor technical amendments. First, Amendment No. 60 will put beyond any question that we might, by using the words "absolute discretion", intend to create a bar on the exercise of judicial review in connection with the imposition of penalty payments. The amendment, however,
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maintains the policy intention that discretion will be exercised reasonably, based on the circumstances, in order to determine the amount of the financial penalty.
During consideration of the Bill, the noble Earl, Lord Russell, moved an amendment to probe the intention behind the meaning of "absolute discretion" in connection with this clause. There was concern that the intention was to oust the jurisdiction of the courts as regards judicial review. There was never any such intention. We always expect the Secretary of State to act reasonably but I thought that the noble Earl made the better case. Therefore, I am happy to bring forward an amendment to meet the noble Earl's concerns without changing the policy intent.
Amendment No. 61 is a minor amendment intended to clarify the drafting of Schedule 3 to the Bill. Currently, paragraph 11(3)(b) of the schedule amends Section 4(9) of the Child Support Act 1991 by adding the words "treated as made" after the word "application". However, the word "application" appears twice in Section 4(9). We are therefore taking the opportunity to clarify our intention and to put beyond a doubt which part of Section 4(9) is to be amended. With that brief explanation, I beg to move.
Earl Russell: My Lords, I thank the Minister very warmly indeed for Amendment No. 60. I am extremely glad that she is satisfied about the case, although I must admit that when she sat down at the end of our discussions in Committee, you could have fooled me.
She has discharged her duties like a trooper, as a junior Minister should. She is to be congratulated on spotting the point; on having the clout to persuade other people within the Government of its validity; and on drafting the amendment in such a way that it is a good deal better than my original one. I am absolutely satisfied and I warmly thank the Minister.
On Question, amendment agreed to.
Schedule 3 [Amendment of enactments relating to child support]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 61:
Page 107, line 27, after ("after") insert (""an").
On Question, amendment agreed to.
Clause 30 [Earnings from which pension derived]:
[Amendment No. 62 not moved.]
Lord Astor of Hever Lord Astor of Hever moved Amendment No. 63:
Page 26, line 41, leave out ("six") and insert ("eleven").
The noble Lord said: My Lords, in moving Amendment No. 63 I shall speak also to Amendment No. 64. We shall not be moving Amendment No. 65.
With six children of my own, I feel I can comment objectively on the amendment. Even after children reach the age of six, they can place major demands on a carer. My nine year-old son needs just as much, if not more, care now than he did when he was five. It seems unreasonable that pension rights for those who make a major commitment to their family should suffer as a result.
In Committee the Minister gave the Government's reasons for the requirement that a child should be under six for its carer to qualify for the state second pension carer's credit. I did not find those reasons persuasive. We propose instead that deemed benefit contributions be received by those who look after children up to the age of 11. That is consistent with labour market reality. Many more women work full time when their children are over 10.
We are sympathetic to the amendment tabled by the noble Lord, Lord Goodhart, although we prefer the age of 11 to that of 12. I beg to move.
Lord Goodhart: My Lords, Amendment No. 64 stands in the name of myself and my noble friend. It is, of course, to exactly the same purpose as Amendment No. 63 which has just been moved by the noble Lord, Lord Astor of Hever. The arguments we would put are exactly the same as those which he put. The only difference between us is that we propose the age of 12 rather than 11. We do that because we believe that for many children the first year of secondary school is a difficult and, in a few cases, a traumatic one, and it is reasonable for mothers to decide that they will stay at home rather than commit themselves to work until the end of the first year of secondary school of their youngest child. Therefore, we suggest that the appropriate age is 12 rather than 11. However, subject to that, we are in agreement with the amendment moved from the Conservative Benches.
Baroness Hollis of Heigham: My Lords, I am sorry that I was unable to persuade your Lordships in Committee that the Government's policy was the right one. As your Lordships will know, the Government propose that anyone who earns less than the annual lower earnings limit in a given year who is looking after a child under age six and receiving child benefit will accrue entitlement to state second pension (S2P) in respect of that year. In effect, we are targeting extra help on people looking after children up to early primary school age.
That is because we recognise—as can be seen in the employment patterns of mothers with young children—that carers (usually mothers of children below school age) have the least opportunity to work and earn above the lower earnings limit. That is why we are seeking to help them and to ensure that they have the opportunity to build up a decent pension in older age.
The problem currently under SERPS for people caring for a young child is that for every year that they are not working they get a smaller pension when they come to retire. That is a significant reason for women, who are most often affected by periods of caring for children, getting less from SERPS on average than men.
Our proposals for S2P will help to address that problem. Almost 1.5 million women will benefit. Five years out of work looking after a young child will give someone additional pension of about £5 a week in state second pension. Under SERPS, that same person would have received nothing at all.
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However, the amendment focuses on whether that guarantee or passport into S2P should apply beyond the age of five up to either 11 or 12. Your Lordships will know that many mothers of school-age children choose to combine their caring duties with part-time work. Many of those parents will benefit from the low earner's boost in the state second pension by earning as little as £3,500 per year. That means that as a result of the minimum wage, someone will only need to work about 18 hours a week to gain access to the boost.
I have done some calculations. If, for example, a mother with a child from five or six upwards was working five hours a day just for term times weeks—which is well within the school day, even for children of the age of six onwards—at a minimum wage she would already be above the LEL and qualify. That means that a person working a fairly low number of hours—five a day, in term time only—at minimum wage will qualify. Anyone who combines a part-time job with child caring, as around 60 to 70 per cent of married women with children over the age of five or six do, will qualify for S2P. I believe that that is a perfectly reasonable position for us to propose.
Obviously, some mothers may choose to stay at home even when their children are older; whether they are 10, 12 or 14. Some may have no choice because of family or other circumstances. If, for example, those circumstances include a disabled child, they might receive ICA. That would give them other qualifications. It is not our intention to punish them for that. Indeed, we are doing a great deal to help stay-at-home mothers, including big increases in child benefit and really big increase in income-related benefit rates for young children, which have gone up by nearly 100 per cent in three-and-a-half years since the Government came to power.
We are also introducing new rights for parental leave. But we have to ensure that mothers have the choice to return to work if they want to, and the majority do. That is why we have introduced the working families' tax credit, the childcare tax credit and the national childcare strategy. As a result, women are coming into work.
Focusing S2P and the HRP credit for it on those caring for children under school age matches the choices most women make. Generally, mothers take career breaks or periods out of work when their children are very young. As most children start school well before they reach age six, mothers will have had time to adjust to the change and look for suitable part-time work if they choose to do so, as most do. They will be able to qualify for S2P by working within the normal hours of a school day. It is a decision about individual choice. Entitlement to state second pension will simply be one more factor to consider.
Obviously, bringing up children is a valuable contribution. Given what I have said, I hope that your Lordships do not think that mothers have to choose between part-time work, if that is what they wish, and bringing up children over the age of five or six and thus disqualifying themselves for state second pension. These are combinable and are combined by most

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women. However, we are focusing help on those mothers with younger children, below the age of five, where there is not that same access to part-time work, given that the children are still dependent upon them. That is where we believe our priorities should lie. I hope that with that explanation, your Lordships will not feel the need to pursue the amendment tonight.
Lord Astor of Hever: My Lords, I thank the Minister for that response. I take on board the points she makes about part-time work. I agree with the noble Lord, Lord Goodhart, that there are times when it is reasonable for a parent to remain at home looking after a child or children up to the age of 11 or 12. They should not be penalised for that. We shall, of course, carefully read Hansard. However, in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 64 and 65 not moved.]
9 p.m.
Lord Goodhart Lord Goodhart moved Amendment No. 66:
Page 27, line 9, at end insert—
("(e) the pensioner—

(i) did not have an earnings factor for the year equal to or greater than the qualifying earnings factor for the year; but

(ii) would have had such an earnings factor if he had had earnings equal to the lower earnings limit in each week in which paragraph (b), (c) or (d) would have applied to him if the words "throughout the year" had been omitted").

The noble Lord said: My Lords, in moving Amendment No. 66 I shall speak also to Amendment 67. Although it is not formally grouped with Amendment No. 66, I believe that it may be convenient if I speak to it at the same time because it covers a good deal of common ground.
This is the first in a short series of rather complex amendments on matters concerning pension contributions. Clause 30 of the Bill inserts a new Section 44A into the Social Security Contributions and Benefits Act 1992. Among other things, it gives deemed pension credits for the S2P to people who qualify in four different categories. I regret that my amendment covers only three. I notice that I failed to take up a point made by the Minister in Committee. The four categories are: first, those who qualify as recipients of invalid care allowance; secondly, those with home responsibility for a child under the age of six; thirdly, recipients of long-term incapacity benefit; and, fourthly, recipients of severe disablement allowance. In each of those four cases, the pensioner, or prospective pensioner, gets credit only if he or she falls within that category for the whole of a fiscal year. This creates serious problems for what might be described as the "entry and exit years"; namely, the year in which the right to the benefit begins or ends. I use "benefit" as a shorthand way of including people with home responsibility, who are not receiving benefit as such.
If in the entry or exit years a contributor has sufficient earnings, he or she qualifies for S2P credits on that basis. The level of earnings required, as I understand it, is 52 times the lower earnings limit for each week. That aggregate is described as the "qualifying earnings factor". But there will obviously be many cases, particularly if the change from earner to carer comes early in a fiscal year, in which the contributor will not have reached the qualifying earnings factor before he or she switches from earning to caring.
Therefore, as the Bill now stands, many people will lose the year's credit towards the S2P for their entry and exit years because they do not have sufficient earnings in those years to reach the qualifying earnings factor, but have not been receiving the relevant benefit for the whole of that year. I believe that that is unfair. Why should people in those circumstances lose credit? Not only is it unfair, it is also random, because the question of whether a contributor has reached the QEF in any particular year may well depend on whether the switch from earning to caring, or earning to benefits, has happened late or early in that year. Moreover, it is worse than random because it discriminates against the poor. Even though, of course, earnings above the higher earnings limit are disregarded for this purpose, one will reach the QEF much more quickly if one's earnings are at the higher earnings limit than if they are at the lower earnings limit. So, this is irrational; it is random; and it is discriminatory against the poor.
The way of curing that problem is obvious: to allow people to mix and match. If someone switches from earnings to benefits half way through the year, surely one should take the earnings for the first half of the year and add on a notional credit for earnings at the lower earnings limit during the period when that person has been in receipt of benefits. That in the great majority of cases would solve that particular problem. Therefore, why not allow mix and match?
In Committee, the noble Baroness, Lady Hollis of Heigham, recognised the problem and promised to look at it again. No doubt she has done so, but no government amendment appears in the Marshalled List. Clearly, although she has looked at it again, it has been decided that nothing should be done. I have to say that I find it difficult to believe that the problem is as intractable as that. I await with interest her explanation.
The only problem that I can see is that the Contributions Agency, which is now part of the Treasury, will have to talk to the Benefits Agency. The Contributions Agency will know what a contributor's total earnings were in any year. It will have to find out from the Benefits Agency, whether any person was receiving relevant benefits for part of that year. Surely, those are facts which are relatively simple to ascertain. All one has to do is to put the two of them together, and "hey presto", if the aggregate sum reaches the qualifying earnings factor, problem solved. I do not believe that the problem is insoluble. I believe that if there is a will to solve the problem, it could be solved.
I should like to finish by referring briefly to Amendment No. 67. That derives from a matter raised by the noble Baroness, Lady Pitkeathley, both at Second Reading and in Committee. There is a special problem which relates to ICA (invalid care allowance). This can be lost temporarily if a person cared for is in hospital or respite care for more than 28 days in any one period of six months. The pension credit, therefore, in this case may be lost not only in the entry and exit years but in an intermediate year in which the hospital or respite care exceeded the permitted amount.
The purpose of the amendment is to allow a carer to continue claiming the pension credit, although not the ICA itself, during the period of hospital or respite care of the person being cared for, for up to three months. This is perhaps a relatively small point, but it is surely a very important one for those who are affected. I believe that the Government would do well also to accept the principle of this amendment. I beg to move.
Baroness Pitkeathley: My Lords, in Committee I put my name to an amendment similar to this one in the name of the noble Lord, Lord Goodhart. I have not done so on this occasion because I believe there may be some technical difficulties with the suggestions that he puts forward. However, I want very much to speak in support of the principles which I believe underlie his amendments. I raised these issues about carers' income at Second Reading and in Committee. I must acknowledge the huge progress that has been made for carers in recent years: the Carers (Recognition and Services) Act 1995, the National Carers Strategy, and —if your Lordships will forgive the commercial— the Carers and Disabled Children Bill, which I shall bring before your Lordships' House tomorrow. But, so far as income is concerned, progress for carers and policy thereon have not kept pace.
At Second Reading I asked about a review of carer's benefits. I raised that again with my noble friend last week in a Starred Question. I am particularly concerned at this moment about carer's income because the latest survey published by the Carers National Association—Caring on the Breadline—shows that 77 per cent of carers say that they are worse off as a direct result of their caring responsibilities; one in three have trouble paying for gas and electricity; and one in three have been or are in debt. It is an extremely gloomy picture.
I know that the Government value carers. But on the question of income, carers are beginning to have doubts about that. I am not suggesting that there should be vast influxes of money; like all carers, my requests are modest. But small changes can make big changes in carers' lives; for example, raising the earnings limit for invalid care allowance and the lower earnings limit for national insurance contributions; introducing a taper on invalid care allowance; extending invalid care allowance for eight weeks after the death of the person being cared for. There is a precedent for that, as I pointed out on an earlier occasion, because the carer's premium, which was introduced some years ago, extends for eight weeks
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beyond the death of the person. Alternatively, the respite care provision could be continued as suggested by the noble Lord, Lord Goodhart, in Amendment No. 67.
I hope that the Minister, who I know is extremely sympathetic to the problems of carers, will take note of these points, either now or at Third Reading. The Government must show some movement in this area if carers are to be reassured that they are valued in the way that everybody agrees they deserve.
Baroness Hollis of Heigham: My Lords, we discussed Amendment No. 66 in Committee. As the noble Lord, Lord Goodhart, said, in good faith I took it away to see what I could do.
The intention of the amendment is to allow someone with earnings below the annual lower earnings limit for the year (LEL) to benefit from the lower earner" s boost where they were also entitled to ICA, long-term incapacity benefit or home responsibilities protection (HRP) for part of that year.
During the previous debate I tried to set out the very real difficulties underlying what the amendment sought to achieve. I said that I had then and continue to have sympathy for it. I hoped that if there were an easy solution we would find it. I was more than willing to take it away to see what we could do.
We have examined these matters again. Speaking personally, I have been engaged in two quite long and extensive meetings with officials. I am still unable to see a way through the difficulties, as I shall explain. But perhaps for those who were not present at the time, I can say what the nature of the problem is.
As is the case for SERFS, entitlement to S2P (state second pension) will be calculated on an annual basis on a person's surplus earnings; that is to say, the amount by which someone's earnings exceed the annual lower earnings limit of £3,500. That means that we need to look at someone's earnings over the whole of the tax year in question. That is consistent with the annual returns made by employers on each employee's earnings in the preceding year.
This means that someone who has earnings between the annual LEL and the low earnings threshold for the year in question will benefit from the state second pension low earner's boost. And someone who has been entitled to ICA or long-term IB throughout the year will be credited into the state second pension.
The noble Lord, Lord Goodhart, supported by my noble friend Lady Pitkeathley, was seeking to see whether we could mix and match benefits and earnings for the entry and exit years. The difficulty is the consequential anomalies that would result. We have found ways around some of the problems, but there are others we are unable to resolve.
We have proposed that it will be necessary to meet the qualifying criteria for the whole of a year—that was the original intent—because it would not be operationally feasible for either employers or the department to move to a system which calculated entitlement not on a yearly basis, but on a weekly

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basis, given that all earnings details are provided on an annual basis by employers and are recorded as such by the department.
Having looked carefully at that issue to see whether we could find a workable solution, we established that it would be operationally possible to combine earnings for weeks in which someone earns over the lower earnings limit (£67 a week) with credits for ICA and long-term IB recipients, treating the credits as if they were equivalent to earnings at the level of the weekly LEL. So far so good. Technically we could do that.
The problem arises—it may be that I did not explain this fully enough at the time, but I have been round this time and again and cannot see a way forward—when we try to read across to home responsibilities protection for basic pension purposes. HRP will be of much greater benefit to such carers under our proposals for state second pension, and we intend many more to be aware of it. But as HRP is only available for whole years of caring activity, we cannot unpick and revise that legislation to allow for part years. Any measure therefore which benefited only certain carers would not only be morally difficult to justify, but would also leave us open to future ECHR challenges.
Perhaps I can remind your Lordships that ICA goes to those who are caring for more than 35 hours a week and earning less than £50 a week and therefore are likely to be either in a household where no one is in receipt of benefit or, alternatively, are likely to be in work. As the noble Lord said, it is not beyond our wit to do a mix and match for entry and exit where people are above the LEL for the other part of the year. Our problem lies with home responsibilities protection: HRP goes to two other major groups. It goes to the carers of elderly or disabled people who qualify for ICA but do not receive it; for example, those who are on income support with the carer premium, the poorest carers, or those who, although they are entitled to ICA, also get another, higher benefit, such as widows' benefit or IB, who are often the most frail carers. So those who most need the protection are those who are most likely to be protected by HRP, rather than getting ICA.
Given the way that all the records are built up, we cannot possibly "part-year" home responsibilities payments for carers. Even if we could, we would have to consider what to do about the people receiving HRP because they are caring for children under five. The cost of extending these exit and entry years would be extremely high—about £200 million per year. In addition, we must also consider the implication of extending that to a group far wider than that envisaged by the noble Lord.
Our problem is that wherever the line is drawn, greater anomalies are created than if that line was not drawn at all. That is our dilemma. We can solve it for those on ICA. However, we cannot have equitable treatment of those carers of older people who are receiving HRP without at the same extending it to other groups, who I am sure are not envisaged by the
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noble Lord as requiring entitlement, such as those who get HRP through caring for children. For HRP, that is built up on an annual basis.
I am very sorry about this. I very much wanted to see whether we could deliver a mix and match. I recognise the arguments and I have every sympathy with them. However, I now honestly believe that we cannot do it without producing more anomalies than we solve. I am afraid that the read-across consequences of doing something which here looks decent, right and proper, but which in turn generates other unfairness and injustice in the system, is a recurrent problem in social security. It is for that reason that, although I took away the provision in good faith, I have not been able to come back with something that will meet the concerns of the noble Lord tonight. With that explanation, I hope that the noble Lord will accept my arguments.
The noble Lord also referred to Amendment No. 67. It may be helpful if I remind your Lordships about the interaction of ICA rules regarding periods spent in hospital and residential care, including respite breaks. During any six-month period, ICA can still be paid for four weeks when there is a break in the caring. In addition, it remains payable for a total of eight weeks in a six-month period if either the carer or the disabled person is in hospital. The total of 12 weeks can all be taken as a hospital in-patient if no respite breaks are taken. If the carer is in hospital, the eight weeks could cover one period. However, if the disabled person is in hospital, the length of time for which ICA is payable depends on the disabled person's DLA or AA still being paid.
The DLA and AA rules for periods in hospital have recently been changed to extend entitlement to DLA and AA to include the day of discharge from hospital and the day of admission to hospital, which means that there will be fewer cases where there is a break in entitlement. Similarly, the carer of a disabled person—it might be a severely disabled child in a weekly residential school—who is in publicly funded care all week, but who returns home on Saturdays and Sundays, could now become entitled to ICA for the whole week. Because of the discharge rules of DLA and AA, that would not previously have been possible; it is now possible. There has been some decent movement on that front, where, particularly for parents with disabled children or someone in weekly residential care, the entry and exit days do not jeopardise their entitlement to ICA. I think that the rules are quite generous.
This amendment would introduce a set of different rules in S2P for periods spent in hospital or residential care for respite breaks to those receiving ICA, which we think would be administratively cumbersome. A carer whose ICA had ceased during such a period would be treated as though they were still entitled to ICA for up to three months at a time, which is quite a long period in which to have a roll-over of entitlement. It could be repeated several times during the year. Therefore, although the majority of the year could be spent not caring, that year would still provide a year's entitlement towards S2P.

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In addition, it is worth noting that this proposal would break the essential link between DLA and AA and its carry on entitlement to ICA and, therefore, the link between ICA and caring for a severely disabled person.
With regard to Amendment No. 67, I hope that the noble Lord will agree that the Government have gone quite a long way to meet some of the very real concerns. I hope that he will recognise, however, that we cannot do what he is now asking us to do, which would not only be cumbersome but probably unfair. In the light of my explanations and my regret that we cannot move on Amendment No. 66, I hope that the noble Lord will withdraw his amendments.
9.15 p.m.
Lord Goodhart: My Lords, I am most grateful to the Minister for the obvious effort that she has put into seeking a way round what are undoubtedly real administrative difficulties in this matter. I very much regret that it has not been possible to find a way round these difficulties, because I think that this is a cause of real unfairness and injustice.
I accept that it would, of course, cause anomalies to extend the measure to cases in which it could be done, such as ICA, while not extending it to HRP. At the same time, however, I want to say two things about that. First, the anomaly is no greater than the existing anomaly where someone who starts drawing ICA on 31st March will then get credits starting from the following 6th April, whereas someone who starts drawing ICA on 12th April will have to wait nearly a whole year to be able to get the credit. That seems to me to be at least as serious an anomaly as the other one.
I also think that this is perhaps a case where the following principle applies: thou shalt not do a just thing today for fear of having to do a juster thing tomorrow. Were the Government to at least extend it where it could be done with relative administrative ease, they might find themselves more motivated to come forward with a solution for the more serious difficulties surrounding HRP.
Nevertheless, I feel that this is a highly technical issue. Without the administrative backing that the noble Baroness enjoys, I am reluctant to insist that this problem that can be overcome. In those circumstances, it would frankly be wrong for me to do anything other than beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 67 not moved.]
Lord Higgins Lord Higgins moved Amendment No. 68:
Page 27, line 14, after ("1") insert ("and Class 2").
The noble Lord said: My Lords, the House is most fortunate in having a Minister who is able to explain the kind of technicalities that we have just debated. Indeed, if I may presume to say so, she gave quite a remarkable exposition. However, I fear that the matter now before us is probably equally complicated. I recall
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that I used to give instructions to parliamentary draftsmen a long time ago on how to draft a particular passage of legislation. A month or two later, when the matter reached Committee stage, I would perhaps experience some difficulty in recognising what was before me because there seemed to be no resemblance whatever between what I had asked them to do and what appeared on the face of the Bill. The drafting of this clause is somewhat unusual. I hope that the Minister will be able to clarify one or two points in that respect.
The whole clause is drafted in relation to Section 22 of the Social Security Contributions and Benefits Act 1992, but it relates to the state second pension, which is entirely new. Can the Minister say whether this section has repercussions on other pensions legislation apart from the state second pension? If it does not, can she tell us why it is set out by reference to the 1992 Act, when the state second pension could perfectly well have been self-contained? It is always most unfortunate to approach these matters by reference to previous legislation, because the subject matter is not then self-contained.
Having said that, it seems to me that we have a strange two-tier system of drafting before us. Under subsection (3) of Clause 30, a new Section 44A (Deemed earnings factors) is to be inserted into the 1992 Act. My amendment relates to new subsection (2)(d), as set out at the bottom of page 26 of the Bill. But, instead of going on to deal with all the other points relating to that subsection, the legislation goes on under new subsection (3) to define the,
"requirement referred to in subsection (2)(d)".
Thereafter, new subsection (4) says that,
"the purposes of subsection (3)—
the part I just quoted—are something else. I am not clear why those three provisions are not included in the same subsection. There are three descending tiers in the drafting. That makes it extraordinarily difficult to follow.
I believe that the proposal includes the provision for a state second pension; I am not sure whether it also affects other pensions—so that when determining their deemed earnings factors one should not only take account of primary Class 1 contributions but also Class 2 contributions.
If I understand the Bill correctly, it proposes to strip from those who undertake employment and self-employment in the same year the ability to count their income for both Class 1 and Class 2 contributions towards their pension. I understand that such art arrangement for both classes is possible under the existing legislation. Are we now adopting a more stringent process as far as those people are concerned? If I have understood the drafting correctly, this applies only to people who are on incapacity benefit payable throughout the year. This measure, unamended, would adversely affect the pension prospects of those who switch between low paid employment and self-employment—a group whose numbers may well increase as a result of rapid economic and technological change. I believe that the group is

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comparatively small but those who are self-employed are likely to have a small pension and to that extent they are more vulnerable.
Having said that, I hope that the Minister will accept that for those on incapacity benefit who meet all the requirements that I have just set out, the fact that Class 1 contributions are taken into account is insufficient. They should at least be allowed to have Class 2 contributions taken into account in calculating their entitlement to the state second pension and, also, perhaps, to other pensions. I beg to move.
Baroness Hollis of Heigham: My Lords, I am in some difficulty in answering some of the noble Lord's questions. Our understanding of the amendment did not encompass some of the issues that he raised in his speech. I am sure that the noble Lord did not do that on purpose. However, I am anxious not to "wing" my words as people, and pension fund personnel, need to be given precise forms of wording to assess the Government's intention in this regard. I shall answer those questions that I can and respond more fully in writing to those questions which do not appear to bear much relationship to the amendment as we understand it. None the less they are perfectly legitimate questions to raise. I do not blame the noble Lord for asking those questions but he cannot blame me for not necessarily having the answers ready to hand.
Amendment No. 68 would enable periods of self-employment to count towards the 10 per cent work requirement for long-term disabled people. As the noble Lord recognised, this raises the wider questions of pensions for self-employed people. It is in that context that I shall respond to the amendment.
Our proposals for the state second pension will do a great deal for disabled people with broken work records—indeed it brings them into additional pension provision for the first time. Of course, one can always go further, but I believe that we have—in that favourite phrase—struck the right balance: providing extra help where it is most needed; maintaining incentives to work and save; and protecting those who cannot work for periods. We are doing this within proper and prudent public expenditure limits.
We recognise that the nature of self-employment is changing and that there are real questions about how best to ensure that the self-employed are encouraged to save for their retirement, and protected where they cannot. There are wide-ranging issues which need to be explored, for example, the question of how including the self-employed in additional state pension provision would be funded. When we raised somewhat similar questions at Committee and Second Reading I was anxious to air with noble Lords the dilemma that while we were urged on the one hand to bring people within either compulsory stakeholder schemes or state second pension schemes there was a real problem with self-employed people who might regard their business as their pension. Any requirement to contribute to schemes, or any levying of national insurance for that purpose, might be regarded as a levy on their cash flow and on their ability to maintain the business. There are
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real dilemmas about what is the best public policy for self-employed people who may be working on very narrow profit margins, at least when they start.
Whether self-employed people should eventually be brought into the state second pension was part of the consultation exercise on the pensions Green Paper. There were a wide range of responses and we are still considering the outcome. We are talking to pension providers on the one hand—because it obviously has implications for stakeholders—and with Treasury officials on the other. It would be wrong and premature to accept an amendment on the question of the state second pension for self-employed at this moment. We shall certainly return to the issue—the noble Lord is right to draw it to our attention in that respect; it will not go away—but whether we have yet got the right answer I am not sure.
One of the questions raised by the noble Lord concerned the legal drafting. We are reforming SERPS through the introduction of the state second pension; in legislative terms it is still additional pension but the amount of entitlement is calculated in a different way. Therefore there are no repercussions for any other benefit.
Perhaps I may write to the noble Lord on some of his other questions.
9.30 p.m.
Lord Higgins: My Lords, in that case, why was it not self-contained? Why is it all done by reference to the 1992 Act? If it is concerned only with the state second pension, why is it done by reference? It may have repercussions if it is done that way.
Baroness Hollis of Heigham: My Lords, I cannot help the noble Lord on that question. I do not know why it was drafted in that particular form. If I were the noble Lord, Lord Ashley, I would know the answer by now. I shall have to write to the noble Lord. I apologise. I simply have not had any guidance as to why parliamentary counsel drafted the Bill in this particular form. Obviously I shall seek advice. If the answers I give to the noble Lord are unsatisfactory, he must come hack to me and I shall make sure that he gets the fullest possible answer.
Lord Higgins: My Lords, I am not sure whether or not I have had an answer.
Baroness Hollis of Heigham: My Lords, it was the one I had already given. We are reforming SERPS legislation; this is why it takes the shape it does. If the noble Lord is less than fully satisfied by that answer, I shall make sure that he gets a fuller one.
Lord Higgins: My Lords, I am most grateful. I look forward to that. If I understand the noble Baroness correctly, now she is saying that this affects not only the state second pension—although that is the heading—but has repercussions for SERPS as well, which is not the heading. We obviously need to go into

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the matter further. I shall be grateful if the Minister will write to me with an explanation. Subject to that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 [Additional pension]:
Lord Goodhart Lord Goodhart moved Amendment No. 69:
Page 112, line 14, at end insert—

(".—(1)This paragraph applies if a pensioner attains pensionable age after the end of the first appointed year and the pensioner's earnings factor (as revalued under section 148 of the Administration Act) in respect of any relevant year before the first appointed year is an amount equal to or greater than the qualifying earnings factor but less than the lower earnings threshold at the date when he attained pensionable age.

(2) The additional pension payable to a pensioner in respect of any relevant year before the first appointed year in which his earnings factor (as revalued) was equal to or greater than the qualifying earnings factor but less than the lower earnings threshold at the date when he attained pensionable age shall (subject to sub-paragraph (3) below) be calculated as if his earnings factor (as revalued) for that year had been equal to the lower earnings threshold at that date.

(3) The number of years to which sub-paragraph (2) above applies shall not exceed the number of complete years between the beginning of the first appointed year and the date on which the pensioner attained pensionable age.

(4) If the number of years to which sub-paragraph (2) above applies is less than the number of years to which it would have applied but for sub-paragraph (3) above, it shall be treated as applying to those years in which its application is most favourable to the pensioner.").

The noble Lord said: My Lords, the amendment is a revised and, I hope, somewhat improved version of an amendment moved at Committee stage. The S2P is an ingenious and interesting idea which has a certain number of defects. One of them is the slow rate of build-up to the full benefits to be provided. If nothing is done to speed it up, we know that it is something which can take up to 40 years—someone's full working lifetime.
The Minister said at Committee stage on 15th May that many of the lower paid,
"can expect to see a significant boost to their pensions within 20 years or so".—[Official Report, 15/5/00; col. 86.]
The implication is that there will not be a significant boost until about 20 years from now. That seems too slow.
The effect of the amendment would be to speed up the benefits. The way in which it would do so is perhaps a little complicated. It would allow any past year in which the benefits derived from SERPS are less than they would have been had S2P then been in operation to be upgraded to the S2P level. That will apply to years in which the earnings of the pensioner, after taking into account the uprating in line with earnings factors, were lower than £9,500.
In order to prevent a large boost in government spending on pensions, we have suggested that this should be done only a year at a time; only one year of SERPS can be exchanged for the higher level provided by S2P for each year after the Bill comes into effect in which a contributor has income at or above the level of the qualifying earnings factor. That means that the
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burden will be increased only gradually, but at rather less of a snail's pace than will be the case with S2P as it is now proposed.
The previous version of the amendment involved the exercise of an option by the pensioner and, of course, a corresponding need to inform the pensioner of his or her right to exercise that option. That complication was rightly criticised by the noble Baroness. The new version tabled here operates automatically, without any need to get in touch with the pensioner to ask whether he or she wishes to exercise the option.
Almost all of the benefit will go to those who are on relatively low earnings. As I explained previously, there is no point in exchanging SERPS for S2P for anyone whose earnings before downrating would have been more than £9,500. It will be of benefit only to someone whose earnings are below that level. That could be of some benefit to those who begin their careers on low pay but subsequently prosper. However, most of the benefit will pass on, proportionately, to those with a lifetime of low earnings.
In our view, this will speed up the conversion of SERPS into S2P. It will provide enhanced levels of pension benefit for some of those who have, in the past, been entitled to only very low levels of SERFS. It will do so at a relatively gradual rate, but even so, it will enable S2P to become effective more rapidly than has been proposed by the Government. I beg to move.
Baroness Hollis of Heigham: My Lords, Amendment No. 69 is similar to one we discussed in Committee. It seeks to boost the amount of additional pension which someone with low earnings would receive from their years of SERFS entitlement while S2P is building up to maturity.
The amendment would allow someone who had low earnings while in SERPS to have their SERPS calculated when they reach pensionable age as if those earnings, when revalued, were at the level of the lower earnings threshold. I am glad to see a comforting shake of the head to acknowledge that the amendment has been understood. That is not always the case!
The number of SERPS years which could be enhanced in this way would be restricted to the number of years between the introduction of S2P and the reaching of pensionable age. This would give a retrospective boost for certain people for years before the introduction of S2P, based on the number of years' entitlement after its introduction.
Perhaps I may remind noble Lords of what we are trying to achieve with S2P. We are reforming SERFS to refocus state help on those who have the least opportunity to build up good second pensions. SERPS has served many pensioners well, but because it is earnings related those who earn the least gain the least from it.
Under SERPS, someone who earns just above the lower earnings limit for the whole of their working life will still retire on a state pension below the minimum income guarantee. And that is before the 1986 and 1995 changes to SERPS have their full effect. But

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under our proposals, anyone retiring with a full working life of employment behind them, or periods of caring or disability, from 2038, when the state second pension has built up, will receive a total of basic and additional pension above the MIG.
We recognise that the benefits in S2Ps take time to build up. Pensions, by their very nature, are a long-term issue. I am sure that the noble Lord will have read the financial pages which state, "If you don't start building your pension at 23, 25 or 27 you will not have a decent one at 65 and you cannot come into a pension scheme at 50 and have anything much worth having".
Lord Goodhart: My Lords, I am grateful to the noble Baroness for giving way. That is true and those advertisements relate to funded pensions. However, as regards pay-as-you-go pensions, the level of pension is determined by what the Government think fit to charge by way of contributions or provide out of general taxation. There is no structural reason why it should build up gradually.
Baroness Hollis of Heigham: Except, my Lords, that current taxpayers have to fund at an additional cost the pensions of a previous generation which has not in turn funded other people to the same extent. That is the definition of a pay-as-you-go scheme. It is paid for in a different way. As regards a state second pension, there is not the advantage of an employer's contribution, which is available in occupational pensions or in some cases—I hope in money purchase pensions—of contributions along with the recycled rebates and the person's own contributions.
Lord Higgins: My Lords, but there are employer's contributions.
Baroness Hollis of Heigham: My Lords, in the state second pension?
Lord Higgins: My Lords, in the basic pension.
Baroness Hollis of Heigham: My Lords, I am talking about the difference between funded schemes, which involve the employer's and employee's contribution together with rebates, as opposed to pay-as-you-go schemes, which still have to be funded but by current taxpayers and national insurance contributors for a generation which is already coming towards retirement—
Baroness Turner of Camden: My Lords, does the Minister agree that all pension provision constitutes a contract between generations, no matter whether it is funded or pay-as-you-go? If it is funded, it comes from the overall economy, which is produced by the present generation in order to support the older generation. There is a contract between the generations, whether pensions are funded or pay-as-you-go.
Baroness Hollis of Heigham: My Lords, I, too, believe that pensions are a contract between
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generations, but I believe there is a deep difference between funded and unfunded schemes. I do not believe that my noble friend's formulation will overcome that. A funded scheme is a personal savings pot into which a person has put money, the employer has made a contribution, and there are recycled rebates and so forth which will grow. As regards pay-as-you-go schemes, whenever you make a pension scheme more generous, those who enjoy it are not the same people as those who have paid for it. The people are currently paying for it at a different rate from the previous generation. That is why, as my noble friend will know, many European countries, such as Italy, France and Germany, where there is a real desire to switch over to funded schemes, cannot do so because one generation will have to pay twice over; for their own scheme and for the generation which has gone ahead.
While I do not disagree in general terms that pensions are a contract between generations, I believe that that conceals the real difference between the method of funding and the nature of that obligation between generations as regards funded and pay-as-you-go schemes.
Baroness Castle of Blackburn: Would my noble friend—
Baroness Hollis of Heigham: My Lords, it is the Report stage; it is not the Committee stage. I shall of course give way to my noble friend, but I suggest that we then return to Report mode.
Baroness Castle of Blackburn: Thank you. I wanted to ask my noble friend a question. If the sin of pay-as-you-go schemes is that those who enjoy them are not those who paid for them, is that not the essence of a means-tested benefit such as minimum income guarantee?
Baroness Hollis of Heigham: My Lords, I do not quite understand the purport of my noble friend's question.
Baroness Castle of Blackburn: Perhaps I may explain it. A person who pays for his pension as of right—the basic state pension—is told that he cannot be given anything, but if he falls within the minimum income guarantee, whether or not he has been among the main savers for his old age, the amount will be made up to £78. The individual will receive that amount whether or not he has paid for it.
9.45 p.m.
Baroness Hollis of Heigham: My Lords, as my noble friend knows very well, the policy behind the minimum income guarantee seeks to address the poverty of those pensioners—mainly older women, including widows—who, by virtue of their domestic and caring responsibilities, have not been able to enter into either a SERPS or occupational pension while in the labour market. They have not had the advantage, which future generations of women in that situation will

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enjoy, of entitlement to the state second pension to float most of them off MIG in future. I hope that my noble friend accepts that description.
Pensions by their very nature are a long-term issue. We have introduced MIG to give extra help to those of today's pensioners who have been unable to save. The need for this extra help will be progressively reduced as the benefits under S2P start to accrue. Many of the lower paid will see a boost to their pensions within 20 years or so. For example, someone who retires in 2025 with earnings of just £6,500 for a full working life will be lifted above MIG by receiving £18 a week more than he would have received under SERPS. The position of couples under S2P is even better, because MIG for a couple is not twice what it is for a single person.
As I said when we debated this matter previously, without our pension reforms one in three pensioner householders would have to rely on MIG by 2050. Our reforms will reduce that proportion to one in five. We shall lift over 2 million pensioners off MIG as a result of our changes. That is our response to an inherited situation whereby a wide range of people—low earners, carers and disabled people—have no hope of a decent income in retirement. Stakeholder pensions and S2P will help people to build up good second pensions in their own right. The MIG provides help to today's pensioners, and will do the same for those currently approaching pensionable age who do not have time on their side to build up an entitlement to S2P. We believe that that balance is right.
Under Amendment No. 69 some low earners would have their SERFS entitlement boosted. I understand the thinking behind the amendment. It recognises that low earners are a group who have benefited least from SERPS and therefore seek to do a swap, as it were, between entitlements. But I do not believe that the way to address the problem is to tinker with entitlement which has already accrued in a way which is partial and unfair. For example, the amendment would not benefit those other groups which S2P is designed to help—carers and long-term disabled people—who have not accrued entitlement under SERPS. It would be unfair to existing pensioners who would be unable to benefit. People with the same earnings in the same year would have the SERPS entitlement calculated in entirely different ways. There would be little gain in the short term because those reaching pensionable age soon after the introduction of S2P would have only a few SERPS years enhanced. Even with that boost, many low earners under SERFS would not have a pension sufficient to keep them above MIG.
The fact is that SERPS is such a poor deal for those on low earnings—which is why we are reforming it— that even this boost would give limited advantage to only a few. That is why in S2P not only do we treat low earners as if they had earnings of £9,500—even if their earnings were £3,500, £6,000 or £7,000 they would get a pension on the basis of earnings of £9,500—but, unlike the noble Lord's amendment, we double the accrual rate on those earnings from 20 per cent in SERPS to 40 per cent in S2P. It is the combined effect of those two measures—the assumption of earnings of £9,500 and the doubling of the accrual rate—which
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gives low earners in S2P a pension which is sufficient both to take them above MIG when they reach pensionable age and to keep them there for a significant number of years.
The noble Lord's amendment does not increase SERPS entitlement to the level of S2P because it delivers the low earners boost only up to the level of £9,500 and does not tackle the issue of the double accrual rate. Further, his amendment would make the calculation of additional pension entitlement very much more complicated. The noble Lord will say that it is not beyond the wit of man to devise a way round it. None the less, any form of retrospection for one group alone—which is what the amendment would do—is not fair to others, and we believe that the operational complexities are mind-boggling. That is why we are directing resources instead through MIG where there is immediate need and introducing S2P to address longer-term need. I hope noble Lords will agree with me in that approach and that as a result the noble Lord, Lord Goodhart, will feel able to withdraw the amendment.
Earl Russell: My Lords, before the Minister sits down, perhaps I may, for the purposes of elucidation and clarification, draw the noble Baroness's attention to the wording in the Companion to the Standing Orders about interventions.
There is no separate rule for interventions on Report. The rule that lengthy or frequent intervention is undesirable is common to all stages of our proceedings. The only thing restricted on Report is speaking after the Minister has sat down, which is to be confined to brief questions for purposes of elucidation. I hope that that may be of some assistance to the Minister and to the House.
Baroness Hollis of Heigham: My Lords, I take that point. None the less it is at Committee stage that we explore, discuss and debate in the sense of to-ing and fro-ing. Under the conventions of the House that is not what we do on Report.
While I am happy to try to answer any point that arises, to engage in a lengthy debate in the course of a speech is, from my experience of the House, not Report but Committee procedure. Although taking interjections and interventions in the usual spirit of the House, I do not think that that is the same as introducing a format of debate into the process of Report stage. Such to-ing and fro-ing debate is Committee style, as I am sure the noble Earl, Lord Russell, knows and practises.
Lord Goodhart: My Lords, I was pleased that I had managed to draft the amendment in a style comprehensible to the experts on the subject.
We have had an interesting debate. I recognise that the proposal would add a fair amount of complexity to what is already a very complex piece of legislation. Taking that into account, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Goodhart Lord Goodhart moved Amendment No. 70:
After Clause 32, insert the following new clause—
("AGE ADDITION
AGE ADDITION
For section 79 of the Social Security Contributions and Benefits Act 1992 there shall be substituted—
"Age addition.

79.—(1) A person who is above the age of 75 and who is entitled to a retirement pension of any category shall be entitled to an increase of the pension to be known as the "age addition".

(2) A person who is in receipt of a pension or allowance payable by the Secretary of State by virtue of any enactment or instrument (whether passed or made before or after this Act is passed), and who—

(a) is above the age of 75, and

(b) fulfils such other conditions as may be prescribed,

shall be entitled to an increase of the pension or allowance, also to be known as the "age addition".

(3) A person who is above the age of 80 and is in receipt of age addition shall be entitled to an increase in the age addition, to be known as the "further age addition".

(4) Age addition and further age addition shall be payable for the life of the person entitled, at weekly rates to be determined by the Secretary of State in regulations."").

The noble Lord said: My Lords, this amendment is what I might describe as our flagship amendment. It is less technical and covers a broader field than Amendments Nos. 66, 67 and 69. Its purpose is to increase the basic state pension for those over 75, with a further increase for those over 80.
The amounts of the further age addition are not specified in the amendment because they need to be varied year by year. My party will announce our own proposals regarding those amounts when our policy paper on ageing—it includes our policy on pensions—is published later this summer.
We believe that these increases should be targeted on elderly pensioners. The elderly have more needs. They need more heating. They need more warmer clothes. They may have to buy more expensive food in local shops because they are unable to travel to supermarkets and return with a heavy load of shopping.
Many present pensioners over the age of 75 do not have occupational pensions as good as those of younger pensioners. Moreover, occupational pensions are always likely to mean that younger pensioners will be better off than older pensioners, particularly in cases where the pensions are based on final salaries and those salaries have increased as a result of the general increase in earnings.
We recognise that there are demographic reasons which make it excessively expensive to go back to restoring the earnings link for all state pensions. But an increase in pensions for those aged 75, and 80 or more, would be much cheaper and would benefit directly those who suffered most from the absence of the earnings link.
The noble Baroness has said that the best way of helping the poorest pensioners is through the minimum income guarantee. She said in Committee, and will no doubt say again, that the income
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differences within age cohorts are much greater than the differences between them. That is obviously true, and I have never sought to deny it. That argument strongly favours a minimum income guarantee. But its logical conclusion is that the state pension should be abolished as a universal benefit for all contributors and the money should be diverted into a still higher MIG.
The real question is: what is the right balance between flat-rate universal pension benefits and income-related pension benefits? We believe that the Government have gone too far—or certainly, if matters continue, will soon have gone too far—in the direction of income-related pensions.
It is a fact that workers have been led to believe, and many no doubt still believe, that the national insurance contributions they pay will be used to pay for their own pensions. That, of course, is not true. Current workers are paying for their parents' pensions and, in due course, it is their children who will pay for their pensions. But whether or not that is the case, they believe—I think rightly—that contributions that they have paid give them a right to be treated fairly: that there is the inter-generational obligation of which the noble Baroness, Lady Turner of Camden, spoke in the previous debate.
If pensioners who are not entitled to MIG see the MIG climbing more and more above the basic pension that they themselves are receiving, they will feel cheated out of what they have earned from their own contributions, and will rebel. No government will get support for MIG if pensioners just above the MIG level feel that they are being treated unfairly. That is what the Government need to realise.
With hindsight, it might have been better to have a system in which pensions were paid for out of taxes and the National Health Service was paid for out of national insurance contributions. Indeed, it probably would have been better. But of course, it is far too late to think of that; it would be impossible to reach that position now.
I believe that our proposal for a general increase for older pensioners will be seen as a fair alternative to full index-linking. But if nothing is done, pensioner anger, shown in the reaction to last year's 75p increase will grow, and grow further.
There is another factor. The state second pension will be earnings-linked up to state pension age, but RPI-linked thereafter for any particular pensioner. The state second pension will be flat-rate—partially so at stage 1 and wholly so at stage 2, when it will be based for everyone on a notional income of £9,500 or whatever is the uprated equivalent. It is an inevitable consequence, assuming that earnings continue to rise faster than prices, that S2P will always be smaller for older pensioners than for younger ones, unlike the basic pension, which is the same for everyone and indeed has been increased by the immensely generous sum of 25p a week for those over 80. The effect of that will be that it will also force many pensioners into reliance on the minimum income guarantee late in their life, after they have been in receipt of pensions for

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perhaps 10 or 15 years. I believe that the fact that older pensioners will receive less than younger ones when both are on a flat-rate pension, and the fact that many pensioners, as they reach the age of 75 or 80, will find themselves having to rely on MIG, will make S2P completely unacceptable.
The noble Baroness may ask, therefore, why we do not link the age addition to S2P rather than the basic pension. That would certainly be cheaper because it would exclude higher earners who opt out of S2P but who are still entitled to the basic pension. That is, indeed, a fair point. If the noble Baroness were to offer to add age additions to S2P, I should promise on the spot to accept that as a fair compromise. However, I doubt that the noble Baroness will do so.
We believe that Amendment No. 70 proposes the minimum amount which is essential if public support for the present pension system is to be maintained. I beg to move.
10 p.m.
Baroness Hollis of Heigham: My Lords, the core of this amendment, a version of which was moved in Committee, is based on a reading of pensioner poverty which I do not believe is accurate. It assumes that the basic determinant of pensioner poverty is the age of the pensioner. Therefore, the response of the Benches opposite is to increase the age-related additions.
It is certainly true that pensioner incomes tend to decline with age. However, the difference between the incomes of older and younger pensioners, which is what the amendment addresses, is, as the noble Lord acknowledged, much, much less than the difference between the incomes of the poorest and best-off pensioners within each age bracket.
Perhaps I may summarise the issue. On average, age reduces the income for a couple, whether they are aged below or above 75, by approximately £20 a week. A couple over the age of 75 will have on average an income of approximately £20 less than a couple aged under 75. The amendment of the noble Lord, Lord Goodhart, would seek, perfectly properly, to address that problem.
However, by no comparison is that discrepancy in the same league as the inequality within each group, age for age. Therefore, the difference between the poorest fifth and the richest fifth, whether they are aged below or above 75, is approximately £250 or more, not £20. That is what MIG addresses and what the noble Lord's amendment leaves unaddressed. He addresses the minor problem. However, because it is a minor problem, the amendment would pass most of the money to those for whom age-related poverty is not an issue. It leaves unhelped those for whom poverty is not age related. He addresses the tiny part of the problem, which is poverty associated with age, and neglects poverty where it occurs among younger pensioners. We address real poverty at whatever age it occurs because all MIG money is spent on the poorest.
My second point is that the feasible levels of age addition would do little to combat poverty, even among older pensioners. Were we to accept the noble
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Lord's amendment, an age increase of £5 for 75 to 79 year-olds would lift 50,000 pensioners in that age group off MIG, but 200,000 would remain on it. An age-related addition of £10 at 80, which is higher than the £7 proposed by the noble Lord, would lift 100,000 pensioners over the age of 80 off MIG but would leave 400,000 on it. In other words, age-related additions would still leave 80 per cent of pensioners who currently receive MIG still needing MIG. That is not targeting, as the noble Lord, Lord Goodhart, suggested; it is not even, in the words of the noble Earl, Lord Russell, "imprecise targeting"; it misses the target almost completely.
The Liberal Democrats would fund their proposals by scrapping the state second pension, as set out in a paper by Mr Steve Webb. That would be equivalent to abolishing SERPS. It would mean withdrawing access to a state-funded second pension from those who do not have access to good occupational schemes. It would also mean ending the national insurance rebates that underpin savings in occupational and other private funded pensions. The foundation of saving for retirement would be seriously undermined and the long-term result would be more poverty rather than less.
I hope that your Lordships will accept that the amendment would not work and would not do what the noble Lord thinks that it would do. It would merely give some money to older pensioners who need it, a lot of money to older pensioners who do not need it and nothing to poorer younger pensioners.
The amendment is virtually irrelevant to pensioner poverty and the scale of the issues that we have to address through the minimum income guarantee and the House should reject it.
Lord Goodhart: The Minister's response was predictable—indeed, I predicted it when I moved the amendment. Let me get out of the way the issue of the paper by my honourable friend, Professor Steve Webb. My party's policy is to maintain a basic pension that includes age additions for older pensioners. We would top that up not with the excessively complicated S2P, but by requiring everybody to contribute to a compulsory stakeholder pension, with contributions from employees and employers.
However, that is a debate for another day. We are talking about the S2P. If we can influence matters before the S2P comes into effect, we would prefer to do without it and move to the system that we propose. However, once the S2P has started to operate, we shall be faced with a fait accompli and we might well feel it necessary to carry on with it.
To return to the main issue, of course I entirely accept what the Minister said about the difference between rich pensioners and poor pensioners within the same age group being far greater than the difference between the age groups. That is an obvious truth. However, she did not answer my point that in fixing the level of pension one has to take account not just of how to help the poorest pensioners—which must unquestionably be an important aim—but of

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how to maintain public confidence in and support for the whole pension system. That cannot be done unless the Government give more than they currently propose to those who are above the MIG level. We propose to achieve that through age additions. We shall shortly hear from the noble Baroness, Lady Castle, in favour of a considerably more expensive scheme to link the state pension to earnings.
The Minister did not answer that point. We feel strongly about this, but it would be ridiculous to vote on it at 10 past 10 at night. However, we are very likely to have to return to the issue on Third Reading. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 71:
After Clause 37, insert the following new clause—
CATEGORY B RETIREMENT PENSION: RATE AND REVIEW
(" . With effect from 1st April 2001, the weekly rate of the category B retirement pension specified in Part I of Schedule 4 of the Contributions and Benefits Act shall be increased to the level of the Minimum Income Guarantee.").
The noble Baroness said: In moving this amendment in the name of myself and my noble friend Lady Castle, I shall speak also to Amendment No. 72, with which it is grouped.
The first amendment deals with the minimum income guarantee. The Government have admitted that it is simply not possible to live on the basic state pension. On 3rd April, my honourable friend the Minister in the other place, Mr Jeff Rooker, said:
"We know that the basic state pension is not enough".
So the Government have introduced the minimum income guarantee at £78 for a single person. It is still not as much as the basic state pension would have been had that pension been increased in line with the wages index which was the original intention under the Castle Plan introduced by the last Labour government. That would now be in the order of £98 or £99 per week.
Nevertheless, it is an acceptance by the Government that that is a minimum income for everyone, and that any single person between the ages of 60 and 74 cannot be expected to live on less than £78 per week. But there is one drawback. It is means tested. As we know, many people, particularly older ones, simply will not go through what they regard as a humiliating experience, filling out forms, declaring their resources, meagre as they may well be, in order to claim that money which the Government acknowledge is really theirs by right.
The Government are now investing thousands of pounds, or perhaps it is a million or so—I do not know what the figure is; perhaps the Minister will enlighten us—on persuading older people that they really should claim the MIG. I do not know how successful that campaign has been. But if the Government were to treat the MIG as the level applicable to everyone and then build up from there, it would be a major step towards dealing with pensioner poverty. I hope that the Minister will not again tell the House that there are
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lots of well-off pensioners. There are certainly more older people who have occupational pensions—we should applaud the success of the occupational pensions movement—but as I have said repeatedly in this House, many of those pension schemes are based on the assumption that they top up the basic state pension.
The noble Baroness has described the basic state pension as the building block. But it is crumbling, as we all know. It needs to be radically improved. Everyone agrees with that, even noble Lords opposite. Of course, better-off pensioners will lose improvements through taxation. I am a pensioner. I have an occupational pension. I lose my entire state pension and more to the Inland Revenue. It is given with one hand and taken away with the other. I do not complain about that. We are not talking about very wealthy people. They are just people who have put aside money during their working lives in order to save for the future. I do not want my situation to be used as an excuse not to pay a decent basic pension to other pensioners, most of whom believe very strongly that having worked all their lives—and let us remember that this is the war-time generation who believe that they made sacrifices at that time—they are entitled to a better deal.
I hope that the Minister will not again talk about how well off many pensioners are. It so happens that I have recently had sent to me a submission by an organisation representing Post Office, BT and Civil Service pensioners generally. It says:
"There is a widespread but erroneous perception that all occupational pensioners are comfortably off on large index-linked pensions".
But it says that:
"The majority, nearly 60 per cent., of occupational pensioners represented by our organisations have second pensions of less than £5,000 per year, equating to less than £100 per week. Indeed, between 30 per cent and 40 per cent have occupational pensions of less than £3,000 a year or less than £60 a week".
Strangely enough, it says:
"In the Civil Service, some 60 per cent of widows receive less than £40 per week in occupational pensions".
It simply is not true that there are lots of well-off pensioners on occupational pensions who would benefit if we were to put into operation what is proposed in the two amendments.
I turn to Amendment No. 72, which again deals with the earnings link. Here, we are talking about social insurance. The welfare concept with which we have lived under successive governments, not just Labour, until relatively recently, accepted the whole concept of social insurance. The result was that we had a system which provided pensions for all, at least at a minimum level, and everyone paid towards the cost. The Government's present policies drive a coach and horses through that concept. The noble Baroness has repeatedly told us that to increase the basic pension for everyone on the lines indicated in the amendment would mean that richer people would get something which presumably they should not. They would, of course, have contributed to it.
If I have a policy with the Prudential, I do not expect the company to say, when pay-off becomes due, "You can't have it; you are better off than you should be". Any insurance company taking such a line would quickly find itself in court and there would be a massive exodus of policy holders. Unfortunately, that is not possible for the millions of pensioners who believed that in paying their national insurance and taxes for over 40 years they were at least ensuring that they would not sink into dire poverty.
We welcome what the Government have done by way of winter fuel payments and free television licences. But we should talk to pensioners. What they want is cash flow; some real improvements in income. They want such improvements without having to submit to the indignity, as many of them see it, of means testing. Everyone knows how upset and disillusioned pensioners are as a result of the insulting, as they see it, 75 pence increase. The Government now have an opportunity to repair the damage which that proposition has done. It is not only older people who feel upset about it. Their families are upset too on their behalf. I hope now that the Government will promise to do something about the basic state pension. I beg to move.
10.15 p.m.
Baroness Castle of Blackburn: I support the amendment moved by Lady Turner. I shall speak to Amendment No. 72 which, as was explained to the House, deals with the restoration of the earnings link. I say "restoration" advisedly. It is not some new, wild revolutionary idea we are espousing, but part of a pension scheme which the Labour Government of 1974 believed was sustainable, honourable and right.
Like Lady Turner, I should like to know how many people responded to the great effort the Government launched to persuade the reluctant poor pensioners to accept means-tested benefit of MIG. I can, however, tell her what the cost is. It was announced in another place, earlier this week, by the Minister, Jeffrey Rooker. So far, £15 million has been spent on this persuasion exercise. We were told earlier that it would be a marvellous effort; there would be TV advertisements, telephonic approaches and everything possible would be done to ease the admitted pain of applying for means-tested benefits.
I do not know how many Members of the House have seen Dame Thora Hird contributing one of the television appeals. It did not last very long. I have to say that I did not feel she had her heart in it. It was not the robust Thora Hird we all loved and rejoiced in. She said, "Well, you know, you really might be entitled to a bit more". Of course her heart was not in it. I cannot see her enjoying applying for minimum income guarantees. Nor would anybody who has any self-respect enjoy doing that.
I wonder how many Members of this House are applying for the minimum income guarantee. Until they do, they had better not throw away easy phrases about helping the poorest pensioners. As I said before, the very label is a contradiction of all I thought our
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movement stood for; namely, to lift everyone to dignity and to independence. When you come to think about it, the whole principle of the means tested income guarantee is that it is the pensioners' equivalent of a glass ceiling. Women will understand that perfectly well because it says specifically, "Earn a bit more, get a bit more independence and whoosh, we will put a ceiling on what you can earn". That is effectively it. I have had cases brought to my attention when retired people have been reluctant to take on a little bit of a job because it might lift them out of the minimum income guarantee if they were honest enough to declare what they had been managing to pick up.
So it is the very opposite of the sort of society which I thought our movement believed in. I must say that I listened with great respect to the speech of Lord Goodhart. I am afraid I think that he has the wrong answer to the problem he set before us. But it was refreshing to hear someone make a case for the importance of sustaining the value and the accompanying rights of the basic state pension scheme. I have been waiting to hear the Minister make as passionate a case in support of it, yet I have not. It has all been about just helping the poorest pensioners, about targeting, picking them out, making them obvious. For instance, in my early days in the Labour movement we campaigned for free school meals. The kids who benefited from them had to be protected from being shown as those who were so poor that their parents could not pay for their school meals. And how we hated that.
Now, I wonder whether the Minister has begun to realise the extent to which more and more people are realising the growing gap between what the earnings-related contribution brings into the fund and what the basic state price index pension takes out of it. The latest example of the people on whom that has dawned has been issued this very week by the Select Committee on Social Security. I do not know whether the Minister has yet had time to read it, but she will remember that, as regards the present way of financing the basic state pension, contributions earnings related and basic pension flat rate, and of course price indexed, the Select Committee says it is bound to create a steadily increasing surplus in the National Insurance Fund. And everyone knows that it is nonsense to say, "The earnings link was quite right when you introduced it, Barbara. We think that was very laudable of you, but of course we cannot afford it". That is not true. The Select Committee itself has said in its report—I have some of the quotes here but unfortunately I cannot read them to the House—that it was worried by this growing surplus which has come out of the pockets of ordinary people in this country through their contributions. They have paid; but they are not enjoying!
Some of that surplus, to this Government's shame, is being devoted to cutting the employers' contribution. In fact, our own Chancellor of the Exchequer, following the example of the previous administration, gloried in the fact that, in order to offset the cost to business of the climate change levy

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and the aggregates levy he was introducing, he would further reduce the employers' contribution to the National Insurance Fund. He told the House proudly, "Employers will be paying £1.35 billion a year less into the National Insurance Fund". It is a strange time when the Chancellor is boasting in another place of cutting the contribution to the National Insurance Fund, and our Minister is saying it must be sustainable.
The Select Committee faced that point in its report. It pointed to the accumulating surplus and said that it will continue to accumulate as long as the present system of financing our pensions continues. I wish I could read the figures to the House; at this time of night I cannot carry that lot in my head. The committee said that there would be this mounting surplus in the future, but if we wanted a double guarantee, we could increase contributions.
It may be said, "That would be a terrible burden. We will lose votes". But the Select Committee said that the increasing burden would be extremely light, and in making that recommendation it quoted the deputy government actuary who gave evidence to the committee and worked out the sums. It was said that around a 3 per cent increase in contributions would be needed, if we restored the earnings limit, up to the year 2011, and taking it up to 2060 it might be a 7 per cent increase. But in that period earnings are not standing still. By spreading it out at, say, 1 per cent a year, people who are receiving the rise in earnings will not notice it. Or at the very least, they will not object any more than they objected when I increased the contribution by 2 per cent of earnings when I introduced SERPS, the earnings link and the annual upratings, which had never been enforced by law before, and the other benefits of the 1974 Labour government.
I remember the Tories at that time saying, "There will be such an outcry. Look at that increase"—mind, it was shared between employer and employee—"People will never stand for it". They were astonished to find that there was barely a murmur. Because people will pay for those things that they want, and they want a guarantee of security in old age.
Any Member of the House who wants to vote on this issue should first read the Social Security Select Committee report.
I cannot go on too long at this time of night. However, I believe that there is a growing public opinion in this country which is behind the arguments of the noble Lord, Lord Goodhart, and the arguments which the noble Baroness, Lady Turner, and I have put forward for years. There is a growing anger at the widening gap between what people pay in and what they get, and that conclusion of the people is growing.
If at this time the Government choose to take £1.35 billion out of the National Insurance Fund and say that all they can afford is to help the poorest pensioners, provided that they fill in the necessary forms and do not earn too much or say too much, it can only mean—and I say this advisedly—that this
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Government have a long-term pensions policy to destroy the state insurance scheme. That would be the consequence. If the Government do not want us to deduce that it is also the desire of the Government, then we must have a better response from the Minister than we have had so far.
I urge the House not to lose touch with public feeling. The public do not want targeting. They do not want labels which say, "You are the poorest" or "You are in the queue for three meals". They want the dignity for which they thought they were contributing.
Finally, I say to the Government that I want them to succeed, that I want them to continue to succeed and that I want them to win the next election. But the Conservative leader, William Hague, is no fool. He may occasionally sound it, but he is not. He has put forward the idea of taking the fuel allowance and the TV licence allowance and turning them into a cash increase on the basic pension. In my opinion, that would be an absolute vote winner, except that in his case it is a once-and-for-all increase. The government spokesmen have been very good at pointing that out, and I would be the first to shout it from the hustings. The Government's biggest defence would be to say, "Whatever pension we introduce, we will keep abreast of rising national prosperity". I believe that one day, when the Government have perilously been faced with the voting apathy of pensioners, they might perhaps recognise that I and Lady Turner, and others, have been right all along.
10.30 p.m.
Earl Russell: My Lords, the noble Baroness, Lady Castle, should feel flattered. It is not very often that we see at least 50 people on the Government Benches.
Lord Graham of Edmonton: Fifty-four.
Earl Russell: My Lords, I am grateful to the noble Lord, Lord Graham of Edmonton, for the correction. I am glad for the confirmation that my mathematics are not that far out either. Fifty-four people on the Government Benches have come in to listen to a single speech by a single Back-Bencher.
The noble Baroness, Lady Castle, deserves that honour. She has made an extremely powerful speech. I am grateful to her for her compliments to my noble friend Lord Goodhart. I would like to return those compliments in the same measured terms. It gave me great pleasure to listen to a speech which showed the same concern that we feel about the basic state pension as a right. However, as she said of my noble friend, we feel that she has not quite got the answer. What we have in common is that we both think that there is a question which needs an answer. But, in the end, whether or not we think it irrelevant, the voters think it in very large numbers.
I spent quite a long time in Romsey; I spent even longer telephone canvassing. I shall not soon forget a half-hour argument with a lifelong Labour voter who told me that he was never again going to vote for anyone. At the end of that conversation, he said, "We

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will vote for you this time, but, if you let us down, God forgive you because I won't". I have paraphrased in order to make his remarks acceptable inside the Chamber.
I was in Tottenham last Tuesday and I heard the same response. I shall not prophecy what sort of news we might hear in an hour's time or thereabouts, but I read in today's Evening Standard a prophecy, which appears to emanate from Millbank, that the poll may be even lower than the 19 per cent scored in Leeds Central. My own experience gives me nothing that leads me to dispute that. We live in a democracy; we must listen to our masters.
When it was decided that the basic state pension was going to be uprated in line with prices, we created a situation where it was in danger of withering. It is about time we took on board the fact that what is true of the basic state pension also applies to income support. Indeed, the need in income support may be greater in some ways than the need in pensions. That means that the problem is greater, but it also means that the potential costs of a solution are greater. In effect, it is a matter of double or quits: it doubles the stakes and makes the problem that much more difficult.
I recall the very constructive debate we had on the matter during the Committee stage of the Welfare Reform and Pensions Bill last Session. The Minister generously agreed with me then that, as a consequence of uprating in line with prices, it was necessary, "as resources allowed"—we agreed on those words—to uprate from time to time, and when possible, fairly well above the level of prices. I believe that the Minister will find that I have recollected her words accurately. This year resources did allow, but the Chancellor of the Exchequer did not take his opportunity. He has already lived to regret it. If there had been a decent uprating this year, and one which was fairly significantly above the level of prices, the problem might have been diffused. That has not happened. The voters will not soon forget.
The sort of anger I faced is directed against the whole of our profession. With respect, I do not think that Mr Hague has the answer to the problem. The redistribution that he suggests might have been a perfectly sensible way of tackling such matters if he had not tried to call it an increase. It is not an increase, except by the 42 pence calculated by my honourable friend Mr Webb, and that comes below the Government's 75 pence. Incidentally, if the noble Lord, Lord Higgins, is to speak later in the debate—I imagine that he will—I hope that he will tell us how the Conservative Party means to find the £90 million from the finances of the Social Fund, which I have always regarded as one of the most cash-strapped parts of the whole social security system.
Therefore, we need increases above the level of prices, as resources allow. That is not to say necessarily that regular increases in line with earnings will be sustainable. Here is where we part company with the noble Baroness, Lady Castle. You may calculate the figures for a short period of time. The difference each
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year is small. Here, I think, is where Mr Darling was completely mistaken in denying my argument that what we are offering here is imprecise targeting. An annual uprating uses a machine-gun. It has a repeat rate of fire. If you get into the target area with the first bullet, you will get a good deal closer over the next 10 or 12. So, the catching up goes on.
If you are uprating by earnings, over the length of a Parliament the increase may or may not be sustainable. But the earnings link means a commitment, year in, year out, in good years and in bad, in fat years and in lean years, to uprate above the rate of prices. It is that continuing commitment over a generation which we on these Benches feel a great deal of doubt about sustaining.
I listened to what the noble Baroness. Lady Castle, said about the surpluses in the National Insurance Fund. The surplus this year is indeed considerable. It would not have been difficult to use some of it for a significant increase this year. But belief in the continuation of future surpluses involves an element of faith. I have not forgotten the first amendment on which I had to consider whether to seek to divide the House from this Front Bench. It was on the then Social Security Bill of 1989. Those were the years of hubris. The government had a healthy surplus in the National Insurance Fund. They believed that it would be there for ever. They introduced a provision to end the Treasury supplement to the National Insurance Fund. They believed that it would never be needed again. I decided not to seek to divide the House but I said that I expected to live to see the provision reversed, as, in the gloomy Budget of 1993, it duly was. Even I had not expected it quite so soon.
The National Insurance Fund responds extremely quickly to economic fluctuations—in fact, on occasion, even more quickly than the Government Actuary expects. It goes up very fast in a period of recovery and goes down extremely fast when that recovery comes to an end. No economic recovery lasts for ever. If the Chancellor of the Exchequer has discovered a way of making it so, he has discovered the philosopher's stone. He is not the first to make that claim, but he would, were he to succeed, be the first in all recorded history to make it good. That would surprise me.
We on these Benches feel a great deal of doubt about the long-term sustainability of a commitment to the earnings link. On the other hand, we feel a great deal of doubt about the long-term sustainability (in the eyes of the voters in a democracy) of the present system of uprating by prices without any further increases, as resources allow. It is no good talking about MIG. First, we are not convinced about the means of delivery of MIG. On the previous occasion that we discussed this matter in Committee I grant that the Minister gave a powerful, well thought out answer. She has thought of a great many ways of encouraging people to apply for money under MIG. What she has not got over is the sense of entitlement felt among voters who believe—as both my noble friend and the noble Baroness, Lady Castle, have said—that, because of their own contributions, they have a resulting

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entitlement to a pension. That is deep seated in the minds of voters. As Angela Rumbold once said of child benefit, it is deep in the culture. Facts and Ministers will not eradicate it. So if they see MIG as being a matter of charity—as do a great many of the voters that I have talked to in recent weeks—it will not be enough to satisfy them; the voters believe that they have a right. If they do have a right, our right to be here at all is contingent on what they say. We must take that on board.
We must have a significant measure of progress. My noble friend has put forward the right answer in spite of all the criticisms that have been made. I shall address those criticisms later. I am not addressing them now because the Minister replied immediately to my noble friend and they would be wide of the present amendment; but the Minister will hear me address them.
I hope that the Minister will listen to one or other of us—or else come up with a real, significant, immediate increase. If it is not immediate, the voters will make her pay for it.
Baroness Park of Monmouth: My Lords, I am not an expert in any of these matters. I am a pensioner and, like the noble Baroness, Lady Turner of Camden, I pay all my pension back in tax. So I have no direct interest in that way.
I feel very strongly about this issue. I do not know how the objective can be achieved—I recognise that all the pundits say that there is not the money to promise it forever—but something has to be done quite urgently now. There are a lot of people out there—not just the old but their families too, who will grow old later—who are watching us to see whether we care enough about them. As the noble Baroness said, the whole issue is one of dignity and self-respect. The Government say a lot about inclusiveness; these people are being excluded—and they feel excluded.
It is absolutely vital that we should also recognise that, if one has independence and self-respect, it has a remarkable effect on, for instance, one's health. We could save a lot of money from the health budget if people were more independent, more able to look after themselves, more able to pay to look after themselves, and had the independence, dignity and self-respect that is part of health.
There are strong arguments for doing something. Whether it will be what the noble Baroness wants I do not know—I shall vote for her anyway—but it is absolutely vital that people do not neglect the fact that there are a lot of angry, resentful people out there who are losing their faith in all politicians—and that matters to all of us. We have to think about that as well.
Lord Davies of Coity: My Lords, without any risk whatever, I venture to suggest that there is not a Member of the House who does not admire the passion, the conviction and the sincerity with which
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my noble friend Lady Castle prosecutes her case in respect of restoring the earnings link. About that I make two points.
First, the arguments have been fully canvassed in this House time and time and time again. The chance of anything new being introduced is very unlikely. Secondly, if an independent observer came here and listened to the way in which the arguments ebb and flow, he would probably get a distinct impression that those who were supporting the restoration of the earnings link were for pensioners; and that the Government, who were defending their proposals, were against pensioners. That is not the case. It is far from the truth. The Government are concerned about pensioners, but their strategy and approach is somewhat different to the one advanced by my noble friend.
As my noble friend Lady Castle knows, governments are required to take some very difficult decisions on occasions. As a Minister of the Crown herself, she will know that she had to face some very difficult decisions during her period of stewardship—which, of course, was a very admirable one.
Here we have a situation where, on the one hand, we have heard arguments in favour of restoring the earnings link for pensioners, an earnings link that was abandoned a long time ago. On the other hand, we can approach this by raising the minimum level of pension income so that it is equal to that of the minimum income guarantee.
Where do the Government stand? As I see it, initially, immediately and for the foreseeable future, the Government wish to devote resources to those greatest in need. That seems to respond to an age-old socialist principle: from those according to their means to those according to their needs. In the long term, the Government want to tackle the real problems of our pension system to ensure that pensioners living through this new century will receive pensions that will be part public and part private. Above all, however, they will be adequate pensions and will be of realistic benefit. It may be thought courageous or even revolutionary to implement such massive changes, but in the long term, I believe that pensioners will benefit from the proposals that the Government have put forward.
I give noble Lords advance notice of what will be announced in the newspapers on Saturday of this week. I shall reach the age when I will attract an old age pension. I know that my old age pension will embrace an element of graduated pension and, perhaps more importantly, a larger element of SERPS. However, if I thought that I was going to receive additional payments to that pension which, at the same time, would mean that worse-off pensioners in either relative or absolute terms would not receive an extra amount that they would otherwise receive, I am afraid that I would feel a measure of guilt.
On balance, I think that the Government are going in the right direction. I certainly hope that, at the end of our debate, the House will give the Government the support they require.
Lord Warner: My Lords, it is with some reluctance and trepidation that I rise to question the wisdom of Amendment No. 72. In the mid-1970s I worked closely with my noble friend Lady Castle, when she was the then Secretary of State for Social Services. I have a huge admiration for her abilities. In those days we both believed strongly in linking upratings of the basic retirement pension to increases in the level of earnings. However, I hope that she will accept that, in the spirit of friendship, I suggest that the world has moved on since that time.
I am not sure that we can now move "back to the future". Pinning pensions upratings to prices has been carried out for around two decades, as a result of the actions of the previous government. This Government have had to tackle the problem of pensioner poverty from the situation as it is, not as they would have liked it to be; namely, as if an earnings link had been in place over the past two decades. Through special measures, they have targeted help—in my view, rightly—on those pensioners in the greatest need. Some of those measures are tax free, which would not be the case if we increased the basic pension. The Government have tried to implement measures to help those in the greatest need. I believe that that is totally consistent with the principles of the Labour movement.
I recognise that this has not been popular with many pensioners. However, to correct my noble friend Lady Turner, we should bear in mind that we are not operating funded state pension schemes.
Baroness Turner of Camden: My Lords, I did not say that.
Lord Warner: My Lords, with all due respect, my noble friend implied that an analogy could be drawn between the state pension and funded private insurance schemes. The reality, however, is that the people who comprise the present working population are in fact paying for today's pensions. Before we commit future generations to certain levels of pension obligation, we must be confident that those can be sustained.
I believe that the present Government have acted in the best interests of the poorest pensioners. The measures they have taken have increased the benefits going to the poorest pensioners to the tune of something in excess of £2 billion more than if they had increased the basic state pension in line with earnings since 1997.
In those circumstances, I am inclined to keep the present flexibility of more for the poorest pensioners rather than tie ourselves to the rigid formula in Amendment No. 72.
Lord Higgins: My Lords, I join noble Lords who have suggested that the noble Baronesses, Lady Castle and Lady Turner, put forward the case with which we are familiar with the greatest eloquence. It is remarkable that they have immediately picked up the report of the Select Committee of another place, The
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Contributory Principle, published only on 7th June. It raises important arguments in relation to the points put forward.
My party's position is clear and at this hour of the night I do not propose to bore the House by repeating it. Unfortunately, I am not at this moment in a position to announce a sudden change of policy. None the less, perhaps I may comment on our recently announced change with regard to combining the Government's various gimmicks on winter fuel payments, television licences and so forth. Because it saves some £40 million a year in administrative charges, it enables a modest increase to be made. Perhaps I may say to the noble Earl that it was not presented as a massive increase; it was a consequence of the action we took. Although it is, as the noble Baroness, Lady Castle, pointed out, a once and for all increase, it raises the basic level on which future increases are made. Therefore, to that extent it is not a once and for all increase.
Not one of the criticisms made of the proposal put forward by Mr Hague a few weeks ago was valid. There was a great deal of immediate reaction from the Government. Every single point they made was based on a misunderstanding of what we were proposing. I speak as one who for 30 years represented one of the "oldest constituencies" in the country. It is said, "They came to Worthing to die and they forgot what they came for." I have to tell the House that the proposals for incorporating into the basic pension the various government measures—
Earl Russell: My Lords, I apologise to the noble Lord, Lord Higgins, for intervening, but before he leaves the subject of his party's policies, is he in a position to answer my question about how it proposes to find a £90 million saving in the Social Fund?
Lord Higgins: My Lords, no, not at this stage. However, if the noble Earl looks at the detailed press release issued at the time, he will find a satisfactory answer.
Perhaps I may repeat what I said a moment ago with regard to the speech of the noble Baroness, Lady Castle. She referred to the Select Committee report but did not quote the relevant paragraph. Paragraph J of the recommendations states:
"We concluded that unless there is a significant change of policy there is likely to be a growing surplus in the National Insurance Fund as a result of benefits being linked to prices and contribution income based on earnings rising at a faster rate".
We agree with the Secretary of State that any use of the surplus must be sustainable in the long run, but it goes on to state:
"The Government Actuary's figures show that in order to pay for an earnings up-rated benefit the combined contribution rate from employers and employees would have to rise by 3.2 percentage points"—
the figure mentioned by the noble Baroness—
"by 2021 and by 7.6 percentage points by 2060".
The Select Committee goes on to recommend that the Government should consider that as one option of funding improvements in benefits. Since this is an

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important and, in many ways, authoritative report, based as it is on the figures of the Government Actuary, I hope that in reply to the noble Baroness, Lady Castle, the Minister will comment on that particular aspect of the matter.
11 p.m.
Baroness Hollis of Heigham: My Lords, it is late. Having spent 50 minutes on this matter—this debate is a repeat of one held at Second Reading and at Committee stage—I am sure that noble Lords want me to be as brief as possible.
Noble Lords: Hear, hear!
Baroness Hollis of Heigham: My Lords, that may be the most enthusiastic cheer that I receive all evening.
I deal first with Amendment No. 71, spoken to by my noble friend Lady Turner, before I turn to the bigger amendment, if I may so describe it, spoken to by my noble friend Lady Castle. Amendment No. 71 would increase the rate of basic pension received by a couple where the woman relied on her husband's contribution record to the level of the minimum income guarantee for a pensioner couple. In subsequent years the Secretary of State would have the option to increase that pension in line with earnings.
My noble friend will be aware that at the moment there are two ways in which a married woman can qualify for a state pension. Like everyone else, she can pay enough full rate contributions herself. As an alternative, when her husband retires she can receive a pension on his contributions if she does not herself satisfy the contribution conditions. This reflects the operation of the national insurance scheme prior to 1978, when a married woman could choose to pay a lower rate of contribution—I was one—and receive a pension based on her husband's rather than her own contributions. I and many others like me made a deliberate calculation to reduce the contribution and receive a lower return.
Married men pay the same rate of contribution as single men and women and so the pension paid to a married woman based on her husband's contribution is, in practice, partly financed by the contributions of single people. I believe that it would be deeply unfair to increase the total level of retirement pension paid to a married couple on the basis of the husband's contribution. Why should a woman, who may have paid no national insurance contributions at all, or, like me, paid reduced rate contributions, receive an increased contribution for which she has not paid when other women, single men and married men who have also contributed throughout their working lives receive no such increase? My noble friend seeks to give that pension entitlement to people who have chosen to make a lower contribution, or, in some cases, none at all. If there is any merit in the contributory principle for which my noble friend has argued this evening, surely she will accept the truth of that proposition.
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I turn to Amendment No. 72, which would uprate the basic state pension by earnings. It has been debated at considerable length on previous occasions. I am sure that all noble Lords around the House tonight share the desire to tackle pensioner poverty. As was said by my noble friend Lord Davies of Coity, my noble friend Lord Warner in particular and other noble Lords, I do not think that this proposal is the right way to achieve that aim. The earnings link, as was pointed out by my noble friend Lord Davies of Coity, existed for a period of only four years between 1974 and 1979. In two of those years prices exceeded earnings. This was at a time when few people had a second pension to add to the basic state pension. Today, when we talk about pensioner incomes we look beyond the basic pension to the total income that pensioners receive.
The basic, irreducible facts, boring though they may be, that my noble friends behind me have consistently refused to take on board are that, over the past 20 years since the earnings link was introduced and then disbanded, pensioner incomes have grown at a faster rate than any other broad group in the population. On average, the incomes of all of us of working age have grown by 38 per cent in real terms since 1979. The increase for pensioners has almost doubled from its base, rising by 64 per cent. As a result, their income increase has been substantial. That has happened despite the break with the earnings link, due largely to the impact of SERPS and occupational pensions. Compared with 1979, the real income of pensioners has grown by almost twice as much as the rest of us on average.
Baroness Turner of Camden: My Lords, that is not true.
Baroness Hollis of Heigham: My Lords, it is true. I am prepared to accept that my noble friend may wish to challenge me. I know she feels that that cannot be the case because, I acknowledge, she has personal experience of friends and acquaintances in particular circumstances. But these are official government statistics which have not been challenged authoritatively by anyone so far as I am aware. Pensioner incomes have increased by 64 per cent on average since 1979; the incomes of the rest of us by 38 per cent. That is the first point.
The second and important point for our consideration is that that 64 per cent conceals the most appalling growth in pensioner inequality and, therefore, pensioner poverty. The top fifth has seen its income increased by more than double the amount of the bottom fifth. As a result, whereas the bottom fifth of couples in the 1997–98 figures has an income of £126 per week, the top fifth of pensioner couples has an income of £426—nearly four times as much. That is an increase in inequality which far exceeds any other inequalities in our society.
That situation did not face my noble friend the former Secretary of State. Had it done so, I am confident that her response in 1979 would have been different from the response when she established SERPS and the earnings link. But that is the fact now.

555
My noble friend's policies were right, decent and proper, and I would have been cheering her on in 1979, but not now.
We have now inherited a situation in which the top fifth of pensioners has seen its income increase by nearly 80 per cent and the bottom fifth of pensioners by between 25 and 30 per cent, depending whether they are single pensioners or couples. That is far less than the rest of us.
What do we do in that situation? Would restoring the earnings link which my noble friend Lady Castle wants to see tackle inequality? Would that reduce pensioner poverty? The answer is a resounding no. Restoring the link would cost an extra £1 billion net in 2000, and extra £7.5 billion in 2010 and an extra £24 billion in 2025. Every pound one puts on the basic state pension adds £0.5 billion to expenditure. But it is not the money question. The cost is not the main problem. The problem is that my noble friend's policy would do nothing to help the poorest pensioners. It would not help in the battle we think that we face: pensioner poverty and inequality.
As my noble friend Lord Warner said, we have spent £6.5 million extra on pensioners in real terms in this Parliament if one includes the winter fuel allowance, the TV allowance, and so on. That is over £2 billion more than we would have spent on earnings uprating and over half of that has gone to the poorest pensioners. Under my noble friend's scheme, only one fifth of that money would have gone to the poorest fifth.
Baroness Castle of Blackburn: My Lords, I am grateful to the Minister for giving way. She said that the restoring the earnings link would do nothing for the poorest pensioner. She is surely aware that, if it had not been abolished by Lady Thatcher, today every pensioner would be receiving £98 a week—more than the minimum income guarantee of £78.
It is a question of what path you follow consistently over the years. Would not she agree that what she is advocating is a consistent path towards the disappearance of the basic state pension? Does not she realise that that is the last thing that even the poorest pensioners want?
Baroness Hollis of Heigham: My Lords, my right honourable friends the Chancellor of the Exchequer and the Prime Minister have made it very clear that the basic state pension will remain an essential building block in pensioners' incomes. That is what we believe and support.
My noble friend will understand that we are not back in 1981, or 1980, when the earnings link was disbanded. We are coming up to 2001; and, since the date when the earnings link was disbanded, the poorest pensioners have fallen well behind not only the median income of pensioners, not only behind the income of the better-off pensioners, but behind the incomes of all of us. The question, then, is whether restoring the earnings link is the right way to address the problem of pensioner poverty.
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A flat-rate provision, which is what the earnings link is (for a couple, it would have been £3.70 this year) would not help the poorest pensioners, because it would be deducted from their income support; and it would be barely noticed by the better-off. The choice is straightforward. You can give £3.70 to everyone—the poorest will not gain, and the better-off do not need it—or you can target the benefit on those who need it, and they will receive £18. So the choice is: £3.70 for all, or £18 for those who need it. That choice will not go away however much my noble friend wishes we were back in 1979—or 1978 perhaps, given the results of the election in 1979!
There is a further point. What does my noble friend propose to do about those pensioners who currently need, and receive, £18 on top of the couple's basic retirement pension to take them up to the MIG level? An earnings link would give them £3.60, £3.70 or £3.80. What about the rest of the money? Is my noble friend saying that they would not receive the rest of the money, so they would be some £15 poorer than they are now? Or is she saying that they would receive the money, and that they would still need to be means-tested on top of the earnings link, but with less money to go into that means-tested, targeted top-up because the money would have gone to the rest of us? What is her choice? Either pensioners do not get the money— or they do get it, in which case they have to get it through the very targeting that she has deplored.
My noble friend cannot have it both ways. She must address the fact that the amendment belongs to a society which I believe no longer exists. It belongs to a society in which income differentials between pensioners were very narrow, and where a flat-rate increase for all was a decent, right and proper way of helping pensioners by locking them into an earnings right. That society has gone. My noble friend has criticised, as have all of us on these Benches over the past 20 years, the policies of increasing poverty and inequality that have afflicted so many in our society. No group has been hit harder than pensioners. They are the ones who have suffered. The poorest 40 per cent of pensioners are the ones who have been left behind.
My noble friend's amendments belong to 1979. They will do nothing for those pensioners. If all they receive is the earnings link, they will remain in poverty. If, on top of that, my noble friend recognises that they need to go up to MIG, they will still need means-testing, but she will have spent the money on people like me and others of my noble friends who do not need it, and those pensioners will not get the money they need. Those are the facts. In a society of inequality, we need to target help to reduce that inequality, not give the same to all—because if we do, we merely perpetuate the inequality into the next generation and the generation thereafter.
I ask my noble friend to respect that fact and to withdraw her amendment. If she chooses to press the amendment, I ask the House not to support it.
Earl Russell: My Lords, one point which I hope the Minister will not find unhelpful and I am sure the

557
House may find helpful is this. How many years of the earnings link would it take to raise the basic pension above the level of the MIG?
Baroness Hollis of Heigham: My Lords, I have no idea what the future rate of earnings is likely to be. It is an impossible question.
I was about to conclude my remarks. I hope that I have persuaded your Lordships that while my noble friend's amendments, particularly Amendment No. 72, are a decent and honourable effort to address the problem that she perceives, I suggest in all humility that that is not the problem that we face. The problem that we face is one not only of pensioner poverty but of pensioner inequality. In order to make an impact on the lives of those who are so socially excluded that they cannot join the mainstream of our society, they need to receive an increase well beyond an earnings link. They need the targeted help that only the Government's policies will bring. Therefore, I hope that your Lordships will support the Government's position tonight.
11.15 p.m.
Baroness Turner of Camden: My Lords, I thank my noble friend for her explanation of government policy. Of course, she knows that I do not agree with it. I am grateful also to all noble Lords who joined in this very interesting debate. I share with the noble Earl, Lord Russell, his pleasure that so many people have come in to listen to my noble friend Lady Castle at this time of night. I believe that that is an enormous compliment to her.
However, frankly, I do not accept the arguments that have been advanced from the Front Bench this evening. First, the two amendments taken together would mean that one begins from the basis of MIG, which the Government agree is the basic minimum that anyone should be expected to live on, and would build on that by adding to it earnings-related increases in the years to come. I still believe that that would be an effective and fair way of dealing with the whole pension problem.
This evening, the Minister has repeated what she said in other debates: that many pensioners are extremely well off and that their incomes have risen faster in the past 20 years than have other incomes. I explained previously why I find that very difficult to accept, and perhaps I may do so again briefly.
First, as the Minister knows, in my working life I had a great deal of experience of negotiating occupational pension schemes. Most such schemes do not provide for increases even as high as that of the retail prices index. Most have a provision under which they rise up to a maximum of 5 per cent per annum or the RPI, whichever is the lower. In addition, we know that the basic state pension has not increased anywhere near in line with earnings; it has simply kept pace with the retail prices index.
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Therefore, those two aspects of pension provision in this country meant that the structure simply did not exist for pensioner incomes to rise beyond the level of earnings; in fact, they rose nowhere near earnings, even if taken together.
Lord Davies of Coity: My Lords, I wonder whether my noble friend is able to help me. I understand that we are able to evaluate the extent to which state pensions have increased. If one compares the level of occupational pensions in 1979 with their level today, we know that not all, but most, occupational pension schemes are based on final salary payments. If that is so and incomes have risen over that period, will not the level of occupational pensions have increased directly in relation to the increases in income?
Baroness Turner of Camden: My Lords, one must understand that very few people, I regret to say, had pensions based on a working life of 40 years. Most people had a chequered work pattern which did not produce the maximum final salary. In addition, as I indicated, very few occupational pension schemes had RPI increases. A person would do quite well to receive a maximum increase of 5 per cent per annum. That was during a 20-year period when the retail prices index was sometimes way above 5 per cent.
Therefore, the structure did not exist in the pensions provision industry to produce a situation in which over that 20 years pensioners would receive incomes in excess of the increase in earnings, which is what has been said from the Front Bench. That is what I meant when I said that I could not accept what had been said about the large increases that pensioners have received over the past 20 years.
Beyond that, I quoted figures in relation to public sector pensioners which show that most people in the public sector are not receiving enormous pensions. In fact, according to the federation whose figures I quoted earlier, the majority of them receive pensions of between £6,000 and £8,000 a year. That is scarcely wealth.
As I said earlier, most pension provision has been based on the assumption that people will receive the basic state pension in addition. With the basic state pension not having increased in line with earnings, which would have been expected 20 years ago when a large number of pension schemes were introduced, people will be much less well off than they expected.
I said earlier that I disagreed with the arguments about pension provision being so excellent that if we increased the basic state pension, far too many people who did not need it would get it. I also pointed out that the well off would lose it all in income tax. I have no objection to the fact that I will lose all my basic state pension in income tax. However, I dislike that argument being used against people who are far less well off and who could very much do with an increase in the basic state pension.
I return again to the argument about social insurance. Several noble Lords have said that the Government are doing the right thing in paying out

559
only to the poorest people who need the money rather than giving money to people whom they do not think need it, but that is not what social insurance is about. The concept of social insurance that we have lived with for many years and that I believe to be the right policy—for many years this has been the policy of my party, the Labour Party—is that everybody pays towards it and people then receive a pension based on the fact that they have made those contributions. I do not know why we are departing from that principle, which I still believe to be right.
Pension provision through the basic state pension is not a charity. It is something to which people believe that they have contributed and to which they therefore have a right. It is not at all surprising that so many pensioners feel hard done by, because the basic pension has not been increased as they expected.
I do not intend to seek a vote on this issue this evening, but it will not disappear or run into the sand. We may well come back to it on Third Reading.
Noble Lords: No!
Baroness Turner of Camden: My Lords, it is very late at night to vote on a major issue. It is 11.20 and we still have a right to come back to the issue at Third Reading. I repeat, I shall not seek a vote at this time of night because I think it inappropriate to start voting so late on something that many of us regard as very important. I think it wrong to call a vote at 11.20 and I never gave any indication that I would do so. I therefore beg leave to withdraw the amendment.
Noble Lords: No!
The Deputy Speaker (Viscount Simon): My Lords, is it your Lordships' pleasure that the amendment be withdrawn?
Noble Lords: No!
The Deputy Speaker: My Lords, the Question is, That the amendment be agreed to.
On Question, amendment negatived.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 72:
After Clause 37, insert the following new clause—
INCREASE OF BASIC RETIREMENT PENSION
(" . The weekly rate of the basic retirement pension shall be increased in April each year in line with—

(a) the percentage increase in the general level of earnings during the preceding year; or

(b) the percentage increase in the retail prices index during the preceding year;

whichever is the greater.").
The noble Lord said: My Lords, in view of the fact we have been told constantly this evening that Amendments Nos. 71 and 72 hang together and as this is a very important subject, I beg to move Amendment No. 72.
11.25 p.m.
On Question, Whether the said amendment (No. 72) shall be agreed to?
Their Lordships divided: Contents, 6; Not-Contents, 84.

Division No. 3

CONTENTS

Castle of Blackburn, B.

Graham of Edmonton, L. [Teller]

Cocks of Hartcliffe, L.

Faulkner of Worcester, L. [Teller]

Park of Monmouth, B

Turner of Camden, B.

NOT-CONTENTS

Acton, L.

Harris of Haringey, L.

Ahmed, L.

Harrison, L.

Alli, L.

Haskel, L.

Amos, B.

Hayman, B.

Andrews, B.

Hilton of Eggardon, B.

Archer of Sandwell, L.

Hollis of Heigham, B.

Bach, L.

Howells of St. Davids, B.

Berkeley, L.

Hughes of Woodside, L.

Bernstein of Craigwell, L.

Hunt of Chesterton, L.

Billingham, B.

Hunt of Kings Heath, L.

Blackstone, B.

Jay of Paddington, B. (Lord Privy Seal)

Borrie, L.

Bragg, L.

King of West Bromwich, L.

Brennan, L.

Lea of Crondall, L.

Brooke of Alverthorpe, L.

Macdonald of Tradeston, L.

Brookman, L.

McIntosh of Haringey, L. [Teller]

Burlison, L.

Carter, L. [Teller]

McIntosh of Hudnall, B.

Chandos, V.

MacKenzie of Culkein, L.

Clarke of Hampstead, L.

Mackenzie of Framwellgate, L.

Cohen of Pimlico, B.

Massey of Darwen, B.

Crawley, B.

Mitchell, L.

Davies of Coity, L.

Pitkeathley, B.

Davies of Oldham, L.

Ponsonby of Shulbrede, L.

Desai, L.

Puttnam, L.

Donoughue, L.

Ramsay of Cartvale, B.

Dormand of Easington, L.

Rendell of Babergh, B.

Dubs, L.

Renwick of Clifton, L.

Elder, L.

Richard, L.

Evans of Parkside, L.

Rix, L.

Evans of Temple Guiting, L.

Sewel, L.

Evans of Watford, L.

Shepherd, L.

Falconer of Thoroton, L.

Simon, V.

Farrington of Ribbleton, B.

Stone of Blackheath, L.

Filkin, L.

Symons of Vernham Dean, B.

Gale, B.

Tomlinson, L.

Gavron, L.

Turnberg, L.

Gibson of Market Rasen, B.

Warner, L.

Goldsmith, L.

Warwick of Undercliffe, B.

Goudie, B.

Whitaker, B.

Gould of Potternewton, B.

Whitty, L.

Greengross, B.

Wilkins, B.

Grenfell, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 38 [Preservation of rights in respect of additional pensions]:
[Amendment No. 73 had been withdrawn from the Marshalled List.]
House adjourned at twenty-five minutes before midnight.

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